Consolidation has been on the rise throughout the economy, and Marriott International (NASDAQ:MAR) made a big move when it decided to acquire rival Starwood Hotels & Resorts late last year. Now that the merger is complete, the hotel company has hoped that the payoff would come quickly and with significant impact on its growth.

Coming into Monday's first-quarter financial report, Marriott investors had high hopes that both sales and earnings would grow extensively, both because of the Starwood acquisition and favorable conditions in the industry in general. Marriott managed to surpass most of those expectations, and it sees a healthy future ahead for the company. Let's look more closely at Marriott and what its latest results say about the hotel industry and the company's role in it.

Marriott resort location.

Image source: Marriott.

Merger momentum creates growth

Marriott's first-quarter results continued the favorable push higher that the hotel company saw last quarter. Total revenue climbed by nearly half to $5.56 billion, far exceeding the $5.29 billion consensus forecast among those following the stock. GAAP net income of $365 million was higher by two-thirds from year-ago levels, and the resulting $0.95 per share in earnings was better than the $0.91 per share that investors had expected to see.

Looking at how Marriott did, the hotel enjoyed accelerating growth in some of its most important metrics. Comparable systemwide revenue per available room, or RevPAR, rose 3.1% in constant-dollar terms on both a worldwide basis and in the key North American market. Currency impacts were relatively small, costing Marriott less than two percentage points of RevPAR growth even in its international segment. Base management and franchise fees were up by nearly half, and worldwide incentive management fees climbed by more than half, both largely a result of the Starwood acquisition.

Yet even with Starwood under its belt, Marriott didn't stop expanding. The hotelier saw its portfolio climb by 103 new properties, with almost 17,200 new rooms. Despite seeing 22 properties leave Marriott's system, the total end-of-quarter numbers included 6,161 properties and more than 1.2 million rooms. The company's pipeline is also impressive, with more than 2,500 additional properties that have roughly 430,000 rooms.

CEO Arne Sorenson was happy with Marriott's numbers. "RevPAR exceeded our expectations in North America and Europe due to stronger group attendance and higher-rated business transient demand," Sorenson said, and "demand in Greater China and elsewhere in the Asia Pacific region was also better than expected." The CEO also noted how well the integration of Starwood has gone so far.

What's ahead for Marriott?

In particular, Marriott was happy with how well it did compared to its expectations. Actual total fee revenue of $782 million was far above Marriott's previous guidance for $740 million to $750 million, and better-than-expected performance in owned, leased, and other revenue also contributed to overall gains. Meanwhile, less spending on expenses saved the company $15 million to $20 million from its initial overhead cost projections.

As we've seen before, though, Marriott's guidance going forward appeared to be somewhat conservative. The company sees comparable RevPAR coming in flat to up 2% in North America, with faster gains of 3% to 5% internationally pulling up the global growth number to between 1% and 3%. It believes it will bring in $820 million to $835 million in fee revenue. For the full year, Marriott boosted its guidance, with a one-point RevPAR boost to 1% to 3% growth in North America and between 2% and 4% in growth internationally. That will bring worldwide RevPAR growth to between 1% and 3%, up half a point from its most recent guidance.

Marriott investors celebrated the news, and the stock jumped almost 5% in after-hours trading following the announcement. With such a healthy environment for the industry, Marriott appears to have timed its Starwood acquisition particularly well. As long as the global economy continues to produce consistent results, Marriott should continue to have an opportunity to grow and prosper in the months and years ahead. 

Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Marriott International. The Motley Fool has a disclosure policy.