Marriott International Inc., the top U.S. hotel operator, said on Thursday that second-quarter profit rose a better-than-expected 11 percent, but concerns about slowing growth in North America led to a decline in its shares.

For the second straight quarter, Marriott lowered its forecast for revenue per available room, or revpar -- a key measure of hotel performance -- from its hotels in North America. The lowered forecast reinforced concerns about a slowdown in its home market.

Marriott's second top-line revision for 2007 offers one more support to our view that trends in the US are decelerating at a faster-than-expected clip, Goldman Sachs analyst Steven Kent said in note.

Marriott, which typically manages hotels instead of owning them, said net income rose to $207 million, or 51 cents per share, from $186 million, or 43 cents per share, a year earlier, helped by higher room rates and new hotels.

On an adjusted basis, which excludes earnings of 8 cents a share from Marriott's synthetic fuel business and charges related to the settlement of a tax dispute, the company earned 57 cents a share, beating Wall Street expectations of 53 cents a share, according to Reuters Estimates.

Revenue for the company, which operates hotels under brands such as Marriott, Ritz-Carlton, and Fairfield Inn, rose 11 percent to $3.21 billion, boosted by higher room rates. The company also added 30 hotels to its system of 2,898 properties.

Revpar rose 7.5 present at the company's comparable properties worldwide. The growth was driven by strength in markets such as Moscow, Dubai and Beijing. In North America, revpar rose 5.6 percent.

Marriott lowered its forecast for 2007 revpar growth in North America to between 6 percent and 7 percent from an already reduced range of 6 percent to 8 percent.

Despite the lowered North American revpar forecast, Marriott raised its full-year profit forecast, and its strong quarterly earnings suggest that the lodging industry's ongoing boom, while slowing, remains intact.

Marriott raised its earnings per share forecast for 2007, excluding its synthetic fuel business, to a range of $1.88 to $1.96, compared with an April forecast of $1.84 to $1.94.

Wall Street analysts have been expecting Marriott to post 2007 earnings of $1.92 a share, according to Reuters Estimates.

But the third quarter may be weak. Marriott forecast earnings between 27 cents a share and 31 cents a share for the period, well below analysts' expectation of 37 cents, according to Reuters Estimates.

Marriott shares, which hit a 13-year high of $52.00 on April 18, were down $1.38 or 3 percent at $44.97 in midday trade on the New York Stock Exchange.

HOT COMMODITY

Robust demand from business and leisure travelers and limited construction of new hotels have allowed hoteliers to steadily raise rates and grow earnings.

The lodging boom has made hotel assets hot commodities and led to Blackstone Group's (BX.N: Quote, Profile, Research) $20 billion offer for Hilton Hotels Corp. (HLT.N: Quote, Profile, Research) last week, which would be the biggest-ever deal in the sector.

While analysts see Marriott as an unlikely target because the family of founder J. Willard Marriott owns 23.5 percent of the company, Sorenson said the impact of private equity on the industry and the company have been a topic of board discussions.

He declined to comment on whether Marriott would consider a private equity offer.

MORE ROOMS

Marriott -- which is developing a new brand for high-end, style conscious travelers as well as a chain of family-friendly resorts with kids' television broadcaster Nickelodeon -- said it plans to add 30,000 hotel rooms to its system this year and the same number in 2008.

Rampant supply growth could halt the industry's ability to raise room rates and threaten the long-running boom, but analysts see little immediate threat.

Right now, they're getting supply growth in the areas where it helps them and doesn't really hurt them, said Robert LaFleur, an analyst with Susquehanna Financial Group.

Marriott, for its part, remains upbeat because of its strength in urban markets and in full-service hotels, which are less threatened by a run-up in supply.

We think we got some years left of a positive run, Chief Financial Officer Arne Sorenson said on a conference call.

(Reporting by Chris Reiter)

Dubai