Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from C. Patrick Scholes – Friedman, Billings, Ramsey & Co.
C. Patrick Scholes – Friedman, Billings, Ramsey & Co.
I know certainly with your limited visibility my question may be difficult to answer but can you just give us a little bit of breakdown on how your bookings are looking for groups as far as RevPAR? And, if that’s about 40% of your business, what have the RevPARs been for the other part, that transient business especially in the fourth quarter coming up and the first quarter of next year?
Arne M. Sorenson
Probably the best indication on group business is bookings for 2009. For the Marriott Hotels & Resort brand we think about 40% of that brands’ business is group. You’ll recall a quarter ago we talked about group RevPAR for that brand being up about 4% to 5%, someplace in that range. When we look at it now at the end of the third quarter it’s flat so you can see there an impact of declining strength in the group business as we look forward towards 2009 quarter-to-quarter.
About half of that decline is the pace of new bookings and about half of that decline is attrition. Now, by attrition what we mean is that’s our hotels reducing the estimated size of the groups that are already on the books to show up for next year. Group is clearly trending down. What we’re seeing is our group customers we think are still committed to holding their events but deferring final commitment to booking it. Not terribly surprising in the sense that there’s a bit more uncertainty for everybody going around and I think there is probably less reason for them to have to rush than they might have thought a year ago certainly.
Net-net we think a bit over half of our group business for next year is fully on the books. When you look at transient and leisure you see the kinds of trends you’d expect. I don’t think there’s a category of business that we can look at and say is strong at the moment. I think we see weakness in corporate transient, we’ve seen weakness all year in leisure transient. We are seeing some mix shift in our hotels which is helping us and I talked about that in the prepared remarks where we’re going after some contract business or some discount business which in effect allows us to shrink a hotel and preserve strong rates in the balance of the hotel through our corporate business and the like.
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