Q2 REVIEW
CHINA SYNDROME
CHINA TROUBLE DRAGS DOWN MARRIOTT Q2 PERFORMANCE , FULL-YEAR OUTLOOK .
By DAVID EISEN
Not that your memory needs to be jogged , but COVID-19 brought the hotel industry to its knees — closures , layoffs , debt headaches , a host of issues . What you may not recall is that China , through its zero-COVID policy that used strict lockdowns and community-wide testing to try and mitigate transmission ( it has since been deemed a failure ), was the first country to show a bounce-back in hotel performance .
In summer 2021 , STR observed : “ Travel in China has quickly rebounded in both the leisure and business travel segments . Sure , performance declines have occurred during lockdowns , but rebounds have quickly followed , and through the first half of 2021 , hotel performance has remained pretty much near normal based on the market ’ s historical trends .”
That was then , this is now . As a Truist note put it : “ China is experiencing ‘ revenge travel ’ fatigue following the re-opening a year ago . It wrote that in relation to Marriott International ’ s second-quarter earnings , which , on a global scale , were good , minus Mainland China , where revenue per available room declined roughly 4 % in the quarter , “ as macroeconomic pressures led to softer domestic demand ,” said Marriott International President and CEO Tony Capuano .
China is Marriott ’ s second-largest market and any fragility there ripples through the entire system . It ’ s weight that much that Marriott has guided down its full-year RevPAR outlook . “ As we look ahead to the full year , we are narrowing our global RevPAR range to 3 % to 4 % growth , largely due to anticipated continued weakness in Greater China ,” Capuano said , adding that
6 hotelsmag . com September 2024