Hospitality is a tricky business. Treat people right, and your restaurants, hotels and resorts can become multi-generational destinations; think of Disney (NYSE:DIS) or the Four Seasons. At the same time, it's a brutal business - demanding customers, rampant competition and the vagaries of the economic cycle all put heavy demands on management. Marriott (NYSE:MAR) is clearly a long-term winner and a leader in the industry, but there is an incredible amount of noise in the market right now.
A Pretty Comfy Third Quarter
All things considered, Marriott delivered solid third quarter results. Revenue (net of reimbursements) rose almost 11%, with constant currency revenue per available room (RevPAR) about 7% globally. The RevPAR was pretty consistent both at home and abroad, and the company is seeing modestly positive occupancy trends (up 2%) despite rate increases.
Profitability is also coming in fairly well. Operating profits rose nearly 14% and earnings before interest, taxes, depreciation and amortization (EBITDA) climbed about 11% this quarter. On an adjusted basis, EBITA was up a more modest 9%, but still slightly more positive on balance than many analysts had expected. (For related reading, see A Clear Look At EBITDA.)
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