By Anshuman Tripathy May 6 (Reuters) – Hotel operator Marriott International raised annual room revenue growth forecast on Wednesday, betting that strong U.S. travel demand would drive bookings across its properties. After a challenging year when inflation and growth worries pinched customer budgets, U.S. travel is regaining momentum, a shift echoed in airlines’ latest results. […]
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Marriott raises annual room revenue growth forecast amid strong travel demand
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By Anshuman Tripathy
May 6 (Reuters) – Hotel operator Marriott International raised annual room revenue growth forecast on Wednesday, betting that strong U.S. travel demand would drive bookings across its properties.
After a challenging year when inflation and growth worries pinched customer budgets, U.S. travel is regaining momentum, a shift echoed in airlines’ latest results.
Marriott reiterated its optimism about international tourism, supported by the FIFA World Cup, and expects the uplift to continue in the third quarter.
It expects 2026 revenue per available room — a key lodging metric that acts as a proxy for pricing power — to grow between 2% and 3%, compared with a 1.5% to 2.5% increase forecast earlier. Its shares gained about 2%.
CEO Anthony Capuano said travel and experiences remained a priority over consumption of hard goods across demographics, and the shift was visible even in lower-income households.
Room revenue at Marriott’s budget segment rebounded in the first quarter, while U.S. and Canada luxury properties stayed strong, buoyed by resilient spending from affluent travelers.
Marriott’s adjusted per-share profit of $2.72 beat analysts’ estimate of $2.55, according to data compiled by LSEG.
MIDDLE EAST IMPACT
Uncertainty from the Middle East conflict looms as it risks raising consumer costs and dampen travel spending.
While Marriott said its outlook assumes a continued impact, peer Hilton and online travel agency Booking Holdings flagged effects from the conflict.
“We estimate Marriott has about 4% exposure to the Middle East, the highest of the U.S.-based hotel C-Corps,” said Truist analyst Patrick Scholes.
First-quarter room revenue in Middle East and Africa fell 1.9%, while occupancy was down 5.4%.
Marriott’s new CFO Jen Mason said booking activity showed some signs of recovery from the March lows.
“We are back to kind of pre-conflict trends in terms of domestic versus international travel bookings from the U.S.”
(Reporting by Anshuman Tripathy in Bengaluru; Editing by Shilpi Majumdar)