Marriott Q1 earnings beat lifts shares as travel demand holds; RevPAR outlook raised

Marriott International shares rose 1.28 per cent to $359.06 on Wednesday after the world’s largest hotel operator reported first-quarter earnings that beat analyst expectations and raised its full-year revenue forecast, a sign that global travel demand is holding up despite disruption in the Middle East.

The Bethesda, Maryland-based company posted adjusted diluted earnings of $2.72 per share for the three months to 31 March, ahead of the $2.58 consensus estimate from analysts polled by Zacks Investment Research. Reported revenue came in at $6.654 billion, up 6 per cent from a year earlier and above the $6.59 billion consensus. Adjusted total revenue, which strips out $4.844 billion in cost-reimbursement charges, was $1.810 billion.

Worldwide comparable systemwide revenue per available room, the industry’s benchmark performance metric, rose 4.2 per cent from a year earlier in constant-currency terms, driven by a 6.8 per cent surge in U.S. and Canada luxury properties. “We delivered excellent first quarter results, reflecting the strength of our brands, our unmatched global footprint, and the resilience of demand for travel,” chief executive Anthony Capuano said in the earnings release.

What the print showed

The top-line RevPAR number split into two distinct stories. U.S. and Canada comparable systemwide RevPAR rose 4.0 per cent to $128.80, but the luxury tier, spanning Ritz-Carlton, St. Regis, Edition, W Hotels, and JW Marriott, posted a 6.8 per cent gain to $339.42, more than triple the RevPAR of premium and select-service brands. Premium tier properties (Marriott, Sheraton, Westin, Delta) rose 3.8 per cent to $144.83, while select-service brands gained 3.5 per cent to $103.87, according to the company’s SEC filing.

International RevPAR grew 4.6 per cent to $112.01, though the aggregate masked wide regional dispersion. Europe led with a 6.6 per cent increase. Asia-Pacific excluding China rose 7.3 per cent, Greater China added 5.7 per cent, and the Caribbean and Latin America grew 2.0 per cent. The Middle East and Africa was the only region to decline, falling 1.9 per cent as the regional conflict suppressed travel.

The results extend a pattern that has held since late 2025: high-income leisure travellers are spending freely on premium properties while budget-conscious guests trade down or delay. Marriott’s luxury tier, which generates a disproportionate share of fee revenue, has now outpaced the broader portfolio for five consecutive quarters.

The guidance

Marriott raised its full-year 2026 worldwide RevPAR growth forecast to between 2.0 and 3.0 per cent, up from its previous range. Full-year adjusted EPS guidance was set at $11.38 to $11.63, representing 14 to 16 per cent growth from 2025, CFO Jennifer Mason told analysts on the post-earnings call.

For the second quarter, the company guided adjusted EPS of $2.99 to $3.06 and worldwide RevPAR growth of 1.5 to 2.5 per cent. Mason said the Middle East conflict would weigh on the global RevPAR figure by an estimated 100 to 125 basis points for the full year, with the region’s second-quarter RevPAR expected to decline roughly 50 per cent. The effect of recent U.S. tariff increases on corporate and inbound international travel was “not yet visible in the data,” she added, but the company was monitoring booking patterns closely.

Full-year gross fee revenue is projected at $5.925 billion to $5.985 billion, with adjusted EBITDA of $5.880 billion to $5.970 billion.

Rooms and capital return

Marriott added 15,900 net rooms globally during the quarter, roughly half in international markets. The development pipeline stood at 4,107 properties representing nearly 618,000 rooms at quarter-end, with 43 per cent of pipeline rooms already under construction. Year-end net rooms growth is projected at 4.5 to 5.0 per cent, consistent with the company’s long-term expansion target.

“We had record first quarter signings,” Capuano said, noting that conversions, where independent hotels switch to a Marriott flag, accounted for more than 35 per cent of signings and over 40 per cent of openings in the period. The conversion trend has accelerated across the hotel industry as independents face rising distribution costs and seek the booking power of global loyalty programmes.

The company repurchased 2.1 million shares for $700 million during the quarter. Mason said Marriott expects to return more than $4.4 billion to shareholders through dividends and buybacks in 2026. Year-to-date shareholder returns through 29 April totalled more than $1.2 billion.

What’s next

The beat adds to evidence that consumers are still spending on travel even as macro uncertainty lingers. Luxury outperformance, the strongest segment in both absolute RevPAR and growth rate, suggests higher-income households are not pulling back, consistent with what airlines and cruise operators have reported in recent quarters.

The raised full-year guidance, delivered despite the Middle East headwind, indicates management views the regional disruption as contained. At roughly 2 to 3 per cent of global room inventory, the Middle East exposure is material but not outsized. Whether tariff-related uncertainty begins to show up in corporate booking data in the second half of 2026 is the open question, a risk Mason flagged on the call.

Marriott shares have gained roughly 8 per cent year to date, broadly in line with the S&P 500. At 22 times forward earnings, the stock trades slightly below its five-year average as the market waits for clarity on tariffs and the Middle East conflict.