Marriott International today reported fourth quarter 2016 results, the first full quarterly period as a combined company after its purchase of Starwood Hotels & Resorts Worldwide in September.
“The company delivered record high fee revenues in 2016, boosted by significant unit growth, RevPAR improvement, outstanding property-level margin gains and the acquisition of Starwood Hotels & Resorts,” said Arne Sorenson, president and CEO of Marriott International.
“Looking ahead, we’ve never been more optimistic about our long-term prospects,” Sorenson said. “Our expected new rooms growth for 2017 remains healthy, customers love our hotels and loyalty programs, and owners and franchisees prefer our portfolio of brands more than ever. Around the globe, Marriott brands represent nearly one in four hotels under construction, and one in three hotels under construction in North America.”
Sorenson said that this year the company anticipates growing rooms distribution by 6%, and that systemwide comparable constant dollar RevPAR for the combined portfolio will increase 0.5% to 2.5%. “While we do not assume asset sales in our earnings guidance, we believe assets will be sold in 2017,” he said. “Not including asset sales, we expect to return US$1.5 billion to US$2.0 billion to shareholders in share repurchases and dividends in 2017.”
Marriott’s Q4 2016 adjusted EBITDA of US$756 million, which represented the combined Marriott-Starwood, exceeded SunTrust Robinson Humphreys’ US$702 million estimate and the consensus of US$689 million, SunTrust analyst Patrick Scholes wrote in a note. The majority of that appeared to be from a tax provision; without that, EBITDA is in line with the consensus, he wrote.
Other details, according to the company:
- Fourth quarter reported diluted EPS totaled US$0.62, a 19% decrease over prior year results. Fourth quarter adjusted diluted EPS totaled US$0.85, a 20% increase over fourth quarter 2015 combined results. Adjusted 2016 fourth quarter results exclude merger-related costs. Combined 2015 fourth quarter results assume Marriott’s acquisition of Starwood and Starwood’s sale of its timeshare business had been completed on January 1, 2015.
- North American comparable systemwide constant dollar RevPAR rose 1.1% in the 2016 fourth quarter, while worldwide comparable systemwide constant dollar RevPAR rose 0.8%.
- During the 12 months ended December 31, 2016, Marriott and Starwood together added more than 68,000 rooms, including roughly 11,000 rooms converted from competitor brands and approximately 31,000 rooms in international markets.
- At year-end, Marriott’s worldwide development pipeline increased to more than 420,000 rooms, including nearly 34,000 rooms approved, but not yet subject to signed contracts.
- Fourth quarter reported net income totaled US$244 million, a 21% increase over prior year results. Fourth quarter adjusted net income totaled US$334 million, a 15% increase over prior year combined results.
- Adjusted EBITDA totaled US$756 million in the quarter, an 11% increase over fourth quarter 2015 combined adjusted EBITDA.
- For full year 2016, Marriott repurchased 8.0 million shares of the company’s common stock for US$573 million, including 4.3 million shares for US$348 million in the fourth quarter.