Marriott International Reports Third Quarter 2020 Results
- Third quarter 2020 comparable systemwide constant dollar RevPAR declined 65.9 percent worldwide, 65.4 percent in North America and 67.4 percent outside North America, compared to the 2019 third quarter;
- Third quarter reported diluted EPS totaled $0.31, compared to reported diluted EPS of $1.16 in the year-ago quarter. Third quarter adjusted diluted EPS totaled $0.06, compared to third quarter 2019 adjusted diluted EPS of $1.47. Third quarter 2020 impairment charges related to COVID-19 impacted reported and adjusted diluted EPS by $0.07;
- Third quarter reported net income totaled $100 million, compared to reported net income of $387 million in the year-ago quarter. Third quarter adjusted net income totaled $20 million, compared to third quarter 2019 adjusted net income of $488 million. Third quarter 2020 impairment charges related to COVID-19 impacted reported and adjusted net income by $24 million after-tax;
- Adjusted EBITDA totaled $327 million in the 2020 third quarter, compared to third quarter 2019 adjusted EBITDA of $901 million;
- The company added more than 19,000 rooms globally during the third quarter, including roughly 1,400 rooms converted from competitor brands and approximately 7,600 rooms in international markets. Net rooms grew 3.8 percent from the year-ago quarter;
- At quarter-end, Marriott's worldwide development pipeline totaled nearly 2,900 hotels and more than 496,000 rooms, including roughly 25,000 rooms approved, but not yet subject to signed contracts. Approximately 228,000 rooms in the pipeline were under construction as of the end of the third quarter;
- As of the end of the third quarter, the company's net liquidity totaled approximately $5.1 billion, representing roughly $1.5 billion in available cash balances, and $3.6 billion of unused borrowing capacity under its revolving credit facility, less $30 million of commercial paper outstanding.
Arne M. Sorenson, president and chief executive officer of Marriott International, said, "While COVID-19 is still significantly impacting our business, our results for the third quarter showed continued improvement in demand trends around the world. Worldwide RevPAR  declined 66 percent in the quarter, a nearly 19-percentage point improvement from the decline in the second quarter. Greater China continues to lead the recovery and demonstrates the resiliency of travel demand, with third quarter occupancy of 61 percent and RevPAR recovering to down 26 percent, a 35-percentage point improvement compared to the decline in the second quarter. Third quarter occupancy at our hotels in North America reached 37 percent, nearly double occupancy in the second quarter, primarily driven by leisure, drive-to demand, with business and group recovering more slowly. Globally, 94 percent of our hotels are now open and welcoming guests."
"The Asia Pacific region led deal signings in the third quarter, accounting for more than half of all rooms signed globally, with the vast majority of those rooms in Greater China. During the third quarter, we added more than 19,000 rooms to our system, nearly 70 percent more than were added in the second quarter, achieving 5 percent gross rooms growth in the last 12 months. At quarter-end, approximately 228,000 rooms of our more than 496,000-room pipeline were under construction. Progress on projects under construction largely continues apace around the world, although we have designated a slightly higher number of projects on hold given macroeconomic uncertainty and discussions with our owners. For full year 2020, we now expect 2.5 to 3 percent net rooms growth, including terminations of 1.5 to 2 percent. Assuming progress is made in containing COVID-19, we would expect gross room additions in 2021 to accelerate compared to our expectations for 2020."
"Although the timing of a full recovery remains unpredictable, we are pleased with the significant progress we have made in restructuring and repositioning the company to successfully manage through these challenging times. Financially, we have strengthened our liquidity position, realigned our cost structure, and minimized our cash burn. We have also remained keenly focused on working with our hotel owners and franchisees to significantly reduce hotel level costs and help preserve cash in this extremely low revenue environment. Operationally, we have elevated our health and cleanliness standards to establish trust and credibility with travelers and to enhance the safety and wellbeing of our associates and guests."
"We still have a long road ahead, but this crisis will come to an end, and I believe travel will rebound quickly. I am confident that the many steps we have taken this year, combined with our unrivaled global portfolio, the strength of our brands, and the power of Marriott Bonvoy position us very well now and for the future."
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About Marriott International
Marriott International, Inc. (NASDAQ: MAR) is based in Bethesda, Maryland, USA, and encompasses a portfolio of more than 7,500 properties under 30 leading brands spanning 132 countries and territories. Marriott operates and franchises hotels and licenses vacation ownership resorts all around the world. The company offers Marriott Bonvoy™, its highly-awarded travel program. For more information, please visit our website at www.marriott.com, and for the latest company news, visit www.marriottnewscenter.com. In addition, connect with us on Facebook and @MarriottIntl on Twitter and Instagram.
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