Marriott Beats Estimates as RevPAR Jumps 6.5% and Outlook Rises

Marriott raised its full-year outlook on Monday after revenue per available room, the hotel industry's core demand gauge, rose 6.5% in the third quarter.

Adjusted diluted earnings per share were $3.02 in the quarter ended September 30. That compared with $2.47 a year earlier. On a reported basis, diluted earnings per share were $3.04, up from $2.67.

RevPAR rose in every major market

Worldwide RevPAR rose 6.5% in the quarter. RevPAR in the United States and Canada rose 7.4%. International RevPAR rose 4.4%. The company said higher room rates and higher occupancy drove the worldwide gain.

Asia-Pacific excluding China led the international regions. Its RevPAR rose over 9% on strong inbound demand. Europe, the Middle East and Africa also grew. The Middle East conflict still weighed on results there, but trends improved from the second quarter.

Fees did the heavy lifting

Franchise and base management fees rose 13% to $1.34 billion. Incentive management fees rose 22% to one hundred eighty-one million dollars. The company credited higher card fees, higher RevPAR and rooms growth for the fee gain.

Total revenues rose 8% to $7.01 billion. Gross fee revenues rose 14% to $1.52 billion. Reported operating income rose to $1.27 billion, from $1.18 billion a year earlier.

Owned, leased and other revenue, net of expense, fell to forty-one million dollars. It was seventy million dollars a year earlier. General and administrative expenses were two hundred fourteen million dollars, little changed from a year earlier.

Consensus sat below the print

Adjusted earnings of $3.02 a share beat the $2.84 consensus estimate. Revenue also topped the $6.93 billion consensus estimate. The Wall Street Journal reported both estimates, citing FactSet. The estimates are not company figures, and the release does not carry them.

Profit, cash and the buyback

Reported net income rose 9% to seven hundred ninety-four million dollars. Adjusted net income was seven hundred ninety million dollars. Adjusted earnings before interest, taxes, depreciation and amortization rose 12% to $1.51 billion.

The company repurchased three point five million shares for $1.3 billion in the quarter. Year to date through October 28, it returned about $4.0 billion to shareholders. That total covers dividends and share repurchases.

Total debt stood at $16.8 billion at quarter-end. Cash and equivalents totaled five hundred million dollars. Interest expense, net, rose to two hundred nineteen million dollars, from one hundred ninety-four million a year earlier.

A record pipeline and a bigger system

Marriott added about twenty thousand one hundred net rooms in the quarter. Net rooms grew 4.6% from a year earlier. The global system passed ten thousand two hundred properties, with nearly one point eight million rooms.

The development pipeline reached a record four thousand two hundred nine properties. It held more than six hundred thirty-four thousand rooms. Forty-four percent of pipeline rooms were under construction, including hotels pending conversion.

The quarter-end pipeline included one thousand seven hundred fifty properties under construction. Those properties held over two hundred seventy-eight thousand rooms. Over half of all pipeline rooms sat in international markets.

Membership in Marriott Bonvoy reached about three hundred nine million members. Conversions drove over a third of signings this year. They also drove over 40% of openings in the first nine months.

The raised outlook, line by line

Marriott now expects worldwide RevPAR growth of 4.5% to 5% for full-year 2026. The Wall Street Journal put the prior outlook at 3% to 3.5%. Fourth-quarter RevPAR growth is also seen at 4.5% to 5%.

Adjusted earnings per share for the full year are now guided to $12.07 to $12.14. The prior range was $11.64 to $11.81. Fourth-quarter adjusted earnings are seen at $3.14 to $3.21 a share.

Net rooms growth is now seen at the low end of 4.5% to 5%. Full-year adjusted EBITDA is guided to $6.08 billion to $6.10 billion. Capital return for the year is guided to at least $4.8 billion.

"Our excellent third quarter results reflected continued momentum across our business," said Anthony Capuano, President and Chief Executive Officer. "Global RevPAR increased 6.5 percent in the third quarter, on higher ADR and occupancy." The company held its earnings call at 8:00 a.m. Eastern Time on Monday.

What remains unknown

What remains unknown starts with the fourth quarter. The release does not show whether United States demand holds at this pace. It also does not show how Middle East trends move from here. Whether card fees keep outrunning room revenue is also unproven.

The tests that come next

What to watch begins with the fourth-quarter print against the new guide. It will test RevPAR growth of 4.5% to 5% directly. It will also show whether the pipeline converts into openings at the guided rooms pace.