Marriott Third Quarter Disappointing Results & Lower Fourth Quarter Guidance

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Marriott International today released their third quarter results and the markets were not impressed. The stock was down 6% in after-hours trading at the time of writing this piece. It seems that hotel customers were not booking with Marriott at the level Mr. Sorenson was hoping for while the Marriott platform was being “stabilized” (read more here).

Marriott Revenue Falling & Stock Falling

Marriott did not meet their revenue target and lowered their guidance for the fourth quarter. Profit for the quarter was up however. Basically fewer people were booking Marriott rooms in the quarter (did this come as a surprise to anyone?).

You can access Marriott’s main site here.

Here’s the press release with financial data from Marriott:

Download (PDF, 393KB)

Here is the current Marriott property count:

Marriott Property Count Correct

And we found an interesting snippet:

Marriott Occupancy Down

Isn’t it interesting that the occupancy rates in this quarter are down and Marriott also estimates that the fourth quarter is not quite what their earlier estimates were?

Here is the the daily Marriott stock chart:

Quite a drop in the after-hours trading.

Here is a “short list” of some merger related issues that we identified and could have something to do with the falling revenues:

Conclusion

Perhaps these softer occupancy rates have something to do with the merger mess that have made booking and dealing with Marriott and legacy Starwood properties at times impossible and very time consuming.  Some have likened it to beating your head against the wall.

Marriott CEO Mr. Sorenson has tried to play down all the issues with the program merger that has plagued many members and properties ever since August 18th. Perhaps this is no longer just “noise around the edges” (read more here) as he most recently put it.

Customer service has been an utter mess and many members have been actively booking and staying away from Marriott-affiliated hotels including myself. Business travelers don’t have time to waste with non-working websites or with customer service that take hours to resolve simple issues.

It is not difficult to have gains in short term profitability by cutting corners but you can only fool people for so long.

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