Marriott reports £2.62b in earnings for 2018
Marriott International has reported earnings of $3.47b (£2.62b) in its 2018 full-year financial results, an 11% increase on 2017.
The hotel group's fourth quarter saw adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of $864m (£652m), a 10% increase on 2017's fourth quarter.
Full-year 2018 revenue per available room (revpar) rose 2.6% worldwide, 1.3% during the fourth quarter, and the company added more than 80,000 rooms during the year, including more than 9,900 rooms converted from competitor brands.
During the year, Marriott signed a record 125,000 rooms, increasing the company's worldwide development pipeline to a record 478,000 rooms as of year-end, including nearly 23,000 rooms approved, but not yet subject to signed contracts.
Arne M Sorenson, president and chief executive officer of Marriott International, said: "Our team delivered solid results in 2018 even as we worked to complete the integration of Starwood Hotels & Resorts. Our rooms grew by nearly 5%, net; worldwide revenue per available room, or revpar, increased nearly 3%; general and administrative expenses rose only 1%; and adjusted earnings per share surged 48%. We ended the year with a record 1.3 million rooms operating under our 30 leading lodging brands. During the year, we reduced operating costs for owners, increased the value of our loyalty program for customers, and improved guest ‘intent to recommend' scores.
"We continue to grow our market share of industry rooms. According to STR, our worldwide market share of rooms at year-end 2018 stood at 7%, while our share of rooms under construction totalled a leading 20%. We expect rooms growth will accelerate, as we signed contracts for a record 125,000 rooms in 2018 and our development pipeline increased to a record 478,000 rooms…
"For the full year 2019, we expect North America and worldwide revpar growth of 1%-3% and rooms growth of roughly 5.5%, net. This should yield an increase in total fee revenue of 5%-7%, despite foreign exchange headwinds. It should also enable us to return at least $3b (£2.27b) to shareholders in share repurchases and dividends in 2019, even assuming no asset sales for the year.
"We are pleased that, just over two years since the acquisition, the integration of Starwood is nearly complete. With the announcement of our new loyalty brand, Marriott Bonvoy, just a few weeks ago, customers are enjoying the meaningful benefits of the combined company. I am very grateful for all the hard work and dedication of Marriott associates around the world who made the integration happen."
At the year end, Marriott had 6,906 properties having added 494 new hotels during the year and exited 107. At year-end, the company's worldwide development pipeline stood at 2,882 properties with more than 478,000 rooms, including 1,150 properties with approximately 214,000 rooms under construction and 141 properties with nearly 23,000 rooms approved for development, but not yet subject to signed contracts.
For the 2019 first quarter, Marriott expects revpar to increase 1%-3% worldwide and EBITDA of $820m-$845m (£619-£638m), a 6%-10% increase over first quarter 2018 EBITDA of $770m (£581m).
For the full year, Marriott anticipates a revpar increase of 1%-3% worldwide and EBITDA of $3.62-$3.72m (£2.73-£2.81m), a 4%-7% increase over 2018, as well as net room additions of roughly 5.5% for the year, assuming deletions of 1%-1.5%.
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