Marriott International Q1 Earnings Call Highlights

Key Points

• Q1 beat and raised outlook: Marriott exceeded the top end of its Q1 guidance with adjusted diluted EPS up 17% to $2.72 and system-wide constant-currency global RevPAR +4.2%, prompting management to raise full‑year global RevPAR guidance to 2–3% and lift key financial targets (gross fees, EBITDA, EPS).
• Middle East conflict is a material risk: Management is modeling about a ~50% RevPAR reduction in Q2 for the Middle East, expects the conflict to subtract roughly 100–125 basis points from full‑year global RevPAR, and has lowered near‑term EMEA expectations.
• Robust development pipeline: Marriott reported record Q1 signings, a pipeline of nearly 618,000 rooms (43% under construction), with conversions driving more than 35% of signings and management maintaining a net rooms growth target of 4.5–5%.

Marriott International NASDAQ: MAR reported first-quarter 2026 results that exceeded the top end of its guidance ranges, driven by RevPAR growth and continued development momentum. President and CEO Tony Capuano said the company delivered “excellent first quarter performance,” noting that both RevPAR and financial results came in above expectations while development activity remained robust.

RevPAR growth led by luxury, improving select service, and strong APAC

System-wide constant-currency global RevPAR increased 4.2% in the quarter, with U.S. and Canada RevPAR up 4%. Capuano said luxury and resort hotels continued to lead in the region, with luxury RevPAR rising nearly 7%. He also highlighted a rebound in select-service performance: select service RevPAR increased 3.5%, improving from a year-over-year decline of more than 1% in the fourth quarter.

Internationally, RevPAR increased 4.6% despite March pressure from the conflict in the Middle East. In APAC, RevPAR rose more than 7%, which Capuano attributed to strong ADR growth and increased demand from Chinese guests, though he noted that Middle East travel corridor disruptions beginning in March affected some APAC markets including India and the Maldives.

In Greater China, Marriott’s hotels “continued to gain market share,” Capuano said, and first-quarter RevPAR rose nearly 6% on stronger leisure demand. He cited particularly strong results in Hong Kong and Hainan Island, both up around 20% year over year due to strong ADR growth.

In CALA, RevPAR increased 2%, led by record leisure results in the Caribbean, partially offset by a decline at Mexican luxury resorts. In EMEA, RevPAR rose more than 3% as gains in Europe and Africa were partially offset by weakness in the Middle East. Capuano said Middle East RevPAR declined more than 30% in March, while Europe rose 4%, with conflict impacts “relatively minimal” outside countries near the region.

Segment trends: leisure and group outpaced business transient

Marriott reported broad-based demand across customer segments. Capuano said first-quarter leisure RevPAR rose 6% globally (5% in the U.S. and Canada), while group RevPAR rose 5% globally and in the U.S. and Canada.

Business transient RevPAR rose 1% globally and 2% in the U.S. and Canada. Capuano said results included “mid-single-digit declines in government room nights” and slight declines in other business transient room nights, partially offset by higher ADR.

On the call, Capuano provided additional detail, saying global business transient RevPAR was up 1% on a 3% ADR increase, while room nights were down 2%. In the U.S. and Canada, business transient RevPAR rose 2% on 3% ADR gains and a 1% room-night decline. He added that government transient RevPAR was down 6% in the U.S. and Canada, with government RevPAR down 12% to 13% in January and February before rising about 8% in March as comparisons eased.

Discussing U.S. strength into April, Capuano told Bank of America analyst Shaun Kelley that performance continued to be solid across leisure and group, and that “if you exclude government, business transient is pretty solid as well.” He also pointed to strength across chain scales, calling the select-service improvement “a really, really encouraging sign.” In response to JPMorgan analyst Dan Politzer, Capuano said some consumers may be pivoting toward domestic and drive-to destinations amid uncertainty and higher airline fares. CFO Jen Mason added that year-over-year increases in tax refunds had an impact, alongside what she described as relatively low supply growth in the U.S. and Canada in recent years. Capuano also said consumer spending data from Marriott’s credit card partners continues to show travel and experiences being prioritized over hard goods, including among lower-income households.

Conflict in the Middle East pressured results and remains a key variable

Management repeatedly emphasized that the Middle East conflict has created volatility, particularly for properties in the region and for markets reliant on Gulf hub connectivity. Capuano said Marriott’s top priority since “day one of the conflict” has been the safety of associates and guests.

Mason said booking activity has shown “some signs of recovery” from March lows, but the company expects impacts to continue through the end of the year. She said Marriott is modeling “about a 50% reduction in RevPAR in Q2” in the Middle East, followed by sequential improvement in Q3 and Q4. She also reminded listeners that Q4 of last year was a particularly strong quarter in the Middle East due to large citywide events that drove high ADR.

In its guidance framework, Mason said the company assumes the conflict could reduce full-year global RevPAR growth by 100 to 125 basis points. She added that EMEA guidance was lowered to reflect continued year-over-year declines in Middle East properties, with the “most severe decline expected to occur in the second quarter.” She also noted that the Middle East represents about 3% of open rooms, 7% of pipeline rooms, and 3% of 2025 global gross fees.

