Marriott Posts First Annual Loss Since 2009 as COVID-19 Loomed Large in 2020
BETHESDA, MD. — Marriott International (NASDAQ: MAR) posted a net income loss of $267 million for 2020, which The Wall Street Journal reports is the hotel giant’s first annual loss since 2009. The company posted a net loss of $164 million in fourth-quarter 2020, which is a significant drop from its net income of $279 million in fourth-quarter 2019.
The COVID-19 pandemic materially changed global traffic patterns for both leisure and business travelers in 2020, and Marriott’s hotels bore the brunt of the subdued demand for hotel rooms, as well as conventions and conferences.
“With the global pandemic, 2020 was the most challenging year in our 93-year history,” says Stephanie Linnartz, Marriott’s group president of consumer operations, technology and emerging businesses. Linnartz, along with Tony Capuano, are overseeing Marriott’s day-to-day operations of corporate matters in the wake of president and CEO Arne Sorenson’s passing earlier this week.
On April 14, 2020, the Transportation Security Administration (TSA) reported its lowest travel volume of only 87,500 passengers throughout all TSA checkpoints nationwide, representing just 4 percent of passenger volume recorded on the same weekday in 2019. Average travel volume per day between Thanksgiving and New Year’s Eve, which is typically TSA’s busiest time of year, continued to fluctuate between a low of 24 percent and a high of 61 percent of holiday travel volume in 2019.
Linnartz says that the slowdown in travel had a direct impact on the company’s occupancy and revenue per available room (RevPAR), especially at the onset of the pandemic.
“In April, we experienced the sharpest worldwide RevPAR decline on record, down 90 percent year-over-year with just 12 percent occupancy,” says Linnartz.
In fourth-quarter 2020, Marriott’s worldwide RevPAR declined 64.1 percent, and RevPAR in the United States and Canada declined 64.6 percent.
Despite the setback in performance, Marriott’s development pipeline remains robust. The company’s inventory grew by 3.1 percent in net rooms over the course of 2020. At year-end, Marriott’s worldwide development pipeline totaled 2,881 properties with more than 498,000 rooms, including 1,187 properties with over 229,000 rooms under construction and 119 properties with roughly 20,000 rooms approved for development but not yet subject to signed contracts. This month two new Marriott-branded hotels opened in Florida, the J.W. Marriott Tampa and Moxy South Beach in Miami Beach.
“While the current environment remains challenging, we believe our financial condition is strong and we look ahead to the rest of 2021 with optimism,” says Leeny Oberg, executive vice president and chief financial officer of Marriott.
Marriott’s stock price closed at $128.19 per share on Wednesday, Feb. 17, down from $144.94 a year ago.