Marriott closed hotels coronavirus

Marriott International said it could lose about $25 million per month in
first-quarter fee revenue due to the coronavirus outbreak, although CEO Arne Sorenson
cautioned it was a conservative forecast given the virus’ continued spread.

He called the estimate “a China travel story and an
Asia-Pacific story.”

“Obviously, when you look at South Korea and Italy, we will
see cancellations and declining RevPAR in those markets,” Sorenson said during
Marriott’s Q4 earnings call. “We’re going to see some impact in other markets
around the world not entirely dependent on China travel.”

Marriott has approximately 375 properties in Greater China (mainland
China, Hong Kong, Taiwan and Macau), accounting for around 9% of the group’s
total rooms. Approximately 90 of those hotels are currently closed because of
the coronavirus outbreak. 

In the Asia-Pacific region outside of China, Marriott has
412 properties, representing roughly 7% of its total rooms. 

According to Sorenson, Marriott’s February revenue per
available room (RevPAR) for Greater China is down nearly 90% from a year ago, while
February RevPAR across the entire Asia-Pacific region is down 50%. 

Sorenson said there hasn’t been a virus-related impact on demand
outside of the Asia-Pacific region, “though the situation obviously remains

Through March 15, Marriott is waiving hotel cancellation
fees for guests with reservations at hotels in Greater China as well as for Chinese
citizens with reservations at Marriott properties worldwide.

Despite huge uncertainty surrounding the ongoing health
crisis, Sorenson is optimistic about Marriott’s longer-term outlook, citing
strong momentum in the fourth quarter.“I think even though we would expect this
would be messy for the next few weeks, if not the next few months, this will
end,” asserted Sorenson. “It’s clear that it’ll end. We can’t tell you when,
but when people start to get confidence that they don’t have to be worried
about picking up [coronavirus] if they’re thinking about going to Seoul, for
example, that travel will come back and it will probably come back fairly

Marriott reported systemwide RevPAR growth of 1.1% and 1.3%
for the fourth quarter and full year 2019, respectively. 

For 2019, total revenue increased 2%, to $5.37 billion.

Correction: In the headline, a previous version of this report had an incorrect number of closed China hotels.

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