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The April jobs report shows a staggering loss of 20.5 million jobs, which is the largest monthly loss in recorded history. Employment dramatically dropped across almost every industry. The unemployment rate jumped to 14.7 percent, the highest since the Great Depression. The unemployment rate underestimates the amount of slack currently in the labor market. 5.1 million additional workers are now working part-time even though they prefer a full-time job. And the number of people outside the labor force grew by 6.6 million, showing many are currently discouraged to even try to find a job. Over the coming months, we should expect participation to increase again as the economy begins to open up.

The jump in average hourly earnings is not very meaningful as it rose for the wrong reasons. Large layoffs of mostly low-paid workers raised the average pay, as was the case in the Great Recession.

Dramatic as they are, the top line numbers are not very telling for what’s ahead. It is obvious that when many businesses are shut down, and many workers are not allowed to go to work, unemployment rates will skyrocket. As the economy opens, millions of people will go back to work. From that perspective, the report offers a somewhat positive statistic: A large majority, 78 percent, of the unemployed are on temporary layoff.

The report shows that some demographic groups are much harder hit than others due to the layoffs thus far. While the overall unemployment rate increased by 11.2 percentage points between February and April, this increase was 12.8 for women, 14.5 for Hispanic people, 19.3 for those age 20-24 and 20.9 for those age 16-19.

Over the past 12 months, the overall unemployment rate increased by 11.1 percentage points. This increase was just 6.1 percentage points for management, professional and related occupations, versus a 23.1 percentage point increase for service occupations. While the labor market slack increased for all types of workers, it much more dramatically increased for those without a college degree. 

Marriott International, Inc. reported first quarter 2020 results, which were dramatically impacted by the COVID-19 global pandemic and efforts to contain it (COVID-19).

Arne M. Sorenson, president and chief executive officer of Marriott International, said, “In the last few months we have seen the impact of COVID-19 spread throughout our business in an unprecedented way.  Worldwide RevPAR¹ began the year with a strong 4.6 percent growth rate for January, excluding Greater China, where COVID-19 was already impacting results.  For the first two months of the year, worldwide RevPAR grew 3.2 percent, excluding the Asia Pacific region.  As the pandemic moved around the world, we saw global RevPAR fall sharply and, in April, worldwide RevPAR declined approximately 90 percent.  Currently, roughly a quarter of our worldwide hotels are closed.

“The resilience of travel demand is evident in the improving trends we see in Greater China.  Occupancy at our hotels in the region reached 25 percent in April, up from less than 10 percent in mid-February 2020.

“Looking at our occupancy and booking trends, it appears that lodging demand in most of the rest of the world has stabilized, albeit at very low levels.  Occupancy was around 20 percent over the past two weeks in North American limited-service hotels, benefitting from leisure and drive-to demand.

“As national, state and local restrictions around travel and business are gradually relaxed, we are preparing to welcome back our associates and guests.  A large, and very important, part of that process is addressing their health and safety concerns while on property.  To that end, we are rolling out a multi-pronged platform to elevate cleanliness standards and hospitality norms to respond to the new health and safety challenges presented by the current pandemic environment. 

“Hotel owners continue to show their preference for our brands.  Rooms signed during the quarter were in line with the year ago quarter, and our development pipeline grew slightly to nearly 516,000 rooms, with 45 percent under construction.  At the end of the first quarter, our rooms distribution around the world in 134 countries and territories had grown by 4.4 percent compared to one year prior.  While we expect COVID-19’s dramatic impact on the global economy will likely result in significantly lower new room openings than we had budgeted for 2020, we are already seeing an uptick in owner interest in discussing conversions to our brands.

“We have taken substantial steps to preserve liquidity and mitigate the impact of these extremely low levels of demand.  In addition to reducing our operating expenses dramatically, in mid-April we issued $1.6 billion of senior notes and, last week, we announced amendments to our existing co-brand credit card agreements with JPMorgan Chase & Co. and American Express, raising $920 million of additional liquidity.  We are confident we have sufficient resources to manage through this evolving situation.

“Our thoughts are with everyone who has been impacted by the pandemic.  These are extremely challenging times, but I am confident that we will be able to successfully navigate through them.”

First Quarter 2020 Results
Marriott’s reported operating income totaled $114 million in the 2020 first quarter, compared to 2019 first quarter reported operating income of $510 million.  Reported net income totaled $31 million in the 2020 first quarter, compared to 2019 first quarter reported net income of $375 million.  Reported diluted earnings per share (EPS) totaled $0.09 in the quarter, compared to reported diluted EPS of $1.09 in the year-ago quarter.  Reported results in the 2020 first quarter included impairment charges, bad debt expense, and guarantee reserves of $193 million pretax ($148 million after-tax and $0.45 per share), related to COVID-19.

