Home > > Marriot's RevPAR in Greater China drops 90% in February

Marriot's RevPAR in Greater China drops 90% in February

02/28/2020| 8:49:40 PM| 中文

Marriott estimates to earn $25 million less in monthly fee revenue, compared to its 2020 base-case outlook.

Marriott International on February 26 reported the fourth quarter and full-year financial report of 2019 ended December 31, 2019.


● Fourth quarter 2019 comparable systemwide constant dollar RevPAR rose 1.1 percent worldwide, with 1.5 percent growth outside North America and 0.9 percent growth in North America;

● Worldwide comparable systemwide RevPAR index grew 240 basis points in the fourth quarter;

● Fourth quarter reported net income totaled $279 million, a 12 percent decrease from prior year results. Fourth-quarter adjusted net income totaled $517 million, a 4 percent increase from prior year adjusted results;

● Adjusted EBITDA totaled $901 million in the 2019 fourth quarter, a 4 percent increase compared to fourth quarter 2018 adjusted EBITDA;

● Full year 2019 comparable systemwide constant dollar RevPAR rose 1.3 percent worldwide, with 2.2 percent growth outside North America and 1.0 percent growth in North America;

● The company added more than 78,000 rooms globally during 2019, including roughly 14,300 rooms converted from competitor brands and approximately 34,000 rooms in international markets;

● At year-end 2019, Marriott’s worldwide development pipeline totaled nearly 3,050 hotels and approximately 515,000 rooms, including roughly 23,000 rooms approved, but not yet subject to signed contracts. Over 220,000 rooms in the pipeline were under construction at the end of 2019

Arne M. Sorenson, president and chief executive officer of Marriott International, said, “We are pleased with our performance in 2019. We grew rooms nearly 5 percent, achieved record RevPAR index gains, drove higher guest satisfaction scores, and maintained global hotel profit margins in a low RevPAR growth environment. Our fee-driven, asset-light business model and successful asset recycling continued to generate significant excess cash, allowing us to return a total of $2.9 billion to shareholders during the year.

“Marriott Bonvoy is driving market share at our hotels by leveraging our industry-leading distribution and powerful brand portfolio. Loyalty members accounted for 52 percent of occupied rooms in 2019, a 250-basis point increase year over year. Our worldwide systemwide RevPAR index for comparable hotels increased 200 basis points in 2019 and rose 240 basis points in the fourth quarter alone. We are increasing our market share of rooms as well, with record signings in 2019 taking our development pipeline to approximately 515,000 rooms at year-end.”


Due to the uncertainty regarding the duration and extent of the Coronavirus outbreak, Marriott cannot fully estimate the financial impact from the virus, which could be material to the first quarter and full-year 2020 results. As such, the company is providing a base case outlook for the first quarter and full-year 2020, which does not reflect any impact from the outbreak.

Assuming the current low occupancy rates in the Asia Pacific region continue, with no meaningful impact outside the region, Marriott estimates the company could earn roughly $25 million in lower fee revenue per month, compared to its 2020 base-case outlook. Room additions for the current year could also be delayed as a result of the Coronavirus outbreak.

Arne M. Sorenson said on the conference call that as the virus emerged in Wuhan earlier this year, the teams assisted guests and provided support for associates, whose lives have been significantly disrupted. I couldn't be prouder of our associates in the Asia-Pacific region, who have worked tirelessly.

Marriot continues to waive cancellation fees for hotel stays, through March 15, for guests with reservations, at our hotels in Greater China and for guests from Greater China with reservations at Marriott destinations, globally.

“We began to see the impact of the coronavirus on our business in mid-January, with occupancy declines gradually, spreading from Wuhan to other markets in the Asia-Pacific region. In February, RevPAR at our hotels in Greater China declined almost 90%, versus the same period last year.”

Greater China

Marriott is the world’s largest hotel operator with 800 properties in the Asia Pacific region and roughly half in Greater China.

China is also Marriott’s fastest-growing market, where it is building a number of new hotels. Leeny Oberg, EVP and CFO said openings could slow down due to the virus.

At the end of 2019, Marriott had 375 properties with roughly 122,000 rooms across Greater China, representing 9% of our total global rooms. Around 90 of these properties are currently closed.

In the Asia-Pacific region outside Greater China, what Marriott called APAC, February RevPAR declined roughly 25%, year-over-year. For APAC Marriott had 412 properties with 100,000 rooms at year-end 2019, representing 7% of our total worldwide rooms.

February RevPAR in the Asia-Pacific region overall has been running down around 50% compared to February of last year. Outbound travelers from China in, 2019 made up less than 1% of room nights in the system outside of Asia-Pacific and around 0.5 of 1% of room nights in North America.

To date, apart from a handful of citywide event cancellations, Marriott has not seen a significant impact on overall demand outside of the Asia-Pacific region, so the situation obviously remains fluid.

Read Original Report

TAGS: Marriot | RevPAR | financial report
©2022 广州力矩资讯科技有限公司 粤ICP备06070077号
Tell us more about yourself!