Hotels

Marriott’s RevPAR falls more than 80pc in Q2, but CEO notes “steady signs” of demand returning

Huntley Mitchell

Huntley Mitchell

Marriott’s boss is optimistic about the company’s recovery from the impact of the COVID-19 pandemic, thanks in large part to Greater China.

The hospitality giant revealed earlier this week a RevPAR decline of 84.4 per cent worldwide in the second quarter of 2020.

However, Marriott president and CEO Arne Sorenson said that while the company continues to be profoundly impacted by COVID-19, it is seeing “steady signs” of demand returning.

“Worldwide RevPAR has climbed steadily since its low point of down 90 per cent for the month of April, to a decline of 70 per cent for the month of July,” he said.

“Worldwide occupancy rates, which bottomed at 11 per cent for the week ended April 11, have improved each week, reaching nearly 34 per cent for the week ended August 1.

“Currently, 91 per cent of our worldwide hotels are now open, compared to 74 per cent in April, and 96 per cent are open today in North America.”

Sorensen noted that Greater China continues to lead the recovery for Marriott.

“As of early May, all our hotels in the region are open, and occupancy levels are now reaching 60 per cent, compared to 70 per cent the same time last year, and a marked improvement from single-digit levels in February,” he said.

“While Greater China’s recovery was originally led by demand from leisure travellers, particularly in resorts and drive-to destinations, we are now seeing more widespread business demand, including some group activity.

“The improvement we have seen in Greater China exemplifies the resilience of travel demand once there is a view that the virus is under control and travel restrictions have eased.

“Our other regions around the world have also experienced steady improvements in demand and RevPAR over the last couple of months, though the pace varies and tends to be slower in regions that depend more on international travellers.”

Marriott will need these steady improvements to continue, having swung to a US$234 million ($328.6 million) loss in the second quarter of 2020 from a US$232 million ($325.8 million) profit in the same period a year ago.

The company added more than 11,400 rooms globally during the second quarter, including roughly 2,000 rooms converted from competitor brands and approximately 4,700 rooms in international markets.

At quarter-end, Marriott’s worldwide development pipeline totalled nearly 3,000 hotels and approximately 510,000 rooms, including roughly 28,000 rooms approved, but not yet subject to signed contracts.

Over 230,000 rooms in the pipeline were under construction as of the end of the second quarter.


Featured image source: iStock/dlewis33

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