Adjusted operating income in the 2020 first quarter totaled $192 million, compared to 2019 first quarter adjusted operating income of $655 million.  Adjusted operating income in the 2020 first quarter included impairment charges, bad debt expense, and guarantee reserves of $180 million, related to COVID-19.

First quarter 2020 adjusted net income totaled $85 million, compared to 2019 first quarter adjusted net income of $482 million.  Adjusted diluted EPS in the first quarter totaled $0.26, compared to adjusted diluted EPS of $1.41 in the year-ago quarter.  These 2020 first quarter adjusted results included impairment charges, bad debt expense, and guarantee reserves of $138 million after-tax ($0.42 per share), related to COVID-19.  Adjusted results exclude merger-related costs and (recoveries) charges, cost reimbursement revenue, and reimbursed expenses.  See page A-2 for the calculation of adjusted results.

Base management and franchise fees totaled $629 million in the 2020 first quarter, compared to base management and franchise fees of $732 million in the year-ago quarter.  The year-over-year decline in these fees is primarily attributable to RevPAR declines related to COVID-19, partially offset by unit growth and an increase in other non-RevPAR related franchise fees.  Other non-RevPAR related franchises fees in the 2020 first quarter increased $7 million compared to the year-ago quarter, largely due to an increase in residential branding fees.  Credit card branding fees were roughly flat year over year.

Marriott recognized no incentive management fees in the 2020 first quarter, compared to incentive management fees of $163 million in the year-ago quarter.  While many of the company’s managed hotels earned incentive management fees in the quarter under the terms of their contracts, no incentive fees were recognized under accounting standards due to the significant uncertainty created by COVID-19 as to the extent to which the company will be entitled to such fees on a full year basis.

Contract investment amortization for the 2020 first quarter totaled $25 million, compared to $14 million in the year-ago quarter.  The year-over-year change largely reflects impairments of investments in management and franchise contracts.

Owned, leased, and other revenue, net of direct expenses, totaled $8 million in the 2020 first quarter, compared to $50 million in the year-ago quarter.  Compared to the year-ago quarter, the decline in results is primarily attributable to RevPAR declines related to COVID-19.

Cost reimbursement revenue, net of reimbursed expenses totaled a loss of $80 million in the quarter, compared to a $136 million loss in the year-ago quarter.  The year-over-year improvement largely reflects the results of the loyalty program, which had lower marketing and redemption expenses.

Depreciation, amortization, and other expenses for the 2020 first quarter totaled $150 million, compared to $54 million in the year-ago quarter.  The year-over-year change largely reflects a $90 million impairment charge associated with several leased hotels in North America.

General, administrative, and other expenses for the 2020 first quarter totaled $270 million, compared to $222 million in the year-ago quarter.  Expenses in the 2020 first quarter include $65 million of bad debt expense due to higher projected loss rates and $14 million of guarantee reserves. 

In the 2020 first quarter, the company incurred $15 million of expenses and recognized $17 million of insurance recoveries related to the data security incident it disclosed on November 30, 2018.  The expenses and insurance recoveries are reflected in either the reimbursed expenses or merger-related costs and (recoveries) charges lines of the Income Statement, both of which have been excluded from all adjusted results. 

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled $442 million in the 2020 first quarter, compared to first quarter 2019 adjusted EBITDA of $821 million.  First quarter 2020 adjusted EBITDA included $79 million of bad debt expense and guarantee reserves, related to COVID-19.  See page A-8 for the adjusted EBITDA calculation.

Selected Performance Information
The company added 88 new properties (14,525 rooms) to its worldwide lodging portfolio during the 2020 first quarter, including nearly 2,100 rooms converted from competitor brands and approximately 7,200 rooms in international markets.  Eighteen properties (3,670 rooms) exited the system during the quarter.  At quarter-end, Marriott’s global lodging system totaled more than 7,400 properties and timeshare resorts, with nearly 1,392,000 rooms.

At quarter-end, the company’s worldwide development pipeline totaled 3,035 properties with nearly 516,000 rooms, including 1,238 properties with over 230,000 rooms under construction and 149 properties with more than 24,000 rooms approved for development, but not yet subject to signed contracts.

In the 2020 first quarter, worldwide RevPAR declined 22.5 percent (a 22.7 percent decline using actual dollars).  North American RevPAR declined 19.5 percent (a 19.5 percent decline using actual dollars), and international RevPAR declined 30.4 percent (a 31.3 percent decline using actual dollars).

Balance Sheet and Liquidity
At quarter-end, Marriott’s total debt was $12.23 billion and cash balances totaled $1.76 billion, compared to $10.94 billion in debt and $225 million of cash at year-end 2019.

