Marriott FY03 Earnings Document Extent Of Trading Down

Marriott International today reported 2003 earnings that showed a modest decrease in revenue per available room, compared with 2002. However, the 1.6 percent decrease in RevPAR growth at such full-service brands as Ritz-Carlton, Marriott and Renaissance in North America was twice the 0.8 percent drop in RevPAR at Marriott's midprice brands, which include Courtyard, Fairfield Inn and SpringHill Suites, among others.

Marriott's results suggest travel buyers throughout the year continued to trade down, steering their travelers to midprice alternatives that were more cost effective than full service.

According to industrywide reports for the fourth quarter of 2003 and early 2004, however, full-service brands seem to be staging a rebound as the economy continues to strengthen. J.W. Marriott Jr. echoed this view: "We are encouraged by the signs of improving trends and look forward to business travel demand building throughout 2004," he said. The company expects 2004 RevPAR growth to increase 3 percent to 4 percent in North America.