On Monday, shares of Marriott International Inc (NASDAQ: MAR) fell as first-quarter earnings missed expectations.
Like its peers, the hotel-chain operator is bearing the weight of the pandemic that put the world under lockdown. Despite, revenue per room, as well as bookings, plunging, April appears to be the bottom for the hotel industry as the lockdowns are eased and demand rises.
First Quarter Report
Revenue dropped 7% from a year ago and resulted in a net income of $31 million. Adjusted earnings per share of 26 cents missed FactSet's consensus forecast of 87 cents. The results account for guarantee reserves of $148 million and impairment charges and bad-debt expenses. What really beat Marriott down was revenue per available room (RevPAR), which fell 22.5%.
The worst is behind?
On a brighter note, North American occupancy improved to 20% over the past two weeks for Mariott as the global economy reopens.
Due to the unprecedented uncertainty, however, a financial outlook was not given.
Murky Outlook Ahead
Back in March, the American Hotel and Lodging Association and the U.S. Travel Association estimated the hotel industry would experience nearly $1.4 billion in revenue losses weekly, along with a 30% drop in hotel occupancy over a year.
In light of its current situation, Hyatt Hotels Corporation (NYSE: H) will lay off 1,300 employees, while the Hilton Hotels and Resort CEO is more optimistic as he feels hotels are likely to recover faster than airlines but that a full recovery could take several years.
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