What To Make of Marriott’s Post-Pandemic Playbook

What to do with the Marriott Post-Pandemic Playbook?
The world's largest hotel company signaled Monday's transition from survival mode to a potential model to restore the coronavirus business.
Marriott offered some new loyalty incentives to drive bookings, while announcing repurchase of debt, which may indicate that crisis mode is leaving and travel restrictions are uncertain.
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Marriott plans to offer Marriott Bonvoy members who make award bookings in 5,500 participating open and participating hotels by July 30th for stays through July 31st only off-peak rates. The company also plans to improve the options for elite loyalty status by depositing night credits with each member's account, which is half the status requirement they acquired in 2019.
The measures are aimed at attracting Bonvoy members to a summer vacation when the hotel operators are only opening again after shutting down the corona virus.
“We want to support our loyal Marriott Bonvoy members who are starting to travel again, and we are pleased to announce that we are reducing the points required for award travel to over 5,500 of our hotels and accelerating our members' ability to reach a higher elite -Achieving status By the end of next year, we'll be depositing overnight credit into Elite member accounts, ”said David Flueck, Marriott's senior vice president of global loyalty, in a statement to Skift.
Bonvoy offers include some of the most expensive member accommodations to redeem award travel, including the Ritz-Carlton, Half Moon Bay, and St. Regis Bahia Beach Resort in Puerto Rico. Ambassador Elite members can also give someone Platinum Elite status.
Marriott has already extended Bonvoy loyalty status, which was acquired in 2019 through February 2022 due to coronavirus shutdowns and travel restrictions in its portfolio.
The latest loyalty game comes after a few catastrophic months for Marriott.
According to Arne Sorenson, CEO of Marriott, Coronavirus is well on the way to having negative effects that are worse than the September 11 terrorist attacks and the financial crisis combined. But Marriott also played a financial game on Monday morning to signal that the company could have more positive momentum.
Marriott announced a tender offer of up to $ 1 billion in outstanding debt. The company plans to purchase bonds due in October 2021 and in January, September and October 2022.
According to a filing with the U.S. Securities and Exchange Commission, Marriott sold $ 985 million in debt earlier this month and is not expected to mature until 2030. This debt issuance came after the company sold $ 1.6 billion of debt in mid-April and made $ 920 million in changes to American Express and JPMorgan Chase's trademarked credit card agreements.
Marriott declined to comment on Skift on Monday to buy back debt, but analysts see this as a sign that the company has gone beyond the last difficult months of trying to support liquidity.
"If anything, it means that Marriott feels more comfortable about its future prospects than it did a few months ago, as it is ready to spend $ 1 billion on debt buyback," said Ryan Meliker, president of Lodging Analytics Research & Consulting. "I would point out just a week later that if they buy back $ 1 billion in bonds, they could turn around and issue $ 1 billion in bonds. However, this indicates a positive rather than a negative direction for the company. "
The only way is (hopefully) up
Marriott is already seeing signs of a recovery in China and expects similar results in the US.
The company's entire Chinese portfolio of 350 hotels is reopening, and average occupancy has passed the 40 percent mark in early June, Sorenson said at a NYU webinar earlier this month. Given the high level of domestic travel in both the US and China, Sorenson expected both countries to recover faster than Europe.
The Marriott management team also stated that the Marriott Bonvoy loyalty program would be a key part of its recovery, including using the Bonvoy app as a way to participate in social distancing measures such as mobile check-in. The loyalty promotion on Monday is another signal for the Bonvoy-oriented approach to recovery.
"It will most likely be a practice that all major brands will adopt with these major loyalty programs," said Evan Weiss, chief operating officer of LW Hospitality Advisors. "I think they'll all try to use the leverage they can pull to induce demand."
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