Marriott Swings to Quarterly Loss With Global Travel Frozen

(Bloomberg) -- Marriott International Inc. swung to a loss as travel bans and social-distancing efforts weighed heavily on the company’s second-quarter results.

• Marriott reported an adjusted loss per share of 64 cents, worse than the average analyst estimate of 42 cents. It was the first quarterly loss for the company since 2011.
• Revenue per available room, or RevPar, declined by 84%, the company said in a statement on Monday.

Key Insights

• U.S. room demand has ticked up since April as leisure travelers embarked on road trips to regional destinations. Marriott relies more heavily on higher-priced hotel brands than Hilton Worldwide Holdings Inc., leaving it more exposed to corporate travel policies and the whims of airline passengers.
• Marriott’s RevPar was still down 70% in July compared with a year earlier, an indication of the long recovery facing the hotel industry. Travel has once taken as coronavirus cases spiked across the U.S.
• Marriott said occupancy rates are reaching 60% in its Greater China hotels, compared to 70% at the same time last year. The rebound includes an increase in business travel, demonstrating that people are booking hotels in places where “there is a view that the virus is under control and travel restrictions have eased.”
• Marriott raised cash through bond sales and credit card deals during the second quarter to give itself liquidity to ride out the pandemic. Industry executives say a full recovery will take at least two years.

Market Reaction

• Marriott shares were up less than 1% at $94.61 as of 9:38 a.m. in New York on Monday. The stock had declined 38% this year through Friday’s close.

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