Marriott lifts outlook as hotel demand powers third-quarter growth

Marriott International, Inc. (NASDAQ:MAR) raised its full-year room-revenue outlook after worldwide RevPAR climbed 6.5% in the third quarter, with the strongest gains coming from the U.S. and Canada. Reported diluted earnings per share rose to US$3.04 from US$2.67 a year earlier, while reported net income increased 9% to US$794 million.

The company now expects worldwide RevPAR growth of 4.5% to 5.0% for 2026, compared with its earlier forecast. The guidance assumes the current macroeconomic environment continues, so the upgrade is an improvement in expectations rather than a promise of uninterrupted momentum.

US and international hotel demand diverge

U.S. and Canada RevPAR increased 7.4%, supported by higher occupancy and average daily rates across customer segments and chain scales. International systemwide RevPAR rose 4.4%, led by Asia Pacific excluding China, where growth reached 9.3%, and Europe, where it increased 6.4%.

The regional picture was not uniformly strong. Systemwide RevPAR fell 5.3% in the Middle East and Africa, with occupancy down five percentage points, while Greater China declined 0.3%. Marriott said the Middle East conflict continued to affect results, although trends in that region improved meaningfully from the second quarter.

Fee growth drives earnings improvement

Marriott’s asset-light engine continued to do the heavy lifting. Franchise and base management fees rose 13% to US$1.341 billion, while incentive management fees increased 22% to US$181 million. The company attributed the gains primarily to higher co-branded credit-card fees, stronger RevPAR and room growth.

Adjusted net income, a non-GAAP measure, was US$790 million compared with reported GAAP net income of US$794 million. Adjusted diluted EPS rose 22% to US$3.02, versus reported GAAP diluted EPS of US$3.04. Adjusted EBITDA increased 12% to US$1.512 billion. The adjusted figures exclude items including cost reimbursement activity and selected impairment and restructuring-related charges, so they should not be treated as substitutes for the GAAP results.

Record pipeline supports expansion while debt rises

Marriott added about 20,100 net rooms during the quarter, taking its global system to more than 10,200 properties and nearly 1.834 million rooms. Its development pipeline reached 4,209 properties and more than 634,000 rooms, with 44% of those rooms under construction. More than half of the pipeline rooms were outside the U.S. and Canada, and conversions represented more than 40% of openings during the first nine months.

The expansion is being paired with aggressive capital returns. Marriott repurchased 3.5 million shares for US$1.3 billion during the quarter and said it had returned about US$4.0 billion through dividends and buybacks by October 28. Total debt stood at US$16.8 billion at quarter-end, up from US$16.2 billion at the end of 2025, while the company refinanced and enlarged its credit facility to US$5.0 billion with maturity extended to September 2031.

Fourth-quarter targets keep the pressure on

Marriott’s full-year outlook calls for adjusted EBITDA of US$6.075 billion to US$6.098 billion and adjusted diluted EPS of US$12.07 to US$12.14. It expects to return at least US$4.8 billion to shareholders in 2026, alongside investment spending of US$1.25 billion to US$1.35 billion.

The next test is whether the higher RevPAR forecast can hold across regions rather than being carried mainly by North American pricing and occupancy. Greater China and the Middle East and Africa remain clear weak spots, while higher interest expense and the planned sale of another U.S. and Canada hotel add moving parts to the fourth-quarter numbers.