Marriott International Reports 9% Increase in Third Quarter 2015 Results

By BW Hotelier MARRIOTT INTERNATIONAL, Inc reported third quarter 2015 results. Third quarter 2015 net income totalled USD 210 million, a nine-per cent increase over 2014 third quarter net income.- Diluted earnings per share (EPS) in the third quarter totalled USD 0.78, a 20 per cent increase from diluted EPS in the year-ago quarter.- On July 29, 2015, the company forecasted third quarter diluted EPS of USD 0.72 to USD 0.76. Arne M. Sorenson, President and Chief Executive Officer of Marriott International, (see photo) said, ’Our company posted solid performance in the third quarter.- North American system wide RevPAR rose over 4 per cent despite the impact of unfavourable holiday shifts on our group business compared to the year-ago quarter.- Our hotels are full with occupancy at nearly 78 per cent allowing us to continue to raise rates and reduce lower-rated business to drive RevPAR. ’Our global development pipeline continues to increase, reaching more than 260,000 rooms at the end of the quarter as owner and franchisees continue to choose our brands.- Combined, our pipeline and open rooms exceed one million rooms worldwide.- Recently unveiled in the U.S., Moxy and AC Hotels have a combined five hotels open and 82 hotels signed or approved domestically.- Our newest brand, Delta Hotels, expects to open its first U.S. property later this year, a conversion from a competitor’s brand. ’Our asset-light business model continues to deliver significant profit growth with modest capital requirements, yielding outstanding return to shareholders.- For the full year 2015, we expect to return more than USD 2.25 billion to shareholders through dividends and share repurchases, a record, which would bring our total return to shareholders to nearly USD 8 billion over the last 5 years.- Over the last 12 months, our return on invested capital has totalled 47 per cent. ’For 2016, we expect system wide constant dollar RevPAR will increase 4 to 6 per cent in North America, outside North America and worldwide.- Our group bookings for our North American full-service hotels for 2016 are up more than 7 per cent with about 75 per cent of expected group business volume booked thus far. ’Given our strong development pipeline, we anticipate our number of rooms will increase 7 to 8 per cent, gross, in 2015, including the 9,600 rooms from the Delta acquisition, accelerating to 8 per cent, gross, in 2016.- Nearly 40 per cent of our more than 260,000 room pipeline is already under construction.’ For the 2015 third quarter, RevPAR for worldwide comparable system wide properties increased 4.5 per cent (a 2.2 per cent increase using actual dollars). International comparable system wide RevPAR rose 6.2 per cent (a 4.0 per cent decline using actual dollars) in the third quarter. -International RevPAR growth was helped during the quarter by the earlier start of Ramadan and very strong demand in Europe. Marriott added 68 new properties (10,253 rooms) to its worldwide lodging portfolio in the 2015 third quarter, including Mandapa, A Ritz-Carlton Reserve in Indonesia and The Hotel Lucerne, Autograph Collection in Switzerland.- Twenty-one properties (2,596 rooms) exited the system during the quarter.- At quarter-end, the company’s lodging system encompassed 4,364 properties and timeshare resorts for a total of 750,000 rooms. The company’s worldwide development pipeline totalled 1,591 properties with more than 260,000 rooms at quarter-end, including nearly 600 properties with roughly 95,000 rooms under construction and over 100 properties with approximately 20,000 rooms approved for development, but not yet subject to signed contracts. Worldwide comparable company-operated house profit margins increased 50 basis points in the third quarter with higher room rates, improved productivity, and lower food and utility costs.- House profit margins for comparable company-operated properties outside North America increased 60 basis points and North American comparable company-operated house profit margins increased 40 basis points from the year-ago quarter. For the 2015 fourth quarter, the company expects worldwide comparable system wide RevPAR to increase 4 to 6 per cent on a constant dollar basis.- Outside North America, the company expects comparable system wide constant dollar RevPAR to increase 3 to 5 per cent.- Compared to the fourth quarter RevPAR guidance provided on July 29, today’s fourth quarter outlook for our international regions assumes more moderate RevPAR growth in the Asia Pacific and Middle East and Africa regions. -For North America, the company expects comparable system wide RevPAR will increase 5 to 7 per cent on a constant dollar basis.- Based on early fourth quarter transient RevPAR trends, North American RevPAR is likely to increase at the low end of the guided range. The company anticipates gross room additions of approximately 7 to 8 per cent, or 6 to 7 per cent, net, worldwide for the full year 2015, including the 9,600 rooms from the acquisition of the Delta brand.