Marriott Sees U.S. Hotel Demand Slowing Into 2009

Marriott International today reported a 17 percent drop in profits for the second quarter of 2008, and the company expects domestic demand and revenue growth to continue to slow for the remainder of the year.

"While our hotels outside the U.S. continue to benefit from solid global demand, business conditions have deteriorated in the U.S," Marriott CEO J.W. Marriott Jr. said in a statement." While there is much uncertainty, we expect weak economic growth and soft U.S. lodging demand to persist into 2009."

Marriott reported that revenue per available room in the United States grew by 1.4 percent for the quarter compared with the same period in 2007, and the average daily rate increased by 2.3 percent. Outside of North America, RevPAR was up 15.5 percent, and rates increased by 15.4 percent. Overall, rates were up 6.3 percent and RevPAR was up 4.2 percent.

For the rest of the year, Marriott expects worldwide RevPAR to be flat or increase by up to 2 percent, and North American RevPAR to range from a 1 percent increase to a 1 percent decline.

Marriott said the company is still on track to meet its supply growth target for the year. It added 9,000 rooms, 2,500 of which were outside North America, to its portfolio in the second quarter and has 130,000 rooms in its worldwide pipeline.