Marriott International, Inc. today reported first quarter 2021 results, which were materially impacted by the COVID-19 global pandemic and efforts to contain it (COVID-19).
Tony Capuano, Chief Executive Officer, said, “We were pleased to see demand improve meaningfully during the first quarter. We are welcoming more and more guests to our hotels as consumers are traveling again once they feel it is safe. While recovery trajectories vary from region to region, the resiliency of demand has been most keenly demonstrated in mainland China, where occupancy is near the pre-pandemic level. Occupancy reached 66 percent in mainland China in March, nearly the same as in March 2019, on strong demand from both leisure and business travelers.
“In our largest region, the U.S. & Canada, demand increased rapidly as vaccine rollouts accelerated. Occupancy started the year at 33 percent in January and reached 49 percent by March. Leisure demand gained momentum, particularly in ski and beach resort destinations. We are encouraged to see green shoots in special corporate and group bookings, which have been improving as companies slowly begin to return to their offices. The pickup in transient booking pace for the U.S. & Canada points toward continued improvement in consumer sentiment around travel.
“Our conversion signings were particularly strong in the quarter and included nearly 7,000 rooms that were part of an all-inclusive deal in our Caribbean and Latin America region. More than 23,500 rooms joined our system in the quarter. Consistent with our view a quarter ago, we expect gross rooms growth could accelerate to approximately 6 percent in 2021. Including deletions, we continue to estimate our rooms distribution could grow 3 to 3.5 percent, net, for the full year.
“Throughout the pandemic we have been proactive in connecting with our Marriott Bonvoy members, and we continue to focus on enhancing our valuable loyalty platform for our 150 million members. Over the last few weeks, we have announced several exciting new programs. We introduced new co-brand credits cards in South Korea and Mexico, and we rolled out a new collaboration with Uber, allowing members in the U.S. to earn points through ride sharing and food delivery.
“As vaccines roll out around the world and government restrictions ease, I am optimistic that demand will continue to strengthen. We have seen signs that there is a significant amount of pent-up demand, regardless of trip purpose, and we look forward to welcoming travelers in increasing numbers to our more than 7,600 properties around the world.”
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.