Hotel giant Marriott International reported fourth-quarter and full-year earnings Wednesday evening that beat expectations—again—by a healthy margin, even as the company undergoes a significant expansion of its business.
Here are three key points from the hotel chain’s results.
1. Marriott posted record results.
For the full year, Marriott’s (MAR) sales were $13.8 billion, up 8% from 2013 — the highest sales figure since 2007 and a record for the company. Net income for the full year was $753 million, up 20% from last year. Revpar, a key measure of hotel revenue, was up nearly 7% for the year.
“We are very optimistic about the long term,” said CEO Arne Sorenson, citing numbers from the World Travel Organization that show international arrivals have more than doubled in recent years to 1.1 billion visits in 2013, as well as Marriott’s U.S. hotels reporting a 20% increase in guests coming from greater China.
“It’s numbers like these that confirm that we are truly in a new golden age of travel,” Sorenson said.
The company’s fourth-quarter net income rose 30% from 2013, and earnings per share rose 39 percent. Sales for the quarter were $3.56 billion, up from $3.2 billion last year and beating the consensus estimate of $3.47 billion.
2. A growth push.
Marriott is in a significant expansion phase. Every region inked a record number of deals last year for a total signing of 100,000 new rooms for Marriott, more than three times the pace of five years ago. The company ended 2014 with 240,000 rooms in the development pipeline, pushing toward its goal of surpassing 1 million rooms by the end of the year.
The growth push is part of several initiatives under CEO Arne Sorenson, who took over for Bill Marriott in 2012 (he remains executive chairman and chairman of the board). The company is in the midst of a transformation from a number of different perspectives, a few of which Sorenson called out during the earnings call Thursday.
For one thing, all that growth poses a management and operational challenge for a company that operates 4,000 hotels in 79 countries; to be able to be more nimble, Sorenson has decentralized top management, putting in place four continental operating presidents who are closer to the local markets and regions so that decisions can be made faster and acquisition opportunities spotted sooner.
3. Getting millennial-friendly.
The owner of the Marriott and Ritz-Carlton hotel brands is aggressively reengineering itself to become more relevant to millennials. That includes adding new brands to the portfolio, such as Moxy Hotels, AC Hotels by Marriott, and the Edition collection in partnership with Ian Schrager. It also means making tweaks to everything from its web presence (nearly 20% of its bookings on Marriott.com last year came from mobile devices) to its rewards program (millennials like to earn points faster) to its room design (did you know that millennials don’t like to unpack their clothes into drawers?).
Sorenson mentioned one particular point of pride on the call: the redesign of the lobby at Marriott’s headquarters to be much more millennial-friendly. (However, later in the discussion he also pointed out that millennials also tend to loathe the term millennial — “they are not monolithic,” he said.)
