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Marriott checks in a profit
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July 6, 2000: 2:25 p.m. ET
Hotelier posts second-quarter earnings of 50 cents a share, above forecasts
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NEW YORK (CNNfn) - Marriott International Inc., the nation's biggest hotel chain, Thursday reported second-quarter profits that beat Wall Street forecasts as travelers flocked to its properties - especially in the United States and Asia.
Earnings for the quarter ended June 16 rose to $126 million, or 50 cents a share, from $114 million, or 42 cents a share, a year earlier. Analysts had expected the Washington, D.C.-based company to earn 48 cents a share, according to First Call, which tracks Wall Street profit forecasts.
"We saw substantial improvement in demand during the second quarter across all of our brands," Chief Executive J.W. Marriott Jr. said in a statement. "We had particularly exciting results in several major markets, including New York, Boston, San Francisco and Hong Kong."
Sales rose to about $2.4 billion from $2.0 billion.
During the quarter, Marriott announced an agreement to sell 10 extended stay and select service hotels for $145 million, while still retaining long-term management agreements that allow it to reap revenue by running the hotels. Eight of the hotels were sold during the quarter for approximately $90 million, with the remaining two expected to be sold by the end of the year.
 Across all of its different businesses, Marriott said its rate of revenue per available room rose 7.6 percent during the quarter. Average room rates rose by 5.6 percent during the quarter, while occupancy rose to 81.6 percent of capacity. The average rate for a room ranged from $252.19 a night at the posh Ritz-Carlton to $61 a night at the more-thrifty Fairfield Inn.
Profits were also bolstered by a 26 percent increase in Marriott's Vacation Club International contract sales, reflecting continued strong demand for timeshares, particularly at club resorts in Hawaii, Aruba and California, the company said.
Strong contract sales also reflected growing interest in the division's newest timeshare brands, Horizons in Orlando and Ritz-Carlton Club resorts in St. Thomas and Aspen, Marriott said.
A total of 42 hotels and resorts, or about 5,500 rooms, were added in the second quarter. In the past 12 months, the company has added 227 hotels and timeshare resorts, or about 34,500 rooms. It removed 29 properties, or 6,500 rooms, from its worldwide lodging portfolio.
Marriott said his hotel chain plans to open an additional 38,000 hotel rooms and timesharing villas through the remainder of 2000; within the next five years, the company plans to open 175,000 rooms.
Looking to the future, Arne Sorenson, executive vice president and chief financial officer of Marriott said that the implementing an Internet strategy is important in a variety of ways including how rooms are sold.
Already this year, we've sold more rooms on the Internet than we did all year last year," Sorenson told CNNfn. "We use the Internet for procurement, for buying supplies for our hotels. We formed a joint venture with Hyattwhich will provide a web-based platform for procurement. And we are seeing the Internet also become relevant to the guest room experience."
Sorenson said high-speed Internet access is also currently available in Marriott hotel rooms in the United States, and Internet-based entertainment will be rolled out in over the next year or two. For more on Soresnson's comments click [WAV 328KB] or [AIF 328KB].
Marriott (MAR: Research, Estimates) stock rose 1-1/2 to 38-1/4 in trading Thursday. 
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Marriott
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