It doesn't seem to matter which hotel I choose. The end result is, more often than not, a restless night spent tossing and turning on a stone-like mattress. Then again, I have trouble sleeping anywhere without a minimum of three or four feather pillows.
Still, it's nice to see that Marriott
Aside from the charges, though, it was pretty much business as usual at Marriott. In the U.S., increasing numbers of travelers lifted occupancy north of 76%. That, coupled with a solid 8.5% jump in average daily rates (ADR), generated a 10% improvement in the ever-important figure the industry calls revenues per available room (RevPAR). Overseas demand was even stronger, with a mid-teens gain in both Mexico and the Caribbean and a 23% spike in China helping to produce an overall 17.3% rise in international RevPAR.
For the quarter, base management and franchise fees (which are tied to RevPAR) were up by double digits, topping the $200 million mark. Also, with profit margins at the property level expanding 170 basis points to 37.9%, the company was entitled to receive incentive income from more than 40% of its properties (versus about one-fourth last year), which pushed the total in that department up 44% to $52 million.
Like last quarter, the company's website -- which guarantees the best rates at Marriott properties -- continues to draw traffic away from online travel sites like Cendant's
Looking forward, Marriott is expecting full-year earnings to rise sharply to between $2.68 and $2.78 (including one-time charges), driven by RevPAR growth of up to 10%, the addition of more than 25,000 new rooms to its system, and a 25% to 28% jump in timeshare revenues. In fact, the company is forecasting smooth sailing through at least 2008.
The resurgent wave of travel and the firmer pricing environment that have buoyed Marriott have also benefited rivals, such as Hilton
Sleep soundly, but not until you've read more on the hotel business:
Fool contributor Nathan Slaughter owns none of the companies mentioned.
