Marriott: investors hold fast after a revenue miss and an earnings beat
Select language to see a machine translation of this article. The original language of the Article is English and the translation is provided for your convenience.

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

marriott g 070319

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.”

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


If you would you like to receive the Newsfeeds daily, please click here to sign up now!

Help us make this Newsfeed better by rating this article. 1 star = Poor and 5 stars = Excellent
0.0/5 rating (0 votes)

Disclaimer
The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.