Marriott International Inc., the
largest U.S. hotel company, said third-quarter profit dropped 18
percent as expenses rose and room rates fell. Earnings this
quarter will top analysts’ forecasts, the company said.
Profit from continuing operations in the quarter ended Sept.
12 fell to $93 million, or 38 cents a share, from $114 million,
or 45 cents, a year earlier. Revenue climbed 9.2 percent to $2.1
billion, Bethesda, Md.-based Marriott said in a statement.
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Early signs of a rebound in corporate travel spending
sparked the improved fourth-quarter outlook, according to
Marriott. The company cut its full-year earnings forecast in
July, blaming a three-year slump in business travel that had
caused room rates and occupancies to decline. Marriott is the
first big U.S. hotel company to report quarterly earnings.
“Companies have a greater demand for productivity from
their employees and they’re putting them on the road more,” said
Patrick McKeigue, an analyst at Independence Investments LLC, who
manages $10 billion, including shares of Marriott.
Marriott, which owns, manages or franchises about 2,600
hotels under Ritz-Carlton, Marriott, Fairfield Inn and other
names, expects fourth-quarter profit from continuing operations
of 60 cents to 62 cents a share. The average estimate of analysts
surveyed by Thomson Financial is 59 cents.
Shares of Marriott fell yesterday in New
York Stock Exchange composite trading. They have risen 36 percent
this year.
The average daily room rate in the third quarter fell 0.7
percent to $117.05 at Marriott’s owned and managed hotels in
North America, while occupancy rose 0.1 percent to 72.3 percent.
Revenue per available room, a measure of occupancy and room rate,
slipped 0.5 percent. Marriott manages or franchises most of its
hotels.
The company was expected to have profit of 38 cents a share
in the third quarter, the average estimate of analysts. A loss
from discontinued operations — a senior-living business the
company sold — made net income $92 million, or 37 cents.
An $11 million loss from discontinued operations in the year-earlier period made net income $103 million, or 41 cents.
Marriott is led by Chairman and Chief Executive J. Willard
“Bill” Marriott, 71, who succeeded his father J. William
Marriott Sr. as chief executive in 1972.
Among Marriott’s competitors, Hilton Hotels Corp. reports
earnings on Oct. 22 and Starwood Hotels & Resorts Worldwide Inc.
reports on Oct. 30.
Bloomberg News
