Marriott Sees Business Collapse in April With Travelers Home

(Bloomberg) -- Marriott International Inc. saw its business crater in April, with travel virtually shut down around the world.

• Revenue per available room, a measure of occupancy and pricing, decreased 90% in April, a sign that the company faces a tough road to recovery from the pandemic.
• Marriott reported adjusted earnings per share of 26 cents per share for the first quarter, compared with an average analyst estimate of 80 cents. The company’s shares slipped as much as 5.4% to $82.47 in New York on Monday.

Key Insights

• April may have been the worst month in the history of the lodging industry. Roughly a quarter of Marriott’s 7,300 hotels are closed. In a sign of how bad things are in North America, the company highlighted the performance of its limited service hotels, which are benefiting from people driving to vacation destinations. At those properties, occupancy has stabilized at about 20% over the last two weeks.
• Marriott said there are signs that its business in Greater China is starting to bounce back. Occupancy at hotels in the region hit 25% in April, up from less than 10% in February. Still, the numbers show there is a long way to go.
• Marriott is marshaling cash to ride out the pandemic, shuttering properties, furloughing workers and raising money through bond issues and loyalty-point sales. The company said it “cannot presently estimate the financial impact of this unprecedented situation,” but that outbreak will continue to be “material to the company’s results.”

Market Reaction

• Marriott shares had plummeted 42% this year through May 8, compared with a 36% drop in the Bloomberg Americas lodging index.

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