Marriott's third-quarter profit rises on higher room rates, group travel
Reuters
Published Nov 02, 2023 06:45AM ET
Updated Nov 02, 2023 10:21AM ET
By Doyinsola Oladipo and Priyamvada C
(Reuters) -Marriott International reported a rise in third-quarter profit on Thursday, as the hotel operator benefited from pricier rooms and a recovery in group travel but expects higher expenses and lower fee revenue to soften its full-year earnings.
Marriott benefited in the last few months from a recovery in international travel but demand in the fourth quarter may not be enough to offset higher expenses due to higher staffing levels and lower non-room revenues.
"While there is heightened geopolitical risk and continued macroeconomic uncertainty, the consumer is still generally holding up well and our forward bookings through the end of the year in most regions around the world remain solid," Marriott's CFO Kathleen Oberg said on a call with investors.
The Maryland-based company posted an 8.8% rise in revenue per available room, a key measure for hotels' top-line performance, for the quarter, compared to a year earlier.
Marriott, which owns hotels such as Sheraton, Westin and St. Regis (NYSE:RGS), lifted its 2023 room revenue growth forecast for the second consecutive quarter this year to 14%-15% from 12%-14%, as demand for travel encouraged hotel operators to implement price hikes in the past year.
General and administrative expenses for the third quarter totaled $239 million, compared with $216 million a year prior. The year-over-year change largely reflects higher staffing levels, the company said.
The company now forecasts full-year adjusted earnings per share between $8.50 and $8.59, compared with its prior estimate of $8.36-$8.65 per share.
Marriott's net income was $752 million, or $2.51 per share, in the quarter through September, compared with $630 million, or $1.94 per share, a year earlier.
The company's revenue rose 12% to $5.93 billion, ahead of the analysts' average estimate of $5.89 billion, according to LSEG data. Its adjusted profit per share of $2.11 was in line with estimates.
The Sheraton operator — shares of which were down 2.4% at $184.17 in early trading — cut its annual net rooms growth forecast to between 4.2% and 4.5%, compared with the earlier projection of 6.4% to 6.7%.
Last week, rival hotel operator Hilton Worldwide Holdings (NYSE:HLT) beat third-quarter revenue estimates and lifted its annual forecast.
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Written By: Reuters
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