Marriott Posts Net Loss in First Quarter, But CEO Forecasts Room Demand to Strengthen
BETHESDA, MD. — Marriott International Inc. (Nasdaq: MAR) posted a net loss of $11 million in first-quarter 2021, a notable shift from last year when the firm generated $31 million in earnings, though that quarter did not experience the full shock of the COVID-19 pandemic.
Marriott’s earnings were adjusted to 10 cents a share, which was higher than what Wall Street estimated at 3 cents per share, according to The Wall Street Journal. Marriott’s revenue decreased from $4.7 billion in first-quarter 2020 to $2.3 billion in first-quarter 2021 as worldwide RevPAR (revenue per available room) dipped 46.3 percent year-over-year. Additionally, the company saw an adjusted net income of $34 million, which is roughly 79 percent lower than the first quarter of last year ($160 million).
Marriott’s CEO Tony Capuano predicts the company’s earnings to bounce back due to a higher demand for travel in the United States and Canada following the widespread implementation of the three COVID-19 vaccines.
“As vaccines roll out around the world and government restrictions ease, I am optimistic that demand will continue to strengthen,” says Capuano.
According to Capuano, who took over a few months ago from the late Arne Sorenson, the company saw an uptick in leisure travel this quarter, especially at ski and beach resort locations, as well as an increase in corporate and group bookings.
Hotel occupancy in the Marriott’s portfolio fell by 15.3 percentage points down to 37.7 percent. However, in mainland China in the month of March 2021, occupancy levels were 66 percent, which was close to occupancy levels in March 2019, according to Capuano. In the United States and Canada, Marriott’s largest region, Marriott started the year at 33 percent occupied in January and reached 49 percent by March.
Additionally, the Bethesda-based company reports that it added 23,500 rooms across the world during the first quarter of 2021, including about 12,000 rooms abroad. At quarter end, Marriott’s worldwide development pipeline totaled over 2,800 properties and approximately 491,000 rooms.