tcook052
Feb 14, 03, 5:15 pm
Full story from NY Times:
WASHINGTON, Feb. 10 — Marriott International Inc., the hotel chain, said today that its fourth-quarter loss was narrower than a year ago, and it lowered its outlook for 2003 because demand for lodging remained soft.
Marriott, based in Bethesda, Md., reported a loss of $37 million, or 15 cents a share, for the quarter ended Jan. 3, compared with a loss of $116 million, or 48 cents a share, in the fourth quarter of 2001.
The company, which has been hurt by a drop in travel spending, has moved to focus on its core hotel business and is selling its food service distribution and elder-care operations. Deals to sell those businesses should be completed in March, the chief financial officer, Arne M. Sorenson, said in a conference call.
Marriott also said it had agreed to sell a 50 percent interest in a synthetic fuels business to an investment bank it refused to name, for an initial $25 million payment, and additional payments later.
Marriott's bottom line was also improved last year with the sale of its stake in Interval International, a time-share exchange company based in Miami, and $80 million in profit from a noncore activity, the synthetic fuel business.
Fourth-quarter revenue was $2.68 billion, up from $2.14 billion.
Revenue rose to $8.44 billion in 2002, from $7.79 billion the previous year.
Revenue per available room increased 7.4 percent in North America, and 14 percent in other countries.
Nonetheless, Mr. Sorenson said that he expected revenue per room to be flat in this year. He said that in the first quarter it would drop about 3 percent from a year ago, a forecast that does not include any slowdown caused by a war with Iraq.
Rising costs for insurance and employee medical benefits will also lower profits, he said. Mr. Sorenson reduced earnings per share estimates for 2003 to $1.85 to $1.95 from an earlier estimate of $2.05 to $2.15.
Saying that he had "never seen a business environment more difficult to forecast," Mr. Sorenson added that 2003 would be a "transition year" for the hotel industry. Marriott, he said, will need to attract more business travelers to replace tourists, who are more price sensitive.
Despite a decrease in the demand for lodging, Marriott added about 31,000 rooms last year. The company expects to add 25,000 to 30,000 rooms around the world in 2003 and 2004, it said.
Marriott has been facing complaints from some of its 500 hotel owners about how it buys bulk supplies from a purchasing firm, Avendra. Mr. Sorenson said the company had met with about 75 percent of its hotel owners to explain details of its purchasing. At least four hotel owners have sued Marriott or Avendra, contending financial mismanagement.
WASHINGTON, Feb. 10 — Marriott International Inc., the hotel chain, said today that its fourth-quarter loss was narrower than a year ago, and it lowered its outlook for 2003 because demand for lodging remained soft.
Marriott, based in Bethesda, Md., reported a loss of $37 million, or 15 cents a share, for the quarter ended Jan. 3, compared with a loss of $116 million, or 48 cents a share, in the fourth quarter of 2001.
The company, which has been hurt by a drop in travel spending, has moved to focus on its core hotel business and is selling its food service distribution and elder-care operations. Deals to sell those businesses should be completed in March, the chief financial officer, Arne M. Sorenson, said in a conference call.
Marriott also said it had agreed to sell a 50 percent interest in a synthetic fuels business to an investment bank it refused to name, for an initial $25 million payment, and additional payments later.
Marriott's bottom line was also improved last year with the sale of its stake in Interval International, a time-share exchange company based in Miami, and $80 million in profit from a noncore activity, the synthetic fuel business.
Fourth-quarter revenue was $2.68 billion, up from $2.14 billion.
Revenue rose to $8.44 billion in 2002, from $7.79 billion the previous year.
Revenue per available room increased 7.4 percent in North America, and 14 percent in other countries.
Nonetheless, Mr. Sorenson said that he expected revenue per room to be flat in this year. He said that in the first quarter it would drop about 3 percent from a year ago, a forecast that does not include any slowdown caused by a war with Iraq.
Rising costs for insurance and employee medical benefits will also lower profits, he said. Mr. Sorenson reduced earnings per share estimates for 2003 to $1.85 to $1.95 from an earlier estimate of $2.05 to $2.15.
Saying that he had "never seen a business environment more difficult to forecast," Mr. Sorenson added that 2003 would be a "transition year" for the hotel industry. Marriott, he said, will need to attract more business travelers to replace tourists, who are more price sensitive.
Despite a decrease in the demand for lodging, Marriott added about 31,000 rooms last year. The company expects to add 25,000 to 30,000 rooms around the world in 2003 and 2004, it said.
Marriott has been facing complaints from some of its 500 hotel owners about how it buys bulk supplies from a purchasing firm, Avendra. Mr. Sorenson said the company had met with about 75 percent of its hotel owners to explain details of its purchasing. At least four hotel owners have sued Marriott or Avendra, contending financial mismanagement.