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Thursday, March 28, 2024

Marriott profit plunges 92%

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Marriott profit plunges 92%
Marriott profit plunges 92%

Marriott International's quarterly profit plummeted Monday, as bookings plunged due to coronavirus-led travel restrictions.

But as Fred Katayama reports, the hotel operator says it has begun to see demand stabilize.

Marriott's quarterly profit plunged 92% as the global pandemic forced people to cancel bookings and stay at home.

The company, which owns the Ritz-Carlton and St.

Regis luxury brands, said Monday impairment charges, bad debt expense, and guarantee reserves set aside for the health crisis bit deeply into the bottom line.

Revenue per available room - a metric the industry uses to track performance - dropped by more than a fifth.

Marriott said it had a strong start to the year but by April, that metric plummeted 90% worldwide, and today, a quarter of its hotels are closed.

But the company's CEO, Arne Sorenson expressed guarded optimism, noting that occupancy has started to rebound in Greater China as the economy gradually reopened.

He also said demand for lodging in most of the rest of the world has - in his words - "stabilized, albeit at low levels." Last week, rival Holiday Inn-owner InterContinental Hotels also said it was seeing signs of recovery in some markets such as Greater China.

Shares of Marriott, which have fallen more than 40% this year, slid further in early trading Monday.

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