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Marriott holds RevPAR growth guidance
BETHESDA, Maryland – Marriott International reported a 0.5% global RevPAR gain during the third quarter with U.S. and Canada declining 0.4% due to weaker demand in the lower chain scales, largely reflecting reduced government travel.
International RevPAR increased 2.6%, led by APEC, which delivered nearly 5% growth fueled by strong performance in key markets like Japan, Australia and Vietnam.
Globally, Marriott luxury hotels continued to outperform, driven by robust demand and strong rate performance, with luxury RevPAR rising 4% in the quarter.
Full-year RevPAR growth guidance is unchanged at 1.5%-2.5%, and Marriott is forecasting 1.0%-2.0% growth in 4Q25 with strength in international markets and higher-end chain scale performance. Full-year Adjusted EBITDA guidance is increasing to reflect the $46 million beat in 3Q25 and a $31.5 million decrease in 4Q25, according to R.W. Baird analyst Michael Bellisario.
President and CEO Anthony Capuano said that during the first nine months of the year, Marriott had record year-to-date signings with momentum on conversions continuing, comprising around one-third of their signings and openings. “We still expect net rooms growth to approach 5% for full year 2025 and be in the mid-single-digit range over the next few years,” he said.
The company added roughly 17,900 net rooms during the quarter, including nearly 13,900 net rooms in international markets. At the end of the quarter, Marriott’s global system totaled over 9,700 properties, with approximately 1,754,000 rooms.
At the end of the quarter, the worldwide development pipeline totaled 3,923 properties with more than 596,000 rooms, including 229 properties with nearly 36,000 rooms approved for development, but not yet subject to signed contracts. The quarter-end pipeline included 1,536 properties with over 250,000 rooms under construction, including hotels that are in the process of converting to the Marriott system. Over half of the rooms in the quarter-end pipeline are in international markets.
Base management and franchise fees totaled $1.190 billion in the 2025 third quarter, a nearly 6% year-over-year increase. The increase was primarily driven by rooms growth and higher co-branded credit card fees.
Incentive management fees totaled $148 million in the third quarter, compared to $159 million a year ago, primarily reflecting declines in the U.S. and Canada. Managed hotels in international markets.
Gross fee revenues were +$13 million versus the high-end of guidance, according to Bellisario.
Marriott’s reported operating income totaled $1.180 billion in the third quarter, compared to $944 million a year ago. Reported net income totaled $728 million in the third quarter, a 25% year-over-year increase. Reported diluted earnings per share (EPS) totaled $2.67 in the quarter, compared to $2.07 a year ago.
Adjusted operating income in the 2025 third quarter totaled $1.119 million, compared to $1.017 billion a year ago. Third quarter 2025 adjusted net income totaled $674 million $638 million last year. Adjusted diluted EPS in the 2025 third quarter totaled $2.47, compared to $2.26 in the year-ago quarter.
Adjusted EBITDA totaled $1.349 million in the 2025 third quarter, a 10% increase compared to third quarter a year ago.
Experts on China, Japan and the current APAC investment cycle
SINGAPORE — During a HICAP panel on investment insights for the Asia Pacific, the subject turned to China and its current attractiveness as an investment destination for hospitality assets.
Kenny Gaw, president & managing principal for Hong Kong-based Gaw Capital Partners, said it’s a difficult question.
“In the past, we have invested a lot in China in all categories, but honestly not much in hotels,” he said. “Because for many years, hotels were uninvestable, because many hotels were built by large developers who got big pieces of land, and the profit driver has always been from a [local interest]… they’re required to build a hotel, often by the local government, because the local government wants a place they can host a big event. Or for a developer to boost his ego, as he wants a place to entertain his friends and government officials. A lot of hotels have been built for reasons like that, rather than with a true economic intent.”
However, Gaw said that due to years of distress in the market, there are now potential hospitality investment opportunities in China.
“Domestic traveling has really moved and now you have this so-called downgrade consumption,” he said. “That means fewer people are traveling out of the country and more people are traveling domestically. Many new destinations have been discovered, and hotels have been built specifically to cater to this new travel class.
“With the distress, now there’s not as much competition in China, so actually, I do think that there may be interesting opportunities coming up [in potentially] getting good prices.”
