Marriott CEO sees business travel in China growing again, even as US shows steady recovery

Marriott International

Marriott International, which has reopened all its hotels in China, is seeing a steady recovery in the United States, its biggest market.

Chief Executive Officer Arne Sorenson said, “It’s not just leisure travel growing, but it is business travel. Chinese are flying again.”

Sorenson said the occupancy rate in China was 40% currently, up from 7% to 8% in February, when COVID-19 started spreading.

In the United States, Marriott’s hotels that have remained open, crossed the 20% occupancy threshold and continue to see an improvement, Sorenson said.

The company had an occupancy rate of about 12% in North America in April, as 16% of its hotels closed temporarily.

However, Sorenson warned that it could take Marriott a few years to get back to levels of occupancy seen in 2019, when its global occupancy rate was 71%. The hotel chain has 350 outlets across China.

Last week Marriott had said the financial impact from the pandemic has been more severe for the hotel chain than 9/11 and the 2008 financial crisis combined.

The hotel group, which owns about 30 brands including Ritz-Carlton, St Regis and Sheraton, has extended furloughs for employees and reduced working weeks until early October.

“Given the company’s expectation that prior levels of business will not return until beyond 2021, the company anticipates a significant number of above-property position eliminations later this year,” it said in a statement.

Rival Hilton reopened all of its 255 hotels in China two weeks ago and introduced a CleanStay initiative to protect employees and guests.

The hotel and travel industry in China were among the first to be hit from the coronavirus outbreak, and look to be the slowest to recover as businesses and factories reopen across the country.

Last month, Shanghai Disneyland reopened its gates although it introduced strict social distancing rules and limited daily visitors to about 24,000, compared to its pre-pandemic level of 80,000.