Marriott International has posted a fourth-quarter net loss, as restructuring charges, cutbacks in business travel, and its slowing time-share business take their toll.
Marriott reported a net loss of $10 million compared with a year-earlier profit of $176 million. The company also forecast continued weakness in 2009, but said it is close to selling off time-share loans.
“In the fourth quarter, corporate group revenue declined 13 percent at the Marriott brand as meeting planners deferred short-term training meetings, staff meetings and the like. We also saw more corporate cancellations,” Marriott Chief Financial Officer Arne Sorenson said on a conference call.
He said Marriott will reduce investment spending by US$400 million this year. Cost-saving efforts include modifying menus and restaurant hours to reviewing room amenities, adjusting work schedules and implementing hiring freezes.
Sorenson also said Marriott expects to complete US$250 million to US$350 million in time-share note sales this year, at a breakeven price.
The company said it took $192 million in pretax charges due to “significant economic decline affecting worldwide lodging and timeshare demand and the turmoil in the financial markets.”
Fourth-quarter revenue fell 7.3 percent to US$3.8 billion. RevPar declined 8.4 percent on a comparable basis worldwide.
J.W. Marriott, Jr., chairman and chief executive officer of Marriott International, said, “Results in the fourth quarter of 2008 demonstrated the impact of economic disruption to our business. Despite these highly challenging times, our priorities are straightforward. First, we are focusing on driving higher market share at the property level and through new room additions. Second, we are enhancing our cash flow by reducing investments in new projects. And third, we are reducing costs in all areas of our business to reflect the realities of the marketplace.”