Marriott International Inc. yesterday reported that its third-quarter net income rose 26 percent to $58 million, the result of additions to its portfolio and the overall health of the robust hotel industry.
As it had in recent quarters, the Bethesda-based lodging operator posted net income gains well ahead of its sales growth. For the quarter ended Sept. 6, Marriott's revenue rose just 15 percent to $2.2 billion from the comparable period last year.
"This was a very good summer for the lodging industry," J. W. Marriott Jr., president and chairman of Marriott International, said. "All of our brands posted excellent results due to a combination of high occupancy levels, substantial room-rate growth and increased distribution."
For the first three quarters of the year, Marriott generated net income of $196 million, or $1.44 per share, a 25 percent jump from the same period a year ago. Revenue between Jan. 1 and Sept. 6 rose 11 percent, to $6.7 billion.
Marriott's stock price fell $1.25 per share to close at $54.75 a share, but analysts were unfazed by that. "This quarter simply underscores just how strong their lodging business is," said Neil Barsky, a Morgan Stanley & Co. Inc. hotel analyst.
The company attributed the climb primarily to more than 6 percent gains in revenue available per room for its Marriott Hotels, Resorts & Suites, Courtyard, Residence Inn and Fairfield Inn brands as well as the net addition of 16,600 rooms over the past year and higher earnings from its 49 percent stake in the Ritz-Carlton hotel chain.
In the third quarter, Marriott added 3,800 new rooms to its lodging portfolio, including properties in Switzerland, Costa Rica and Mexico. In all, Marriott's lodging group now controls 1,144 properties containing 222,000 rooms.
In its Marriott Hotels division, the company's full-service line raised average room rates 9 percent to $113 in the third quarter, and boosted occupancy one percentage point to 80 percent. Marriott, like its sister corporation Host Marriott Corp., has targeted so-called full-service hotels as a key area for future growth.
"The lodging industry is smokin'," said Bruce E. Thorp, an industry analyst with PNC Institutional Investment in Philadelphia. "The outlook remains favorable, and Marriott has been doing better than the industry because they have superior management, have been showing good unit growth and are expanding overseas."
Marriott's higher results also reflected increases in its management and senior living services divisions, the company said.
Pub Date: 9/27/96