The Palace Hotel, a Marriott luxury property in San Francisco on April 11, 2020. Marriott International, the world’s largest hotel chain, is furloughing most of its American workers.Cayce Clifford/The New York Times News Service
Marriott International said on Tuesday bookings in Greater China were improving steadily in April as authorities lifted some coronavirus-led travel curbs, even as it forecast a 60 per cent decline in its March total revenue per available room.
Shares of the company, which owns the Ritz-Carlton and St. Regis luxury hotel brands, rose as much as 6.7 per cent to $83.30 in morning trading.
Marriott said occupancy in Greater China rose to roughly 20 per cent in the first week of April, underpinned by a recovery in leisure demand, as restrictions on movement and quarantine measures ease.
The hotel industry has been hurt by a jump in booking cancellations due to coronavirus-driven lockdowns, forcing Marriott and smaller rivals Hilton Worldwide and Hyatt Hotels to abandon their outlooks.
But with the world’s second-largest economy slowly reopening for business, the number of closed Marriott hotels in Greater China fell to just under 20 as of Tuesday, from more than 90 hotels in mid-February, the company said.
“We believe leisure demand will likely lead the recovery as businesses are likely to balance travel needs with viable alternatives such as virtual meetings,” Jefferies analyst David Katz wrote in a note.
Marriott, however, said booking trends for the rest of the world have not yet stabilized.
It estimated a 23 per cent drop in first-quarter revenue per available room, a key measure of hotel health, and said it plans to eliminate or delay around 40 per cent of its annual investment spending plan of between $700 million and $800 million.
The company “does not expect to see a material improvement (in RevPAR performance) until there is a view that the spread of COVID-19 has moderated and governments have lifted restrictions,” it said.
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