In preparation for MAR's Q4 earnings release tomorrow, we’ve put together the recent pertinent forward looking company commentary.




  • “For 2012, total revenue bookings for the Marriott brand are running up 7% year-over-year, compared to only 3% pace in February.”
  • “In mid-August, we surveyed 4,500 industry group meeting planners. Two-thirds said that no other lodging company is easier to do business with than Marriott, and 80% said they are more likely to do business with Marriott brands in 2012 than in 2011.”
  • “Our international REVPAR growth is likely to slow from the third quarter pace. Many of our newer comparable hotels in Asia have benefited from ramp-up in recent quarters, and the fourth quarter will reflect tougher comps. REVPAR in Europe will likely moderate in the fourth quarter due to the timing of this year's fairs in Germany, as well as tougher comparables."
  • “REVPAR in London is expected to remain strong, but we anticipate weak performance in the British provinces as a result of government austerity efforts. So for the fourth quarter, we are assuming international system-wide REVPAR growth to increase 3% to 5% on a constant-dollar basis, or 5% to 7% excluding the Middle East and Japan.”
  • “In North America, we expect system-wide REVPAR growth of 6% to 8%. Across North America, we see little evidence of economic slowdown in our lodging business. Group cancellations and attrition levels are running at normal levels. In fact, group attendance is running a bit higher than meeting planner expectations at many hotels.”
  • “On this basis, we expect fourth quarter contract sales to total $200 million to $210 million, and timeshare sales and services net to total $68 million to $73 million. Similarly, we would expect timeshare segment results would total $45 million to $50 million, reflecting continued reductions in interest income as outstanding mortgage balances continue to decline.”
  • “For the fourth quarter, we expect earnings per share to total $0.45 to $0.50 per share, a 15% to 28% increase over the prior-year adjusted EPS.”
  • “For the full year 2011, we expect adjusted EPS will increase 19% to 23%, to $1.37 to $1.42. We anticipate adjusted EBITDA will climb 7% to 8% compared to last year's adjusted amount. Our guidance assumes the spinoff will not occur until year-end 2011, and again, includes the $13 million pre-tax we spent on year-to-date spinoff costs, but excludes future spinoff costs. On a cash basis, we estimate the total cash transaction costs related to the spin at $40 million to $50 million for the full year 2011. We have already expensed about $13 million of this through the income statement year-to-date. Not all of the $40 million to $50 million will be expensed in 2011, as some will be capitalized.”
  • “For 2011, we assume $500 million to $600 million in Marriott investment spending, including $50 million to a $100 million in maintenance spending. Year-to-date, we've repurchased over 36 million shares for over $1.2 billion through the end of the quarter, and given our current debt levels, we expect to slow our repurchase pace in the fourth quarter.”
  • “3% REVPAR growth correlates with modest GDP growth, perhaps 1% or so, and it's hopefully too conservative. 7% REVPAR growth correlates to 2.5% to 3% GDP growth, and is probably too aggressive to count on, but we present these bookends to allow investors to independently model the business, as we all have different views of the future.”
  • [Autograph] “With 24 hotels worldwide today, we expect to have roughly 40 properties opened or signed by year-end 2011 and 60 to 70 properties by year-end 2012.”
  • “We expect to open roughly 5,000 rooms in the fourth quarter of this year, 30,000 rooms for the full year of 2011, and another 30,000 rooms in 2012.  We expect to achieve growth in rooms with modest net invested capital. We also expect to generate meaningful amounts of free cash flow.”
  • “In 2012, we expect to have another $500 million to $1 billion of cash available for share repurchase or opportunistic investing. In fact, even if we only see 3% REVPAR growth, we would expect some level of share repurchase activity in 2012.”
  • “Group revenue on the books is up 7% for 2012, and U.S. government per diems are up 4% to 7%, depending on the market. We'll have to see how special negotiated corporate rates turn out, but our strong book of group business gives us some negotiating leverage.”
  • “I would say that we feel really good about the bookings going forward, both for Q4 and for 2012, and we think sales transformation is a piece of that. I think it's one of the reasons we feel positive about the way that program is developing....We think most of that is economic cyclicality, group business tends to come back a little bit more slowly, and some of that is the impact of the D.C. market, where we've got a number of big boxes, and obviously that's a little bit weaker.”
  • “I think implicit in the numbers we've got within that 3% to 7% range next year is relatively more modest growth in Europe than in other parts of the world, and I think a bit of that is their fare schedule, which is a bit more relevant to the way our business reports there than it is in other parts of the world. So I think part of that is just a bit more modest expectations for those economies generally.”
  • “The hotels that are in our pipeline of 105,000 rooms are 90% under construction in China, some number like that, and will represent the bulk of what we open into mid-2012.”
  • “We'll keep our debt levels at a 3x coverage ratio. We obviously want to stay BBB.  That keeps us in the commercial paper markets. We think that's an efficient debt structure. So we'll maintain that 3x, but with growing EBITDA, obviously that gives us debt capacity that we can draw upon, but at the same time maintaining that 3x. So I think you'd see a combination when I talk about that $500 million to $1 billion capacity, being made up of, again, maintaining that 3x plus the excess cash.”
  • [Courtyard incentive fees] “We haven't done budgets yet for 2012, but I don't think I'm sticking my neck out too far to say that at least some of the largest portfolios of these few first hotels are not paying incentive fees in 2011, and we're not anticipating that they'll pay incentive fees in 2012.”
  • “We will not publish what the commission rate is with Expedia. Our contract with them comes to term at the end of this year. We are in discussions with them about terms of a renewal. I think, generally, what we can tell you is that someplace between 2% and 3%, maybe about 3% of our total business comes from online travel providers, including Expedia, but that would include the Pricelines and Orbitzes and Travelocitys, and others. Expedia probably is in the 1%, 1.5% maybe, range of our system. All the OTAs will be more significant in hotels which are more leisure-dominated."

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