Since the peak of the COVID-19 pandemic in March, which saw record low occupancy levels for hotels around the world, Marriott has seen an increase each month in every region, the company reported Monday in its quarterly earnings call.
Global occupancy in July hit 31% for all hotels, and occupancy in July for the hotels that were opened for each of the last four months reached 39%, increasing by 23 percentage points over that period.
“While the full recovery from COVID-19 will clearly take time, the current trends we are seeing reinforce our view that when people feel safe traveling, demand returns quickly," said President and Chief Executive Arne Sorenson.
Second quarter worldwide RevPAR was down 84%, while April RevPAR fell 90%, the toughest year-over-year comparison on record, and demand has risen steadily since then. RevPAR declined 85% in May, 78% in June, and 70% in July. Most hotels that were temporarily closed due to COVID-19 have now reopened. As of today, 9% of global properties remain closed compared to more than 25% in April.
“There is still no visibility around when RevPAR could return to 2019 levels,” Sorenson said. “However, the global industry trends experienced over the last couple of months give us confidence that people will continue to increase their travel. We are optimistic that the second quarter will mark the bottom and that the worst is now behind us.”
Leading the recovery, Greater China has seen rapid improvements in occupancy and new bookings with occupancy up to 60%, up significantly from the single-digit levels in mid-February. Trends in the rest of Asia-Pacific are improving at a slower pace, as countries are in various phases of reopening and as certain borders remain closed.
Sorenson said, “the recovery of travel in Greater China demonstrates the resiliency of demand once there is a sense that the virus is better under control and restrictions can be safely lifted.”
In North America, 96% of hotels are now open. There’s a steady recovery across all chain scales, Sorenson said, “although the rate of recovery within markets and by hotel type has varied tremendously.”
Leisure demand has been strong in resort areas as well as in secondary and tertiary drive-to markets, while extended stay hotels have experienced the fastest pace of recovery.
New bookings in North America “have been building nicely,” and “despite the recent surge in cases in some states, consumers are increasing their travel.” Sorenson expects that solid leisure demand will continue through Labor Day in North America and could continue into the fall.
“Every segment has gotten better every month albeit with leisure and drive-to being the strongest. We see government business up modestly. We see special corporate business up modestly. We basically see that folks are increasingly willing to step out and travel a bit more.”
Europe, Middle East, Africa, Caribbean and Latin America regions posted the lowest occupancy levels and steepest RevPAR declines in the second quarter.