Marriott International (NYSE: MAR), a leading brand in the highly competitive hotelier industry, posted third-quarter results Thursday morning. Management actually went beyond the high end of its guidance by producing adjusted income from continuing operations of 15 cents per diluted share. According to our earnings preview, Wall Street was figuring on 13 cents per share for the bottom line.

Of course, the earnings beat has to be put in some perspective. Earnings from continuing operations declined well over 50% year-over-year. And the top line plunged 17%. These are significant drops, and they show that the global recession still has some bite left in it, no matter what some of the rosier headlines as of late have said about a recovery.

Hotel giant Marriott International Inc. (NYSE: MAR) will get its chance to impress Wall Street tomorrow morning before the market opens when it reports its third quarter earnings numbers.

Analysts are expecting to see the company show earnings of 13 cents for the quarter, down from 34 cents per share during the same period last year. The last time the company reported earnings was on July 16 when it beat out analyst estimates of 21 cents per share by reporting 23 cents for its second quarter.

Timeshares, that wonderful relic from the 1970s, are about as popular as disco and excessive chest hair this year. Thanks to the recession, timeshare sales are forecasted to suffer their worst fall since this vacation option came on the scene more than 30 years ago. The plunge could reach 30 percent, according to Howard Nusbaum, president and CEO of the American Resort Development Association, a trade group, and the next year and a half could be tough, as well.

In the United States, timeshare sales fell 8.5% last year to $9.7 billion. They reached their peak the year before, when sales hit $10.6 billion, according to a study by Ernst & Young. The 2008 decline was the first sustained by the industry since it started keeping score in 1975.

In another sign of how companies have been forced to adapt to changing economic times, the average price for an American hotel room dropped 17% (year-over-year) during the first six months of 2009.

The average traveler booking a room in the U.S. can now expect to pay $115 a night, down from $139 during the first half of 2008. New York City and Washington D.C. were the priciest destinations on the list, although Las Vegas is the most popular destination. Gaming fans can grab a room in Sin City for an average of $82 per night.

How can exports not rebound? Last year ended on a sour note after posting record results, and 2009 is by all accounts likely to be ugly. The tourism and travel industry is expected to shed more than 200,000 jobs this year. Fortunately, there's a light at the end of the tunnel. The U.S. Department of Commerce expects international visits to the United States to come back in 2010 – after its first forecasted year of decline (i.e., 2009) since 2003.

This year, international travel to the United States is expected to fall 8%. The following year, however, U.S. travel exports are expected to gain 5%, with 5% annual increases through the end of 2013. We'll come out ahead in all this, but it's going to take some time.

Will the influx of foreign visitors over the next four years be enough to turn the travel industry in the United States around? It's too soon to tell right now, and much will depend on the contributions made by domestic routes. Needless to say, even this glimmer of hope must be welcome to investors committed to the airline and hotel sectors.

Upscale hotel chain Marriott International (NYSE: MAR) is likely to experience difficult leisure conditions for at least the next year. Further, when the economy rebounds, consumers will be looking to add back basics, rebuild nest eggs, and perhaps replace an aging car: few will be thinking about a vacation in a far away destination.

Likewise, business travelers will continue to be asked to belt-tighten: conference call when possible, meet without a night's stay when possible, and perhaps stay at lower-cost hotel when traveling great distances.

Quietly, something of a market milestone passed this week. The market capitalization of Apple surpassed that of General Electric. Apple (NAS:APPL) has 2008 revenues of $32.5 billion. GE (NYS:GE) had 2008 revenues of $182.5 billion. Yes, Apple, should it choose, could quite conceivably acquire GE. Not that it would want to, as GE has a slew of problem loans on its books courtesy of its troubled finance arm. Piqqem Sentiment on Apple and GE is, of course, quite divergent with Apple way positive and GE way negative.

Even while dancing on the edge of the Great Abyss one should keep one's eye on the numbers. In this case, the key indicators that presage an economy at risk of totally imploding. Sure, the auto sales numbers were no worse than grim expectations and the ISM manufacturing number was actually a positive. But, oh, we have lots of nasty numbers to go around. Start with the RevPar number. That's short for revenue per available room at hotels and is a solid indicator of the health of the travel industry, as well as the state of business travel spending. The number? Down a stunning 15.3% in the month of January, year-over-year.

In an economy like this, is anyone going to the game?

Yes -- but Pittsburgh people will stay in their cars (hotels are too expensive), and the Arizona people will stay in foreclosed houses (so they should feel right at home).

Speaking of hotels -- short 'em.

I received an e-mail from the Mirage in Las Vegas to come out to watch the Super Bowl for $69 a night.

Last time I was there for the Super Bowl, maybe 15 years ago, it was about $400 a night.

The Mirage is owned by MGM Mirage (NYSE: MGM), which is hovering at a technical support price. Once it breaks through, look out.

