Marriott Ends 4Q with Profit

by Alfie FEATHERSTONE on February 12, 2010

Marriott International reported a 4Q profit on Thursday as leisure travelers took advantage of promotions and business travel improved. The hospitality chain also offered outlooks for the 1Q and full year, which were in range with expectations of analysts, as well as increased their guidance for this year’s key revenue figure.

Upscale hotels count for about 25% of the hotel market in the US but were hit hard during the recession while leisure guests and businesses scaled back on travel. However, hoteliers have started to see recovery during recent months although it’s a small one and room rates are still way below the peak.

Businesses have started to travel more and so have families, but it may take longer for leisure travel to pick back up. Consumers are still wary about the recession, while high unemployment levels are postponing travel or making people take shorter trips. Most hospitality companies have tried to attract customers with discounts that squeeze profits just to keep their rooms full.

Marriott earned 28 cents/share, which is $106 million, for the 4Q ended January 1. This compares to the $10 million loss in the 4Q of 2008, which was only 3 cents/share. Adjusted income from operations was 32 cents/share after removing $7 million of restructuring charges and other items.

These figures beat the forecast 26 cents/share profit from Thomson Reuters, as well as their own guidance for adjusted earnings, which was predicted to be between 20 and 23 cents/share. CEO and chairman J.W. Marriott Jr. says that leisure travelers responded well to promotions, and business travel started picking up, especially overseas.

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