Marriott International Tops Q4 Forecast (MAR)
Marriott International Inc. (NYSE: MAR) on Tuesday reported better than expected fiscal third-quarter results as revenue was bolstered by higher room rates amid rising international travel.
For the fiscal fourth quarter, the Bethesda, Maryland-based company reported that total revenue-per-available-room (ravPAR), a key gauge on hotel chain’s performance, climbed 6% even as room rates increased by 4%.
Marriott International, known for brands such as Ritz-Carlton, Courtyard and Residence Inn, anticipates that revenue-per- available-room is likely to grow 4% to 7% in the fiscal 2013.
The hotel operator said that it is maintaining a very conservative outlook due to fears over possible budget cuts or sequester which could impact the demand in North America.
“There is nothing in the business we can see today that would cause me to go out and say 4 percent revPAR growth, but March 1 is coming and we will have to see what Congress does,” said Laura Paugh , company’s spokeswoman in a statement.
Paugh also said that the Company was in talks with corporate customers to hike room rates by high single digit percentage; nevertheless congressional negotiations over the ‘fiscal cliff’ held up the process, added Paugh. Better demand from corporate customers has been the key driving force behind hotel industry’s rebound in North America. For Marriott International, revenue from corporate customers account for more than three quarters of entire revenue.
Net income during the quarter came at $181 million or 56 cents per share up 28 percent from $141 million, or 41 cents per share, in the year earlier quarter.
Excluding onetime items, adjusted or non-GAAP earnings stood at 56 cents a share. Revenue during the period rose 2% to $3.76 billion.
Analysts’ consensus estimate was for earnings of 55 cents a share on revenue of $3.66 billion, according to a data compiled by Thomson Reuters.