Marriott International Inc. yesterday reported that its first-quarter income jumped 29 percent over the same period a year ago, the result of a healthy lodging industry, acquisitions and increases in average room rates.
The Bethesda-based hotel giant generated net income of $89 million in the three-month period ended March 27, fueled largely by its purchase of the Renaissance Hotel Group N.V. and a 9 percent gain in daily average room rates.
"The U.S. lodging industry remains very robust, and Marriott lodging continues to set the pace in terms of both [revenue available per room] growth and profitability," said J. W. Marriott Jr., the company's chairman and chief executive.
Sales in the quarter totaled $2.2 billion, a 15 percent gain from the same period in 1997. Marriott's average occupancy dropped slightly to 77 percent, however, the one black cloud in its clear-sky earnings.
"Marriott continues to be a growth story of a company with a very good track record," said Joyce R. Minor, a Lehman Brothers lodging analyst. "We're starting to see for the first time some price resistance in the industry, but people have expected it to go from a very strong level to a very good level."
"But overall, the company's results in the quarter were very good, and beat our expectations," Minor added.
Marriott currently has 65,000 hotel rooms and 100 senior living communities under development. In the first quarter, the company added 30 hotels containing 5,700 rooms. In all, Marriott's portfolio contains 1,540 properties totaling 302,700 rooms and 3,500 time-share villas.
"We have aggressive growth targets for each of our businesses," Marriott said.
"And we expect to invest $1 billion annually in growth opportunities."
Marriott shares fell $1.875 to $36.50 on the New York Stock Exchange yesterday.
Pub Date: 4/17/98