Marriott posts $164M loss following “most challenging year in 93-year history”

On the heels of a difficult past 12 months, Marriott International suffered another blow earlier this week with the unexpected passing of president and CEO Arne Sorenson.

Sorenson, 62, died on Monday after a battle with pancreatic cancer.

As the industry mourns the loss of an important figure in hospitality – Sorenson joined the company in 1996 and was first appointed CEO of the group in 2012 – Marriott is tasked with moving forward following what Stephanie Linnartz, group president, consumer operations, technology and emerging businesses, calls “the most challenging year in our 93-year history.”

In the fourth quarter 2020, Marriott reported a net loss of $164 million compared to a reported net income of $279 million year-over-year.

Fourth quarter adjusted net income totaled $39 million compared to $498 million in the fourth quarter of 2019.

Marriott’s reported operating loss totaled $128 million in Q4 2020 compared to reported operating income of $274 million year-over-year.

Adjusted EBITDA for the quarter totaled $317 million compared to fourth quarter 2019 adjusted EBITDA of $901 million.

Fourth quarter 2020 comparable systemwide constant dollar RevPAR declined 64.1% globally, 64.6% in North America and 62.7% in international markets, compared to the fourth quarter 2019.

“In April, we experienced the sharpest worldwide RevPAR decline on record, down 90% year-over-year with just 12% occupancy. Demand around the world improved from this trough at varying rates, with China leading the way. RevPAR in mainland China saw a meaningful rebound through the year and was down less than 10% year-over-year in December,” Linnartz says.

“While China has shown that demand can be quite resilient when the virus is perceived to be contained, we have also seen that progress can be slowed by significant spikes in virus cases, such as we saw in the U.S. and Europe towards the end of 2020.

“Global occupancy remained at 35% in the fourth quarter, in line with the third quarter, and still substantially above the trough in April. While no one can know how long this pandemic will last, we are seeing some small, early signs that the acceleration of vaccine rollouts around the world will help drive a significant rebound in travel and lodging demand.”

Marriott added nearly 63,000 rooms worldwide throughout 2020, including more than 28,000 rooms in international markets and a total of roughly 8,100 conversion rooms. Net rooms grew 3.1% from year-end 2019.

At the end of 2020, the company’s worldwide development pipeline totaled nearly 2,900 properties and more than 498,000 rooms, including about 20,000 rooms approved, but not yet subject to signed contracts.

“We are gratified that we continue to see strong demand for our industry leading brands from owners and franchisees despite the unprecedented challenges resulting from the pandemic,” says Tony Capuano, group president, global development, design and operations services at Marriott.

Capuano and Linnartz are sharing responsibility for overseeing the company’s day-to-day operations until Marriott’s board of directors appoints a new president and CEO, which is expected to occur in the next two weeks.

“In the face of the unprecedented environment resulting from the pandemic, our associates and leadership team rose to the challenge. We worked closely with our owners and franchisees to help them weather the crisis by implementing cost savings, both temporary and permanent. And operationally we implemented heightened cleanliness standards across our portfolio to enhance the safety and wellbeing of our associates and guests, while also introducing additional protocols to help enable meeting and group business to safely take place.”

Marriott’s net liquidity totaled about $4.4 billion at the end of 2020, representing roughly $0.8 billion in available cash balances and $3.6 billion of unused borrowing capacity under its revolving credit facility. During the fourth quarter, the company reduced its debt by more than $600 million.

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