Hotel chain validates slowdown in travel, lodging sectors

Jun 05, 08 | 1:57 am

By Alan Fein

One of the nation's biggest hotel chains, Marriott International, Inc. (NYSE: MAR), validated the economic slowdown in the travel sector Monday when it lowered its North American room occupancy forecast for the second-quarter.

Marriott lowered its second-quarter North American revenue-per-available-room growth, also known as revpar, to 2 percent from its previous forecast of between 3 to 5 percent.

Revpar, a key barometer of how well the lodging company is performing, was lowered due to the tighter cash availability of both business and consumer travelers who are feeling the pinch of the near-recessionary economic state of the nation.

Airlines are also in trouble, whose own losses are running into the billions worldwide due to the skyrocketing costs of jet fuel. This morning the the International Air Transport Association revised its earlier forecast from a profit for the international airline sector to a loss of $2.3 billion due to higher jet fuel costs.

The airlines group, which represents 240 airlines worldwide, had forecast a $4.5 billion profit for the industry in March, so with fuel costs skyrocketing, the IATA has factored in a $1.6 billion cost to the airline industry for every dollar increase in fuel costs.  That's being passed through to travelers, though not enough to turn the airline industry around in 2008.  But with a global economic slowdown, air travel into and across North America is down as a result and Marriott's drop in revpar only validated what many ecomonoic pundits were already saying - that the U.S. economy isn't going to recover anytime soon.

Source: Axcess News