Surging demand pushes Marriott back into profit

Hotel News - 07/10/2010

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Marriott International has seen its performance return to profit in the third quarter of the year, thanks to a recovery in both business travel and tourism. The major hotel group reported on Wednesday that it generated profits of $83 million, or 22 cents per share. This compares well with the same period last year, when it lost $466 million, or $1.31 per share.

Revenue in the quarter was at $2.65 billion, up from $2.47 billion in the same quarter of 2009. The average forecast from a range of analysts surveyed by FactSet Research had estimated profit for the quarter at 23 cents per share on income of $2.65 billion.

Marriott’s RevPar, or revenue per available room, was up by 9 per cent. In North America, RevPar rose by 7.2 per cent. Internationally, it was up by 12 per cent. The average daily room rate rose marginally, by 1.8 per cent. Marriott said it opened 5,000 rooms in the quarter, 2,000 of which were abroad.

J.W. Marriot Jr., CEO of the group, said the company was enjoying stronger demand for leisure and corporate travel. He added that Marriott was leading the industry in the USA when it came to achieving retail price increases. Marriott is forecasting comparable system-wide RevPar to expand globally by between 6 per cent and 8 percent in the last quarter of the year. It also expects earnings in that quarter to hit 33-36 cents per share.

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