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10 November, 2020

Hotel giants reveal their third-quarter performance, and the recovery signs are promising

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It’s been a difficult year so far for hotel companies, to say the least, but the key players are all witnessing green shoots in their recovery from the impacts of COVID-19.

In the third quarter of this year, Marriott International saw its worldwide RevPAR drop 65.9 per cent, compared to the same period in 2019.

However, CEO Arne Sorenson noted this figure was a nearly 19-percentage-point improvement from the decline in the second quarter.

“Greater China continues to lead the recovery and demonstrates the resiliency of travel demand, with third-quarter occupancy of 61 per cent and RevPAR recovering to down 26 per cent – a 35-percentage-point improvement compared to the decline in the second quarter,” he said.

“Third-quarter occupancy at our hotels in North America reached 37 per cent – nearly double occupancy in the second quarter – primarily driven by leisure, drive-to demand, with business and group recovering more slowly.

“Globally, 94 per cent of our hotels are now open and welcoming guests.”

Sorenson said the Asia-Pacific region led Marriott’s deal signings in the third quarter – accounting for more than half of all rooms signed globally – with the vast majority of those rooms in Greater China.

“During the third quarter, we added more than 19,000 rooms to our system – nearly 70 per cent more than were added in the second quarter – achieving five per cent gross rooms growth in the last 12 months,” he said.

Like Marriott, Accor experienced a significant fall in RevPAR during Q3 of 2020. However, the group noted that the 62.8 per cent decline was a “significant sequential improvement” in the wake of a “difficult” second quarter when RevPAR plummeted 88.2 per cent.

“This improvement reflects a recovery in business in all regions, and most especially in Europe during the summer season,” Accor said.

Accor opened 57 hotels (or 7,800 rooms) during Q3, which it described as “encouraging figures”.

By the end of September 2020, 90 per cent of the group’s hotels were open for business.

Hilton’s RevPAR decreased by 59.9 per cent during the third quarter of 2020. However, the three-month period also saw the group approve 17,400 new rooms for development, bringing its development pipeline to 408,000 rooms as of 30 September, representing eight per cent growth from 30 September 2019.

Hilton also opened 17,100 rooms in the third quarter, contributing to 14,800 net additional rooms in the group’s system, and representing 4.7 per cent net unit growth from 30 September 2019.

And, as of 2 November, 97 per cent of Hilton’s system-wide hotels were open.

Image source: iStock/tupungato

Hilton boss Christopher Nassetta said the company’s third-quarter results show “meaningful improvement” over the second quarter.

“The vast majority of our properties around the world are now open and have gradually begun to recover from the limitations that the COVID-19 pandemic has imposed on the travel industry, with occupancy increasing more than 20 percentage points from the second quarter,” he said.

“While a full recovery will take time, we are well-positioned to capture rising demand and execute on growth opportunities.”

RevPAR for InterContinental Hotels Group (IHG) declined by 53 per cent in Q3, compared to a 75 per cent decline in the prior quarter; while occupancy was at 44 per cent, up from 25 per cent in Q2.

IHG managed to open 11,000 rooms (82 hotels) during the third quarter and signed a further 14,000 rooms (82 hotels). Only three per cent of the group’s hotels (199 properties) remained closed as of 30 September.

“Domestic mainstream travel remains the most resilient, and our industry-leading Holiday Inn brand family positions us well to meet that demand as it slowly returns,” IHG chief executive Keith Barr said.

As for Hyatt, overall RevPAR decreased by 72 per cent in Q3, but also marked a continued recovery across all regions, more than doubling sequentially off the low in the second quarter of 2020.

Hyatt also doubled the number of room nights sold compared to the second quarter of 2020.

“I am exceptionally proud of our hotel teams who gained transient demand market share in the segments and geographies of strongest demand globally as they continue to discover and secure demand from many different sources,” president and CEO Mark Hoplamazian said.

“I am also very encouraged that we opened 27 new hotels representing over 4,300 new rooms – a record number of hotel openings for any third quarter in our history – while sustaining our pipeline for future growth during this disrupted time.”

As of 30 September, 92 per cent of Hyatt’s hotels (88 per cent of rooms) were open, compared to 80 per cent of hotels (74 per cent of rooms) at 30 June.

Featured image source: iStock/kadmy

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accor Arne Sorenson Christopher Nassetta hospitality hotels Hyatt ihg intercontinental hotels group keith barr Mark Hoplamazian marriott marriott international