Marriott posts 3Q loss on timeshare charges

CHICAGO — Vacationers helped Marriott International Inc. post a better profit for the third quarter than the hotel owner and operator had forecast.

The hotelier, whose brands include its various namesake Marriott brands as well as the upscale Ritz-Carlton chain, said leisure travelers spent about 7 percent more nights at the company’s lodgings during the quarter than they did a year earlier.

“In the midst of an enormously difficult time, leisure business came back,” said Arne Sorenson, Marriott’s president and chief operating officer.

Leisure travelers accounted for 40 percent of business during the quarter — up from 35 percent from last summer. But visitors were still paying less — about 13 percent less — per night than last year, the Bethesda, Md.-based company said.

And the company posted a significant loss because of one-time items that dragged down results. So its results may not be a clear sign the hotel business — which has suffered as everyone from big corporations to small families rein in spending — is recovering.

That’s particularly true because summer is a popular leisure travel time, while 60 percent of Marriott’s business still comes from business travelers, corporate accounts and group reservations.

Executives said corporate room rates and visits both fell 19 percent for the quarter from a year earlier. But that’s not as bad as the second quarter’s 23 percent drop.

For the whole quarter, Marriott posted a hefty $466 million, or $1.31 per share, loss because of charges the dragged down results. That compares to a profit of $94 million, or 25 cents per share, one year go.

Excluding the charges, most of which related to its high-end timeshare business, Marriott earned $53 million, or 15 cents per share. Revenue fell 17 percent, $2.47 billion.

Both figures managed to top Wall Street forecasts.

Comparable revenue per available room at company-operated properties around the globe sank 23.5 percent during the quarter. That figure is considered a key measure of health for lodging companies.

Bernstein Research analyst Janet Brashear told investors that Thursday’s results were “only a slight relief.”

The hotelier didn’t provide specific forecasts for 2010 but said business will remain tough because of the weak economy. Although an accounting change may lift Marriott’s annual earnings between $30 million and $50 million.

Meanwhile, Marriott expects fourth-quarter adjusted income from continuing operations in a range of 20 cents to 23 cents per share. Analysts polled by Thomson Reuters expect 22 cents per share.

Revenue per available room at comparable North American hotels will decline between 13 percent and 16 percent for the quarter, the company said.

Goldman Sachs analyst Steven Kent said he expected Marriott’s shares to fall Thursday because of its conservative comments about 2010.

“Given the industry’s poor performance and inability to forecast, we are not surprised management has taken a conservative stance,” he told investors in a research note. “We argue there is significant upside to guidance due to pent up demand and what appears to be an economic recovery.”

Marriott shares fell 15 cents, or 0.6 percent, to close at $26.80 Thursday.

AP Retail Writers Michelle Chapman and Betsy Vereckey in New York contributed to this report.