Marriott International has said it expects RevPAR across its hotels to fall by 23 per cent during the first quarter of the year in the wake of the Covid-19 outbreak. In America, the figure is expected to be 20 per cent, though the hospitality giant warned the data was still being finalised. While there have been early signs of improving demand trends in Greater China, the negative trends in the rest of the world have not yet stabilised, Marriott added.
Currently, roughly 25 per cent of the company’s more than 7,300 hotels are closed.
Marriott said it anticipated 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 company said it cannot presently estimate the financial impact of this unprecedented situation, 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. Occupancy in Europe is currently under ten percent, with around 500 hotels, or 79 per cent, temporarily closed. The Middle East and Africa region currently has roughly 150 hotels temporarily closed, or 54 per cent, while hotels temporarily closed in the Caribbean and Latin America total nearly 200, or 69 per cent.
In mid-March, Marriott announced at least US$140 million of estimated reductions to anticipated 2020 corporate general and administrative costs, including significant cuts in senior executive salaries.
The company’s actions to date 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 US$1.5 billion to further boost liquidity.