Marriott International Inc.’s first-quarter profit plunged 92 percent as business was “dramatically impacted” by COVID-19 and the efforts to contain the virus.
The Bethesda, Maryland-based hotel operator and franchisor earned $31 million, or 9 cents a share, in the three months through March, down from $375 million a year ago, as total revenue slumped 7 percent to $4.68 billion. Adjusted earnings were 26 cents a share.
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The results included a $148 million, or 45 cents a share, after-tax impairment charge related to COVID-19.
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“We have taken substantial steps to preserve liquidity and mitigate the impact of these extremely low levels of demand,” Marriott International CEO Arne Sorenson said in a statement. “We are confident we have sufficient resources to manage through this evolving situation.”
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Marriott ended the quarter with $1.76 billion cash and $12.23 billion debt. The company's net liquidity increased to about $4.3 billion in May as a result of raising about $2.5 billion through a note sale and amendments to cobranded credit-card agreements.
Marriott said worldwide occupancy fell by 18.2 percentage points to 50.8 percent. Revenue per available room sank 26.3 percent to $94.61.
There are some signs demand is slowly returning.
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Occupancy at hotels in Greater China, the region first impacted by COVID-19, reached 25 percent in April, up from 10 percent in mid-February. Additionally, occupancy improved to 20 percent over the past two weeks in North American limited-service hotels.
Marriott was unable to give guidance due to the uncertainty caused by COVID-19, but said the virus was likely to result in "significantly lower new room openings" than for what was budgeted.
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Marriott shares were down 42 percent this year through Friday, trailing the S&P 500's 9.3 percent loss.