Gaw was part of an “Investment Insights — Financial Gurus Tell It Like It Is” panel as part of the second day of the Hotel Investment Conference Asia Pacific (HICAP) in Singapore. The panel included Gary Kwok, CEO for Hong Kong-based AXE Management Partners; Jason Leong, executive director and head of investment & asset management for Singapore-based Frasers Hospitality; Hoe Kit Mark, managing director for Singapore-based CapitaLand Investment Ltd. and Eric Seigel, APAC head of hospitality for Radnor, Pennsylvania-based EQT Real Estate. Nihat Ercan, CEO of Asia Pacific for JLL Hotels & Hospitality Group served as moderator.
APAC at a crossroads
When asked where Asia Pacific is right now in terms of the hotel investment cycle, Mak said he sees the area at a crossroads.
“There are definitely very bright signs with the return of travel… but we also need to have a very cautious attitude, because there are also big [headwinds] that we need to be careful about. While interest rates are definitely declining, helping a lot of investment activity and attracting many people, some say rates are not coming down fast enough.”
Mak said, however, the level of caution may depend on each company’s risk profile.
“It also depends on your own risk-return profile and capability,” he said. “We have still been actively buying. We just bought something in Korea… we take a lot of effort to look at deals. Buying cheap, of course, is important. Having cheap financing is important, but that is not the most important [thing]… we actually look at our assets.
“We look at the floor space, look at the configuration, the performance, the distribution and the channel, together with our operator, to see how we can add to that. That really makes a lot of difference and has been very instrumental for us to be able to buy in better times or worse times.”
Leong said the crossroads reference felt right to him.
“There are certainly very good dynamics going on in the hospitality sector and that’s why we are all drawn to it. But given the wider macroeconomic conditions that’s actually impacting [hospitality], we have achieved quite a bit of uncertainty as well.”
Leong said that in many of the countries where Frasers has invested, the company is seeing good and stable performance. However, that doesn’t mean he doesn’t also see uncertainty on the horizon. That’s why he’s always focused on how to improve assets.
“In terms of underwriting new deals or even existing asset performance, that’s something that we spend a lot of time watching,” he said. “Apart from acquisitions, what we do a lot of is take a look at our internal assets [and ask] can we make it better through renovations? These are some of the things we ask with every asset that we have: Can we make it better?”
Opportunities in Japan
Siegel said that, in terms of Asia Pacific investing, EQT Real Estate is still “getting its feet wet,” but he noted that the company has been underwriting opportunities in resort markets in Japan.
“Accessibility is really important for us, though, when it comes to resorts, whether it be drive-to or the airlift factor. That doesn’t hold us back, but that’s really, really important,” he said. “We actually view theme parks as resorts. So it’s like an urban resort, and that’s something we’ve definitely bid out for a couple of transactions.
Seigel also mentioned luxury opportunities in APAC and how they could also include a mixed-use residential component to help the investment pencil.
“If we were go into more luxury, which we are studying, then we would probably want to do that to find our own mixed-use scenario with some type of residential play. Our team has done multiple very high-end luxury residential [projects]. So far, they are unbranded, but we are beginning to also look at potential branded residential with luxury in resort settings.”
Kwok, whose AXE Management Partners recently completed several deals for midscale Garner conversions in Japan, said the Asia Pacific region has experienced numerous cycles and challenges over the past 10 years.
“We are on the cycle where the interest rates are starting to come down,” he said. “From our perspective, we are a specialized player. So we tend to focus on the asset alpha, the repositioning, remodeling alpha and also the operation alpha.”
Kwok said that involved focusing on the company’s current investment thesis and keeping a sensitive eye on underwriting.
“From our perspective, it’s just been focusing on what we have been doing and focusing on the alpha,” he said. “Having said that, given where things are at, especially in the U.S. situation in terms of tariffs, I think everyone will be extra sensitive in terms of what they do in underwriting and different types of sensitivities with interest rates, currency, markets, etc.”
International demand the main driver of Marriott's hotel performance
International travel demand is expected to continue to drive hotel performance through 2026 for Marriott International while the U.S. and Canada continue to struggle.
During the company’s third-quarter earnings call, Marriott Chief Financial Officer and Executive Vice President of Development Leeny Oberg said that with the ongoing economic uncertainty, Marriott expects global revenue per available room to increase by 1% to 2% in the fourth quarter.
That acceleration from the third to the fourth quarter is partially due to calendar shifts and one-time events, she said.
“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.
During Marriott's second-quarter earnings call, executives said they were — like many other companies at the time — lowering their full-year guidance for 2025 over worries of slowing economic activity.
As Marriott continues to work on next year’s budget, the preliminary view is that 2026 year-over-year global RevPAR growth will be similar to the 1.5% to 2.5% growth expected this year, Oberg said.
