Marriott US$37 million profit is a quarter of 2008 results

Marriott International last week reported its second quarter profits, which at US$37 million, amounts to a little under a quarter of the US$157 million achieved a year earlier.

Revenue dropped by a fifth, reaching US$2.56 billion compared toUS$3.19 billion achieved a year earlier.  Marriott’s bottom line was hurt by restructuring costs, without which the hospitality giant should have achieved US$84 million for the three months on report.

US$33 million was used by Marriott for restructuring costs, mainly utilised for severance packages as well as timeshare facilities exit costs, says the accommodation provider.

“In the second quarter, we delivered impressive house profit margins as a result of ongoing cost controls and operational improvements, despite a significant decline in revenue per available room,” said J.W Marriott, Jr., Marriott International Chairman and CEO.

In its financial statement Marriott adds, “In the 2009 second quarter REVPAR [revenue per available room] for the company's worldwide comparable company-operated properties declined 26.1% and REVPAR for the company's worldwide comparable systemwide properties declined 23.6%.”

Marriott adds that for its hotels outside of North America, public fear concerning influenza A(H1N1) dragged numbers down.

Marriott was hesitant to offer an earnings guidance for the rest of the year, but says that assuming its timeshare sales and services does as well as expected and general, administrative and other expenses total between US$135-US$145 million a similar profit should be achieved in the third quarter.

“For the full year 2009, the company expects the business climate, particularly the pricing environment, to remain very unpredictable,” adds Marriott.  “With continued concerns regarding the H1N1 virus and weakening economies in most international markets, the company assumes full year 2009 REVPAR declines of 17 to 20%.”

Marriott’s cash balances currently sit at US$125 million, nine million less than the figure found at the end of last year.