Marriott shares are up around 3% after posting a strong earnings report and plans to make its timeshare business separate from its hotel operations.
The split is regarded as a wise move for the company as the timeshare business has slowed down significantly since the recession.
- In the fourth quarter, timeshare sales for Marriott fell to $201 million from $203 million in 2009.
- The timeshare spin-out’s revenue of $1.5 billion will be distributed to the 400,000 Marriott shareholders as a tax-free dividend at the end of the year.
- The business has 71 properties with 33,000 rooms.
- Marriott reported a profit of $173 million in the fourth quarter or $0.46 per share, up 63% from 2009.
UBS analysts said MAR will also benefit from franchise fees paid by the new timeshare business for use of the Marriott and Ritz-Carlton brands.
The two companies will have separate boards. Stephen Weisz, president of the timeshare business will become CEO and William Shaw will be chairman.