“Growth is expected to again be higher internationally than in the U.S. and Canada, and next summer's World Cup could contribute around 30 to 35 basis points to full-year global RevPAR growth,” she said.
Third-quarter performance
Marriott's RevPAR growth for the third quarter was modest, as expected, reflecting the ongoing global macroeconomic uncertainty, President and CEO Tony Capuano said. Marriott’s hotels continued to gain RevPAR index, however.
Third-quarter global RevPAR grew by half a percent, with international markets growing RevPAR by 2.6% while RevPAR was down 0.4% in the U.S. and Canada, he said. RevPAR growth was strongest in the Asia-Pacific region excluding Greater China, growing nearly 5% due to robust average-daily-rate growth and higher demand from international travelers, particularly from Greater China and Europe. RevPAR in India grew by 2.5% due to an increase in both ADR and occupancy led by strong regional demand.
When excluding the impact of the Summer Olympics in France and the Euro 2024 in Germany last year, RevPAR in Europe, the Middle East and Africa would have been up by 5% year over year, he said. RevPAR in the Caribbean and Latin America rose nearly 3% with gains in both ADR and occupancy, helped by citywide events in Puerto Rico and Rio de Janeiro.
Macroeconomic conditions continue to challenge the operating environment in Greater China, but Marriott’s market share across the region continued to grow, he said.
“With year-over-year comps easing and demand stabilizing, RevPAR was flat and would have been slightly positive excluding the impact of multiple typhoons,” he said. “Leisure demand was solid, offsetting a decline in business-transient demand.”
RevPAR declines in the U.S. and Canada were fueled by underwhelming performance at Marriott's select-service hotel brands, Capuano said. The gains in luxury and calendar shifts affecting group demand helped offset those declines.
Third-quarter group RevPAR decreased by 3% while leisure was up slightly and business transient was down slightly compared to last year, he said. The 14% decline of government-related RevPAR further affected business transient.
By customer tier, global RevPAR growth was strongest at the higher end of Marriott's offerings, Capuano said, adding that “high-end consumers have demonstrated resilience to macroeconomic uncertainties and continue to prioritize travel.”
Luxury revenue grew by 4% as performance weakened down the chain scales, he said. Ten percent of Marriott’s hotel rooms portfolio is in the luxury segment, and another 42% of the rooms are in the full-service premium segment.
By customer segment on a global basis, leisure transient continued to lead RevPAR performance, rising 1%, he said. Business transient RevPAR was flat, and group RevPAR declined 2%, reflecting the timing of events.
Pipeline update
Marriott added about 17,900 net hotel rooms to its portfolio during the quarter, resulting in net room growth of 4.7% year over year, according to the company's earnings report. Of the rooms added, nearly 13,900 were in international markets. By the end of the quarter, Marriott’s global hotel system had more than 9,700 properties with more than 1.75 million rooms.
By the end of the quarter, Marriott had 3,923 hotels with more than 596,000 rooms in its worldwide development pipeline. Of those, 229 properties with nearly 36,000 rooms were approved for development but not yet subject to signed contracts. The pipeline included 1,536 properties with more than 250,000 rooms under construction, which includes those undergoing conversions. More than half of the hotels in the quarter-end pipeline are in international markets.
The pipeline figures do not include any rooms from Marriott’s acquisition of the CitizenM brand, which should integrate into the company's system and platforms next quarter.
Conversions remain a key driver of Marriott's portfolio expansion, accounting for about 30% of both signings and openings during the first nine months of the year, Capuano said.
During the quarter, Marriott launched its Outdoor Collection by Marriott Bonvoy, which includes the Postcard Cabins and Trailborn Hotels brands.
By the numbers
For the third quarter, Marriott reported total revenue of nearly $6.5 billion, up 4% year over year, according to the earnings release. It reported net income of $728 million, an increase of 25% year over year.
Adjusted earnings before interest, taxes, amortization and depreciation totaled nearly $1.4 billion, a 10% year-over-year increase.
At the end of the third quarter, Marriott reported it had a total debt of $16 billion and cash and equivalents of $700 million, according to the earnings report. By the end of 2024, Marriott had total debt of $14.4 billion and $400 million in cash and cash equivalents.
It repurchased 3 million shares of common stock in the third quarter for $800 million. Year to date through Oct. 30, it has repurchased 9.7 million shares for $2.6 billion.
As of press time, Marriott’s stock was trading at $274.15 per share, down 0.1% year to date. The NASDAQ Composite was up 22.4% for the same period.
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