Marriott International, the largest hotel chain globally, announced on Tuesday that it has lowered its annual forecasts for revenue growth and profit due to a downturn in U.S. travel demand.
In the second quarter, total room revenue in the U.S. and Canada was up only 1% year-over-year.
This decrease particularly impacted budget-friendly hotels such as Marriott Courtyard, Fairfield Inn, and Spring Hill Suites, compounded by a notable 17% drop in bookings from government employees.
“The low-end of the travel segment is currently underperforming overall,” commented Dan Wasiolek, an analyst at Morningstar. He noted that inflation continues to rise in areas affecting budget-conscious travelers.
Marriott now predicts revenue growth will range from 1.5% to 2.5% in 2025, revising its previous guidance down from 1.5% to 3.5%. The company also adjusted its earnings forecast from $9.82 per share to a lower range of $10.08.
The firm expressed concerns over “increasing macroeconomic uncertainty” stemming from shifts in trade policy.
Luxury hotel brands under the Marriott umbrella, such as Ritz-Carlton and JW Marriott, experienced a 4.1% increase in room revenues in the U.S. and Canada during the second quarter.
According to Wasiolek, luxury properties had an average room rate of $417, whereas budget hotels averaged around $161.
Overall, Marriott’s total revenue grew by 5% to $6.744 billion, driven largely by luxury accommodations and international operations.
While the company hasn’t specifically commented on international tourism impacts, there are reports suggesting that President Trump’s tariffs have deterred visitors from Canada, Mexico, and other countries.
Last month, Marriott CEO Anthony Capuano expressed that the signing of a significant bill has helped alleviate some of the prevailing uncertainties affecting the industry. He remarked that the resolution brings clarity for consumers as well as the company’s owners and franchisees.
