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• Unlike this time, it took hotel industry almost five years to get pricing power back after 2001 terrorist attacks and 2008 global financial crisis
• Marriott’s US business generated April revenues in line with same month in 2019
Marriott International Inc (NASDAQ: MAR) will likely start buying back its shares this year as travel demand is returning to normal after the COVID-19 pandemic.
Earlier this month, the hotel operator said it would resume its dividend and share repurchasing program.
Chief Executive Officer Tony Capuano on Tuesday reiterated the plan in a Bloomberg TV interview at the World Economic Forum in Davos, Switzerland, as pricing power has returned quickly.
Marriott’s forward summer bookings into Europe are the strongest ever, with luxury room rates up 27% in the first quarter, Capuano told Bloomberg.
“We talked a little bit in the earnings call about considering share repurchase,” he said.
“We’ll continue to look. If you look at the way we have come out of other downturns, we have started with the dividend then pivoted to share repurchase.”
The coronavirus pandemic and lockdowns in 2020 hit the hotel industry the hardest as governments worldwide shut off travel to limit the spread of COVID-19.
Capuano told Bloomberg that while the revenue generated by each available room across Marriott’s global portfolio was down around 9% in March compared to pre-pandemic levels, the US business generated April revenues that were in line with the same month in 2019.
The CEO said it took the industry four to five years to get its pricing power back after previous downturns following the September 11, 2001, terrorist attacks and the global financial crisis.
“It has taken less than two years this time,” Capuano said.
Picture Credit: USA Today
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