Marriott International, the world’s leading hotel company, has reported signs of recovery in their business after a recent dip. The company is expecting to see an increase in revenue by 10% this year.
Marriott International has reported signs of recovery. The company has seen a 4% increase in revenue and an 11% decrease in expenses.
Today, August 3, Marriott International published its second-quarter 2021 report, indicating that leisure tourism is improving, but still lagging below pre-pandemic levels as corporate travel continues to languish and the Delta variant causes anxiety among travelers.
Over the course of the pandemic, the global hotel company has maintained its projected expansion, adding just under 25,000 rooms in the past quarter, with 2,750 buildings presently under construction across the globe.
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Marriott’s increase is astounding when compared to last year’s second-quarter results: From the second quarter of 2020 to the second quarter of 2021, RevPAR (revenue per available room) rose 262.6 percent globally. However, these figures are still 43.8 percent lower than in 2019, indicating that the hotel industry’s recovery is still far from complete. For the quarter, global occupancy was just 51 percent.
Marriott is back in the black in terms of net income, earning $422 million for the second quarter, compared to a loss of $234 million in 2020. Marriott’s net debt remains at $9.5 billion, which is the same as it was at the end of 2020.
The passengers who are helping the company recover are mostly leisure travelers who want to make up for time spent not traveling during the epidemic; nevertheless, hotels depend on corporate travel to remain afloat. The rates of recovery will not approach pre-pandemic levels before business passengers resume traveling.
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 careful watch on the Delta and other variant strains, we remain hopeful that the global recovery will continue on its upward track. We expect a significant rise in business transient and group demand in the autumn as a result of more employees returning to their workplaces on a hybrid basis. Many of our colleagues have begun to return to work, and our biggest corporate customers have indicated that they are doing so as well. Our current recovery has taught us that there is a huge unmet need for the travel experiences we regularly provide. Timelines are difficult to forecast and will continue to vary by area, but I think we are on our way to a complete worldwide recovery,” said Marriott International CEO Anthony Capuano.
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.
To read the whole report, go here.
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