Marriott International's net income tumbled to $31 million for the first quarter of 2020, compared to $375 million year-on-year.
Adjusted EBITDA for the hotel giant came in at $442 million in Q1, down from $821 in the first quarter of 2019.
Arne Sorenson, president and CEO of Marriott, says that while worldwide RevPAR was up 4.6% in January, excluding China, in April global RevPAR was down 90% as the impact of COVID-19 hit most regions.
About a quarter of Marriott’s hotels are closed, although Sorenson says there were some encouraging signs coming from China where occupancy at its hotels reached 25% in April, compared with 10% in mid-February.
He adds that occupancy in North America was around the 20% mark in the past two weeks for limited-service properties and those within driving distance.
Sorenson says the company is preparing for reopenings with “a multi-pronged platform to elevate cleanliness standards.”
Despite the current situation, hotel owners are still signing up to Marriott brands with room signings in line with the first quarter of 2019.
During an investors’ call, Leeny Oberg, Marriott’s chief financial officer, said the company has a strong portfolio of soft brands and is seeing increasing conversations around conversions in that area.
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The company has put in place a number of measures to support its finances including issuing $1.6 billion in senior notes and $920 million raised through amendments to co-branded credit card agreements with banks.
Including these measures, the company’s liquidity position is currently at around $4.3 billion.
The company detailed cost-cutting measures in mid-March that included cuts to the salaries of senior executives, shorter working weeks around the world and temporary leaves.
Marriott said it estimates savings of at least $140 million as a result.
At the time it also said it planned to remove or defer planned investment spend by a third of the $700 to $800 million previously forecasted.