The hospitality industry is benefiting from what's shaping up to be a record year. And Marriott
Revenue per available room, or RevPAR, a key indicator of strength in the hotel industry, rose by 10.4% for the second quarter. That, in turn, led to nice increases in net income, which climbed 17% to $182 million when adjusted for the company's synthetic-fuel business and a $94 million one-time charge. Revenue, meanwhile, rose 7.1% to $2.8 billion, led by demand around the globe. Europe's results in particular were propelled by heavy advance demand for World Cup lodging. RevPAR in North America was up about 10% over last year, mostly because of bookings at large downtown and convention hotels. The company also boosted its earnings estimates for the rest of the year, citing continuing expected demand for lodging and travel.
Given such hefty growth and tough competition from competitors such as Four Seasons
The new rules, however, sound an awful lot like corporatespeak: "I build strong relationships and create Ritz-Carlton guests for life." And "I have the opportunity to continue to learn and grow." Still, the new standards are giving some flexibility to what were previously dogmatic rules. Will it make a positive difference for the brand? This Fool thinks it is a positive, but ultimately, Ritz-Carlton employees have to execute on the new rules and hope that their guests aren't turned off.
Does this all mean that Marriott is a compelling investment at these prices? Perhaps, but with a P/E of 27 against a long-term expected growth rate of 15%, it seems that a lot of growth and big expectations are already priced in.
For more traveling-related Foolishness:
- Four Seasons Pampers Its Investors
- Between a Hard Rock and a Hard Place
- Marriott Calls It Splitsville
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Fool contributor Stephen Ellis does not own shares in any companies named above. You can view his holdings here . The Motley Fool has a king-sized disclosure policy .