Marriott Not Too Worried About U.S. Hotel Financing Tightening

Marriott International acknowledged that bank lending challenges in the U.S. might impact the pace of its hotel development in North America. But so far, the banking crisis hasn't affected its hotel pipeline. The company forecasted that it would sidestep any major problem.

"We do expect the tightening in hotel financing to be short-term," said CEO and President Anthony Capuano.

The Bethesda, Maryland-based company — which operates 31 hospitality brands ranging from The Ritz-Carlton to its latest select-service brand, City Express by Marriott — was responding to the aftershocks of recent U.S. bank collapses. Since March, bank uncertainty around regulations regarding capital requirements has slowed down the willingness of some bankers to push some hotel project financings over the finish line.

So far, Marriott executives said they hadn't seen a kink in its development pipeline. The number of deals leaving its development flow was 1.5 percent — below the historical average of just above 2 percent — and that rate hadn't increased recently. Marriott said the biggest effect could be on new hotel construction, particularly for the development of its U.S.-based limited-service franchised properties.

"One thing to remember in that is that our pipeline is over 50 percent international, which does tend to be less dependent on senior loan financing," said Kathle