May 11 - Marriott International, Inc. reported first quarter 2021 results, which were materially impacted by the COVID-19 global pandemic and efforts to contain it (COVID-19).

 

First Quarter 2021 Results

Marriott’s reported operating income totaled $84 million in the 2021 first quarter, compared to 2020 first quarter reported operating income of $114 million. Reported net loss totaled $11 million in the 2021 first quarter, compared to 2020 first quarter reported net income of $31 million. Reported diluted loss per share totaled $0.03 in the quarter, compared to reported diluted earnings per share (EPS) of $0.09 in the year-ago quarter.

 

Adjusted operating income in the 2021 first quarter totaled $138 million, compared to 2020 first quarter adjusted operating income of $293 million. Adjusted operating income in the 2020 first quarter excluded impairment charges of $101 million.

 

First quarter 2021 adjusted net income totaled $34 million, compared to 2020 first quarter adjusted net income of $160 million. Adjusted diluted EPS in the 2021 first quarter totaled $0.10, compared to adjusted diluted EPS of $0.49 in the year-ago quarter. These adjusted 2021 first quarter results and adjusted 2020 first quarter results excluded impairment charges of $3 million after-tax ($0.01 per share) and $75 million after-tax ($0.23 per share), respectively.

 

Adjusted results also excluded restructuring and merger-related charges, cost reimbursement revenue, and reimbursed expenses. See pages A-2 and A-9 for the calculation of adjusted results and the manner in which the adjusted measures are determined in this press release.

 

Base management and franchise fees totaled $412 million in the 2021 first quarter, compared to base management and franchise fees of $629 million in the year-ago quarter. The year-over-year decline in these fees is primarily attributable to RevPAR declines related to COVID-19. Other non-RevPAR related franchise fees in the 2021 first quarter totaled $141 million compared to $139 million in the year-ago quarter, aided by $11 million of higher residential branding fees.

 

Incentive management fees totaled $33 million in the 2021 first quarter. The company recognized no incentive management fees in the first quarter of 2020. Roughly 45 percent of the incentive management fees recognized in the quarter were earned at hotels in the Asia Pacific region, largely in Greater China.

 

Contract investment amortization for the 2021 first quarter totaled $17 million, compared to $25 million in the year-ago quarter. The year-over-year change largely reflects impairments of investments in management and franchise contracts recorded in the 2020 first quarter.

 

Owned, leased, and other revenue, net of direct expenses, totaled a $27 million loss in the 2021 first quarter, compared to $8 million of profit in the year-ago quarter as a result of RevPAR declines related to COVID-19.

 

Depreciation, amortization, and other expenses for the 2021 first quarter totaled $52 million, compared to $150 million in the year-ago quarter. The year-over-year change largely reflects a $90 million impairment charge recorded in the 2020 first quarter.

 

General, administrative, and other expenses for the 2021 first quarter totaled $211 million, compared to $270 million in the year-ago quarter. The lower expenses in the 2021 first quarter largely reflect $50 million of lower bad debt expense and $14 million of lower guarantee reserves. Expenses in the 2021 quarter include $14 million of additional non-recurring executive compensation related to leadership changes.

 

Interest expense, net, totaled $100 million in the first quarter compared to $87 million in the year-ago quarter. The increase is largely due to higher interest expense associated with 2020 debt issuances.

 

Equity in losses for the first quarter totaled $12 million, compared to a $4 million loss in the year-ago quarter. The increase in losses largely reflects the negative impact on results at joint venture properties due to COVID-19.

 

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled $296 million in the 2021 first quarter, compared to first quarter 2020 adjusted EBITDA of $442 million. See page A-9 for the adjusted EBITDA calculation.

 

Selected Performance Information

The company added 134 new properties (23,567 rooms) to its worldwide lodging portfolio during the 2021 first quarter, including roughly 7,300 rooms converted from competitor brands and nearly 12,000 rooms in international markets. Additions in the 2021 first quarter included 11 all-inclusive conversion properties (3,700 rooms) in the company’s Caribbean and Latin America region. One hundred and fourteen properties (17,381 rooms) exited the system during the quarter, including 88 Service Properties Trust hotels (12,803 rooms). At quarter end, Marriott’s global lodging system totaled more than 7,600 properties, with over 1,429,000 rooms.

 

At quarter end, the company’s worldwide development pipeline totaled 2,825 properties with approximately 491,000 rooms, including 1,141 properties with more than 222,000 rooms under construction and 105 properties with roughly 18,000 rooms approved for development, but not yet subject to signed contracts.

 

In the 2021 first quarter, worldwide RevPAR declined 46.3 percent (a 45.9 percent decline using actual dollars) compared to the 2020 first quarter. RevPAR in the U.S. & Canada declined 46.3 percent (a 46.3 percent decline using actual dollars), and RevPAR in international markets declined 46.1 percent (a 44.8 percent decline using actual dollars).

 

Balance Sheet and Liquidity

At quarter end, Marriott’s net debt was $9.6 billion, representing total debt of $10.2 billion less cash and cash equivalents of $0.6 billion. At year-end 2020, the company’s net debt was $9.5 billion, representing total debt of $10.4 billion less cash and cash equivalents of $0.9 billion.

 

In the first quarter, the company issued $1.1 billion of Series HH Senior Notes due in 2031 with a 2.85 percent interest rate coupon.

 

The company’s net liquidity was approximately $4.7 billion at the end of the first quarter, representing $0.6 billion in available cash balances and $4.1 billion of unused borrowing capacity under its revolving credit facility.

 

The company halted share repurchases in February of 2020 and suspended its quarterly dividend beginning in the second quarter of 2020.

 

COVID-19

Due to the numerous uncertainties associated with COVID-19, Marriott cannot presently estimate the impact of this unprecedented situation on its future results, which is highly dependent on the severity and duration of the pandemic and its impacts, but expects that COVID-19 will continue to be material to the company’s results.

 

The company expects to provide additional information about the current impact of COVID-19 on its business on its call later this morning.

 

Marriott International, Inc. will conduct its quarterly earnings review for the investment community and news media on Monday, May 10, 2021 at 8:30 a.m. Eastern Time (ET). The conference call will be webcast simultaneously via Marriott’s investor relations website at marriott.com/investor, click on “Events & Presentations” and click on the quarterly conference call link. A replay will be available at that same website until May 9, 2022.

 

The telephone dial-in number for the conference call is 1-706-679-3455 and the conference ID is 9559023. A telephone replay of the conference call will be available from 2:00 p.m. ET, Monday, May 10, 2021 until 8:00 p.m. ET, Monday, May 17, 2021. To access the replay, call 1-404-537-3406. The conference ID for the recording is 9559023.

 

All occupancy and RevPAR statistics are systemwide constant dollar and include hotels that have been temporarily closed due to COVID-19. Unless otherwise stated, all changes refer to year-over-year changes for the comparable period. RevPAR comparisons between 2021 and 2020 reflect properties that are comparable in both years. RevPAR comparisons between 2021 and 2019 reflect properties that are defined as comparable as of March 31, 2021, even if they were not open and operating for the full year 2019 or they did not meet all the other criteria for comparable in 2019.

 

 

---

More Travel News:

Hyatt announces return of Hyatt Loves Local with more than 160 small business collaborations to help revitalize communities
High cost of PCR tests will continue to negatively impact international travel recovery, says GlobalData
Why book direct at Vivaresorts.com?
Ocean El Faro is reopening with fully vaccinated staff!