Marriott revenue rise fails to meet market expectations

Marriott International has seen revenue rise to $5.35 billion in the second quarter, up from $5.21 billion a year ago.

The figure was, however, below market expectations, seeing shares in the company fall four per cent.

At the same time, Marriott reported net income of $610 million for the period, a 25 per cent increase from prior year results.

Second quarter adjusted net income at the hotel giant totalled $619 million, a 46 per cent increase over last year.

Arne Sorenson, president and chief executive officer of Marriott International, said: “We were pleased with our performance in the quarter across the board. 

“Worldwide constant dollar RevPAR grew nearly four per cent in the second quarter, with particularly strong transient demand in many markets outside North America. 

“In North America, solid group business allowed us to drive higher room rates in the quarter.”

Second quarter 2018 comparable systemwide constant dollar RevPAR rose 3.8 percent worldwide, 5.7 percent outside North America and 3.1 percent in North America, Marriott said.

At the end of the quarter, Marriott’s worldwide development pipeline increased to roughly 466,000 rooms, including approximately 41,500 rooms approved, but not yet subject to signed contracts.

Sorenson added: “Our owners opened more than 82,000 rooms over the last 12 months, yielding net rooms growth of 5.7 per cent. 

“Over 40 per cent of these gross room additions are located outside North America and more than one-third are in upper-upscale and luxury tiers. 

“Our development pipeline increased to roughly 466,000 rooms at quarter-end.”

Marriott repurchased 6.2 million shares of the company’s common stock for $850 million during the second quarter.

Year-to-date through August 6th, the company has repurchased 14.1 million shares for $1.9 billion.

“Since we acquired Starwood, we have recycled capital totalling nearly $1.8 billion, exceeding our goal of recycling $1.5 billion by year-end 2018,” added Sorenson.

“For full year 2018, we expect to return more than $3.1 billion to shareholders through share repurchases and dividends. 

“To date this year, we have already returned $2.2 billion to shareholders.”

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