Marriott International posts 3rd-quarter profit as room rates, occupancy rise

Marriott reports 3Q profit; room rates rise

PORTLAND, Ore. — Hotel operator Marriott International Inc. returned to a profit in the third quarter as revenue rose on higher room rates and it wasn’t weighed down by one-time costs.

The company, based in Bethesda, Md., said corporate and leisure travel is improving and the company has been able to capitalize on that demand with higher rates.

Hotel operators were hard-hit during the recession as both business travelers and vacationers stayed home. To fill empty rooms, chains dramatically slashed prices — a trend they’ve tried to reverse as the economy improves.

“We are leading the U.S. industry in pushing retail price increases,” Chairman and CEO J.W. Marriott Jr. said in a statement.

Marriott reported late Wednesday that it earned $83 million, or 23 cents per share, for the quarter. That’s up from a loss of $466 million, or $1.31 per share, last year when it recorded a big charge to write down the value of its time-shares, restructuring costs and other items. Marriott would have earned 15 cents per share last year after adjusting for those items.

Revenue rose from $2.5 billion to $2.6 billion for the quarter.

Wall Street analysts expected earnings of 22 cents per share on revenue of $2.66 billion, according to Thomson Reuters.

Marriott said its profit margins improved on higher room rates and occupancy. The company’s growing base of hotels also helped boost its revenue for the quarter — Marriot added 32 properties and more than 5,000 rooms during the quarter.

Marriott said the key performance measure of revenue for each available room rose 7.5 percent during the quarter. Internationally, the measure was stronger at 12 percent adjusted for exchange rates.

Marriott said it anticipates demand to continue to grow into 2011.

The company said it expects to earn 33 to 36 cents per share for the fourth quarter and $1.09 to $1.12 per share for the full year. The guidance came in mostly below analyst expectations of 36 cents per share for the quarter and $1.12 for the year.

Shares of the company fell 86 cents, more than 2 percent, in after-hours trading to $37.