Marriott shares soar on back of strong first quarter
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Marriott shares soar on back of strong first quarter

Marriott International, the world’s largest hotel and hospitality group, reported earnings for the first quarter of 2017 this week, wowing investors and sending its stock price up. The company beat earnings estimates significantly, returning $1.01 per share against forecasts of $0.90. It also saw a big beat on revenue, reporting a figure of $5.56 billion for the three months against expectations of $4.91 billion. Looking at that revenue figure year-on-year, it translates into a massive gain of 47% since the first quarter of 2016.

Marriot’s share price has surged since the results were posted

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SOURCE: Yahoo Finance

In the world of luxury hoteliers, RevPAR is an important metric. This stands for ‘Revenue Per Available Room’ and is, as the name would suggest, a measurement of a hotel’s capacity for monetization. Marriott’s president and CEO, Arne Sorenson, took the opportunity to update investors on the earning call:

“Across our company worldwide systemwide RevPAR increased 3.1% in the first quarter with a nearly 2 percentage point improvement in occupancy. Worldwide RevPAR index rose for both legacy Marriott and legacy Starwood portfolios, increasing nearly one full point on a combined basis. Our operating teams kept their eye on the ball translating RevPAR growth into 100 basis points of higher house profit margin. We added more than 17,000 rooms in the quarter and increased the development pipeline by nearly 10,000 rooms.”

He added more generally: “We were pleased by our performance in the quarter across the board,” and said that the group “continue to make great process on integrating the Starwood and Marriott lodging businesses, gaining efficiencies at both the corporate and property levels.”

Disclosure

Dominion holds Marriott International in its Global Trends Luxury Fund.


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