Marriott profits climb 26% as group travel improves

Profits at Marriott International rose 26 percent during the first quarter, driven by a jump in group bookings and leisure travel throughout the United States and Mexico, the hotel giant reported Tuesday.

“North America led the way this quarter,” said Laura E. Paugh, senior vice president of investor relations for the Bethesda-based company. “We saw surprisingly strong [revenue growth] in markets like San Francisco, San Diego, Dallas, Denver, even in Florida.”

Profits rose to $172 million, or 57 cents per share, during the first quarter, up from $136 million, or 43 cents per share, a year earlier. Total revenue grew 4 percent to $3.29 billion, up from $3.14 billion, in the same period.

Group travel and business bookings, which have pushed down profits for hotel companies in recent years, have begun rebounding — even in the Washington area, where government budget cuts have taken their toll, Paugh said.

Revenue per available room — a key industry metric — increased 5.8 percent to $126.61. In the Washington area, the statistic dipped 1 percent when compared to the first quarter of 2013.

“It’s not that there’s any big resurgence in government demand, but business seems to have stabilized,” Paugh said. “Groups are opening their wallets.”

“We saw fewer cancellations than typical,” she said. “We saw better attendance than typical. Even the restaurants had better revenue than what we’ve seen in the last eight to 10 quarters.”

Marriott added nearly 6,000 rooms during the first quarter, and the company has another 200,000 in development.

The company bought back 7 million shares of its common stock for $356 million during the first quarter. Paugh said Marriott expects to shell out between $1.25 billion and $1.5 billion in share repurchases and dividend payments by the end of this year.

Abha Bhattarai covers local retail, hospitality and banking for The Washington Post. She has previously written for The New York Times, The Wall Street Journal, Reuters and the St. Petersburg (Fla.) Times.
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