(Bloomberg)—Marriott International Inc. will likely begin buying back shares this year as travel demand returns after the coronavirus pandemic.
The company, which said on May 4 that it would reinstate its dividend, is planning to start repurchasing shares again, Chief Executive Officer Tony Capuano said Tuesday in a Bloomberg TV interview at the World Economic Forum in Davos, Switzerland. Marriott’s forward summer bookings into Europe are the strongest ever and hotel pricing power has returned quickly with luxury room rates up 27% in the first quarter, Capuano said.
“We talked a little bit in the earnings call about considering share repurchase,” he said. “We’ll continue to look. If you look at the way we have come out of other downturns, we have started with the dividend then pivoted to share repurchase.”
The hotel industry was among the hardest hit as the coronavirus pandemic swept the world in 2020, shutting off travel as governments rushed to limit the spread. The build-up of savings by consumers forced to stay home and pent-up demand for leisure and hospitality has helped those companies weather the brunt of the pandemic.
The revenue generated by each available room across Marriott’s global portfolio was down about 9% in March compared to pre-pandemic levels, according to Capuano. The company’s US business generated April revenues from available rooms that were in line with the same month in 2019.
It took the industry four to five years to get its pricing power back after previous downturns like those following the September 11, 2001 terrorist attacks and the global financial crisis, Capuano said.
“It has taken less than two years this time,” he said.
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