Marriott International has reported fourth quarter and full year 2013 results, with full year 2013 net income totalling $626 million compared to $571 million for full year 2012. For 2014, worldwide systemwide REVPAR is expected to increase 4 to 6 percent.
Arne M. Sorenson, president and chief executive officer of Marriott International, commented:
“2013 was a year of firsts. Strong REVPAR growth and new hotels drove Marriott’s fee revenue to a record $1.5 billion. We signed contracts with owners and franchisees for 67,000 new rooms, the most productive year in our history averaging more than one hotel every day. Our development pipeline reached a record 195,000 rooms.”
Highlights
- Full year diluted EPS totalled $2.00, a 16 percent increase over prior year results. Excluding the $0.08 per share Courtyard joint venture gain in 2012, diluted EPS grew 22 percent year-over-year;
- North American comparable company-operated REVPAR rose 5.1 percent in the fourth quarter and 5.4 percent for full year 2013;
- On a constant dollar basis, worldwide comparable systemwide REVPAR rose 4.3 percent in the fourth quarter and 4.6 percent for full year 2013;
- Comparable company-operated house profit margins increased 130 basis points in North America and 90 basis points worldwide for the full year;
- At year-end, the company’s worldwide development pipeline increased to over 195,000 rooms, including nearly 30,000 rooms approved, but not yet subject to signed contracts;
- Nearly 26,000 rooms were added in 2013. In the fourth quarter alone, nearly 7,700 rooms were added, including over 3,900 rooms in international markets;
- The company signed a record 67,000 rooms in 2013;
- For full year 2013, Marriott repurchased 20.0 million shares for $829 million including 4.4 million shares for $200 million in the fourth quarter;
- For full year 2014, Marriott expects North American and worldwide Systemwide constant dollar REVPAR to increase 4 to 6 percent;
- Return on invested capital totalled 32 percent in 2013.
Arne M. Sorenson, president and chief executive officer of Marriott International, full comments:
“2013 was a year of firsts. Strong REVPAR growth and new hotels drove Marriott’s fee revenue to a record $1.5 billion. We signed contracts with owners and franchisees for 67,000 new rooms, the most productive year in our history averaging more than one hotel every day. Our development pipeline reached a record 195,000 rooms.
“Our North American group sales organization booked $3.4 billion in new group business in 2013 for all future periods, eclipsing their prior record from 2007. Group revenue on the books for 2014 is running more than 4 percent higher than 2013 levels for the Marriott brand. Special corporate negotiated rates are nearly complete with room rates expected to rise about 5 percent in 2014.
“Marriott Rewards and Ritz-Carlton Rewards signed a combined 3.4 million new members, contributing to the nearly 50 percent growth in membership over the last 5 years. Roughly 45 percent of that 5-year growth was outside the U.S. In 2013, a record 25 percent of room nights were booked on Marriott.com. Marriott mobile reservations surged by 67 percent in 2013 and we introduced mobile check-in for all Marriott Hotels in the United States, another industry first.
“For 2014, we expect worldwide systemwide REVPAR to increase 4 to 6 percent. With our strong development pipeline and the anticipated addition of the Protea hotels in Africa, we expect rooms growth will accelerate to approximately 6 percent gross or roughly 5 percent, net of deletions.
2013 fourth quarter
For the 2013 fourth quarter, REVPAR for worldwide comparable systemwide properties increased 4.3 percent (a 4.1 percent increase using actual dollars).
In North America, comparable systemwide REVPAR increased 4.7 percent in the fourth quarter of 2013, including a 3.3 percent increase in average daily rate. REVPAR for comparable systemwide North American full-service and luxury hotels (including Marriott Hotels, The Ritz-Carlton, Renaissance Hotels and Autograph Collection Hotels) increased 5.9 percent with a 4.3 percent increase in average daily rate. REVPAR for comparable systemwide North American limited-service hotels (including Courtyard, Residence Inn, SpringHill Suites, TownePlace Suites and Fairfield Inn & Suites) increased 3.6 percent in the fourth quarter with a 2.5 percent increase in average daily rate.
International comparable systemwide REVPAR rose 3.2 percent (a 2.3 percent increase using actual dollars) in the fourth quarter.
Marriott added 47 new properties (7,681 rooms) to its worldwide lodging portfolio in the 2013 fourth quarter, including The Ritz-Carlton Almaty in Kazahkstan, the JW Marriott Hotel Hanoi and the Hotel Am Steinplatz, an Autograph Collection hotel in Berlin. Fourteen properties (2,532 rooms) exited the system during the quarter. At year-end, the company’s lodging group encompassed 3,916 properties and timeshare resorts for a total of nearly 676,000 rooms.
The company’s worldwide development pipeline increased to approximately 1,165 properties with over 195,000 rooms at year-end, including approximately 170 properties with nearly 30,000 rooms approved for development, but not yet subject to signed contracts. The company’s pipeline at year-end 2013 does not include the approximately 10,000 rooms associated with the Protea transaction.
MARRIOTT REVENUES totalled $3.2 billion in the 2013 fourth quarter compared to revenues of over $3.7 billion for the fourth quarter of 2012. Base management and franchise fees totalled $315 million compared to $369 million in the year-ago quarter. The company estimates that the change in fiscal calendar resulted in approximately $72 million of lower fees year-over-year. The calendar change impact was partially offset by higher REVPAR and non-room sales at existing hotels, as well as fees from new hotels.
Outlook
For the 2014 first quarter, the company expects comparable systemwide calendar REVPAR on a constant dollar basis will increase 4 to 6 percent in North America, 3 to 5 percent outside North America and 4 to 6 percent worldwide.
The company expects full year 2014 comparable systemwide REVPAR on a constant dollar basis will increase 4 to 6 percent in North America, 3 to 5 percent outside North America and 4 to 6 percent worldwide.
The company anticipates gross room additions of 6 percent worldwide for the full year 2014 including the Protea hotels. Net of deletions, the company expects its portfolio of rooms will increase by approximately 5 percent by year-end 2014.
The company assumes full year fee revenue could total $1,650 million to $1,700 million, growth of 7 to 10 percent over 2013 fee revenue of $1,543 million. The company’s estimated first quarter total fee revenue reflects roughly $5 million of lower fees due to the three additional days in the year-ago quarter related to the change in the fiscal calendar.