Marriott Sees Income Dip in Q3

BETHESDA, MD—Marriott International Inc. has reported a 23% decrease in net income for the third quarter, while RevPAR jumped 1.5%.

Arne M. Sorenson, president/CEO of Marriott International, said, “It’s been just over three years since the completion of the Starwood acquisition. In that time, we’ve realized meaningful synergies, enhanced guest satisfaction and recycled more than $2.2 billion of assets. Earlier this year, we launched our new loyalty program, Marriott Bonvoy, which provides meaningfully enhanced member benefits while leveraging our broad portfolio and significant hotel distribution. With more than 12 million guests joining Marriott Bonvoy since the beginning of the year, program membership reached 137 million in the quarter and the percentage of occupancy from members increased 320 basis points worldwide.”

Third quarter 2019 comparable systemwide constant dollar RevPAR rose 1.5% worldwide, 1.9% outside North America and 1.3% in North America; third quarter reported net income totaled $387 million, a 23% decrease from prior year results. Third quarter adjusted net income totaled $488 million, an 18% decrease from prior year adjusted results; adjusted EBITDA totaled $901 million in the quarter, flat compared to third quarter 2018 adjusted EBITDA.

Sorenson continued, “In the third quarter, our worldwide comparable systemwide constant dollar RevPAR increased 1.5%, consistent with our guidance, while our global RevPAR index rose 210 basis points. Our sales organization is hitting its stride. For comparable hotels in North America, group revenue booked in the third quarter for all future periods increased 6% and, today, group revenue pace for 2020 is up at a mid-single digit growth rate. Year-to-date through Nov. 1, we have already returned nearly $2.3 billion to shareholders. For full year 2019, we expect cash returned to shareholders through dividends and share repurchases could approach $3 billion.”

Third quarter reported diluted EPS totaled $1.16, compared to $1.43 in the year-ago quarter. Third quarter adjusted diluted EPS totaled $1.47, compared to third quarter 2018 adjusted diluted EPS of $1.70. Reported and adjusted diluted EPS for the 2018 third quarter included $0.26 of asset sale gains.

“We expect continued strong demand for our products. For the fourth quarter of 2019, we expect comparable RevPAR on a constant dollar basis will increase 0-1% in North America, roughly 1% outside North America, and roughly 1% worldwide. For full year 2020, we expect comparable systemwide RevPAR on a constant dollar basis will be flat to up 2% worldwide, with RevPAR growth in North America around the middle of that range,” he said.

The company added more than 17,700 rooms during the third quarter, including roughly 3,100 rooms converted from competitor brands and approximately 6,700 rooms in international markets. At quarter-end, Marriott’s worldwide development pipeline totaled roughly 2,950 hotels and nearly 495,000 rooms, including more than 31,000 rooms approved, but not yet subject to signed contracts. Approximately 214,000 pipeline rooms were under construction at the end of the third quarter, and Marriott repurchased 3.8 million shares of the company’s common stock for $500 million during the third quarter. Year-to-date through Nov. 1, the company has repurchased 14.2 million shares for $1.83 billion.