Marriott’s first full year since Starwood acquisition is officially “terrific”
According to Marriott International, the world’s largest luxury hotelier, its first full year following the acquisition of Starwood Hotels and Resorts was “terrific”. The company released earnings for 2017 at the end of last week, demonstrating a robust business that’s garnering more money-per-customer and expanding into hundreds of new locations.
Marriot’s share price is up by 46% in the past 12 months
SOURCE: Yahoo Finance
Marriott’s president and CEO, Arne Sorenson, described the fourth quarter as “the icing on the cake to a terrific year in 2017”. Net income in the quarter rose by 24% year to $415 million. For the full year, fee revenue and earnings before interest, taxes, depreciation and amortization both rose by 8% from 2016, while earnings per share increased by an impressive 32% to $4.36.
The company also oversaw a dramatic physical expansion, adding more than 76,000 rooms and 473 new properties around the globe. This expansion is even more impressive when taken in tandem with the fact that revpar (Revenue Per Available Room – a critical metric in the hotel industry for obvious reasons) is rising: 3.1% for the full year (against 2016), and 4.6% for the fourth quarter (against the comparable quarter in 2016).
Speaking to the strength of the company’s results and its view of the future, Sorensen told listeners on an earnings call:
“We are bullish about our future. No other hotel company offers our comprehensive range of destinations, no other company has loyalty programs of the breadth and depth that we do, and none offer the meaningful scale that drives both guest satisfaction and owner returns. But our most powerful advantage is our culture. It is a deep commitment to people, treating each other with dignity and respect, offering everyone opportunities for learning and growth, and working together as a team. Given the outstanding results demonstrated in 2017, I'd like to say thank you to all the Marriott associates who made it possible.”
Dominion holds Marriott International in its Global Trends Luxury Fund.
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