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Marriott sees revenue weakness in third quarter, shares fall

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By Reuters
Marriott sees revenue weakness in third quarter, shares fall
A Marriott flag hangs at the entrance of the New York Marriott Downtown hotel in Manhattan, New York November 16, 2015. REUTERS/Andrew Kelly   -   Copyright  Andrew Kelly(Reuters)

(Reuters) – Marriott International Inc <MAR.O> on Monday signalled weakness in revenue per available room (revPAR) in North America, its largest market, for the third quarter, sending shares of the world’s largest hotel chain down about 4 percent.

The company expects revPAR, an important metric that measures a hotel chain’s health, to increase by 1.5 percent to 2 percent in the region due to Independence Day holiday falling in the middle of the week and tough comparisons to last year’s numbers that included the impact of hurricane relief efforts.

However, Marriott, which owns the Ritz-Carlton and St. Regis luxury hotel brands, kept its forecast for worldwide revPAR for the full year unchanged at 3-4 percent.

The company also raised its forecast of full-year adjusted profit to $5.81 to $5.91 per share from $5.43 to $5.55 per share.

Net income rose to $610 million, or $1.71 per share, in the second quarter ended June 30, from $489 million, or $1.28 per share, a year earlier.

Excluding items, the company earned $1.47 per share, beating the average analyst estimate of $1.38, according to Thomson Reuters I/B/E/S.

Revenue rose to $5.35 billion but missed Wall Street estimate of $5.84 billion due to a drop 5.6 percent in fee received from the properties that the company owns or leases.

The company’s shares was down at $124.45 in extended trading.

(Reporting by Arunima Banerjee and Munsif Vengattil in Bengaluru; Editing by Arun Koyyur)