Marriott quarterly earnings rise on higher room revenue
(Reuters) - Marriott International reported better-than-expected quarterly results as room revenue rose, aided by rising international travel and higher rates, and the hotel operator said it expects per-room revenue to rise further in 2013.
Marriott said it expects revenue per available room (revPAR), a key metric that measures hotel health, to rise 4 to 7 percent this year.
During the fourth quarter, world wide revPAR rose 6 percent while room rates were up 4 percent, said the owner of brands such as Ritz-Carlton, Residence Inn and Courtyard by Marriott.
Marriott said it had kept the forecast conservative on fears that possible federal budget cuts would limit North American demand.
"There is nothing in the business we can see today that would cause me to go out and say 4 percent revPAR growth, but March 1 is coming and we will have to see what Congress does," company spokeswoman Laura Paugh said.
Unless a deal is reached in Congress, about $85 billion in across-the-board federal spending cuts kick in at the beginning of March and continue through September 30 as part of a decade-long $1.2 trillion budget savings plan.
The company is in negotiations with corporate customers to increase room rates by high single digits, but fiscal cliff fears have stalled the process, Paugh said.
Increased demand from corporate customers has led to a recovery in North America -- the source of more than three quarters of its revenue.
FOURTH QUARTER BEATS
Net income was $181 million, or 56 cents per share, in the fourth-quarter, up 28 percent from $141 million, or 41 cents per share, a year earlier, Marriott said in a statement.
Excluding one-time items, the company earned 56 cents per share.
Fourth-quarter revenue 2 percent to $3.76 billion.
Analysts on average were expecting earnings of 55 cents per share on revenue of $3.66 billion, according to Thomson Reuters I/B/E/S.
Shares of the Bethesda, Maryland-based company were down 1 percent in trading after the bell on Tuesday. They had closed at $40.83 on the New York Stock Exchange. (Reporting by Tej Sapru in Bangalore; Editing by Sreejiraj Eluvangal)