Marriott posts surprise profit on cost cuts, improved bookings

Marriott International Inc reported a surprise third-quarter profit, helped by cost cuts and a near doubling of occupancy rates in its North American hotels from the previous quarter as leisure travel rebounded on easing COVID-19 curbs.

While international travel continues to be affected because of border restrictions in many countries, travel within nations has picked up and resulted in a recovery in occupancy rates for hotel chains.

Marriott, which owns the JW Marriott and Ritz-Carlton brands, said 94% of its hotels around the world had resumed operations and demand continues to improve.

Occupancy rates in North America, its biggest market, rose to 37% in the third quarter ended Sept. 30, from 19.6% in the second quarter. Marriott said business and group travel was recovering more slowly.

Greater China was Marriott’s best-performing market in the reported quarter, as occupancy rates jumped to 61.4% from 35.5% in the second quarter.

Earlier this week, smaller rival Hilton Worldwide also said it had seen a gradual improvement in demand from a pandemic-induced slump after cost cuts helped the company post a surprise quarterly profit. Marriott’s total expenses fell 57.2% to about $2 billion in the reported quarter, while net profit dropped by 74% to $100 million, or 31 cents per share.

Excluding items, Marriott earned 6 cents per share, beating analysts’ expectation for a loss of 8 cents per share, according to IBES data from Refinitiv.

Revenue slumped 57.3% to $2.25 billion but topped Wall Street’s expectation of $2.23 billion.

Marriott’s shares were down about 1% at $99.85 along with the broader market, as investors awaited the U.S. presidential election result.