Marriott CEO Arne Sorenson told Bloomberg Television on
Tuesday that the U.S. government shutdown is wreaking havoc on business in the
Maryland-based hotelier's backyard, Washington, D.C.
"It varies from market to market," he said in an
interview at the World Economic Forum in Davos, Switzerland. "Washington,
of course, we are big -- that's our hometown. We have 150 hotels in the greater
Washington area. Business there is down double digits."
Marriott isn't the only hotelier suffering from the
shutdown. For the week ending Jan. 12, the D.C.-Maryland-Virginia region
registered the third-largest declines in each of the hotel industry's three key
performance metrics, according to STR.
Occupancy was down 20 percent to 47.4% compared with
the same week in 2018; average daily rate dropped 7.9% to $124.32; and revenue
per available room was down more than 26% to $58.89.
While January and February are generally slower times for
the D.C. hotel market, STR analysts noted that postponed trips among government
contractors and canceled group travel due to the government shutdown impacted
Marriott had a record number of organic signings in 2018 and
opened nearly 500 properties comprising more than 80,000 rooms around the
world, including a 200-room Moxy Hotels location in D.C.
A Jan. 11 note from Baird equity research analyst Michael
Bellisario said supply increases, a weaker convention calendar and reduced
lobbying activity had weighed on results in the market. With its property
concentration in the region, Marriott is more exposed than other hotel brands.
The hotel industry at large sits in a crucible of issues
surrounding the shutdown. Not only is it suffering from a slowdown in business
and government travel but also, given the number of foreign workers the U.S. hotel
industry employs, it is at the center of the issue driving the shutdown,
immigration. Should the shutdown lift in the short term, there are longer-term
industry interests in play, as well.
Aside from the government shutdown, however, Marriott
remains bullish on global travel going into 2019. Chief commercial officer
Stephanie Linnartz told Yahoo Finance that a growing middle class in a number
of strong markets and globe-trotting millennials will supply travelers for its
approximately 6,900 hotels.
On the negative side, she said, "political
uncertainty and stock market volatility" were concerns moving deeper into
the new year.
Source: Business Travel News