Marriot cites slow US economy for cautious outlook

Marriott said Monday that weakness in the U.S. market will likely drag on what has been a strong performance by hotels worldwide. Chairman and Chief Executive J.W. Marriott Jr. said he would be surprised if anything changed in the second half of the year.

The lodging industry, along with many sectors, has been squeezed as consumers tighten spending due to the continued housing slowdown, eroding credit, rising food and gas costs and recession worries. Revenue per available room, also known as revpar, is a key gauge of a lodging company's performance. Marriott, speaking at events related to the New York University International Hospitality Industry Investment Conference, said the company now anticipates North American revpar growth of about 2 percent, down from its prior forecast for growth between approximately 3 percent and 5 percent. Marriott said he would be surprised if North American revpar strengthened in the second half of the year, citing weaker demand. Demand from weekend leisure travelers is down and midweek demand, bookings that mostly come from business travelers, has begun to soften as well, Marriott said.

With a Fusion IQ master score of only 29 we agree with Marriott that this sector as well as its stock is likely something to be avoided.


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