Capuano also said the Middle East accounts for roughly 10% of global transit traffic demand, which Marriott is monitoring closely due to its footprint in markets such as India. He said the company expects the most significant APAC impact in Q2 and assumes conditions soften as other carriers help replace some lost capacity.

Development: record signings, growing pipeline, and conversion momentum

Capuano said Marriott delivered “record first quarter global signings” and reported net rooms growth of 4.5% over the trailing 12 months through March. First-quarter deal signings were up 9% year over year, and the company’s global pipeline increased more than 5% to a record of nearly 618,000 rooms at quarter-end, with 43% under construction (including pending conversions).

Conversions remained a major driver, representing more than 35% of signings and more than 40% of openings in the quarter. Capuano highlighted a multi-unit agreement with Sun Group to add 10 hotels across eight brands in Vietnam over the next few years, and agreements to bring Series by Marriott to Europe, including six projects in Italy and five in the United Kingdom. He also said Lefay, described as Marriott’s “first brand dedicated exclusively to luxury wellness,” is expected to enter the portfolio later this year.

Marriott maintained its net rooms growth outlook of 4.5% to 5%, including its typical assumption of 1% to 1.5% room deletions. Addressing questions about potential Middle East development impacts, Mason said the company still expects openings in the Middle East to “generally proceed as planned,” though it is watching conditions closely. She said Middle East hotels yet to open this year represent about 4% of expected net room openings for the full year.

Capuano also pointed to traction in mid-scale, noting that Marriott entered the segment a couple of years ago and has now reached the 500-hotel mark when combining open properties and pipeline.

Financial results and updated 2026 outlook

Mason, appearing on her first earnings call as CFO, said first-quarter total gross fee revenues increased 12% year over year to $1.43 billion. She attributed the increase to higher RevPAR, rooms growth, a 37% jump in co-branded credit card fees, and an increase of more than 70% in residential branding fees.

Incentive management fees rose 9% to $222 million, led by a 13% increase in the U.S. and Canada. Owned, leased, and other revenue (net of expenses) rose 21% due to higher termination fees and strong results at the Elegant Hotels in Barbados and other portfolio hotels. G&A increased 5% year over year, which Mason said was primarily due to compensation timing and partially offset by lower litigation expenses.

Adjusted EBITDA increased 15% to $1.4 billion, and adjusted diluted EPS rose 17% to $2.72.

For the full year, Marriott raised its global RevPAR growth outlook and now expects 2% to 3% growth, incorporating first-quarter outperformance and stronger-than-expected U.S. and Canada trends. Mason said the company also raised its outlook for Greater China to low single-digit RevPAR growth. Offsetting factors include lower near-term expectations for APAC due to softer long-haul demand into markets reliant on Gulf connectivity, a slightly reduced CALA outlook largely due to Mexico, and lowered EMEA expectations due to continued weakness in the Middle East.

Marriott’s full-year guidance also assumes the World Cup will contribute 30 to 35 basis points to global RevPAR growth, Mason said. Responding to questions about press reports of softer demand, she said Marriott remains confident in that expectation, citing benchmarking against other large events and noting that revenue is “pacing up nicely” over match dates. Mason said FIFA room block cancellations were expected and baked into forecasts, and that group occupancy for this event is expected to be closer to 15%, compared with around 40% for the Super Bowl.

Additional 2026 guidance elements Mason discussed included:

• Gross fees: $5.93 billion to $5.99 billion, up 9% to 10%.
• Incentive management fees: expected to be around flat year over year, with Middle East declines expected to offset first-quarter outperformance.
• Co-branded credit card fees: expected to rise around 35%, excluding any impact from new U.S. card deals.
• Residential branding fees: expected to increase around 45% to 50%.
• Adjusted EBITDA:
• Adjusted diluted EPS:

For the second quarter, the company expects global RevPAR growth of 1.5% to 2.5% and gross fees growth of 10% to 11%. Second-quarter incentive management fees are expected to decline in the mid-single digits due to “significant declines in the Middle East,” Mason said.

Mason also raised 2026 investment spending guidance to about $1.05 billion to $1.15 billion, an increase of roughly $50 million primarily tied to anticipated investment in Lefay. She said about 30% to 35% of total spending is expected to support the company’s digital technology transformation, with “the overwhelming portion” expected to be reimbursed over time. Marriott expects to return more than $4.4 billion to shareholders in 2026 via repurchases and dividends, she said.

On loyalty, Capuano said Marriott Bonvoy ended March with nearly 283 million members, and the company now has 37 co-branded credit cards in 13 countries following launches in Indonesia and Brazil. On technology, he said Marriott transitioned its 1,000th hotel to its new tech ecosystem and is rolling out AI-powered tools in areas including customer engagement centers and pre-arrival guest communications. Capuano also said a phased rollout of a natural language search experience on Marriott’s website and app is planned by the end of the second quarter.

About Marriott International NASDAQ: MAR

Marriott International is a global lodging company that develops, manages and franchises a broad portfolio of hotels and related lodging facilities. Its core activities include hotel and resort management, franchise operations, property development and the provision of centralized services such as reservations, marketing and loyalty program management. The company's brand architecture spans market segments from luxury and premium to select-service and extended-stay, enabling it to serve a wide range of business and leisure travelers as well as corporate and group customers.

The company traces its roots to the hospitality business founded by J.

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