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As always, before we get into the discussion of our results, let me first remind everyone that many of our comments today are not historical facts and are considered forward-looking statements under federal securities laws. These statements are subject to numerous risks and uncertainties as described in our SEC filings, which could cause future results to differ materially from those expressed in or implied by our comments. Forward-looking statements in the press release that we issued last night, along with our comments today, are effective only today, October 6, 2011, and will not be updated as actual events unfold. You can find a reconciliation of non-GAAP financial measures referred to in our remarks on our website at www.marriott.com/investor.Well, in the third quarter, we reported adjusted diluted earnings per share of $0.29, a 32% increase from our prior year. On an adjusted basis, we were at the upper end of our $0.25 to $0.29 July guidance. Our adjusted operating income was also at the upper end of our guidance, excluding spinoff transaction costs. Timeshare sales and services net was about $0.01 lower than expected, largely due to reportability. On the plus side, stronger-than-expected REVPAR increased results in our leased hotels, particularly in London and Tokyo, which gave us about $0.01 upside. We also picked up about $0.01 each from termination fees, tax rate and share count. North American transient demand remained very strong in the third quarter. System-wide North American REVPAR rose 7%, at the high end of our expectation with most markets showing significant REVPAR improvement, including double-digit REVPAR growth in San Francisco, Los Angeles and Miami. In the greater Washington D.C. market, system-wide REVPAR declined 2%. Demand continues to be constrained by the shortened congressional calendar, ongoing budget battles, weak government group demand and, in this quarter, Hurricane Irene. Fortunately, better group bookings in D.C. and an increase in the government per diem should help the fourth quarter.
North American system-wide Courtyard REVPAR rose 8% in the quarter. We are seeing meaningful impact from the Courtyard Refreshing Business lobby renovations. Over 370 hotels have been renovated today with another 77 properties planned for 2012. We expect to have substantially all our Courtyard properties offering the new product by year-end 2013.Ritz-Carlton had a terrific third quarter. North American Ritz-Carlton REVPAR rose nearly 14%. Sales of club level and suites are up, and worldwide luxury incentive fees almost doubled in the quarter. We launched Ritz-Carlton Rewards last year, and we've already signed up more than 150,000 members. Today, Ritz-Carlton's worldwide hotel development pipeline stands at nearly 6,000 rooms, largely in international markets. These rooms represent a more than 40% increase on the existing Ritz-Carlton International room base. Company-operated REVPAR for the domestic Marriott brand increased 4% in the quarter with group business up 2%. Catering sales also rose 2% in the quarter. Group business was impacted by weak government group demand in D.C. and the slow return of association group business. Our sales executives continue to do a great job. For 2012, total revenue bookings for the Marriott brand are running up 7% year-over-year compared to only 3% pace in February. Bookings made in the third quarter for 2 years out, in this case, 2013, are up 31% year-over-year. One of the key benefits of our new sales organization in the U.S. is the pitching and catching of meeting prospects between regions. This is possible because we now have the systems, the training and the incentives for sales executives to sell our system rather than a single hotel. For group business booked in the first 3 quarters of 2011, nearly 900,000 room nights were obtained by sales executives selling business going to hotels outside their regions, which represented roughly 7% of all group revenue booked. We believe this is largely incremental business and is significantly ahead of our expectations.
The new sales organization is also doing well when we examine more intangible measures. Our customer response time, sales quality and follow-up performance are closely monitored and continue to improve. In fact, Marriott sales office response time is industry-leading in the third quarter according to a third-party survey. Our customers are delighted. In mid-August, we surveyed 4,500 industry group meeting planners. 2/3 said that no other lodging company is easier to do business with than Marriott, and 80% said they are more likely to do business with Marriott brands in 2012 than in 2011.Read the rest of this transcript for free on seekingalpha.com