Hotel operator Marriott International cut its full-year forecast for revenue growth and profit on Tuesday, signaling challenges from slow travel demand in the US amid looming economic uncertainties.
American consumers have been cutting back on discretionary expenses, including travel, after US President Donald Trump’s shifting tariff policies and the resulting trade war sparked fears of a recession.
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Marriott’s total room revenue in the US and Canada was flat during the second quarter compared with the year earlier, as the impact of the travel slowdown on its budget and select-service segments was offset by strength in its upscale properties in the region.
The company’s upscale segment, which includes brands such as the Ritz-Carlton and Sheraton, caters to more economically resilient customers.
Room revenue in its US and Canada luxury segment grew 4.1 percent, while that in select-service decreased 1.5 percent.
The select-service segment, which includes legacy brands such as the Courtyard and Fairfield, also took a hit from a 16 percent drop in government revenue during the quarter.
“Two thirds of (all) government revenues are in the select-service segment,” CEO Anthony Capuano said, adding that the hotel operator also saw weak demand from small business customers across segments.
The Bethesda, Maryland-based company expects 2025 room revenue growth of 1.5 percent to 2.5 percent, compared with its previous forecast of a 1.5 percent to 3.5 percent increase.
It expects 2025 adjusted profit to be between $9.85 and $10.08 per share, with the midpoint below its earlier projection of $9.82 to $10.19 per share.
“The trim off the top end of guidance is expected and, we believe, reflected in the shares,” said David Katz, analyst at Jefferies. He expects the stock reaction to be neutral.
Excluding items, Marriott’s per-share profit for the quarter came in at $2.65, while analysts estimated $2.62, according to data compiled by LSEG.
