Marriott to open 1,700 hotels, return $11 billion to shareholders by 2021

(Reuters) - Marriott International Inc said on Monday it plans to open more than 1,700 hotels and return up to $11 billion to shareholders by 2021 as part of its three-year growth strategy, sending its shares up as much as 3 percent. The owner of Ritz-Carlton and St.

Reuters March 19, 2019 00:05:30 IST
Marriott to open 1,700 hotels, return $11 billion to shareholders by 2021

Marriott to open 1700 hotels return 11 billion to shareholders by 2021

(Reuters) - Marriott International Inc said on Monday it plans to open more than 1,700 hotels and return up to $11 billion to shareholders by 2021 as part of its three-year growth strategy, sending its shares up as much as 3 percent.

The owner of Ritz-Carlton and St. Regis luxury hotel brands also forecast its annual profit in a range of $7.65 per share to $8.50 per share by 2021, largely above analysts' average estimate of $7.72 per share, according to Refinitiv data.

Marriott has been criticized recently by activist investor Jonathan Litt who, according to media reports, has urged the company to consider culling its 30 brands to better align itself with competitors such as Hilton Worldwide Holdings Inc. Opening of 1,700 hotels by 2021 will average more than 500 hotels per annum, adding between 275,000 and 295,000 rooms over the next three years, and potentially generating $400 million in fee revenue in 2021. Marriott added about 386 and 440 hotels in 2018 and 2017, respectively.

"We view the new medium-term outlook positively as it supports the earnings power afforded by the Starwood acquisition," Jefferies analyst David Katz said.

"Anticipated capital returns totaling about 25 percent of the market cap over the next three years should further bolster investors' confidence," Katz said.

During the three-year period, the company plans to pay $1.9 billion to $2 billion in dividends and buy back shares worth $7.6 billion to $9 billion, Marriott said.

The hotel chain had come under scrutiny after it was hit by a massive data breach involving up to 383 million guests in its Starwood hotels reservation system, which was disclosed in last November.

Chief Executive Officer Arne Sorenson earlier this month apologized before a U.S. Senate panel and vowed to protect against future attacks.

The company, which held an investor conference on Monday, expects comparable hotel revenue per available room (RevPAR) growth - a key measure of hotel health - between 1 percent and 3 percent per year for the three-year period.

Last month, Marriott missed Wall Street estimates for fourth-quarter revenue and forecast a lower-than-expected full-year profit, blaming slowing demand in North America, its largest market.

Up to Friday's close, Marriott shares had risen 12.7 percent this year, compared with a 11.3 percent increase in the Dow Jones U.S. Consumer Services Index.

(Reporting by Sanjana Shivdas and Ankit Ajmera in Bengaluru; Editing by Anil D'Silva and James Emmanuel)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.