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Why Shares of Marriott International Plunged 9.6% on Wednesday

By Travis Hoium - Apr 1, 2020 at 4:09PM

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This time it's not COVID-19's fault.

What happened 

Shares of hotel brand Marriott International Inc (MAR 0.57%) fell as much as 9.6% in trading Wednesday, and this time it wasn't the COVID-19 coronavirus outbreak that was the cause. A data breach hit the chain, and at 3:45 p.m. EDT shares were still down 8.5% for the day. 

So what

Marriott said that in February the personal information of 5.2 million guests had been taken in a data breach. Names, addresses, phone numbers, dates of birth, and other information was taken, but management said that it didn't believe payment data had been stolen. This follows a 2018 data breach at Starwood, a Marriott subsidiary, that affected the records of 383 million guests. 

Bell at a reception desk

Image source: Getty Images.

It didn't help that the market overall was down, with the S&P 500 index down 4.3% as of this writing. But the Marriott plunge was certainly exceeding the market's drop by a wide margin. 

Now what

The data breach comes at a bad time for Marriott given the sharp drop in demand at the brand's hotels. Shares of Marriott stock are already down 55% in 2020, and today's drop puts them near 52-week lows. Long-term, this breach probably won't cost the company much business, based on previous breaches, but it's not the kind of news the company needs at the moment and certainly isn't helping consumer confidence in the hotel business. 

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