Marriott International took a larger-than-expected quarterly loss due to the coronavirus pandemic but its shares rose as investors focused on signs of a recovery in global travel, particularly in China.
For the second quarter, the world’s second-largest hotel chain posted a loss of $234 million, or 72 cents a share, compared with a profit of $232 million, or 69 cents a share, a year ago.
Adjusted losses were 64 cents a share while revenue fell 72.4% to $1.46 billion. Analysts had been expecting adjusted losses of 41 cents per share on revenue of $1.68 billion.
Marriott CEO Arne Sorenson called the three months ended June 30 “the worst quarter we have ever seen by far.” Impairment charges and bad-debt expense related to COVID-19 hit reported and adjusted losses by $61 million and $54 million.
But Marriott’s shares rose 2.7% to $96.33 in trading Monday as Sorenson reported that the company is “seeing steady signs of demand returning,” with worldwide revenue per available room, a key metric, climbing steadily since its low point of down 90% for April to a decline of 70% last month.
Worldwide occupancy rates have improved each week since the low of 11% for the week ended April 11, reaching nearly 34% for the week ended Aug. 1. Currently, 91% of Marriott hotels worldwide are open.
“Greater China continues to lead the recovery,” Sorenson said, adding that “other regions around the world have also experienced steady improvements in demand and RevPAR over the last couple of months.”
As The Wall Street Journal reports, “The hotel industry is suffering through its worst period in modern times, as the pandemic has led to world-wide cutbacks in business travel and cancellations of conference events.” Some hotel executives have said it could be two or more years until business travel returns to pre-Covid-19 levels.
But Marriott’s stock gain on Monday indicates that “Investors focused on some of the bright spots, including signs of life in Chinese travel and the prospect that the worst stretch for the company may be behind it,” the Journal said.
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