Strong overall hotel demand across the globe has led Marriott International to raise its revenue per available room growth outlook for the second time this year.
Second-quarter global revenue per available room rose 3.4%, with RevPAR in the U.S. and Canada region growing 5%, its highest quarterly increase in 13 quarters with strength in World Cup and non-World Cup markets, Marriott President and CEO Tony Capuano said during the company's second-quarter earnings call. Excluding the World Cup, Marriott's second-quarter RevPAR in the U.S. and Canada rose 4%.
Marriott's luxury and resort hotels continued to lead in the U.S. and Canada in the quarter, with luxury RevPAR up over 9%, he said. Strength was pervasive across hotel chain scales, with Marriott's select-service RevPAR increasing over 4%.
With the conflict in the Middle East weighing on Marriott's performance results, second-quarter international RevPAR dipped year over year, Capuano said. RevPAR in Europe, the Middle East and Africa declined just over 5% as the drop in performance the Middle East offset a solid showing in Europe, which grew over 4% year over year. RevPAR in the Middle East fell 43% in the quarter, better than prior expectations thanks to better-than-expected domestic leisure demand.
Second-quarter RevPAR in the Asia-Pacific region rose over 5%, he said. Disruptions in travel from the Middle East did weigh on select Asian markets in April, but RevPAR surpassed previous expectations in May and June due to improved flight capacity and strong intra-regional demand.
RevPAR in Greater China rose over 3% led by strong inbound leisure demand recovery as Marriott’s hotels continue to gain share in an uneven consumer spending environment, he said.
In the Caribbean and Latin America region, RevPAR rose 3% driven by strong luxury and leisure demand across the Caribbean.
Marriott is increasing its full-year global RevPAR guidance to 3% to 3.5% growth due to its second-quarter global outperformance and strong outlook for the second half of the year in all regions, said Jen Mason, executive vice president and chief financial officer.
“Note that the strong World Cup performance in June and July provided a slightly larger boost to full-year global RevPAR than expected, at closer to 45 basis points globally, above our prior expectation of 30 to 35 basis points,” she said.
Marriott expects third-quarter global RevPAR to increase 3.5% to 4%, she said. In the U.S. and Canada, it expects a strong demand trend that extended into July across chain scales and customer segments to continue. World Cup performance should help RevPAR in the third quarter, but the fourth quarter may see a small negative impact from the midterm elections in the U.S.
In Greater China, Marriott forecasts full-year RevPAR to be up 2% to 3%, Mason said. The Asia-Pacific region should show continued strength through the back half of the year thanks to solid domestic and international demand, especially from the U.S.
Strong leisure demand across the Caribbean should continue to drive CALA performance, offsetting weakness in Mexico, she said.
The ongoing conflict in the Middle East will continue to have an impact on the EMEA region, but it should be to a lesser extent than previously anticipated, Mason said. Year-over-year RevPAR growth in the region should improve in the third quarter relative to the second, but it will moderate again in the fourth quarter as the Middle East will face difficult comparisons to the fourth quarter of 2025 when several large events drove meaningful average daily rate increases.
“In addition, because the Middle East enters its peak tourism season in October, the region's performance will have a greater impact on EMEA's fourth-quarter results than it did in the third quarter,” she said.
Owner relations
In June, the Wall Street Journal reported a group of 51 hotel owners with more than 1,000 Marriott-branded hotels among them wrote a letter to Marriott executives in March saying they should receive more of the revenue that Marriott makes from its credit-card agreements since they are the ones who take on the expense of guests redeeming their Bonvoy points.
When asked about the letter on the earnings call with analysts, Capuano said he wasn’t going to give an official response.
“That’s a matter between us and our owners,” he said.
However, Capuano went on to say Marriott’s success is closely tied to the success and financial strength of its owner and franchisee community.
“Given our asset-light model, we continue to work every day to address issues, concerns and opportunities with the broader franchisee community around the world,” he said. “And those discussions have gone on for decades, and will continue to go on for decades.
“The letter that we received, I think, is reflective of the passion and commitment that that group of owners has to the relationship and is an acknowledgement of that linkage between our mutual success.”
Marriott has had several meetings already with this group of owners, and it will continue forward with discussions, Capuano said.
In his prepared remarks, Capuano said Marriott is working with hotel owners to strengthen hotel-level economics and drive owner returns and long-term value across the system. To help accomplish this, Marriott has implemented productivity enhancements in its enterprise-wide efficiency exercise.
At the beginning of the year, Marriott lowered its loyalty charge-out rates across its global system by about 5%, he said. It also enhanced owner reimbursement for Bonvoy redemption stays on high-demand nights. The company introduced streamlined brand standards to simplify operations and reduce costs, and it rolled out flexible renovation scopes that focus on customer-facing elements.
Marriott is introducing its new intent to recommend incentive in the U.S. and Canada that will provide a fee discount for “top hotels” that receive strong guest satisfaction scores, he said.
Marriott will roll out the ITR for owners this week, Mason said. It will provide up to 50 basis points of room revenue and fee reimbursement for achieving defined ITR thresholds.
Development update
Marriott saw record global signings during the first half of the year, and it grew net rooms by 4.5% over the 12 months ending June 30, Capuano said.
During the quarter, Marriott added approximately 17,900 net rooms, including about 11,000 net rooms in international markets, according to its earnings release. As of June 30, its global system totaled more than 10,000 properties with nearly 1,814,000 rooms.
Marriott’s worldwide development pipeline amounted to 4,186 properties with about 629,000 rooms by the end of the quarter. That includes 253 properties with over 34,000 rooms approved for development but not yet subject to signed contracts. The pipeline had 1,757 properties with over 279,000 rooms under construction, and that figure includes hotels converting to a Marriott brand.
More than half of the rooms in the quarter-end pipeline were in international markets.
Conversions, including multi-unit deals, are a significant driver of growth representing 34% of Marriott’s signings and 40% of its openings during the first half of the year, Capuano said. One multi-unit deal came through its strategic agreement to introduce Series by Marriott to Greater China, which will add roughly 100 hotels under the collection brand. The first opening is expected later this year.
Marriott expects net rooms to grow in the mid-single-digit range over the next few weeks, he said. Its compound annual growth rate has been 5.2% since the end of 2023. Its full-year 2026 net rooms growth rate will likely be at the low end of its previous outlook of 4.5% to 5%, primarily due to construction delays in the Middle East. This includes its typical assumption of 1% to 1.5% room deletions.
By the numbers
For the second quarter, Marriott reported revenue of $7 billion, up 5% year over year, according to its earnings report. It reported net income of $766 million, up from $763 million the year before.
Adjusted EBITDA totaled nearly $1.6 billion, a 13% year-over-year increase.
As of June 30, Marriott reported total debt of $16.9 billion and cash and cash equivalents of $500 million. For comparison, by mid-year 2025, Marriott had $16.2 billion in total debt and $400 million in cash and equivalents.
Marriott repurchased 3 million shares of common stock during the second quarter for $1.1 billion. Year to date through July 29, it has repurchased 6.2 million shares for $2.2 billion.
As of press time, Marriott's stock was trading at $351.59, up 12.2% year to date. The NASDAQ Composite was up 10.9% for the same period.