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Pandemic Hit, Hotel Chain Marriot Reports Bigger-Than-Expected Loss For Q2

Pandemic Hit, Hotel Chain Marriot Reports Bigger-Than-Expected Loss For Q2
One of the sectors that has been most severely impacted by the novel coronavirus pandemic is the global hotel industry because of travel restrictions imposed to prevent the spread of the pandemic.
And now the true scale of the devastation for the industry is coming out as the largest of the hotel chains of the world come out with their second quarter results.
The latest in this is the second quarter reports was announced by the United States based hotel operator Marriott International.  The chain reported a bigger than expected quarterly loss because of a drastic drop in room bookings as people were restricted from travelling due to the pandemic.
So far this year, the shares of Marriott are down by 40.3 per cent which dropped further by 3.8 per cent after the announcement of the quarterly results.
The company also reported an 84.4 per cent drop in its revenue per available room (RevPAR) for the second quarter which is a key performance measure for the hotel industry.
As a silver lining in the otherwise dismal second quarter announcement, Marriott said that it now expects to see a gradual recovery in the occupancy rates of rooms across the world. It however also cautioned that it could be a few years before the company is able to return to the levels of bookings and revenues of pre-Covid-19 period demand levels. This was also stated by the smaller rival Hilton made last week.
"While our business continues to be profoundly impacted by COVID-19, we are seeing steady signs of demand returning", Marriott Chief Executive Officer Arne Sorenson said in a statement.
The company currently estimates rooms could grow by 2 to 3 per cent for the full year.
In the second quarter ended June 30, the company's loss attributable to stockholders was $234 million, or 72 cents per share, compared to a net income of $232 million, or 69 cents per share, that the company had made in the same period a year ago.
The last time that Marriott had reported a quarterly loss as in the third quarter of 2011.
There was a 72.4 per cent plunge in the total revenues of the company during the quarter to reach $1.46 billion. Marriott reported a loss of $0.64 per share on an adjusted basis. According to Refinitiv IBES data, analysts on average had estimated revenue of $1.68 billion and loss of $0.42 per share for the quarter.

Christopher J. Mitchell

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