In April 2020, the company issued $1.6 billion of Series EE Senior Notes due in 2025 with a 5.75 percent interest rate coupon.  In early May, the company raised $920 million in additional liquidity through amendments to its co-brand credit card agreements with JPMorgan Chase & Co. and American Express. The company expects to use the net proceeds from these transactions for general corporate purposes, including paying near-term debt maturities.

As a result of the debt issuance and amendments to its co-brand credit card agreements, the company’s net liquidity has increased to approximately $4.3 billion as of May 8, representing roughly $3.9 billion in cash and cash equivalents, and $1.3 billion of unused borrowing capacity under its revolving credit facility, less $0.9 billion of commercial paper outstanding. 

The company repurchased 1.0 million shares of common stock in the 2020 first quarter for $150 million at an average price of $145.42 per share.  The company halted further share repurchases in February and suspended its quarterly dividend beginning in the second quarter.

Georgia gas prices  increased slightly at the pump compared to a week ago.  Georgia motorists are now paying an average price of $1.64 per gallon for regular unleaded gasoline. Monday’s state average is 3 cents more than a week ago, 8 cents less than last month, and $1.05 cents less than this time last year.

It now costs motorists $24.60 to fill a 15-gallon tank of gasoline; that is $16.50 less than what motorists paid in April of 2019, when pump prices hit their peak of $2.74 per gallon.

“As some states begin to re-open businesses, those states will likely see demand increase and pump prices will likely follow suit,” said Montrae Waiters, spokeswoman, AAA – The Auto Club Group. “Gas price fluctuation will continue across the country in coming weeks, especially as more states re-open and motorists begin driving more.”

Crude Oil

Since last Monday, the national average for a gallon of regular gasoline has increased by 6 cents to $1.84. The Energy Information Administration (EIA) released new data that showed demand for gasoline increased by 800,000 barrels a day to 6.7 million barrels a day last week, which is 3.2 million barrels a day less than last year at this time. The boost in demand continues to push pump prices up around the country, as more states re-open businesses. Gas demand is expected to continue to grow, leading pump prices to continue their ascent for the coming weeks.

At the close of Thursday’s formal trading session, WTI decreased by 44 cents to settle at $23.55 per barrel. Although crude prices took a slight back step, they are expected to gain some steam this week, as the market continues to believe that crude demand will increase as more states re-open businesses. However, global crude demand is expected to remain low due to COVID-19, tempering price increases.

 Regional Prices

Atlanta ($1.64)

Most expensive Georgia metro markets –Hinesville-Fort Stewart ($1.75), Savannah ($1.71) and Gainesville ($1.66).

Least expensive Georgia metro markets – Athens ($1.51), Rome ($1.52) and Warner Robins ($1.55).     

CURRENT AND PAST PRICE AVERAGES (Regular Unleaded Gasoline)    

	Sunday	Saturday	Week Ago	Month Ago	One Year Ago	2019 Low	2019 High	Record High
National	$1.84	$1.83	$1.78	$1.88	$2.87	$2.23 (January)	$2.90 (May)	$4.11   (7/17/2008)
Georgia	$1.64	$1.63	$1.61	$1.72	$2.69	$2.04 (January)	$2.74 (April)	$4.16   (9/15/2008)

 

Georgia Organics and the Jamestown Charitable Foundation, a public charity from the  real estate investment and management company behind Ponce City Market, have collaborated to launch Food Fight GA.

With a mission to relieve food and income insecurity for food service professionals and Georgia’s small farmers during the COVID-19 pandemic, the new initiative is providing
restaurant workers with weekly grocery boxes including ingredients sourced from Georgia farms and freshly baked bread from Root Baking Co. At this time,
the program is open to current and former staff at Bacchanalia,  Floataway Cafe, Staplehouse, Star Provisions and Georgia Organics Farmer Champion restaurant partners, including BoccaLupo, The Deer & The Dove and Miller Union.

“Restaurants think of their teams as family, not to mention the farmers from whom we source and who become our friends, and the Atlanta food community is doing what we can to make sure our people are safe and cared for during this uncertain time,” said Chris Wilkins, Owner & Head Baker at Root Baking Co., who was instrumental in ideating the program from its inception and is providing fresh baked loaves made from organic, locally sourced flour for every box.

“The food community is at the heart of our city, and restaurants and small farms have been especially impacted by this crisis,” says Michael Phillips, President of Jamestown. “We are grateful to partner with Georgia Organics to take action now against food and income insecurity in these affected industries, while providing fresh, healthy ingredients for restaurant staff to feed their families.”

