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International hotel performance buffers Marriott against weaker US, Canada numbers

Company executives lowered full-year guidance despite second-quarter beat
Marriott International added 17,300 rooms to its portfolio during the second quarter. Among its openings was the JW Marriott Crete Resort and Spa in Greece. (Marriott International)
Marriott International added 17,300 rooms to its portfolio during the second quarter. Among its openings was the JW Marriott Crete Resort and Spa in Greece. (Marriott International)
CoStar News
August 5, 2025 | 3:00 P.M.

Marriott International’s financial results for the second quarter beat its previous estimates despite economic uncertainty. Even so, executives tempered the company's full-year revenue forecast.

During the company’s second-quarter earnings call, Marriott President and CEO Tony Capuano said international revenue per available room grew by more than 5%, led by growth in the Asia-Pacific and Europe, Middle East and Africa regions.

RevPAR in APAC grew by 9% due to strong average daily rate and higher demand from international guests. In EMEA, RevPAR grew 7% due to both strong rate and occupancy growth from transient in-country and cross-border demand.

Even with ongoing conflicts in the Middle East, Marriott's second-quarter hotel RevPAR grew there by more than 10%.

Due to its high reliance on U.S. travelers, weaker leisure demand and less government-related travel, Marriott's hotels in the Caribbean and Latin America felt a bit of a drag, he said. However, strong ADR, especially at its luxury results, drove RevPAR up 3%.

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RevPAR in the U.S. and Canada was flat compared to a year ago and grew almost 1% when adjusting for the Easter holiday shift, Capuano said. RevPAR growth was strongest at the higher end of the chain scale, with luxury RevPAR up 4%. RevPAR at select-service and extended-stay hotels in the region declined by 1.5% primarily due to the drop in government demand.

“Across chain scales, group RevPAR in the U.S. and Canada was also softer than previously anticipated, primarily due to fewer near-term bookings and elevated attrition rates,” he said.

Leisure transient demand grew the fastest during the quarter, with leisure transient rising 3% globally and 1% in the U.S. and Canada, he said. Group RevPAR grew 2% globally and 1% in the U.S. and Canada. Second-quarter business transient RevPAR fell by 2% globally and in the U.S. and Canada in part because of the Easter shift.

Outlook update

With ongoing economic uncertainty, Marriott expects global RevPAR to be flat to up 1% in the third quarter and up 1.5% to 2.5% for the full year, said Leeny Oberg, chief financial officer and executive vice president of development. The previous outlook was 1.5% to 3.5% RevPAR growth.

“Our full-year RevPAR growth is still expected to be meaningfully stronger internationally than in the U.S. and Canada, even with greater China RevPAR still anticipated to be around flat compared to last year,” she said.

Marriott’s luxury and full-service segments account for more than half of its open global rooms, and these segments are expected to outperform those in the lower end of the chain scales globally, Oberg said.

Marriott expects RevPAR growth to accelerate from the third quarter into the fourth quarter due to holiday shifts and the timing of large events in 2024, specifically the Paris Olympics, the Euro Cup, the Republican and Democratic national conventions and the Formula One race in Singapore, she said.

By the end of June on a global basis, Marriott's revenue for group was pacing down 2% for the third quarter and pacing up 4% for the fourth quarter, Oberg said. Full-year 2025 group revenue was pacing up 3%, below the pace observed a quarter ago mostly due to fewer near-term bookings.

Group bookings for 2026 are up 8% in the U.S. and Canada and 7% globally compared to a quarter ago, she said. Leisure transient and group RevPAR are forecast to grow in the low single-digit range.

Marriott expects business transient RevPAR to stay flat year over year as government demand looks to remain weak, she said. Government room nights in the U.S. and Canada were down 16% year over year in the second quarter, more than in March, but they appear to have stabilized around these levels.

Growing the portfolio

During the second quarter, Marriott added about 17,300 net hotel rooms, including more than 8,500 net rooms in international markets, according to its earnings release. By the end of the quarter, the company’s global hotel system had more than 9,600 properties with more than 1.7 million rooms.

As of June 30, Marriott’s worldwide development pipeline had 3,858 hotels with more than 590,000 rooms. That includes 234 properties with more than 37,000 rooms approved for development but not yet subject to signed contracts. The pipeline at the end of the quarter also had 1,447 properties with more than 238,000 rooms under construction including conversions.

More than half of the hotel rooms in Marriott's development pipeline are in international markets. These figures do not include any rooms from Marriott’s acquisition of the CitizenM brand or its launch of Series by Marriott.

Marriott expects strong net rooms growth in 2025 and beyond, Capuano said.

“Even with higher construction costs and the challenging financing environment in the U.S. and Europe, second-quarter deal signings rose 35%, with every region signing more projects than in the same quarter last year,” he said.

Conversions represented nearly 30% of both Marriott's room signings and openings during the first half of the year, he said.

Marriott’s newer midscale brand offerings are attracting significant owner interest, Capuano said. By the end of the quarter, the company had about 200 open midscale hotels and another nearly 200 in the pipeline.

In May, Marriott launched Series by Marriott, a collection brand for hotels in the midscale to upscale segments. Capuano said the brand is designed to bring established quality regional hotels into the Marriott portfolio and further extend the company’s reach to value-conscious travelers.

Marriott also recently closed on its $355 million acquisition of the tech-forward lifestyle brand CitizenM.

Marriott continues to expand its global luxury portfolio, which has nearly 168,000 rooms across 670 properties, Capuano said. The company is planning another 27 luxury openings this year and 270 additional luxury properties in the pipeline.

By the numbers

For the second quarter, Marriott reported total revenue of $6.7 billion, a 5% year-over-year increase, according to the earnings release. It reported net income of $763 million, a 1% year-over-year decrease.

As of June 30, Marriott reported having total debt of $15.7 billion with cash and cash equivalents of $700 million as compared to $14.4 billion in debt and $400 million in cash and cash equivalents at year-end 2024. It achieved adjusted earnings before interest, taxes, depreciation and amortization of $1.4 billion.

The company repurchased 2.8 million shares of common stock in the second quarter for $700 million. Year to date through July 30, the company repurchased 6.4 million shares for $1.7 billion.

As of press time, Marriott’s stock was trading at $257.11 per share, down 7.8% year to date. The NASDAQ Composite was up 8.5% for the same period.

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