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Corporate ‘steadily improving’, says Marriott

Marriott International CFO Leeny Oberg said that the group was selling twice as many business nights as it was in April and May in the US, but was still looking to a vaccine to push demand.

Oberg said that lenders were adopting a “wait and see” approach in Caribbean, Latin America and Europe which was affecting the pace of deals.

Oberg added: “Deals are getting done, but they are taking longer to get done. I don't sense that it's a fundamental view that there's hotel deals not wanting to get done, but just more about the pace of them. In North America, it also depends on how the lenders are feeling and there is a slow, but steady demand, but still some cautiousness as lenders think about new deals.”

Commenting on conversions, the CFO said that she expected the company to get “at least our fair share”, but cautioned “even a small conversion cost can, in today's world, feel more momentous than it does in a normal environment”.

Corporate demand was described as “higher on the drive-to than on the flying, but steadily improving” with Oberg adding that “there's actually the possibility of additional corporate demand from remote work and the fact they want to get folks together who are working more remotely”.

Oberg confirmed that the company was still looking at a negative cash burn.

In relation to net rooms growth, Oberg said that it would depend on the speed at which there was “comfort about travel, and the banking system feeling good about putting the money out, because as you've seen, the pipeline we've still [is] strong [with] almost 50% of rooms under construction.

“There is no reason to think that we wouldn't be able to get back towards mid single-digit net rooms growth, but whether that [comes in] ’21, ’22, or ’23, I think again all depends on the pace of how quickly globally people feel comfortable traveling.”

Looking at current performance, Oberg, who was speaking on the J.P. Morgan Gaming, Lodging, Restaurant & Leisure Management Access Forum, said that the company had seen a 90% decline for global revpar in April to a 63% decline in August.

 

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