Marriott International Inc., boosted by increased profits from its existing hotels and contributions from new projects, generated net income of $96 million in its third quarter, the company announced yesterday.
Marriott also said it plans to continue a share-repurchase program that will involve stock valued about $330 million. Under the program, Marriott will acquire as many as 10 million of its common shares on the open market.
The Bethesda-based hotel conglomerate also attributed its 12 percent gain in earnings in the quarter that ended Sept. 10 to tight cost controls and increased productivity. Marriott noted that its results were dampened slightly by year 2000 readiness efforts and expenses associated with opening senior-living communities.
Marriott said its hotel earnings gains, to 36 cents per share vs. 32 cents per share in the comparable 1998 quarter, were led primarily by its Ritz-Carlton and Courtyard by Marriott brands.
Sales in the quarter totaled $2 billion, an 11 percent increase.
But even as Marriott, the world's largest hotel operator, continues to post better financial results, it is planning growth.
"This year, the company will open nearly 250 new hotels representing well over 30,000 rooms, and we are continuing to replenish our pipeline of projects under development," said J. W. Marriott Jr., the company's chairman and chief executive officer. "Our brands are taking advantage of current industry conditions to gain market share, and we are well-positioned for further growth in 2000 and beyond."
In the third quarter, Marriott added 59 new hotels with a total of 8,700 rooms to its lodging portfolio, which now contains 1,774 projects with a total of 340,600 rooms, 4,400 time-share villas and 6,300 furnished corporate apartments.
Since 1992, the hospitality industry has enjoyed record profits, stemming from the nation's healthy economy, property expansions and unprecedented increases in both occupancy and average daily room rates.
Marriott's average occupancy across its six primary brands in the quarter remained at 80 percent. Its average daily room rate rose 3 percent, ranging from $58.95 for the company's Fairfield Inn brand to $196.79 for its Ritz-Carlton luxury properties.
Marriott's revenue available per room, a key indicator of hotel operating efficiency, rose 3 percent in the quarter, led by a 12.4 percent jump by the company's 35 Ritz-Carlton hotels.
"What was notable in the quarter was the Ritz-Carlton brand," said Bryan A. Maher, a Credit Lyonnais Securities hospitality industry analyst.
"It just knocked the cover off the ball because, with the strong economy, people have the ability to stay at that type of product, and, with Marriott's reservation system being the best in the world, they can push their numbers somewhat," he said.
The company's results, combined with a somewhat stagnant share price -- Marriott's common stock was up yesterday 12.5 cents per share to close at $32.6875 -- are driving the stock buyback, said Tom Marder, a Marriott spokesman.