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1. Luxury boosts profit expectations for Marriott
Luxury hotel performance led the way for Marriott in the third quarter, with its latest earnings numbers showing a 4% revenue per available room increase in that segment year over year compared to a 0.5% across the company's portfolio, CoStar News' Bryan Wroten reports. The high-end outperformance led to a slight increase in Marriott's full-year profit per share projections.
Not surprisingly, international performance outpaced Marriott's domestic hotel portfolio. International RevPAR was up 2.6% for the quarter compared to a 0.4% decline for the metric in the U.S. and Canada.
Marriott Chief Financial Officer and Executive Vice President of Development Leeny Oberg said the company expects global revenue per available room to increase by 1% to 2% in the fourth quarter due to calendar shifts and one-time events.
“RevPAR growth is anticipated to still be meaningfully stronger internationally than in the U.S. and Canada, and higher-end chain scales are expected to continue to outperform lower-end chain scales,” she said.
2. COP30 kicks off in Brazil
The three-week-long COP30 climate summit began Monday in Brazil amid continued complaints from smaller nations on the lack of affordable hotels, Reuters reports.
The summit comes at a period where international economic cooperation is already challenged.
"Today, global cooperation is stagnating amid geopolitical tensions and multiple wars," Reuters reports. "An erratic series of U.S. tariffs has upended economic stability worldwide, while U.S. reversals on clean energy policy and climate science have rattled investors. And while costs for renewable energy have plummeted to below fossil fuels, many countries are juggling competing goals such as food security or developing AI."
3. Corporate fraud a continued concern for lenders
Some noteworthy recent incidents of fraud among corporate borrowers has given lenders pause, and The Wall Street Journal reports they're taking a closer look before putting money out into the market.
"Lenders are increasing due diligence and demanding a longer history of financial data from companies," the newspaper reports. "Some are inserting conditions that permit them to do more frequent checkups before agreeing to make loans. A group of the biggest names in banking, investment management and accounting have formed a task force that will take a deeper look at the nature of the problem and how to protect investors."
4. Hotels now favored real estate for housing conversions
Fast Company reports that hotels are now the most-used form a real estate for conversions to housing, surpassing offices, due to both ease and availability.
In total, hotels made up 37% of apartment conversions in 2024, compared to 24% offices, 19% industrial and 8% schools.
"The process for redesigning a hotel into a residential space is much more streamlined by comparison, as it already has a base infrastructure of single-unit residences, much like the apartment complex it will become," the news outlet reports. "That similarity suggests that converting the space would require less rewiring, less HVAC installation, less teardowns, and less time and money for the developer."
Vacated office space related to companies going remote was one big reason why office lead the way for apartment conversions, but a downturn in hotel demand has made that sector more favorable for housing-focused investors.
5. Hotel companies lean on AI to monetize amenities
The hotel industry is drawing some unfavorable comparisons to airlines in a new report from NBC News that notes hotel companies are leveraging artificial intelligence to charge for amenities to a greater degree than ever before.
"Individual properties can now creatively unbundle and repackage their room inventories, allowing guests to personalize their stays and increasing revenue," the news outlet reports. "But it can be tricky for a hotel to find the sweet spot between giving guests more control over the details of their stays and leaving them feeling like a hotel is charging for perks that guests expect for free."