Marriott expects RevPAR to fall by 23 per cent

Thursday, April 16, 2020

In the wake of the Covid-19 outbreak  Marriott International sees a sharp fallin the global RevPAR and expects it to fall by 23.

The figure is expected to be 20 per cent in America though the hospitality giant warned the data was still being finalised.

There are early signs of improving demand trends in Greater China but the negative trends in the rest of the world is yet to be stabilised.

At present  roughly 25 per cent of the company’s more than 7,300 hotels are closed.

Marriott  anticipates further hotel closures and erosion in RevPAR performance in the short-term and does not expect to see a material improvement until there is a view that the spread of Covid-19 has moderated, and governments have lifted restrictions.

The financial impact of the situation cannot be estimated at present which is highly dependent on the severity and duration of the pandemic.

North American occupancy levels are currently around ten per cent, and more than 870 hotels, or 16 per cent, are temporarily closed, with more closures expected.

While occupancy in Europe is currently under ten percent, with around 500 hotels, or 79 per cent, temporarily closed.

There are 150 hotels temporarily closed in  Middle East and Africa region or 54 per cent, while hotels temporarily closed in the Caribbean and Latin America total nearly 200, or 69 per cent.

Marriott announced at least $140 million of estimated reductions to anticipated 2020 corporate general and administrative costs, including significant cuts in senior executive salaries in mid-March

They have reduced the current monthly run rate of corporate general and administrative costs by approximately 30 per cent compared to the monthly costs initially budgeted for 2020, excluding any bad debt expense that may be incurred.

Marriott also today announced a commitment letter providing for a 364-day senior unsecured revolving credit facility in an aggregate principal amount of $1.5 billion.

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