AP – Marriott saw dramatic improvement in the third quarter as travel demand rebounded in China.
But Marriott President and CEO Arne Sorenson said the recovery remains bumpy, and reinstated lockdowns in Europe and elsewhere could clip bookings.
“Even in China, where there is a much broader sense that COVID is under control, it is not irrelevant yet,” Sorenson said on Friday on a conference call with investors.
Average occupancy at hotels in China hit 61 per cent during the quarter, down just 10 per cent from a year ago. That has roared back from February, when occupancy stood at nine per cent.
In September, hotel occupancy in China reached 67 per cent, which was actually higher than last year.
Sorenson said leisure travellers who might usually go abroad are staying in China, boosting occupancy rates. Business and group demand is weaker, partly because international business travel — which normally accounts for 25 per cent of Marriott’s business in China — is down significantly.
Occupancy in North America was 37 per cent as some leisure demand returned. That was better than the second quarter, when North American occupancy dipped to 20 per cent. Business and group travel has been slower to come back, Marriott said.
Occupancy in Europe was 21 per cent for the third quarter, down 58 per cent from a year ago.
Marriott rival Hilton, which reported earnings on Thursday, saw a similar dynamic. Occupancy was highest in Asia, where it reached 53 per cent, and lowest in the Americas — excluding the United States (US) — at 25 per cent. US occupancy was 44 per cent.
Business bookings — which include things like conventions and athletics — is down 30 per cent in 2021 so far, Sorenson said. But reservations climb further into next year, reflecting optimism about a vaccine, he said.
The trend toward remote work could accelerate a shift the industry was already seeing away from business travel, Sorenson said.
But business travel came back after September 11 and after the Great Recession, and Sorenson said he thinks it will come back from the pandemic as well.
“The fact of the matter is, people love to travel. They love to travel for themselves personally and they love to travel for work,” Sorenson said. “It’s often the most interesting and it is the place they’re going to learn the most.”
Marriott, the world’s largest hotel company, reported earnings of USD100 million in the July-September period, down from USD387 million in the same quarter a year ago.
It said 94 per cent of its hotels are now open worldwide.
Earnings, adjusted for one-time items, were six cents per share. Wall Street had been expecting an eight cent loss, according to a survey of analysts by FactSet. Revenue fell 57 per cent to USD2.25 billion, slightly better than analyst projections. Shares of the Bethesda, Maryland, company rose 2.5 per cent to USD103.39.