Summary
Marriott International Inc. reported a significant net loss of $234 million for the second quarter of 2020, a stark contrast to the $232 million net income in the same period of 2019. This downturn is overwhelmingly attributed to the severe impact of the COVID-19 pandemic on global travel and lodging demand. Revenues were down substantially across all segments, with net fee revenues dropping by 78% year-over-year in the quarter. The company has implemented cost-reduction measures and has drawn heavily on its credit facility to maintain liquidity, ending the quarter with $2.3 billion in cash, cash equivalents, and restricted cash. Despite the significant challenges, Marriott is actively managing its financial position. The company issued new debt, totaling $2.6 billion, and repurchased some outstanding senior notes to manage its debt maturity profile. While occupancy and RevPAR saw drastic declines in the second quarter, there are early signs of a slow recovery, particularly in certain markets, though business and group travel remain weak. The company anticipates that pre-pandemic levels of business will not return until at least after 2021, and has undertaken significant restructuring efforts, including workforce reductions, which are expected to result in substantial charges.
Financial Highlights
44 data points| Revenue | $1.46B |
| Operating Expenses | $1.62B |
| Operating Income | -$154.00M |
| Interest Expense | $127.00M |
| Net Income | -$234.00M |
| EPS (Basic) | $-0.72 |
| EPS (Diluted) | $-0.72 |
| Shares Outstanding (Basic) | 325.60M |
| Shares Outstanding (Diluted) | 325.60M |
Key Highlights
- 1Reported a net loss of $234 million for Q2 2020, compared to a net income of $232 million in Q2 2019, heavily impacted by COVID-19.
- 2Net fee revenues decreased by 78% to $213 million in Q2 2020 compared to $984 million in Q2 2019.
- 3Worldwide comparable systemwide RevPAR declined significantly, with a 88.6% drop for company-operated properties and 84.4% for systemwide properties in Q2 2020.
- 4The company significantly increased its cash position to $2.3 billion by quarter-end through debt issuance and credit facility borrowings.
- 5Marriott issued $1.6 billion in Series EE Notes and $1.0 billion in Series FF Notes in Q2 2020.
- 6The company has implemented substantial cost-reduction measures, including workforce restructuring expected to result in $125-$145 million in charges.
- 7While occupancy and RevPAR are showing early signs of recovery from April lows, the company expects a prolonged recovery period, likely extending beyond 2021.