Summary
Marriott International reported a net loss of $25 million for the first quarter ended March 27, 2009, a significant decrease from a net income of $120 million in the same period last year. This downturn is primarily attributed to the challenging economic environment, including the deepening recession and global credit crisis, which negatively impacted lodging demand across all segments, particularly in luxury properties. Revenues declined by 15% to $2,495 million, driven by lower demand in Timeshare sales and services, as well as reduced management and franchise fees. The company also incurred restructuring costs and other charges totaling $129 million, including impairments related to security deposits and joint venture investments, and provisions for loan losses. Despite the current headwinds, Marriott International continues to focus on cost controls and operational efficiencies. The company is implementing new sales promotions and enhancing its loyalty program to retain and attract customers. The development pipeline remains robust with over 115,000 rooms, and the company opened 8,814 new rooms in the quarter. While the economic climate presents significant challenges, Marriott's strategy of managing and franchising hotels provides a degree of stability and reduces financial leverage compared to direct ownership.
Financial Highlights
23 data points| Revenue | $2.50B |
| Operating Expenses | $2.46B |
| Operating Income | $40.00M |
| Interest Expense | $29.00M |
| Net Income | -$23.00M |
| EPS (Basic) | $-0.06 |
| EPS (Diluted) | $-0.06 |
Key Highlights
- 1Marriott reported a net loss of $25 million for Q1 2009, a stark contrast to the $120 million net income in Q1 2008, due to a challenging economic environment.
- 2Total revenues decreased by 15% to $2,495 million, primarily driven by a 31% decline in the Timeshare segment and reduced management and franchise fees.
- 3The company incurred significant restructuring costs and other charges totaling $129 million, impacting profitability.
- 4RevPAR (Revenue Per Available Room) for comparable company-operated North American properties decreased by 18.0%, reflecting weakened lodging demand.
- 5Despite the downturn, Marriott continues to expand its development pipeline, adding 8,814 rooms in the quarter, and maintains a focus on cost controls and customer loyalty programs.
- 6The company repurchased $122 million of its Senior Notes, recognizing a $21 million gain on debt extinguishment.
- 7Long-term debt stood at $2,834 million, with available borrowing capacity of $1,438 million under its credit facility.