Marriot Earnings Show Growth In ‘Drive-To’ Vacations

Marriott International Inc. reported on Monday (Aug. 10) that comparable dollar revenue per available room (RevPAR) plunged 84.4 percent worldwide in Q2 on a constant-currency basis.

“The lodging industry continues to be profoundly impacted by the COVID-19 global pandemic and the current operating environment remains quite challenging,” Marriott CEO and President Arne Sorenson said on the company’s earnings call.

However, Sorenson said China “is leading the recovery and has seen rapid improvements in occupancy and new bookings.”

The company added that many of its hotels that were temporarily closed due to the pandemic have now reopened. “Leisure demand has been strong in resort areas as well as in secondary and tertiary drive-to markets,” Sorenson said, noting that the company’s extended-stay hotels experienced “the fastest pace of recovery.”

He also said the Marriott Bonvoy global loyalty program continues to support all of the company’s marketing plans. “We remain focused on engaging our members with targeted email campaigns and various promotions,” Sorenson said.

The company reported net liquidity of roughly $4.4 billion, comprised of $2.3 billion in cash and cash equivalents and $2.9 billion in unused borrowing capacity minus $800 million in commercial paper outstanding.

Marriott also said it added more than 11,400 rooms worldwide during Q2. That included approximately 2,000 new rooms changed over from competing brands, as well as roughly 4,700 rooms added in international markets.

All told, Marriott’s global development pipeline currently includes almost 3,000 hotels and roughly 510,000 rooms, including approximately 28,000 rooms approved but not yet subject to signed contracts. More than 230,000 rooms in the pipeline were under construction as of Q2’s end, the company said.

As for overall results, Marriott reported a worse-than-expected adjusted diluted loss per share of 64 cents on $1.46 billion in revenue. Analysts had expected a loss per share of 42 cents on $1.68 billion in revenue.

Despite the red ink, Sorenson said, “I believe we can look forward to a brighter future for travel and for Marriott. With our unparalleled portfolio of 30 global brands, superior loyalty programs, strong liquidity position and the best team in the business, I am optimistic about the trajectory of our business in the months and years ahead.”