Please ensure Javascript is enabled for purposes of website accessibility

Marriott Withdraws 2020 Guidance Due to Coronavirus

By Eric Volkman - Mar 20, 2020 at 8:17AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

However the big hotel company ends up doing this year, its results aren't going to be pretty.

In what can't be considered a great surprise, hotelier Marriott International (MAR -0.15%) has withdrawn the guidance for its current 2020 fiscal year. The reason, of course, is the sudden and sharply deleterious effect of the SARS-CoV-2 coronavirus, and the COVID-19 disease it causes, on the hospitality industry.

Previously, Marriott had provided "base case" guidance -- i.e., estimates that don't take into account the potential impact of the coronavirus's spread and other costs that are challenging to forecast -- for 2020.

A hotel pool in Bali with empty chairs.

Image source: Marriott International.

This guidance anticipated revenue per available room (RevPAR, a key sales metric for hotels) would show flat to 2% year-over-year growth, with growth in fee revenue outpacing this at a 4% to 6% clip. Marriott also forecast a per-share net profit of $6.30 to $6.53. On a non-GAAP (adjusted) basis, that figure for fiscal 2019 was $6. 

In its latest communication, Marriott also gave some detail about its fundamental performance so far in 2020. RevPAR declined notably in Asia due to the coronavirus outbreak; this was not compensated by single-digit gains in the company's other geographies. 

But the crisis is now hitting some of those regions. Marriott said that recently, its lodgings in the crucial North America and Europe markets had seen occupancy rates of less than 25%. One year ago, that figure stood at roughly 70%.

On Thursday, despite its gloomy news, the top hospitality stock essentially rose in price along with the major market indexes by rising nearly 5% on the day.

 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Marriott International, Inc. Stock Quote
Marriott International, Inc.
MAR
$137.52 (-0.15%) $0.21

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
317%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.