Marriott To Slow Development Of Senior Communities
Tuesday November 2 8:28 AM ET
WASHINGTON, Nov 2 (Reuters) - Marriott International Inc. said Tuesday it will slow down construction of senior living communities and cancel projects in the early stages of development because of supply pressures in some markets. The hotel giant, which operates 139 senior living communities, added that a delay in the sale of newly-opened communities has also caused higher startup costs, which before 1999 were capitalized rather than expensed. The slowdown, along with the higher startup costs and other one time-items in the senior living business unit, are expected to cut into Marriott's fourth quarter earnings by about 5 cents per share. Marriott was not immediately available for comment. Analysts have said that the senior living community industry is becoming overbuilt, causing a slower ramp-up in newer developments. In a statement, Marriott said its worldwide lodging operations, which generate 96 percent of its operating profit, will not be impacted by the factors hurting the senior living industry. ''The company's lodging operating profits are expected to post increases in the high teens in the 1999 fourth quarter,'' the company said in a statement. Marriott was expected to earn 49 cents per share on an operating basis, before one time charges, in the fourth quarter, according to First Call/Thomson Financial. By slowing development, Marriott said it will focus on maximizing the profitability of its current senior living communities. |
