Summary
Marriott International, Inc. (MAR) reported its third-quarter 2020 results, significantly impacted by the ongoing COVID-19 pandemic. While revenues and profits declined substantially compared to the prior year, the company demonstrated some sequential improvement from the second quarter. Fee revenues, a key indicator of Marriott's asset-light model performance, saw a sharp decrease, largely attributable to lower RevPAR and co-brand credit card fees. The company has taken aggressive cost-saving measures and has strengthened its liquidity position through various financing activities, including senior note issuances and amendments to its credit facility, to navigate the challenging operating environment. The company's outlook suggests continued material impact from COVID-19 through at least 2021, with recovery dependent on the pandemic's duration and the availability of effective treatments or vaccines. Demand remains primarily driven by leisure travel, with limited recovery in business and group travel. Marriott continues to focus on system growth and managing its development pipeline, though new additions are expected to be lower than initially budgeted.
Financial Highlights
44 data points| Revenue | $2.25B |
| Operating Expenses | $2.00B |
| Operating Income | $252.00M |
| Interest Expense | $113.00M |
| Net Income | $100.00M |
| EPS (Basic) | $0.31 |
| EPS (Diluted) | $0.31 |
| Shares Outstanding (Basic) | 325.90M |
| Shares Outstanding (Diluted) | 326.80M |
Key Highlights
- 1Net income for the three months ended September 30, 2020, was $100 million, a significant decrease from $387 million in the same period of 2019.
- 2For the nine months ended September 30, 2020, the company reported a net loss of $103 million, compared to a net income of $994 million in the prior year.
- 3Total revenues for the third quarter of 2020 were $2.25 billion, down from $5.28 billion in the third quarter of 2019.
- 4Gross fee revenues decreased by 58% year-over-year for the first nine months of 2020, reflecting the severe impact of COVID-19 on travel demand.
- 5Marriott's liquidity position was strengthened through new senior note issuances totaling $3.6 billion and amendments to its credit facility, including a waiver of the leverage covenant.
- 6The company reported approximately 6% of its hotels were closed as of November 4, 2020, a significant improvement from May 2020, indicating a gradual recovery in operations.
- 7Despite the downturn, Marriott expects net rooms growth of 2.5% to 3% for full year 2020, with a development pipeline of over 496,000 rooms.