By bringing fresh produce to restaurant workers, Food Fight GA is simultaneously helping to support Georgia’s local food system by mitigating farmers’ lost revenue due to COVID-19. Many small Georgia farms derive revenue by selling to restaurants who are now closed or operating on a limited model of takeout or delivery in response to the crisis. The program sources directly from farms who are existing sellers to the participating restaurants or are members of the Georgia Organics Farm to Restaurant Cohort program. Participating farms include, but are not limited to Ellijay Mushrooms, Hickory Hill Farm, Levity Farms, Pinewood Springs Farm, Rodgers Greens & Roots Farm, Snapfinger Farm, West Georgia Farmer’s Cooperative and Woodland Gardens.

“During the program’s pilot in the last two weeks, Food Fight GA put nearly $10,000 back into the hands of farm partners and has provided approximately 200 produce boxes to Atlanta restaurant workers each week,” says Alice Rolls, Executive Director of Georgia Organics. “Thanks to donors like Jamestown Charitable Foundation and Ponce City Market, we’re hoping to expand the program to feed more food service professionals and support additional farms across the state over the coming weeks.”

Food Fight GA is now accepting donations from the public here via PayPal, and restaurants interested in joining the initiative can learn more  here.

The post Food Fight GA launches to help food service professionals and small farmers appeared first on Atlanta INtown Paper.

Dr. Lisa Herring has officially been appointed as the new superintendent of Atlanta Public Schools. The Atlanta Board of Education voted to hire Herring at a special called virtual meeting late Monday afternoon.

The decision was not unanimous with Nancy Meister casting the lone dissenting vote.

Herring’s three year contract will begin July 1, but she will have a consulting role with APS as she transitions from superintendent of Birmingham City Schools to Atlanta.

Board Chairman Jason Esteves said current superintendent, Meria Carstarphen, would remain in charge through June 30. The goal is to ensure a continuity of service so there is no disruption of service,” Esteves said.

“I’m grateful for your vote of confidence,” Herring told the board after the vote. “I understand that these are times when many may pause and have curiosity or anxiety around this transition. I want to balance that with some reassurance. I will bring steadfast leadership focused on transition through and out of the pandemic while keeping our scholars and families in mind first.”

The decision not to extend Carstarphen’s contract after six years has been a source of contention with the community and inside the school board itself. Meister said she believed the board was being “careless” in its decision to not renew Carstarphen’s contract during the COVID-19 pandemic.

“Great things have happened for our kids and great things continue to happen,” Meister said of Carstarphen’s tenure. “It’s my opinion that we’re making a change for change sake. And we’re doing it at the worst possible time. In the middle of a pandemic, it’s a poor choice and lacks thoughtfulness for the parents of Atlanta and Birmingham.”

Those who championed Carstarphen cited her leadership in turning APS’s reputation around after the standardized test cheating scandal rocked the city, for boosting morale, and improved test scores. On the other hand, the Atlanta Federation of Teachers vilified Carstarphen’s move to outsource the daily operations of six underperforming schools to charter school groups.

Herring will make an annual base salary of $320,000, plus $2,000 a month for expenses.

The post School board hires Herring as new superintendent of Atlanta Public Schools appeared first on Atlanta INtown Paper.

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The Atlanta Bicycle Coalition will hold a virtual 10th anniversary celebration for Atlanta Streets Alive on May 20 from 5:30 to 6:30 p.m.

During the event, which will be held online at AtlantaStreetsAlive.com, ABC will announce its 2020 program and future plans, which includes increasing frequency for the open streets initiative. There will also be messages from the founders and key supporters and the unveiling of a commemorative t-shirt to help fund future Atlanta Streets Alive events.

“Since the very first route, Atlanta Streets Alive has provided first-hand experiences of what corridors designed for cars would be like if they were reclaimed for people” said Rebecca Serna, executive director of Atlanta Bicycle Coalition. “Over the last decade,
the demand for streets that let people move safely, easily, and sustainably has increased dramatically. We look forward to further championing safe and complete streets to create a more inclusive and thriving Atlanta.”

ABC is encouraging Atlantans to post their favorite Atlanta Streets Alive photos on Twitter and Instagram with the #AtlantaStreetsAlive hashtag and a sentence about how this
initiative has changed the way they experience the city.

ABC launched Atlanta Streets Alive in 2010 to show residents how activity and people-filled parts of the city could transform streets originally designed around automobiles. The program was inspired by an international open streets movement that aims to reclaim urban corridors by closing them to motorized traffic to promote healthy
living, strengthen local businesses and provide sustainable transportation options.

Since then, Atlanta Streets Alive has grown from a one-mile pilot event on Edgewood Avenue during its first year to multiple programs every year, drawing up to 100,000 people on average. To date, Atlanta Bicycle Coalition has hosted 29 Atlanta Streets Alive events with over 1.5 million participants on 83 miles of city streets.

For more details and to join the virtual event, please visit AtlantaStreetsAlive.com
or the Facebook event page.

The post Atlanta Streets Alive to hold virtual 10th anniversary celebration on May 20 appeared first on Atlanta INtown Paper.

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