BETHESDA, MD—Marriott International Inc. has reported third quarter 2018 results.
Arne M. Sorenson, president/CEO of Marriott International, said, “In the third quarter, we were pleased to post gross fee revenues growth of 13% and adjusted EBITDA growth of 12%, as worldwide comparable systemwide hotel RevPAR increased roughly 2%. Our results in the third quarter highlight the resiliency of our asset-light model and our ability to generate cash. Year-to-date through Nov. 5, we have already returned more than $3.1 billion to shareholders through dividends and share repurchases and now believe we could return roughly $3.7 billion in 2018.”
“It’s been just over two years since the completion of the Starwood acquisition. We are in the home stretch on integrating the companies and are pleased with the results,” he said. “On Aug. 18, we integrated our loyalty programs creating one powerful, unified program, allowing our 120 million members to earn, book and redeem across more than 6,700 hotels. At the time of the acquisition, we stated our goal to recycle assets totaling more than $1.5 billion by the end of 2018. We have already exceeded that goal, recycling more than $1.8 billion since the deal closed.”
Third Quarter Highlights:
- Third quarter reported net income totaled $483 million, compared to 2017 third quarter reported net income of $485 million. Third quarter adjusted net income totaled $598 million, a 51% increase over 2017 third quarter adjusted net income of $397 million.
- Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $900 million in the quarter, a 12% increase over third quarter 2017 adjusted EBITDA. Third quarter 2018 gross fee revenues totaled $932 million, a 13% increase from prior year gross fee revenues.
- Third quarter 2018 comparable systemwide constant dollar RevPAR rose 1.9% worldwide, 5.4% outside North America and 0.6% in North America.
- Third quarter reported diluted EPS totaled $1.38, a 7% increase from prior year results. Third quarter adjusted diluted EPS totaled $1.70, a 62% increase over third quarter 2017 adjusted results. Adjusted results exclude merger-related adjustments, cost reimbursement revenue and reimbursed expenses.
- During the 2018 third quarter, EPS included $0.26 from gains on asset sales ($71 million pretax reflected in gains and other income, net and equity in earnings).
- The company added more than 18,000 rooms during the third quarter, including more than 1,500 rooms converted from competitor brands and approximately 10,000 rooms in international markets.
- At quarter-end, Marriott’s worldwide development pipeline increased to roughly 471,000 rooms, including nearly 50,000 rooms approved, but not yet subject to signed contracts.
- Marriott repurchased 6.7 million shares of the company’s common stock for $841 million during the third quarter. Year-to-date through Nov. 5, the company has repurchased 20.8 million shares for $2.7 billion.
“We expect Marriott’s fourth quarter 2018 comparable systemwide RevPAR on a constant dollar basis will increase roughly 2% worldwide, roughly 1% in North America, and 5-6% outside North America. Our forecast for RevPAR in North America reflects an estimated 110-basis-point headwind due to the 2017 hurricane relief efforts in Texas and Florida, and it also reflects the slightly weaker than expected transient demand the industry experienced during September,” he said. “Trends in most international markets are expected to remain strong.”
For full year 2019, Marriott expects comparable systemwide RevPAR on a constant dollar basis will increase 2-3% worldwide, 1-3% in North America and 3-5% outside North America.
For the full year 2018, Marriott anticipates its number of rooms will increase nearly 7% gross while room deletions should total nearly 2%, resulting in net rooms growth of roughly 5% for the year. For the full year 2019, Marriott anticipates gross room additions will increase at a rate similar to 2018, but deletions should moderate to 1-1.5% for the year, resulting in net rooms growth acceleration to roughly 5.5%.