- The Washington Times - Thursday, July 13, 2006

Marriott International Inc. said yesterday that a decline in convention business pulled down its Washington-area hotels in the second quarter.

That poor showing was the company’s only blemish during the quarter, in which earnings rose 35 percent to $186 million (43 cents per share) compared with $138 million (29 cents) a year ago, including a 2-for-1 stock split June 9. Marriott’s revenue per available room, a key indicator for the hotel industry, grew 10.4 percent during the quarter, which ended June 16.

Marriott Chief Financial Officer Arne Sorenson said in a conference call yesterday that the softness in the Washington market also is related to recent lobbying scandals in Congress, which have “probably reduced the number of three-martini lunches in the District, at least temporarily.”

Marriott did not provide additional details about the Washington market yesterday.

The Washington Convention Center has hosted 50 events to date this year, compared with 91 at this time last year, according to its public schedule. The center’s events include conventions, which bring to town attendees, who spend on hotels, restaurants and taxicabs, as well as events that draw mostly locals, such as auto shows and book fairs.

The number of hotel room nights generated by those conventions fell this year, according to the Washington, DC Convention and Tourism Corp., but figures were not available yesterday.

“2005 was a highly unusual year,” said Rebecca Pawlowski, a WCTC spokeswoman, citing the presidential inauguration, the men’s college basketball Atlantic Coast Conference tournament and the 30,000-member American Academy of Orthopaedic Surgeons — the largest in city history. “The mark was set fairly high in 2005, so of course it’s going to look softer in 2006.”

During Marriott’s second quarter, March 25 to June 16, the Convention Center held 23 events, exactly half the number of events it had last year during that time.

The rest of the year is expected to improve, though it still won’t match 2005 numbers.

Several large conventions are scheduled to come to Washington in the next few months, including the Alpha Phi Alpha fraternity later this month, with 1,100 room nights; the American Academy of Family Physicians in September, with 6,000 room nights; and the American College of Rheumatology in November, with 4,800 room nights.

“It’s hard to catch up to last year,” said Emily Durso, president of the Hotel Association of Washington D.C.

Also, hotel rates rose 11 percent in the District this year, according to Smith Travel Research, a Hendersonville, Tenn., hotel industry research company. The group puts the average cost of a hotel night at $179 in the District and $131 in the Washington metropolitan area.

“It’s an embarrassment of riches,” Ms. Durso said. “You want to have a high average rate — it’s good for hotels and city taxes — but after a while, it slightly erodes meeting business.”

Marriott’s bookings also fell in South Florida and the Caribbean because of hurricane worries.

“But those are the only signs of softness we can find in our business, and they are overwhelmed by signs of strength,” Mr. Sorenson said.

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