Marriott International today reported a $10 million loss for the fourth quarter of 2008, largely caused by restructuring efforts and a revenue drop related to the global economic downturn.
Revenue per available room was down 8.3 percent in North America and by 8.4 percent worldwide compared with the fourth quarter of 2007, according to Marriott. The average daily rate at upscale and luxury hotels in North America fell by 3.1 percent, and rates dropped an average of 1.2 percent outside of North America.
"Our priorities are straightforward," Marriott chairman and CEO J.W. Marriott Jr. said in a statement. "First, we are focusing on driving higher market share at the property level and through new room additions. Second, we are enhancing our cash flow by reducing investments in new projects. And third, we are reducing costs in all areas of our business to reflect the realities of the marketplace."
The company added 26,000 net hotel rooms in 2008 and plans to add the same number this year, Marriott said. In preparation for further economic difficulties, Marriott has made company-wide department cuts of about $100 million and has reduced its investment year-over-year investment spending estimate by $400 million, he said. "These are the kinds of steps that will position us to seize new opportunities when they arise," Marriott said.
Choice Hotels International also reported fourth quarter performance this week, with a 33 percent drop in profit to $18.7 million. RevPAR dropped by 7.7 percent in the quarter, and Choice expects it to decline by 12 percent in this first quarter of 2009.
Starwood Hotels and Resorts reported its fourth quarter earnings in late January, seeing even steeper drops in RevPAR than Choice and Marriott and expecting RevPAR to plummet as much as 30 percent during the first quarter of 2009
(BTNonline, Jan. 30).