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Thursday, July 10, 2008

WaPo: "Hotel boom is kaput"

by Calculated Risk on 7/10/2008 09:38:00 PM

From Michael Rosenwald at the WaPo: Slide by Marriott Signals Distress for Hotel Industry (hat tip John)

Let there be no mistaking it now: The hotel boom is kaput.

Marriott International, one of the world's largest hotel operators, released a stream of unsettling news for the industry yesterday: Its second quarter profit fell 24 percent, to $157 million; it lowered yearly profit estimates again; and most importantly, it said revenue per available room, a key measure of hotel strength, could decrease this year in the United States by 1 percent.

"There's no doubt we are in a very turbulent period," said Thomas Baltimore, the president of Bethesda's RLJ Development, one of the largest owners of Marriott hotels. "Clearly we are seeing softening demand -- there's no doubt about that."
Chief executive Bill Marriott said in a statement that "while our hotels outside the U.S. continue to benefit from solid global demand, business conditions have deteriorated in the U.S. . . . We expect weak economic growth and soft U.S. lodging demand to persist into 2009."
This fits with my post yesterday: Hotel Vacancies Rising