Marriott’s Q3 profit forecast falls short of estimates as Middle East revenue drops

MARRIOTT International forecast third-quarter profit below Wall Street expectations on Monday (Aug 3), as lower hotel room revenue from the Middle East eclipsed gains elsewhere from the World Cup and summer travel demand.

Shares of the hotel operator fell more than 4.5 per cent in pre-market trading.

The travel industry’s outlook remains uncertain for the rest of the year, as trade-related uncertainty and the prolonged US-Israeli war on Iran threaten consumer spending.

Airlines have scaled back operations in the Middle East, a key hub for global travel, dampening tourist demand across the region.

Marriott CEO Anthony Capuano said revenue per available room (RevPAR) – a key lodging metric that tracks average daily rate and occupancy – in Europe, the Middle East and Africa (EMEA) fell over 5 per cent as an increase in Europe was outweighed by a 43 per cent decline in the Middle East.

The group expects adjusted earnings per share for the current quarter to be in the range of US$2.74 to US$2.82, below analysts’ estimates of US$2.87, according to data compiled by LSEG.

US demand resilient

Demand in the US has bucked global trends, boosted by the Fifa World Cup and peak summer travel season.

Marriott’s room revenue from the US rose 5 per cent in the second quarter.

The Bethesda, Maryland-based Marriott expects 2026 RevPAR to grow between 3 and 3.5 per cent, compared with its prior forecast of a 2 to 3 per cent increase.

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Room revenue in Marriott’s luxury segments, including at brands such as Ritz-Carlton and Sheraton, was up 9.1 per cent, as affluent travellers shrugged off economic uncertainties.

Last week, peers Hilton and Hyatt also raised 2026 room revenue forecasts, while flagging a hit from the Middle East.

The Sheraton parent reported Q2 adjusted profit of US$3.19 per share, above analysts’ estimate of US$3.09 apiece. Revenue for the quarter came in at US$7.07 billion, below the expected US$7.2 billion. REUTERS