Fractional Ownership News

Marriott reports better than expected results for Q2 2010

Hotel giant Marriott, which earlier this year was forced to freeze its fractional ownership and timeshare development programme, has announced better than expected financial results for Q2 2010, although its timeshare arm saw lower revenues than in the same period last year.

Second quarter diluted earnings per share (EPS) totaled $0.31, ahead of expectations and prior year results; total fee revenue increased 13 percent to $287 million as a result of strong revenue per available room (REVPAR) and unit growth.

Second quarter adjusted Timeshare segment contract sales decreased 21 percent to $167 million (excluding a $6 million allowance for fractional and residential contract cancellations recorded in the quarter) largely due to tough comparisons as a result of the 25th anniversary promotion in the year-ago quarter. In the prior year's quarter, adjusted Timeshare segment contract sales totaled $212 million (excluding a $3 million allowance for fractional and residential contract cancellations).

In the second quarter, timeshare sales and services revenue totaled $289 million and, net of expenses, totaled $50 million for the quarter.

The company's worldwide pipeline of hotels under construction, awaiting conversion or approved for development totaled nearly 95,000 rooms, including over 36,000 rooms outside North America. More than 6,500 rooms opened during the second quarter, including over 1,800 rooms in international markets and nearly 1,300 rooms converting from competitor brands. At the end of the second quarter, Marriott's newest brand, The Autograph Collection, included 10 hotels with over 1,500 rooms.

Early in the 2010 third quarter, the company launched Marriott Vacation Club Destinations (MVCD), a points-based program that offers increased usage and purchase flexibility to its owners. While Marriott Vacation Clubs in North America will offer this improved product to new customers going forward, existing owners will retain full rights and privileges of interval ownership as well as the opportunity to participate in MVCD.

J.W. Marriott Jr, chairman and chief executive officer of Marriott International, said, "This is an exciting time for Marriott. Business and leisure stays at our hotels are trending up. Revenue per available room increased more than expected in the second quarter and room rates at company-operated hotels in North America rose for the first time in nearly two years.

"Totaling approximately 95,000 rooms, our development pipeline reflects expanding global opportunities. We opened over 6,500 rooms during the quarter. With strong interest by owners and franchisees in our brands, we expect to open over 30,000 rooms in 2010, including conversions to our new brand, the Autograph Collection. We are seeing major international growth. At the end of the quarter, a record 39 percent of our development pipeline was outside North America as were two-thirds of our worldwide rooms under construction. During the quarter, we opened superb new international hotels in Phuket, Shanghai, St. Petersburg and Budapest."

"We anticipate even more favorable pricing in the second half of 2010 and into 2011. Combined with productivity improvements achieved over the last year, strong unit growth and increasing demand, we look forward to growing cash flow and strong earnings in 2010 and beyond."

www.marriott.com

15/07/10
 

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