REVEALED: Marriott International's Q3 results
Construction delays and negative RevPAR in Middle East, Africa and North America regions result in falling short of third quarter estimations
Marriott International had a strong third quarter 2015, but missed its total fee revenue estimations marginally on account of negative RevPAR and construction delays in the Middle East, Africa and North America.
On July 29, the company estimated total fee revenue for the third quarter would total US $470 million to $480 million. Actual total fee revenue of $465 million in the quarter was modestly lower than estimated reflecting lower than expected RevPAR growth, in the aforementioned regions.
Third quarter 2015 net income totalled $210 million, a 9% increase over 2014 third quarter net income. Diluted earnings per share (EPS) in the third quarter totaled $0.78, a 20% increase from diluted EPS in the year-ago quarter.
Marriott International added over 10,000 rooms during the third quarter, including roughly 3800 rooms in markets outside the US and nearly 2000 rooms converted from competitor brands.
At the end of the third quarter, the company’s worldwide development pipeline increased to more than 260,000 rooms, including roughly 20,000 rooms approved, but not yet subject to signed contracts.
The company’s adjusted operating income margin increased to 49% compared to 43% in the year-ago quarter.
Arne M. Sorenson, president and chief executive officer of Marriott International, said: “Our company posted solid performance in the third quarter. North American systemwide RevPAR rose over 4% despite the impact of unfavorable holiday shifts on our group business compared to the year-ago quarter. Our hotels are full with occupancy at nearly 78% allowing us to continue to raise rates and reduce lower-rated business to drive RevPAR."
Marriott International has massive expansion plans in the GCC, with the brand's first-ever Residence Inn announced in October 2015. The firm also plans to significantly add to its number of keys in other GCC countries.