Must-know: Marriott’s revenue and net income

Marriott’s revenue and net income

In the last part of the series, we discussed the revenue and income from Marriott’s (MAR) brands. The revenue and income are reported under the following four business segments:

• North America Full Service – Revenue from this segment accounts half of Marriott’s total revenue. The segment reported a net margin of 38% in 2013. The properties are located in the U.S. and Canada. The properties are under its signature brand—Marriott Hotels, its luxury brand—J.W. Marriott, its lifestyle brands—Renaissance Hotels, ClubSport, and Autograph Collection, and its destination entertainment brand—Gaylord Hotels.

• North America Limited Service – This segment includes most of the modern essential brands—like the Courtyard, Fairfield Inn & Suites, and SpringHill Suites. It also includes the extended stay brands like Residence Inn and TownPlace Suites. These brands are all located in the U.S. and Canada. It generates a 40% margin. It’s the highest among all the segments—even though it only accounts for 20% of Marriott’s revenue.

• International – This segment includes Marriott Hotels, J.W. Marriott, Renaissance Hotels, Autograph Collection, Courtyard, AC Hotels by Marriott, Fairfield Inn & Suites, Residence Inn, and Marriott Executive Apartment properties. These brands are located outside the U.S. and Canada. Revenue from the hotels in international locations generated a net margin of 13% in fiscal year 2013. It accounted for 12% of the total revenue.

• Luxury – This segment includes Ritz-Carlton, Bulgari Hotels & Resorts, and EDITION properties. They’re located around the world. These brands accounted for 14% of the company’s total revenue. They generated a net margin of 9%. 

Earlier, Marriott also had a separate timeshare segment. In 2011, it was spun off to Marriott Vacations Worldwide Corporation (or MVW)—the company’s subsidiary. Now, it’s operating as an independent public company. We’ll discuss this more in Part 5.

Marriott and its competitors—including Hilton (HLT), Starwood (or HOT), Hyatt (H), and Wyndham (WYN)—are part of many exchange-traded funds (or ETFs). The ETFs include the Consumer Discretionary Select Sector SPDR Fund (XLY) and the PowerShares Dynamic Leisure & Entertainment Portfolio (or PEJ). These ETFs allow investors to gain exposure to a wide range of companies in related sectors.