Marriott’s Q1 earnings disappoint, North America recovery slows

BETHESDA, MARYLAND First quarter results from Marriott International Inc. came in short of analysts’ estimates, raising concern that the hotel industry recovery may be slowing in North America.

Net income rose to US$101 million, or 26 cents a share, from US$83 million, or 22 cents, a year earlier. Wall Street was expecting earnings of 28 cents.

Marriott’s global RevPAR rose 6.5%, which is below the 7% the company forecast last month. Marriott blames weak demand at its North America hotels for slowing overall growth.

Marriott attributes part of the slowdown to softer demand in the Washington, D.C. market—home to about 5% of the company’s inventory—due to the recent threat of a U.S. government shutdown. Short-term group meetings bookings have also been weak recently.

Total fee revenue increased 9% year over year to US$279 million, while ADR rose 3%.

At the end of the first quarter, the company’s pipeline of hotels under construction, awaiting conversion or approved for development totaled more than 95,000 guestrooms, including nearly 39,000 guestrooms outside North America. More than 14,200 guestrooms were added during the quarter, including 7,100 guestrooms to be branded AC Hotels by Marriott and 1,900 guestrooms converted from competitor brands. The company opened more than 11,000 guestrooms in international markets.

Marriott repurchased 7.8 million shares of the company’s common stock for US$300 million during the quarter. Year-to-date through April 19, the company has repurchased 13.4 million shares for US$493 million.