Big hotel chains come clean over losses but say worst is behind them

Three of the world’s biggest hotel chains have recorded massive losses in the latest round of reporting, but are confident the worst of the coronavirus fallout is behind them.

Marriott posted a US$234 million ($328.6 million) loss in the second quarter of 2020 compared to a US$232 million ($325.8 million) profit in the same period a year ago.

Marriott saw a RevPAR decline of 84.4 per cent worldwide in the same period, but says it is seeing “steady signs” of a return in demand with Greater China leading the recovery.

“Worldwide RevPAR has climbed steadily since its low point of down 90 per cent for the month of April, to a decline of 70 per cent for the month of July,” Marriott president and CEO Arne Sorenson said.

“Worldwide occupancy rates, which bottomed at 11 per cent for the week ended April 11, have improved each week, reaching nearly 34 per cent for the week ended August 1.

“Currently, 91 per cent of our worldwide hotels are now open, compared to 74 per cent in April, and 96 per cent are open today in North America.”

“As of early May, all our hotels in the region are open, and occupancy levels are now reaching 60 per cent, compared to 70 per cent the same time last year, and a marked improvement from single-digit levels in February,” he said.

“While Greater China’s recovery was originally led by demand from leisure travellers, particularly in resorts and drive-to destinations, we are now seeing more widespread business demand, including some group activity.”

Accor recorded a €1.5 billion ($2.5 billion) loss in the six months to 30 June 2020 compared with a €141 million profit in the same period last year.

Overall revenue fell 52.4 per cent to €917 million ($1.5 billion), and RevPAR was down 59.3 per cent.

“Nevertheless, we are observing signs of recovery in all regions, after a particularly hard-hit period in April and May,” said Accor chairman and CEO Sébastien Bazin.

“The peak of the crisis is undoubtedly behind us, but the recovery will be gradual.

“Having taken these emergency steps, we must now finish the job from an asset-light model to a full asset-light company. Beyond COVID-19, this is essential. Accor must become simpler, leaner, more agile and even closer to the field.”

Hilton also posted a net loss of US$432 million ($602.6 million) for the three months to 30 June 2020, compared to a US$261 million ($364.1 million) profit in the same period last year, while RevPAR fell 81 per cent.

“However, as restrictions are lifting and properties around the world are reopening, we are seeing improved occupancy,” said Hilton president and CEO Christopher Nassetta.

“While we have a long journey in front of us, we are on the road to recovery and look forward to the opportunities ahead.”