Marriott wary of Delta impact after hit to Asia-Pac recovery

Bethesda, Maryland, US

MARRIOTT International on Tuesday acknowledged that the Delta variant had stalled recovery in Asia-Pacific in the second quarter and said it would remain watchful of any further impact on a recovery in hotel occupancy.

Shares of the world's largest hotel chain, which posted a profit beat, were down 1.9 per cent as the broader market also fell due to worries over the Delta variant.

Marriott said recovery in its Asia-Pacific region, excluding China, stalled in the quarter before picking up pace, as some countries imposed lockdowns due to a rise in infections.

The hotel operator continues to struggle to fill up rooms, with occupancy remaining well below the rates seen before the pandemic but recovering from last year's lows.

"We will continue to be vigilant as we watch the pace of vaccinations around the world, the effectiveness of those vaccinations relative to the Delta variant" Marriott chief executive Anthony Capuano said.

Delta is as contagious as chickenpox and far more contagious than the common cold or flu. It now comprises more than 80 per cent of new cases nationwide and has been detected in more than 90 countries.

Marriott, which owns the hotel brand Ritz-Carlton, said second-quarter occupancy in its key United States & Canada and Greater China markets rose to 56.1 per cent and 62.4 per cent, respectively, compared to 19.6 per cent and 35.5 per cent a year earlier. Comparable RevPAR fell 43.8 per cent during the quarter, compared to Q2 2019.

Shares of rivals Hilton and Hyatt also slumped 2.7 per cent and 2.8 per cent, respectively. Excluding items, Marriott earned 79 cents per share, versus analysts' average estimate of 45 cents per share, according to IBES data from Refinitiv.

Revenue rose 115.1 per cent to US$3.15 billion, but fell short of expectations of US$3.21 billion. REUTERS