Marriott Earnings Signal Enduring Pain For Hotels
Marriott International Inc.'s (MAR) dour second-quarter earnings suggest a recovery in the embattled lodging industry is still far at hand. The company reported Thursday that its quarterly earnings fell 76% amid weak lodging and timeshares demand. Although the report beat Street estimates, the company said it expects third-quarter revenue per available room to decline 20% to 23% in North America and 22% to 24% elsewhere. Marriott "sets the bar for the outlook to decline," for the industry, said Chris Woronka, an analyst at Deutsche Bank. "Marriott tends to be the bellwether. I can't imagine the other (hoteliers) saying something dramatically different." Woronka also attributed Marriott's earnings beat to some $12 million in adjustments related to residual interest on timeshare notes previously sold that were mark-to-market.