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Marriott admits credit crunch may affect new openings plan

03 October 2008 by

Marriott has become the first major hotel group to admit its new openings plan could be hit by property owners canceling or delaying projects due to the credit crunch.

In its third quarter results statement today, the US hotel giant said it expected the business environment next year "at a minimum . . . to remain unusually challenging".

Chief financial officer Arne Sorensen added that US legislators had to come up with a stabilisation plan as "quickly as possible".

"There are thousands, maybe tens of thousands of jobs at stake in our company alone, and we are typical," said Sorensen, who predicted the financial crisis would prompt owners or franchisees to delay or cancel projects, leading to write-offs.

"We doubt our pipelines will remain at recent levels for long."

Marriott, whose brands include Marriott, Ritz-Carlton and Courtyard, is scaling back on investment, discontinuing share buy-backs and making cuts at its Maryland headquarters.

The chain reported that global revenue per available room (revpar) growth had slipped from 5.6% in the second quarter to 3.4% in the last three months.

Marriott added that it expected fourth-quarter revpar to decline further to around 3%.

For more on the impact of the financial crisis see our credit crunch page>>

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By Gemma Sharkey

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