I'm not traveling to Tampa or Las Vegas -- I'm staying at home for the big game. And I'm shorting MGM.

Michael Shulman is a contributor to OptionsZone.com.

As we discussed in our earnings preview yesterday, hotel manager Marriott International (NYSE: MAR) reported its second quarter numbers this morning, and as we expected, we were given some more troublesome news from the company.

First the good news. While analysts had been expecting to see the company show earnings of 49 cents a share, the company was actually able to come in higher, with 51 cents per share. However, despite showing 2 cents better than expected, this still represents an 11% drop in earnings from continuing operations.

With so much uncertainty around the company going into this morning's earnings report, you may assume that beating its number by 2 cents would have the stock moving higher in premarket trading. Well, you would be wrong. The stock is actually trading down a little more than 6% following the news.

The earnings season was officially launched last night with Alcoa Inc. (NYSE: AA) reporting better than expected numbers, and tomorrow we are going to see another big name, Marriott International (NYSE: MAR) report its second quarter numbers.

The company is due to report its current earnings prior to the market open, and going into tomorrow's report analysts are looking to see the company show 49 cents per share on $3.15 billion in revenues. The housing slump over the past year has definitely been hurting hotel operators, so it will be interesting to see what kind of quarter Marriott is able to show to its investors.

The last time the hotel chain released its quarterly numbers was back on April 17, when it matched analyst estimates for its first quarter with 33 cents per share. The stock made a brief rally following the release, but over the past month has been in a solid downward trend.

Are you wondering what the hotel industry is like during this economic slowdown? Here are a few phrases that may provide a clue:

• It doesn't get worse than this!
• Nightmare on Hotel Street
• Hotel4Sale
• Bait's Motel Reopens (ugh!)
• Hotels Offer Fuel Subsidies to Lure Guests - WSJ.com

In a short article tucked away The Wall Street Journal today, there is an interesting marketing idea being presented: using vouchers to bring in paying guests. But to me, the new plan to give away vouchers for free gasoline as a means to bring in guests is not a very exciting idea. In fact, how many ways and in how many languages can you say stupid?

If lower costs do not drive hotel bookings, does the brilliant marketing team at Sleepin' Now & Sellin' Later think that there is any possible way to bring up occupancy with a $50 carrot? I don't think so.

It goes without saying that diversification is one defense against the onset of a bear market. Further, occasionally the market offers a conglomerate that possesses many of the characteristics of a diversified mutual fund or portfolio, and with the above in mind, Loews is worth a review.

Loews (NYSE: LTR) is a holding company with operations that include property / casualty insurance, hotels, offshore oil/gas drilling, natural gas pipelines, and cigarettes. Don't confuse LTR with that other company with a similar-sounding name: LTR is a conglomerate.

Analysts really like LTR's Diamond Offshore deepwater/midwater oil rig operations, which, as one might sense, are experiencing strong demand and pricing power, given the global drive for more oil. Analysts are equally impressed by LTR's natural gas pipeline business.

Starwood Hotels & Resorts Worldwide (NYSE: HOT) announced today that its W Hotels unit will open W Bangkok in 2011. The new hotel will feature 400 rooms and will be part of a mixed-use development in Bangkok's commercial and diplomatic center. If you think that the company will not fall by too much over the next few months, now could be a good time to look at a bullish hedged trade on HOT.

After climbing to a one-year high of $75.45 in July, HOT took a nosedive to a 52-week low of $52.63 just six weeks later in August. The stock has had a bumpy ride over the past few months, but appears to be settling in with support just below $60. HOT opened this morning at $59.55. So far today, the stock has hit a low of $59.06 and a high of $61.53. As of 3:00 p.m., the stock was trading at $60.46, up $0.72 (1.21%). HOT's chart is improving from bearish to neutral, while S&P gives the stock an encouraging 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider a January bull-put credit spread below the $45 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 6.4% return in just 3 months as long as HOT is above $45 at January expiration. Starwood Hotels would have to fall by more than 25% before we would start to lose money.

HOT hasn't been below $45 since October 2004 and has shown support in the upper $50's recently. This trade could be risky if the company's earnings (due out 10/25) disappoint, but even if that happens, this position could be protected by strong historical support around $55. Additionally, HOT has a strong history of beating earnings estimates, with the company's last earnings miss coming in Q1 2003.

Meg Massie is an options analyst and writer at Investors Observer.
DISCLOSURE: At publication time, Meg neither owns nor controls positions in HOT.

The Hard Rock cafe chain of restaurants and casinos is gearing up for a massive expansion plan around the world. The cafe chain, which was purchased last year by the native American Seminole Tribe of Florida announced yesterday plans to expand the business by up to 100%.

The new expansion plan envisions seeing the Hard Rock logo popping up on cafes, hotels and casinos in some of the fastest growing markets around the world, including China, India and eastern Europe. Currently the chain has around 125 cafes and the new business plan is looking to double that number to upwards of 250 cafes globally.