Marriott: investors hold fast after a revenue miss and an earnings beat
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Marriott: investors hold fast after a revenue miss and an earnings beat

The world’s largest luxury hotelier, Marriott International, reported better than expected earnings for its fourth quarter, but from less revenue than the Street had hoped to see. Investors… well, they wobbled, but seem to be holding fast: the company’s stock declined in extended trading last Thursday, but was already on the rise again by the start of this week. And that upward trend is justified – Marriott’s results, overall, were strong.

Marriott’s share price has risen by 16% year to date

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Source: Yahoo Finance

Marriott said that earnings per share came in at $1.44 for the fourth quarter. That’s 4c better than the Street expected – but it’s also a 48% rise, year on year. Revenue, however, only rose by 1% against the same period in the previous year – missing estimates. RevPar (Revenue Per Available Room) – which is a crucial metric in the hotel industry – rose by 1.3%. And it is worth noting that the company’s RevPar outside of its domestic market (North America) came in much higher (+4%) than at home (+0.2%). Occupancy in those rooms held more-or-less steady, increasing by 1.2% domestically, and decreasing by 0.7% internationally.

The company also increased the number of rooms on its system to a record 1.3 million, shared between its 30 leading brands (that’s about 5% more rooms than it finished the previous year with).

On an earnings call, Marriott’s CEO, Arne Sorensen, said: “We continue to grow our market share of industry rooms. According to STR, our worldwide market share of rooms at year-end 2018 stood at 7%, while our share of rooms under construction totalled a leading 20%. We expect rooms growth will accelerate, as we signed contracts for a record 125,000 rooms in 2018 and our development pipeline increased to a record 478,000 rooms. Select-service signings were especially strong in North America, particularly for Residence Inn, Fairfield Inn & Suites and Courtyard.”

Dominion holds Marriott International in its Global Trends Luxury Fund.

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