Citing weaker-than-expected group business — especially at large group hotels in markets like New York, Atlanta, Orlando and Washington, D.C. — Marriott International has lowered its first-quarter revenue per available room (RevPAR) projections for North America, it announced last week.
Speaking at the J.P. Morgan Gaming, Lodging, Restaurant & Leisure Management Access Forum in Las Vegas, Marriott CFO Carl Berquist said the company expects its worldwide systemwide RevPAR in the first quarter of 2011 to increase approximately 7 percent, at the low end of Marriott's original 7 to 9 percent forecast. In North America, meanwhile, Marriott expects systemwide RevPAR growth of 5 to 6 percent — down from its earlier projection of 6 to 8 percent.
"We had good group performance in December and January, and we used that as the basis for guidance," Berquist said. "In February, group came in up 15 percent, but not at the levels we thought it would be."
Berquist blamed shortfalls in the aforementioned major markets on a glut of new supply, which hurt Marriott's ability to raise rates; snowstorms that impacted travel to New York and Atlanta; and the threat of a government shutdown in Washington, D.C., which affected group and transient travel among government contractors.
Despite disappointments in the domestic group market, Berquist said demand in international markets has been strong; Marriott expects international systemwide RevPAR to increase 11 percent in the first quarter.