Marriott Predicts Room Revenue Plunge But Says China Bookings Improving
Marriott International has forecast a 60% decline in its total revenue per available room (RevPAR) for March, but said that bookings in greater China are improving steadily this month due to authorities lifting some coronavirus-related travel curbs.
Marriott said that occupancy in greater China rose to roughly 20% during 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-related lockdowns, forcing Marriott to abandon its outlook.
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 last week from more than 90 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.
No "Material Improvement" Expected While Crisis Lasts
However, Marriott said that booking trends for the rest of the world have not yet stabilised.
It estimated a 23% drop in first-quarter RevPAR, a key measure of hotel health, and said that it plans to eliminate or delay approximately 40% of its annual investment spending plan of between $700 million and $800 million.
The company said that it "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."