Hotelier Marriott International Inc reported a sharply lower second-quarter profit on Thursday but beat estimates, as cost-cutting measures offset a drop in room rates and occupancy.
Net income attributable to Marriott dropped 76 percent to $37 million, or 10 cents per share. A year earlier, Marriott earned $153 million, or 41 cents per share.
Excluding restructuring costs and other items, earnings were 23 cents per share. Analysts on average had expected 21 cents per share, according to Reuters Estimates.
Revenue for Marriott, which operates chains including Ritz Carlton, Renaissance and Marriott, fell 19 percent to $2.6 billion from $3.2 billion.
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 Chairman and Chief Executive Officer J.W. Marriott Jr., in a statement.
As companies cut back on business trips and retreats, hotel operators like Marriott have been forced to rely on more price-sensitive leisure travelers. Many companies have seen double-digit declines in revenue per available room (RevPAR), a key gauge of industry health.
Marriott said its worldwide comparable company-operated RevPAR dropped 26.1 percent in the quarter and systemwide comparable RevPAR dropped 23.6 percent. International results were hurt by concerns about the H1N1 influenza virus, in addition to the weak global market.
The company said it could not provide its typical exact outlook, given the global economic climate, but it is providing assumptions it is using for internal planning purposes. Marriott said it expects comparable systemwide RevPAR for North America to fall as much as 23 percent in the third quarter and adjusted earnings from continuing operations could total 9 to 14 cents per share.
For the full year, the company said the business climate, particularly the pricing environment, should remain very unpredictable, and adjusted earnings from continuing operations could total 76 to 86 cents per share.
(Reporting by Deepa Seetharaman; Editing by Lisa Von Ahn and Gerald E. McCormick)