J.W. Marriott, Jr., chairman and chief executive officer of Marriott International, said that the company's lodging and contract services groups both contributed to the strong 1998 third quarter results.

"Our U.S. lodging operations had an excellent summer, as our established brands significantly outperformed the industry averages in terms of occupancy, REVPAR growth and profitability," Mr. Marriott said. "In addition, the company's resort timesharing, senior living and distribution services businesses all generated higher profits in the quarter."

"Our major businesses continue to gain market share," Mr. Marriott added. "We will open a record number of new hotels and senior living communities in 1998, and our pipeline of projects under development is expanding. We are confident the company will achieve its earnings growth goals for the year, and we are laying the foundation for further gains in 1999 and beyond."

For the first three quarters of 1998, Marriott International reported net income of $276 million and diluted earnings per share of $1.02, up 22 percent and 21 percent, respectively, versus the 1997 period. Sales totaled $7.0 billion, a 13 percent increase over the first three quarters of 1997.
LODGING operations reported a 19 percent increase in operating profit on 16 percent higher sales in the 1998 third quarter. Results reflected solid room rate growth at U.S. hotels, and contributions from new properties worldwide.

Across the Marriott lodging brands, revenue per available room (REVPAR) for comparable company-operated U.S. properties grew by an average of five percent in the 1998 third quarter. Average room rates for these hotels rose nearly six percent, well in excess of inflation, while occupancy declined slightly to 80 percent.

Results for international lodging operations were moderately lower in the 1998 third quarter, as the impact of difficult economic conditions in the Asia/Pacific region was partially offset by profit growth in Europe, the Middle East and Latin America.

The company has added a net total of 174 properties (25,100 rooms) to its lodging system over the past 12 months, including 45 hotels and resorts (5,600 rooms) opened in the 1998 third quarter. At quarter-end, the Marriott lodging group encompassed 1,633 properties totaling 315,300 hotel rooms and 3,800 timesharing villas. The company expects to add more than 150,000 rooms over a five-year period (1998-2002), including approximately 30,000 rooms (200 hotels) scheduled to open in 1998. Marriott Vacation Club International generated a 14 percent increase in contract sales in the 1998 third quarter. The division benefited from strong sales activity at timeshare resorts in Florida, South Carolina, Hawaii and Spain, and from higher financing income. During the quarter, MVCI commenced sales at its second European timeshare project (Mallorca, Spain), and at new U.S. resorts in Utah (Mountainside at Park City) and New Jersey (Fairway Villas at Seaview). Lodging sales in the 1998 third quarter were up six percent before the impact of consolidating The Ritz-Carlton Hotel Company LLC. In March 1998, Marriott International increased its ownership interest in this hotel management company to 98% from 49% previously.

CONTRACT SERVICES reported that operating profit rose 60 percent in the 1998 third quarter, on 16 percent lower sales. Both businesses contributed to the profit increase. Results for Marriott Senior Living Services were boosted by contributions from 17 communities added over the past 12 months, including three assisted living facilities opened in the 1998 third quarter. Occupancy for comparable senior living communities remained at 94 percent. The division now operates 98 independent full-service and assisted living communities totaling 18,800 units. Marriott plans to add more than 200 communities over a five-year period (1998-2002), including 30 properties scheduled to open in 1998. Marriott Distribution Services achieved sharply higher profits in the 1998 third quarter, despite a net reduction in the number of accounts serviced. The division benefited from consolidation of its food distribution facilities, and realization of significant cost economies in warehouse operations and transportation.

CORPORATE EXPENSES rose $5 million in the 1998 third quarter, primarily due to costs associated with year 2000 software modifications, and reorganization of major administrative and support functions. Interest expense increased by $3 million as a result of incremental borrowings to finance growth outlays and share repurchases. Marriott International repurchased 5.5 million shares of its common stock during the 1998 third quarter. The company's Board of Directors has authorized the purchase of an additional 10.5 million shares as of quarter- end.

MARRIOTT INTERNATIONAL, INC. is a leading worldwide hospitality company, with over 1,700 operating units in the United States and 53 other countries and territories. Major businesses include hotels operated and franchised under the Marriott, Ritz-Carlton, Courtyard, Residence Inn, Fairfield, TownePlace Suites, Renaissance, and Ramada International brands; vacation club (timeshare) resorts; senior living communities and services; and food service distribution. The company is headquartered in Washington, D.C. and has approximately 131,000 employees.
 
 
 

Note: This press release contains "forward-looking statements" within the meaning of federal securities law, including statements concerning the number of lodging and senior living communities expected to be added in future years, business strategies and their intended results, and similar statements concerning anticipated future events and expectations that are not historical facts. The forward-looking statements in this press release are subject to numerous risks and uncertainties, including the effects of economic conditions; supply and demand changes for hotel rooms, vacation timesharing intervals and senior living accommodations; competitive conditions in the lodging, senior living and food service distribution industries; relationships with clients and property owners; the impact of government regulations; and the availability of capital to finance growth, which could cause actual results to differ materially from those expressed in or implied by the statements herein.