Chicago: Marriott International Inc, the largest US hotel company by market value, posted a better-than-expected quarterly profit on Thursday, and said it sees room rates and unit revenue rising this year.
The company, which operates the Marriott, Courtyard and Residence Inn hotels, said its results were helped by a rebound in business travel, an important step to recovery for Marriott, which relies heavily on corporate demand to help set room rates.
Marriott said it sees North American revenue per available room (revPAR) increasing in North America between 3% and 6%.
“In the first quarter we welcomed increasing numbers of business guests to our hotels as travelers got back to work in most markets around the world,” said Marriott chief executive J.W. Marriott.
“While first quarter room rates were generally lower than last year, as occupancy levels continue to improve, we see higher room rates on the horizon,” he said.
Lodging companies were hurt in 2009 by the slide in business travel, forcing hotels to cut room rates to attract more guests. But this week, industry data showed revPAR rose in March, the first monthly rise since July 2008.
Marriott shares inched up to 0.5% to $34.90 in premarket trade from their Wednesday close of of $34.67 on the New York Stock Exchange.
The stock has risen about 80% since March 2009, underperforming the surge in the Dow Jones US hotels index which has quadrupled in that time period.
Marriott posted net earnings of $83 million, or 22 cents, compared with a net loss of $23 million, or 6 cents per share, a year earlier.
Analysts, on average, expected Marriott to post earnings of about 20 cents per share, according to Thomson Reuters.
“While most investors will be neutral on the (first-quarter) beat as expectations were high, we believe they will look favorably on 2010 full-year North American revPAR guidance,” said FBR Capital Markets analyst Patrick Scholes in a research note.
“We see this better than expected outlook as the most important point provided in the release,” Scholes said.
Revenue rose 5.4% to $2.63 billion. The Bethesda, Maryland-based hotel company’s revPAR for the quarter fell 0.7%.