As Marriott International prepares to take on the challenges and opportunities of 2021, the unexpected death of President and CEO Arne Sorenson has dampened some spirits, but company leaders said they are ready to carry on.

Marriott’s top executives began the company’s fourth-quarter and full-year 2020 earnings call with analysts by sharing memories of their time spent with Sorenson.

Executive Vice President and Chief Financial Officer Leeny Oberg recalled Sorenson’s penchant for going on early morning runs, before handling the business of the day, with the associates of hotels he stayed in. She said he always found a way to connect with each person, asking about their families, goals and points of view about their markets.

“You could tell he fed on these connections with people and that he cared about them deeply,” she said. “I learned so much from him, and I’ll miss him tremendously. We’re all committed to honoring our incredible leader by building on his legacy.”

Stephanie Linnartz, group president of consumer operations, technology and emerging businesses, said she accompanied Sorenson to the World Economic Forum in Davos, Switzerland, for the past six years. The first year, she said she stuck closely by Sorenson's side, taking in every meeting and session he did.

“The second year we went, pretty much as soon as we arrived, he pushed me out of the nest, so to speak,” she said. “He encouraged me to schedule my own meetings, to do my own media interviews. He believed I was ready, and in typical Arne fashion, he empowered me to grow.”

After Marriott acquired Starwood Hotels & Resorts Worldwide in 2016, Sorenson wanted the senior leadership team to do an eight-day whirlwind trip around the world to visit as many Starwood properties as possible to welcome the new associates to Marriott and introduce them to the company’s culture, said Tony Capuano, group president of global development, design and operations services.

On one flight to the Middle East, Sorenson woke the leadership team traveling with him and gathered them in the lounge at the back of the plane to talk and connect.

“This was classic Arne,” Capuano said. “He wanted to build a cohesive team that, while not afraid of some spirited debate, truly liked and respected each other, and it worked. Our jobs are infinitely easier, because we're all rowing in the same direction.”

Marriott has stated it will announce a new CEO within the next two weeks. In the meantime, Linnartz and Capuano will oversee day-to-day operations of the company’s business units and corporate functions.

As of press time, Marriott’s stock was trading at $130.13 per share, down 1.4% year to date. The Nasdaq Composite index was up 6.5% for the same period.

Marriott's full-year 2020 revenue per available room declined 60% worldwide with average occupancy slightly over 35%, compared to 73% for full-year 2019, Linnartz said. Occupancy and year-over-year RevPAR changes showed steady improvement from the trough in April through the summer and into the early fall. However, spikes in COVID-19 cases in many markets around the world led to a flattening recovery in the fourth quarter and the first weeks of 2021.

Recovery trajectories vary by region, she said. Mainland China, where there has generally been a sense the virus is under control, has led the recovery and exemplifies the resiliency of demand. Additional proof of the ability for demand to recover was evident in the Maldives and Dubai, United Arab Emirates, after governments eased travel entry restrictions.

During the fourth quarter, many countries reinstituted strict temporary limitations on travel and gatherings to slow the rising number of cases, she said.

“Demand in the U.S. was clearly sensitive to spikes in COVID cases and government travel advisories, as we saw during the traditionally travel-heavy holiday periods from Thanksgiving through New Year’s,” she said. “Many cities in Europe also shut down.”

Assuming wider distribution of effective vaccines, Marriott is optimistic the pace of recovery will accelerate throughout the year, Linnartz said. In the U.S. and Canada, there are promising signs of increased leisure and corporate bookings as well as sales leads on group business. While down year over year, transient booking pace and visits to direct booking sites have been improving.

“Occupancy over Presidents Day weekend was the strongest we have had for a long weekend since the beginning of the pandemic, led by leisure demand,” she said. “And we are also starting to see a bit of momentum behind special corporate bookings.”

Group revenue pace in the U.S. and Canada for 2021 is still down significantly compared to last year, but the declines are expected to be less severe in the second half of 2021, she said. Group bookings for January 2022 are already strong, and this business was booked at average daily rates 11% higher than in January 2020.

“These are encouraging signs that there is strong demand for travel in future years once real progress has been made in containing the virus,” she said.

In 2020, Marriott added nearly 63,000 rooms worldwide, amounting to rooms growth of 4.6% on a gross basis, Capuano said. Slower construction timelines, supply chain issues and delayed openings because of COVID-19 affected the number of new openings during the year.

The company added more than 18,000 rooms in the Asia-Pacific region, representing 8% gross rooms growth versus year-end 2019 and marking the only region in which Marriott opened more rooms than in 2019, he said.

On a net basis, including deletions of 1.5%, Marriott’s global distribution grew by 3.1% year over year, Capuano said. Deletions were generally in line with average levels over the past three years despite the number of hotels exiting the system for COVID-19-related reasons. Although signings for full-year 2020 were not as robust as expected at the beginning of the year, Marriott's overall pipeline continues to lead the industry with more than 498,000 rooms in development at year-end.

The company projects full-year rooms growth in 2021 could accelerate to 6%, he said. While there have been delays in construction starts and there may be delays in openings, 46% of the company’s pipeline is already under construction.

“Additionally, we anticipate benefiting from the backlog of openings that were pushed from 2020 to this year,” he said.

The company also expects meaningful growth from conversions this year as owners and their lenders seek the incremental top- and bottom-line benefits from being part of the Marriott system, Capuano said, citing a recently announced partnership with Sunwing Travel Group to add 19 properties to Marriott’s all-inclusive portfolio.