Marriott International, Inc. (MAR / NYSE) announced today that it has decided to slow the development of senior living communities from previously anticipated levels. Due to continuing supply pressures in some markets, Marriott has decided to cancel projects that are in the early stages of development. In addition, a delay in the sale of newly opened communities has caused higher startup costs, including pre-opening charges, which prior to 1999 were capitalized rather than expensed. Costs in the fourth quarter are also expected to include higher reserves for accounts receivable. Results in its senior living business are expected to decrease Marriott International`s fourth quarter earnings by approximately $.05 per share, primarily as a result of one-time charges.
The company operates 139 Marriott Senior Living Services communities and has 15 additional projects under construction that will open by mid-2000. In slowing development, the company has decided to focus its energies on maximizing the profitability of these communities, and pursuing only those development opportunities which are compelling.
Marriott`s worldwide lodging operations, which generate 96 percent of the company`s operating profit, are not impacted by these factors in the senior living industry. The company`s lodging operating profits are expected to post increases in the high teens in the 1999 fourth quarter. This is based upon Marriott`s strength in new unit openings and revenue per available room.