Marriott International lost $10 million in the fourth quarter of 2008 as the hotel sector overall continued to report weak earnings and braced for an even more dire 2009.
In Q4 Marriott took a $192 million restructuring charge, a $95 million loss on its timeshare business and recorded drops in every key metric.
For the year, Marriott earned $359 million, down 48% from 2007.
The hotel industry has been hard hit by cuts in corporate travel and consumer confidence. In response, most major hotel companies have restructured their operations, cut jobs and frozen or reduced salaries.
"In our timeshare business, we closed less-productive sales offices, substantially reduced overhead and dramatically scaled back development, and we will do more if needed," Chairman and CEO J.W. "Bill" Marriott said in statement.
"Across our company, we reduced annualized general and administrative spending by about $100 million, making cuts in every department. Finally, we reduced our 2009 investment spending estimate by $400 million year over year. All in all, despite a weak economic climate, we anticipate reducing our debt by $600 million to $700 million this year and maintaining our investment grade credit rating."
Marriott's revenue per available room, or RevPAR, a key measure of industry performance, was down 8% in the final quarter of 2008, and Marriott predicted it would be down 17% in the first quarter of 2009.
For the full year 2009, Marriott CFO Arne Sorenson said that "the level of uncertainty is simply too high for us to have too much confidence in predicting results."
"Our most optimistic assumption is a 12% decline in company-operated RevPAR in North America and an 8% decline in company-operated, dollar-constant RevPAR outside North America."
The more pessimistic view, he said, is for a 17% decline in North America and 13% outside North America.
While most hotel companies reported significant drops in profits last quarter, Gaylord Entertainment, which operates large convention hotels, reported that its net income more than doubled in Q4 2008, although room revenue was down and the company said it was preparing for a rough 2009.
Red Lion Hotels reported a $2.5 million loss for Q4 and announced layoffs, pay cuts and other cost-cutting moves.
Choice Hotels International said Q4 profits fell 33% on a drop in franchise fees.
Choice said domestic RevPAR dropped 7.7% in the final quarter of 2008 and was expected to drop 12% in the current quarter.