Marriott International Inc. turned a profit for the September quarter after posting a loss for the previous quarter, as travel demand improved from lows earlier in the pandemic.
“While Covid-19 is still significantly impacting our business, our results for the third quarter showed continued improvement in demand trends around the world,” Chief Executive Arne Sorenson said Friday.
The world’s largest hotel operator posted a third-quarter profit of $100 million, or 31 cents a share, compared with a profit of $387 million, or $1.16 a share, in the same quarter last year. The company recorded a $234 million loss for the second quarter, its second-largest quarterly loss.
Adjusted earnings were 6 cents a share, ahead of the 8 cents a share adjusted loss analysts polled by FactSet were expecting. Impairment charges related to Covid-19 hurt profit by $24 million after tax, it said.
During the July-to-September period, travel demand rose from the rock bottom of March and April as various parts of the world relaxed Covid-19 restrictions. Marriott said it notched gains from the mainland China, Hong Kong, Macau and Taiwan region, which experienced the first wave of coronavirus infections.
But U.S. hotel occupancy fell 29% to 44.4% for Oct. 25 to Oct. 31, its lowest weekly level since mid-June, according to data-analytics firm STR. Rising Covid-19 cases and less leisure travel led to the declines, the firm said. Europe once again became the epicenter of the pandemic, with a dramatic rise in infections leading some governments to reimpose lockdowns.
At Marriott, comparable systemwide revenue per available room, a closely watched industry metric also known as RevPAR, fell 65.9% for the quarter, a softer decline than in the second quarter. Occupancy fell 40.8 percentage points to 35.1%.
In North America, Marriott’s RevPAR fell 65.4% and occupancy declined 40.3 percentage points to 37%. Meanwhile, RevPAR in the mainland China, Hong Kong, Macau and Taiwan region fell 25.6% as occupancy was off 10 percentage points to 61.4%. Europe RevPAR fell 78.6% as occupancy declined 58.7 percentage points to 20.8%.
The Bethesda, Md., company said revenue fell to 57.3% $2.25 billion for the quarter. Analysts were looking for $2.22 billion.
Mr. Sorenson said timing of a full recovery remains unpredictable, though the company expects net rooms to grow 2.5% to 3% for the year. He said 94% of Marriott hotels world-wide are open.
Without the level of business travel typically seen during the workweek, major hotel operators have started offering rooms as temporary workspaces. Marriott launched a program that allows loyalty-program members to check in and out between 6 a.m. and 6 p.m., with no overnight stay included.
On Wednesday, Hilton Worldwide Holdings Inc. posted a loss of $79 million as comparable RevPAR fell about 60%. Hyatt Hotels Corp. booked a loss of $161 million as RevPAR declined about 72%.