Plagued by the COVID-19 pandemic-led crisis, Marriott Vacations Worldwide Corporation
(VAC - Free Report
) suspended operations and amenities in all its North America sales centers for two weeks starting Mar 23, 2020. Moreover, the company is shutting down its branded North America vacation ownership resorts for the next 30 days effective Mar 25, 2020.
With business and travel operations being restricted at an accelerating pace, the company’s decision is in sync with various governmental mandates and advisories.
Notably, the travel industry is experiencing the worst phase in the past several years. Marriot Vacations already closed its theme parks and ski resorts. Consequently, leisure events are facing cancelations while public beaches are closing down. Other major hoteliers like Wyndham Hotels & Resorts, Inc. (WH - Free Report
) , Hyatt Hotels Corp. (H - Free Report
) and Marriott International, Inc. (MAR - Free Report
) are also bearing the brunt of the coronavirus outbreak.
So far this year, shares of the company have declined 59.6% compared with the industry
’s fall of 44.8% and the S&P 500’s drop of 30.2%.
Strategies Implemented to Fight COVID-19
Given the widespread and profound nature of the business, Marriott Vacations suffered massive setbacks in occupancy, rentals and contract sales due to the COVID-19 impact. As a result, the company initiated certain actions to offset the negative impact.
This includes furloughs, reduced work hours and a 50% salary cut in the company's executive leadership team. The company also drafted plans to curb investment in capital expenditures and inventory. Also, it suspended share repurchases.
Nonetheless, the company remains confident about offsetting this downturn on the back of contingency plans, strong revenue-building capacities and the ability to respond appropriately to market conditions.
Marriott Vacations president and CEO Stephen P. Weisz stated, "Thanks to the resilience of our business model and the extremely difficult decisions we are making, I firmly believe that we will come through this an even stronger company."
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