DOW JONES NEWSWIRES
Marriott International Inc. (MAR) said it will stop developing
new residential timeshare projects as it will take nearly $760
million of write-downs in that space.
Meanwhile, fiscal third-quarter results in Marriott's North
American hotels was slightly better than expected. Revenue per
available room dropped 19% for the period ended Sept. 11, slightly
less than the 20% to 24% drop projected.
Big hoteliers also have businesses which sell stakes in vacation
rentals, generating both initial sales proceeds and annual use
fees. But sales have slumped amid the recession and as developers
have been building numerous projects in recent years.
Marriott said Wednesday the write-downs reflect the company's
plan to cut timeshare prices and development "to accelerate cash
flow." Roughly $300 million of the write-downs are at five luxury
residential projects, a similar-sized write-down at nine North
American fractional projects and $95 million at one other North
American project.
Amid the woes in the space, Marriott said it doesn't expect "to
pursue new Marriott-funded" residential timeshares, but does expect
to continuing licensing and managing projects developed by
others.
The company will release the quarter's results Oct. 8.
Shares closed Tuesday at $27.24 and were inactive premarket. The
stock is up 41% this year.
-By Kevin Kingsbury, Dow Jones Newswires; 212-416-2354;
kevin.kingsbury@dowjones.com