Marriott International Reports Signs of Recovery
Marriott International has released its second-quarter 2021 report today, August 3, signaling a growth in the recovery of leisure tourism, but one that still falls short of pre-pandemic levels as business travel continues to lag and the Delta variant creates uncertainty among travelers.
The global hotel corporation has continued its planned growth over the pandemic, adding just under 25,000 rooms during the last quarter, with 2,750 properties currently in development worldwide.
In comparison with last year’s second-quarter results, Marriott’s growth is staggering: RevPAR, or revenue per available room, increased 262.6 percent worldwide from the second quarter of 2020. However, these numbers are still 43.8 percent lower than they were in 2019, an indication that there is still far to go in the hotel corporation’s recovery. Worldwide occupancy reached only 51 percent for the quarter.
In terms of net income, Marriott is once again in the green, reporting $422 million for the second quarter, as opposed to 2020’s loss of $234 million. Marriott’s net debt is still at $9.5 billion, the same number that it reported back at the end of 2020.
The travelers bringing on the corporation’s recovery are mainly leisure travelers who are eager to make up for time lost not traveling during the pandemic; however, hotels rely mainly on business travel to stay afloat. Before business travelers begin traveling, the rates of recovery will not reach pre-pandemic levels.
According to the American Hotel & Lodging Association’s (AHLA) State of the Hotel Industry 2021 Report, business travel makes up the large majority of revenue for the hotel industry, but the demand for business travel is not predicted to make a full return to 2019’s pre-pandemic levels by as far out as the third quarter of 2023.
“While we are keeping a close eye on the Delta and other variant strains, we are optimistic that the upward trajectory of the global recovery will continue. We anticipate that more workers returning to their offices on a hybrid basis will serve as a catalyst for a meaningful increase in business transient and group demand in the fall. Many of our associates are starting to get back on the road, and our largest corporate clients tell us they are beginning to do the same. Our recovery to date has shown us that there is tremendous pent-up demand for the travel experiences we consistently provide. Timelines are hard to predict and will continue to vary by region, but I believe that we are on our way to a full global recovery,” said Anthony Capuano, CEO of Marriott International.
The hotel industry could end up seeing a slowing to its recovery during the next quarter, as the Delta variant grows and continues to bring uncertainty to many travelers’ potential travel plans and as different countries warn their citizens to avoid travel to other countries with particularly high rates of transmission. Domestically, the growth could continue but also risks a slight drop. For now, however, there is hope for a recovery.
Click here to read the full report.