Marriott CEO fears tough winter in Europe: Travel Weekly
As Covid-19 cases, hospitalizations and deaths continue to rise in markets around the world, Marriott International CEO Arne Sorenson has warned that the hospitality industry’s near-term outlook “has turned somewhat deteriorated, “although he added that encouraging vaccine news has meant” the medium to long term [outlook] got a little better. “
“The optimism about a vaccine has gotten much stronger,” Sorenson said, speaking during a question-and-answer session at the Morgan Stanley Virtual Global Consumer & Retail conference on Tuesday. “We can sit here and say with a greater level of confidence that maybe a month or two ago that in 2021 we should see a shift towards an environment in which the virus recedes into the rearview mirror. “
Nonetheless, Sorenson stressed that the next few months will remain difficult, with Europe in particular bracing for a difficult winter.
“With the number of viruses on the rise again there and governments more inclined to reimpose restrictions, I suspect that November [hotel numbers] won’t look good in Europe, and the next two months won’t be good, “he said.” It’s probably one of the weakest large markets in the world. “
Sorenson added that Marriott’s largest volume of hotel closures are currently in Europe. As of December 1, the group had fewer than 500 Marriott-flagged properties that remain closed due to the pandemic around the world, up from around 2,000 at the height of the pandemic.
In contrast, Sorenson said China “continues to be the brightest major market” for Marriott globally, with business approaching 2019 levels thanks to a relatively strong economy and a robust domestic travel industry.
Marriott International CEO Arne Sorenson said China “continues to be the brightest big market” for the company globally. Above, the JW Marriott Sanya Haitang Bay Resort & Spa.
Meanwhile, Sorenson predicted that the hospitality industry as a whole is likely to experience a wave of permanent shutdowns in the wake of the pandemic.
“We will probably see, for the industry, more hotels that will never reopen after this crisis than we have had in previous crises, due to the depth of [the Covid-19 situation],” he said.
Still, with the bulk of Marriott’s projects under construction still on track to open in 2021 and 2022, the company expects gross room growth to continue over the next several years. Sorenson said the number of new rooms joining the Marriott system in the short term should not be “that different from what we were experiencing before the pandemic.”
What the industry pipeline will look like beyond 2022, however, remains a question mark.
“You’re going beyond 2022 into 2023 and 2024 – if you look at that realistically, you should say there will be fewer starts than we would have otherwise,” Sorenson said. “How much less and how long [that is the case] somewhat depends on the form of the recovery, which we obviously cannot yet know for sure. But that would suggest that gross room openings will start to decrease a bit as we approach 2023 and 2024.