Marriott Reports Slowing U.S. Growth

Marriott International today reported slowing domestic revenue growth for the first quarter of 2008, although the company said pricing and performance remains strong in the upper tiers and in international markets.

"While performance at our U.S. hotels reflected slowing economic growth, few markets have witnessed discounting, and full-service room rates rose 4 percent during the quarter," Marriott CEO J.W. Marriott Jr. said in a statement. "With the U.S. on sale through a lower dollar, international guest arrivals are energizing demand in several key markets."

In North America, Marriott's revenue per available room grew by only 2.3 percent for the quarter, compared with the same period in 2007. Internationally, however, RevPAR grew by 18.5 percent, accounting for a 6 percent increase overall. Performance was particularly strong in Manhattan, Los Angeles, Orlando and Seattle domestically and in Moscow, Singapore, Paris, Panama and Dubai internationally, according to the company.

Marriott also said that group travel cancellations were lower than 2007 levels and attendance was on track with expectations. "Group meetings bookings for the remainder of 2008 are strong," he said. "Given these trends, we remain cautiously optimistic about 2008 demand trends."

Even so, Marriott today slightly lowered its earnings outlook, although it maintained its forecast from earlier in the year expecting 2008 RevPAR growth between 3 and 5 percent.

The company also expects to meet its development goals this year, Marriott said. "Our pipeline of hotels under construction, awaiting conversion or approved for development increased to over 130,000 rooms in the first quarter," he said.