Hotels chains Marriott International Inc (MAR) and Hyatt Hotels Corp (H) reported stronger-than-expected quarterly profits as a rebound in U.S. business travel boosted both hotel occupancy and room rates.
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At Marriott, comparable systemwide revenue per available room, or RevPAR, in North America rose 5.2 percent in the third quarter ended Sept. 30.
Hyatt's U.S. full-service hotel RevPAR rose 7.6 percent in the same period.
RevPAR is a metric of hotel health, calculated by multiplying a hotel's average daily room rate by its occupancy rate.
Marriott said short-term group bookings picked up in North America, while the average daily rate in the region increased 3.9 percent.
"For 2014, we expect North America systemwide RevPAR and worldwide systemwide RevPAR to increase 4 to 6 percent," Marriott Chief Executive Arne Sorenson said in a statement.
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Marriott's North American group bookings for next year are strengthening, and are up over 4 percent compared to a gain of 2 percent three months earlier.
Revenue reported total revenue of $3.16 billion for the three months ended Sept. 30, up from $2.73 billion it reported for the 86-day quarter ended Sept. 7, 2012. The company is moving to a calendar reporting cycle starting this year.
Third quarter net income totaled $160 million, or 52 cents per share, compared with $143 million, or 44 cents, in the year-earlier period.
Analysts on average had expected earnings of 45 cents per share on revenue of $3.04 billion, according to Thomson Reuters I/B/E/S.
INTERNATIONAL DRAGS HYATT
Hyatt revenue rose 4 percent to $1.02 billion in the third quarter. Net income rose to $55 million, or 35 cents per share, from $23 million, or 14 cents per share, a year earlier.
Excluding one-time items, the company reported adjusted earnings of 23 cents per share, ahead of Wall Street's estimate of 21 cents.
Marriott said the strength seen in North American was replicated elsewhere but Hyatt's average room prices at its international hotels fell, offsetting some of the U.S. growth.
RevPAR fell 3 percent at Hyatt's managed and franchise hotels in the Asia-Pacific region, hurt mainly by China.
"A lack of demand in China, increased supply growth in China and tougher Olympic-related comparisons in Europe in the third quarter were mainly the culprits," FBR Capital Markets & Co analyst Nikhil Bhalla said.
Average daily room rates at managed properties fell 4.5 percent across the Asia-Pacific region and 2.4 percent across the Europe, Africa and Middle East.
The company also said its board on Tuesday authorized a share repurchase program of up to an additional $200 million.
Hyatt shares, which had risen about 19 percent this year, closed down marginally at $46.62 on the New York Stock Exchange on Wednesday.
Shares of Marriott, which reported after the market close, were trading flat in extended trade after closing at $44.20 on the Nasdaq.