Marriott CEO: Q1 Reflects Resiliency of Business Model

BETHESDA, MD—Marriott International added 19,000 rooms in the first quarter of 2019 with more than 475,000 currently in the pipeline.

“Marriott’s performance in the first quarter was solid,“ said Arne M. Sorenson, president/CEO of Marriott International. “Worldwide systemwide RevPAR for comparable hotels increased 1.1%, net rooms grew 5.3%, and gross fee revenue rose 6%. Despite modest RevPAR growth and higher labor costs, we increased North American house profit margins by 30 basis points and held worldwide house profit margins flat at our company-operated hotels through cost synergies, leading to strong incentive management fee performance in the quarter. Worldwide systemwide RevPAR index increased 100 basis points with index gains in the U.S. at nearly the same level.”

First quarter reported diluted EPS totaled $1.09, a 6% decrease from prior year results. First quarter adjusted diluted EPS totaled $1.41, a 5% increase over first quarter 2018 adjusted results.

First quarter 2019 comparable systemwide constant dollar RevPAR rose 1.1% worldwide, 1.9% outside North America and 0.8% in North America.

The company added nearly 19,000 rooms during the first quarter, including roughly 3,000 rooms converted from competitor brands and approximately 8,000 rooms in international markets. At quarter-end, Marriott’s worldwide development pipeline totaled nearly 2,900 hotels and approximately 475,000 rooms, including roughly 25,000 rooms approved, but not yet subject to signed contracts.

“We continue to build our company for the future,” said Sorenson. “In the first quarter, we opened our 7,000th property, the 27-story St. Regis Hong Kong. Year-over-year gross room openings accelerated to nearly 19,000 rooms, a first quarter record. Our development pipeline totaled approximately 475,000 rooms at quarter-end, nearly 3% higher than a year ago. Marriott Bonvoy membership rose by 5 million to reach nearly 130 million members.”

First quarter reported net income totaled $375 million, an 11% decrease from prior year results. First quarter adjusted net income totaled $482 million, a 1% decrease from prior year adjusted results. Adjusted EBITDA totaled $821 million in the quarter, a 7% increase over first quarter 2018 adjusted EBITDA. Marriott repurchased 6.7 million shares of the company’s common stock for $828 million during the first quarter. Year-to-date through May 8, the company has repurchased 8.1 million shares for $1.02 billion.

“Our results in the first quarter highlight the resiliency of our business model and the strength of our brands,” he said. “Year-to-date through May 8, we have returned nearly $1.2 billion to our shareholders through share repurchases and dividends, and we continue to expect to return at least $3 billion for full year 2019.”

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