Marriott International, Inc. has reported third quarter 2015 results with third quarter 2015 net income totalling $210 million, a 9 percent increase over 2014 third quarter net income. Diluted earnings per share (EPS) in the third quarter totalled $0.78, a 20 percent increase from diluted EPS in the year-ago quarter. On July 29, 2015, the company forecasted third quarter diluted EPS of $0.72 to $0.76.
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 percent despite the impact of unfavourable holiday shifts on our group business compared to the year-ago quarter. Our hotels are full with occupancy at nearly 78 percent allowing us to continue to raise rates and reduce lower-rated business to drive RevPAR.
“Our global development pipeline continues to increase, reaching more than 260,000 rooms at the end of the quarter as owner and franchisees continue to choose our brands. Combined, our pipeline and open rooms exceed one million rooms worldwide. Recently unveiled in the U.S., Moxy and AC Hotels have a combined five hotels open and 82 hotels signed or approved domestically. Our newest brand, Delta Hotels, expects to open its first U.S. property later this year, a conversion from a competitor’s brand.
“Our asset-light business model continues to deliver significant profit growth with modest capital requirements, yielding outstanding return to shareholders. For the full year 2015, we expect to return more than $2.25 billion to shareholders through dividends and share re-purchases, a record which would bring our total return to shareholders to nearly $8 billion over the last 5 years. Over the last 12 months, our return on invested capital has totalled 47 percent.
“For 2016, we expect systemwide constant dollar RevPAR will increase 4 to 6 percent in North America, outside North America and worldwide. Our group bookings for our North American full-service hotels for 2016 are up more than 7 percent with about 75 percent of expected group business volume booked thus far.
“Given our strong development pipeline, we anticipate our number of rooms will increase 7 to 8 percent, gross, in 2015, including the 9,600 rooms from the Delta acquisition, accelerating to 8 percent, gross, in 2016. Nearly 40 percent of our more than 260,000 room pipeline is already under construction.”
Highlights
- Third quarter diluted EPS totalled $0.78, a 20 percent increase over prior year results;
- On a constant dollar basis, worldwide comparable systemwide RevPAR rose 4.5 percent in the third quarter;
- North American comparable systemwide constant dollar RevPAR rose 4.2 percent in the third quarter;
- Marriott repurchased 9.8 million shares of the company’s common stock for $702 million during the third quarter. Year-to-date through October 28, the company repurchased 25.1 million shares for $1.9 billion;
- The company added over 10,000 rooms during the third quarter, including roughly 3,800 rooms in markets outside the U.S. and nearly 2,000 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 percent compared to 43 percent in the year-ago quarter;
- Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) totalled $431 million in the quarter, a 10 percent increase over third quarter 2014 adjusted EBITDA.
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