Marriott Reports International Growth, Domestic Decline

Marriott International delivered a mixed bag of news last week when it announced its second quarter financials, which reflected strong growth abroad but significant decline in the United States.

For the second quarter ending June 13, 2008, Marriott reported an adjusted income from continuing operations of $189 million, which is 17 percent lower than the same period in 2007. Nonetheless, the company recorded total second quarter revenues of $3.2 billion—a 2 percent increase from 2007—and a 5.6 percent growth in worldwide company-operated comparable revenue per available room (REVPAR), thanks largely in part to strong performance in South and Central America, the Middle East and Asia, where REVPAR increased 15.5 percent. In North America, REVPAR rose just 1.4 percent.

"International demand for our products remains high," Marriott Chairman and CEO J.W. Marriott, Jr., said in a statement. "Europeans continue to visit U.S. gateway cities and customers from Asia and Latin America show growing demand for Marriott's timeshare products. But while our hotels outside the U.S. continue to benefit from solid global demand, business conditions have deteriorated in the U.S. While there is much uncertainty, we expect weak economic growth and soft U.S. lodging demand to persist into 2009."

Despite its weak domestic performance, Marriott added more than 9,400 rooms to its portfolio in the second quarter, including more than 2,500 in North America. It plans to move ahead with plans to meet room growth targets for the remainder of the year—which call for approximately 30,000 new room openings in 2008—and expects third-quarter REVPAR to be flat worldwide.