Marriott, like all the other major travel-related companies, has been hammered by the coronavirus as potential travelers stay home.
The company estimates that RevPAR - revenue per available room, a key metric for hotel operators - dropped 23% in the first quarter. That includes a 20% decrease in North America, where the pandemic hit after China and Europe.
“While there have been early signs of improving demand trends in Greater China, [where the coronavirus has abated], the negative trends in the rest of the world have not yet stabilized,” Marriott said in a statement.
About a quarter of the Bethesda, Md., company’s more than 7,300 hotels are temporarily closed.
The near-term outlook is also tough.
“The company anticipates further hotel closures and erosion in RevPAR performance 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," Marriott said.
Its occupancy rate stands at about 10% in North America and below that level in Europe.
Meanwhile, the company has arranged a $1.5 billion one-year revolving-credit facility to enhance its cash position.
Marriott’s cost-cutting program, which includes furloughs for tens of thousands of workers, has reduced monthly corporate general and administrative costs by some 30% compared with what it initially budgeted for 2020, the company said.
Marriott shares recently traded at $81.81, up 4.8%, in an up broad market. The stock has dropped 47% over the past three months.