Marriott International's fourth-quarter profits were lower than the same period a year ago, but a new way of reporting earnings had something to do with it.
Profits fell 17 percent during the quarter as revenue fell 14 percent. The Bethesda, Md.-based hotel operator said a shorter fourth-quarter—92 days in 2013 compared with 112 days the year before—contributed to its lower earnings.
For the fourth quarter, Marriott posted a profit of $151 million, down from $181 million a year earlier. Revenue fell 14 percent to $3.22 billion from $3.76 billion in the same period.
All was not bad, though, as revenue per available room rose 5.1 percent during the quarter, a sign of continued improvement in industry health.
"2013 was a year of firsts," said Arne Sorenson, CEO of Marriott International. "Strong RevPAR growth and new hotels drove Marriott's fee revenue to a record $1.5 billion. We signed contracts with owners and franchisees for 67,000 new rooms, the most productive year in our history averaging more than one hotel every day. Our development pipeline reached a record 195,000 rooms."
The good RevPAR news was coupled with a healthy group year—a sign, too, of business recovery. "Our North American group sales organization booked $3.4 billion in new group business in 2013 for all future periods, eclipsing their prior record from 2007. Group revenue on the books for 2014 is running more than 4 percent higher than 2013 levels for the Marriott brand. Special corporate negotiated rates are nearly complete with room rates expected to rise about 5 percent in 2014."
Sorenson said he expects worldwide systemwide REVPAR to increase 4 to 6 percent in 2014, citing a strong development pipeline and the addition of Protea hotels in Africa.
Marriott added 47 new properties (7,681 rooms) to its worldwide lodging portfolio in the fourth quarter, including The Ritz-Carlton Almaty in Kazahkstan, the JW Marriott Hotel Hanoi and the Hotel Am Steinplatz, an Autograph Collection hotel in Berlin. Fourteen properties (2,532 rooms) exited the system during the quarter. At year-end, the company's lodging group encompassed 3,916 properties and timeshare resorts for a total of nearly 676,000 rooms.
Marriott is the latest hotel company to report earnings, joining Starwood Hotels & Resorts Worlwide, Hyatt Hotels Corp., InterContinental Hotels Group and Choice Hotels International.