Hospitality giants Hilton and Marriott reported fourth quarter earnings that were significantly impacted by the downturn in global travel due to the spike in COVID-19 cases and tightening travel restrictions.
Marriott International posted a fourth-quarter loss of $164 million. The company reported its earnings on Thursday, following the loss of president and CEO Arne Sorenson to his battle with pancreatic cancer.
“We are all deeply saddened by Arne Sorenson’s unexpected passing,” said Leeny Oberg, EVP/CFO of Marriott. “We are grateful to have been able to work with such an inspiring and talented leader and will always treasure our memories of working with him. Our leadership team is committed to honoring him by building on his incredible legacy as we move the company forward.”
The world’s largest hotel operator saw fourth-quarter revenue fall 59.6% to $2.17 billion, while global RevPAR declined 64.1%. Adjusted EBITDA totaled $317 million in the 2020 fourth quarter, compared to fourth quarter 2019 adjusted EBITDA of $901 million.
“With the global pandemic, 2020 was the most challenging year in our 93-year history,” said Stephanie Linnartz, group president of consumer operations, technology and emerging businesses. “In April, we experienced the sharpest worldwide RevPAR decline on record, down 90% year-over-year with just 12% occupancy. Demand around the world improved from this trough at varying rates, with China leading the way. RevPAR in mainland China saw a meaningful rebound through the year and was down less than 10% year-over-year in December.”
Global occupancy remained at 35% in the fourth quarter, in line with the third quarter.
“While no one can know how long this pandemic will last, we are seeing some small, early signs that the acceleration of vaccine rollouts around the world will help drive a significant rebound in travel and lodging demand.”
Marriott added 109 new properties to its worldwide portfolio during the 2020 fourth quarter, including approximately 9,000 rooms in international markets. The development pipeline totaled nearly 2,900 properties and more than 498,000 rooms. Over 229,000 rooms in the pipeline were under construction as of the end of 2020.
Hilton Worldwide Holdings, meanwhile, reported a $225 million loss for the fourth quarter compared to a loss of $81 million for the third quarter.
Hilton President and CEO Chris Nassetta said the company lost $720 million during 2020, compared with a net income of $886 million for the full-year of 2019. The hotel giant reported an adjusted EBITDA of $204 million for the quarter and $842 million for the full year.
“Our fourth quarter results were largely in line with our expectations as rising COVID-19 cases and tightening travel restrictions disrupted the positive momentum we saw throughout the summer and fall,” Nassetta said. “Yet even with a challenging environment, we celebrated our one-million-room milestone during the quarter and achieved net unit growth of more than five percent for the year.”
Hilton has managed to reopen 97% of its hotels. Occupancy for the fourth quarter fell to 41% in the U.S., a drop of more than 30 percentage points from 2019.
Looking to the future, the company announced it has 2,570 hotels across 116 countries and territories in the development pipeline, including 31 properties being built in areas where Hilton does not have any hotels in its portfolio.