Marriot International profit misses estimate as labour costs rises

marriot

Global hospitality group, Marriot International said its first-quarter result that its earnings per share fell to $1.09, a 6 percent decrease from prior year results.

The First quarter adjusted diluted EPS totaled $1.41, a 5 percent increase over the first quarter of 2018 adjusted results.

First quarter 2019 comparable systemwide constant dollar RevPAR rose 1.1 percent worldwide, 1.9 percent outside North America and 0.8 percent in North America.

The company added nearly 19,000 rooms during the first quarter, including roughly 3,000 rooms converted from competitor brands and approximately 8,000 rooms in international markets;  At quarter‐end, Marriott’s worldwide development pipeline totaled nearly 2,900 hotels and approximately 475,000 rooms, including roughly 25,000 rooms approved, but not yet subject to signed contracts.

First quarter reported net income totaled $375 million, an 11 percent decrease from prior year results. First quarter adjusted net income totaled $482 million, a 1 percent decrease from prior year adjusted results.

Adjusted EBITDA totaled $821 million in the quarter, a 7 percent increase over first quarter 2018 adjusted EBITDA.

Marriott repurchased 6.7 million shares of the company’s common stock for $828 million during the first quarter. Year‐to‐date through May 8, the company has repurchased 8.1 million shares for $1.02 billion.

Arne M. Sorenson, president and chief executive officer of Marriott International, said, “Marriott’s performance in the first quarter was solid. Worldwide systemwide RevPAR for comparable hotels increased 1.1 percent, net rooms grew 5.3 percent, and gross fee revenue rose 6 percent. Despite modest RevPAR growth and higher labor costs, we increased North American house profit margins by 30 basis points and held worldwide house profit margins flat at our company‐operated hotels through cost synergies, leading to strong incentive management fee performance in the quarter. Worldwide systemwide RevPAR index increased 100 basis points with index gains in the U.S. at nearly the same level.

“We continue to build our company for the future. In the first quarter, we opened our 7,000th property, the 27‐story St. Regis Hong Kong. Year‐over‐year gross room openings accelerated to nearly 19,000 rooms, a first quarter record. Our development pipeline totaled approximately 475,000 rooms at quarter‐end, nearly 3 percent higher than a year ago. Marriott Bonvoy membership rose by 5 million to reach nearly 130 million members.

“Our results in the first quarter highlight the resiliency of our business model and the strength of our brands. Year‐to date through May 8, we have returned nearly $1.2 billion to our shareholders through share repurchases and dividends, and we continue to expect to return at least $3 billion for full year 2019.”

Leave a Reply

Your email address will not be published.