Marriott's Acquisition of Starwood is Working
Hotel & Resort Patrick Clarke May 09, 2017
Marriott International released its financial results for the first quarter of 2017 Monday, proudly revealing that it exceeded Wall Street estimates.
The world's largest hotel company reported adjusted diluted earnings per share of $1.01 for the three-month period, topping investment research firm Zacks' projection by $0.11.
The figure also represents a 38 percent rise over first quarter 2016 combined results.
Marriott reported revenue of $5.56 billion for the year's opening quarter; Zacks had previously projected $4.91 billion. The company's net income also climbed significantly, reaching $365 million in the first quarter, signaling a 67 percent increase year-over-year.
The big jumps can be partly attributed to Marriott's September 23, 2016, acquisition of Starwood Hotels & Resorts Worldwide. The adjusted first quarter results exclude merger-related costs. By the end of the first quarter, Marriott's development pipeline had increased to more than 430,000 rooms worldwide.
"We were pleased by our performance in the quarter across the board," said Marriott president and CEO Arne Sorenson in a statement.
Sorenson also noted that RevPAR surpassed the company's expectations in North America and Europe thanks to stronger group attendance and higher-rated business transient demand. Demand in the Asia Pacific region, including Greater China has also exceeded expectations:
"Given the stronger than expected RevPAR performance in North America in the first quarter and improving demand trends in the Europe and Asia Pacific regions, we have increased our full year 2017 RevPAR expectations."
READ MORE: Marriott to Open a New Hotel Every 14 Hours for Three Years
Looking ahead, Sorenson said the company expects to return more than $2 billion to its shareholders in 2017.
"We continue to make great progress on integrating the Starwood and Marriott lodging businesses, gaining efficiencies at both the corporate and property levels," the Marriott boss pointed out.
In March, Marriott unveiled an ambitious three-year growth plan, revealing a desire to add between 285,000 to 300,000 rooms worldwide to its massive portfolio by 2019. At the time, Sorenson said the company is "more optimistic than ever" about its future.
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