Marriott Profit Drops 24 Percent
From the Associated Press
Hotel operator Marriott International said second-quarter earnings dropped 24 percent, to $157 million (42 cents a share) from $207 million (51 cents) in the comparable period a year earlier, as the deteriorating economy dragged down demand, a trend the company expects will extend into next year. Revenue rose 2 percent, to $3.18 billion.
Marriott also cut its earnings outlook for 2008 to between $1.77 and $1.88 per share. Analysts expect $1.93 per share.
CEO Bill Marriott said that "business conditions have deteriorated" in the United States, a condition that will lead to "soft U.S. lodging demand" lasting into 2009. Marriott and other lodging companies have suffered as business and leisure travelers pull back on trips because of factors such as higher gas prices, troubles with airlines and skittishness over the economy.
Revenue per available room, an industry benchmark known as REVPAR, grew 5.6 percent globally on strength in markets like the Middle East and Southeast Asia. But in North America, Marriott's largest market, REVPAR rose just 1.4 percent in the second quarter.
The company's REVPAR outlook for the entire year is also dim. Marriott said it expected between flat and 2 percent REVPAR growth worldwide in 2008 and North American REVPAR to range from 1 percent growth to a 1 percent decline.
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