By Ankit Ajmera
(Reuters) - U.S. hotel operator Marriott (O:MAR) missed already lowered estimates for first-quarter profit by a huge margin on Monday, as bookings plunged due to coronavirus-led lockdowns that kept a quarter of its hotels closed.
In line with Holiday Inn-owner IHG's announcement last week, the company said its bookings in Greater China improved in April as the world's second-largest economy gradually reopened for business.
But Marriott's shares, down 42% this year already, dipped another 4.5% as the company reported a 90% slump in the industry's closely-watched revenue per available room indicator in April.
"As the pandemic moved around the world, we saw global RevPAR fall sharply," Chief Executive Officer Arne Sorenson said. "These are extremely challenging times, but I am confident that we will be able to successfully navigate through them."
The COVID-19 pandemic has led thousands of holiday makers and business travelers to cancel bookings and stay at home to contain the spread of the deadly virus.
For the first quarter, Marriott reported a 22.5% decline from a year earlier in revenue per available room to $84.51.
Its worldwide development pipeline, however, still totaled nearly 3,050 hotels and about 516,000 rooms. More than 230,000 rooms in the pipeline were under construction as of the end of the first quarter.
Sorenson said occupancy at Marriott hotels in Greater China reached 25% in April, up from less than 10% in mid-February 2020, and said that was evidence of the resilience of travel demand.
Marriott's total debt jumped by about 12% to $12.23 billion in the quarter and the company said it had net liquidity of about $4.3 billion as of May 8.
Net income fell to $31 million, or 9 cents per share, in the three months ended March 31, from $375 million, or $1.09 per share, a year earlier. On an adjusted basis, Marriott earned 26 cents per share in the quarter.
Revenue slumped 7% to $4.68 billion.
Analysts on average had expected Marriott to earn 80 cents per share on revenue $4.03 billion, according to IBES data from Refinitiv.