Marriott International Q1 Profit Falls, Misses View; But Revenue Beats

marriott april02 11may20 lt

Marriott International, Inc. (MAR) on Monday reported a 92 percent plunge in profit for the first quarter from last year, reflecting lower revenues and impairment charges as a result of the COVID-19 pandemic. Adjusted earnings missed analysts' expectations, while revenues beat their estimates.

The hotel chain's first-quarter net income was $31 million or $0.09 per share, down sharply from $375 million or $1.09 per share in the year-ago quarter.

The latest quarter's results included impairment charges, bad debt expense, and guarantee reserves of $148 million after-tax or $0.45 per share, related to COVID-19.

Adjusted earnings were $0.26 per share, compared to $1.41 per share in the year-ago quarter.

Total revenue for the quarter fell 7 percent to $4.68 billion from $5.01 billion last year.

On average, analysts polled by Thomson Reuters expected the company to report earnings of $0.91 per share for the quarter on revenues of $4.27 billion. Analysts' estimates typically exclude special items.

Comparable system-wide constant dollar revenue per available room or RevPAR declined 22.5 percent worldwide, while it fell 30.4 percent outside North America and 19.5 percent in North America.

As the COVID-19 pandemic spread around the world, Marriott saw worldwide RevPAR falling about 90 percent in April. Currently, roughly a quarter of Marriott's worldwide hotels are closed.

Marriott has added more than 14,500 rooms globally during the first quarter, including nearly 2,100 rooms converted from competitor brands and approximately 7,200 rooms in international markets. Net rooms grew 4.4 percent from a year ago.

Looking ahead, Marriott said that it cannot currently provide a financial outlook due to the uncertainty of the impact of COVID-19.

However, the company is seeing improving occupancy trends in Greater China. Occupancy at the company's hotels in the region reached 25 percent in April, up from less than 10 percent in mid-February 2020.

Marriott noted that lodging demand in most of the rest of the world has stabilized, albeit at very low levels. Occupancy was around 20 percent over the past two weeks in the company's North American limited-service hotels, benefiting from leisure and drive-to demand.

The company said that while it expects significantly lower new room openings than it had budgeted for 2020, it is already seeing an uptick in owner interest in discussing conversions to its brand.

For comments and feedback contact: editorial@rttnews.com

Business News

Follow RTT