Marriott Posts Strong Q2 Earnings

Marriott International during the second quarter gained in all financial areas year over year, boasting higher revenue per available room, growing occupancy and an increase in average daily rate in all hotel tiers, the company said today during its quarterly earnings call.

The multi-brand hotel company's revenue jumped 11 percent to $2.7 billion and is indicative of the general health of the hotel industry.

The company today said systemwide RevPAR increased 11 percent from the same period in 2004, anchored by an 8.9 percent jump in ADR and a 1.5 percentage-point upswing in occupancy, which now stands at more than 75 percent.

"The economy continues to be strong and so does our business," Marriott International chairman and CEO J.W. Marriott Jr. said in a statement. "In the second quarter, surging U.S. travel demand drove occupancy and room rates higher in most markets, from New York and Seattle to New Orleans and San Francisco. Marriott's occupancy and room rates improved due to accelerating corporate demand, growing group meeting attendance and increasing global travel."

Performance in North America fell slightly below systemwide averages, but Marriott still recorded strong growth for the region, with RevPAR jumping by 10 percent, occupancy up by 1 percentage point and ADR increasing by 8.5 percent.

"With robust industry demand, our increasing share of expected low industry supply growth and the strength of our brand preference, we expect continued pricing power and strong financial results for the remainder of 2005 and beyond," Marriott said.

The company said it expects North American RevPAR to increase between 8 percent and 10 percent for full-year 2005, which is a range slightly higher than industrywide forecasts.

Marriott is the first major multi-brand hotel company to release earnings for the second quarter, to be followed later this month by Starwood and Hilton.