Marriott beats on earnings in first quarter
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Marriott beats on earnings in first quarter

Marriott International, the world’s largest luxury hotelier, reported mixed first quarter earnings last week. Although the company missed analysts’ expectations on revenue, it delivered a strong beat on earnings – and this was enough to send its share price higher.

Marriott’s share price has risen by 6% over the last 30 days

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Source: Yahoo Finance

Marriott said that revenue for the quarter came in at $5,006 million. This failed to meet analysts’ expectations of $5,753 million, but was still a 2% rise against the same quarter in 2017. However, when it came to earnings, the company had more positive news. Marriott said that adjusted earnings per share hit $1.34, surpassing the Street’s prediction of $1.25 per share.

The company’s results were driven by impressive RevPAR growth. RevPAR, or Revenue Per Available Room, is a key metric in the hotel industry, and describes how much revenue Marriott can squeeze from each room across its many premises.

For the quarter under review, Marriott said that RevPAR for “worldwide comparable system-wide properties” increased by 3.6% in constant dollars (or 5.5% in actual dollars). This was a beat against the company’s own predicted range of 0% - 2%.

Looking to the future, Marriott said that adjusted earnings before interest, taxes, depreciation, and amortisation, would increase by between 10% and 12% for the full year, measured against 2017.

Marriott is in a strong position to continue capitalising on the trend towards experiential travel. It’s also got a growing international presence – more than half of the 425,000 new rooms in its pipeline are outside the U.S., with particular exposure to Asia. That, taken in tandem with its industry-leading loyalty program, and the announcement that it’s looking to roll out an upmarket homesharing service, should leave investors feeling very positive indeed.

Disclosure
Dominion holds Marriott International in its Global Trends Luxury Fund.


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