Marriott International Inc., the largest publicly traded U.S. hotel chain, said first-quarter earnings rose 31 percent as demand increased from business travelers in such U.S. cities as New York.
Net income climbed to $136 million, or 43 cents a share, from $104 million, or 30 cents, a year earlier, the Bethesda, Maryland-based company said today in a statement. The average estimate of 14 analysts was 41 cents a share, according to data compiled by Bloomberg.
Marriott, whose brands include Ritz-Carlton, benefited from demand in the U.S., buoyed by an improving economy and business-travel spending, according to Patrick Scholes, an analyst at SunTrust Robinson Humphrey Inc. in New York.
“Domestically, the individual business traveler is doing well, particularly in cities like New York,” Scholes said in an interview before the results were announced. The greater New York area contributes about 10 percent of Marriott’s earnings, he said.
Revenue per available room, an industry measure of occupancies and rates, climbed 5.8 percent at company-operated hotels in North America. Worldwide the measure increased 4.6 percent in the first quarter, excluding currency fluctuations.
“Our first quarter fee revenue exceeded our expectations,” President and Chief Executive Officer Arne Sorenson said in the statement. North American revpar rose, “reflecting strong transient demand and favorable pricing” and “particular strength among full-service hotels in the U.S.”
For the second quarter, the company expects revpar to increase 5 percent to 7 percent in North America, 2 percent to 4 percent outside North America and 4 percent to 6 percent worldwide.
Marriott also forecast full-year earnings per share of $1.93 to $2.08, a 12 percent to 21 percent increase from 2012. That compares with a February estimate of $1.90 to $2.05 a share.
Total revenue climbed to $3.14 billion in the first quarter from $2.55 billion a year earlier.
Marriott released its results after the close of regular U.S. trading. The shares fell 1.4 percent to $42.48 today in New York. They have gained 7.1 percent in the past year.
Starwood Hotels & Resorts Worldwide Inc., owner of the luxury St. Regis and W brands, yesterday said first-quarter earnings increased 66 percent because of a tax benefit and growth in North America. Hyatt Hotels Corp., the chain controlled by the Pritzker family, today reported first-quarter profit fell 20 percent as renovations cut into revenue and demand declined for rooms booked in groups.