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Marriott Revenue Rises As It Bulks Up Global Hotel Presence

Marriott Revenue Rises As It Bulks Up Global Hotel Presence
An artist’s impression of part of the Fiji Marriott Resort being built at Momi Bay.
February 22
09:30 2015

Marriott reported better-than-expected fourth quarter earnings on Wednesday, sending shares higher in extended trading.

Net income rose 30 per cent to US$197 million, or US$0.68 per share, which beat Wall Street consensus estimates of US$0.65 per share and the company’s own previous guidance of US$0.62 to US$0.66.

Total revenue rose 11 per cent to US$3.56 billion, also beating consensus estimates of US$3.48 billion.

Revenue per available room, a common performance metric used in the hotel industry, increased more than six per cent.

Strength in Marriott’s North American hotel portfolio drove revenue, while currency headwinds were a drag on its international business.

The company said international system-wide revenue per available room was nearly five per cent in constant dollars, but actually increased only 0.5 per cent, despite positive trends like leisure demand in the Caribbean and Mexico and increasing travel to Egypt.

Global presence

Marriott is continuing to bulk up its global presence to drive growth.

It added over 46,000 rooms in 2014, including over 10,000 rooms associated with its acquisition of the Protea hotel portfolio, bringing its total footprint to 715,000 rooms across 79 countries.

It hopes to reach one million rooms before the end of this year.

“Today, we post both record earnings and unit growth and conclude 2014 with the strongest worldwide development pipeline of rooms in our history,” said CEO Arne Sorenson in a statement.

As of the end of the year, it had 240,000 rooms in its pipeline. Last month it announced plans to acquire Canada’s Delta Hotels and Resorts, which adds another 10,000 rooms.

Looking ahead, Marriott is calling for a five to  seven per cent rise in revenue per available room in 2015.

Shares of Marriott are up 59 per cent over the last 12 months, and popped four per cent to US$84.92 in after-hours trading.



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