Marriott International Inc. (MAR) has provided a better outlook for its North American hotels for the fourth quarter of 2009. The company now expects comparable systemwide revenue per available room (RevPAR) inside North America to decline 13% – 14%. This is slightly better than its previous guidance issued on Dec. 8, 2009, where the company said that it expects a RevPAR decline of 13% to 16% for its North American hotels.
For comparable systemwide hotels outside North America, Marriott expects its RevPAR to report a decline of 14% to 16% on a constant dollar basis. This is consistent with the company’s outlook disclosed in December.
Marriott is expected to release its fourth quarter earnings on February 11. According to the Zacks Consensus Estimate, Marriott will report earnings of 25 cents per share for fourth quarter and 86 cents per share for full fiscal 2009.
Marriott’s third quarter earnings of 15 cents per share were two pennies above the Zacks Consensus Estimate. Results were also above the company’s guidance of 9 cents to 14 cents issued at the time of the second quarter earnings release on July 16, but were down 55% year-over-year.
Results reflected higher-than-expected revenue as a result of sustained leisure demand driven by promotional activities such as rate cuts. Along with this, the company experienced the benefits of several cost-control initiatives implemented over the last few quarters.
While the operating environment in the lodging sector has continued to deteriorate in the recent months and we expect RevPAR to keep falling in the near term, Marriott’s strong development pipeline will provide some relief and offset the declines. Also, we note that declines in RevPAR have moderated of late.
With some early signs of economic recovery, we believe that Marriott is better positioned to command a premium room rate relative to the overall lodging industry.
On Thursday, the shares of Marriott closed at $27.98, up 11 cents on the New York Stock Exchange.
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