Dive Brief:
- Marriott International lowered its RevPAR growth guidance for 2025 amid heightened economic uncertainty that is limiting consumer confidence, CEO Anthony Capuano shared on a Tuesday Q1 2025 earnings call.
- Marriott downgraded its full-year 2025 RevPAR outlook to a 1.5% to 3.5% growth range, lower than its previously forecast 2% to 4% range. The shift comes after solid revenue and development performance in the first quarter, though, with Marriott reporting 4.1% year-over-year global RevPAR growth in Q1.
- Marriott also posted 4.6% year-over-year growth in global net rooms in the quarter. Strong momentum on the development front will be a bright spot for Marriott as the year continues, Capuano noted.
Dive Insight:
Despite heightened market volatility, Marriott does not assume “a recession scenario” is imminent, Capuano shared on the call. He added that Marriott has lowered its RevPAR growth guidance given “tougher visibility into the back half of the year.”
On the flip side, Marriott upgraded its net rooms growth expectations on the heels of its April CitizenM acquisition. Assuming the deal closes this year, Marriott now expects its full-year 2025 net rooms growth to approach 5%, up from its previously forecasted range of from 4% to 5% growth.
In the first quarter, Marriott added roughly 12,200 rooms. The company’s worldwide development pipeline stood at approximately 3,800 properties and more than 587,000 rooms, which was up 7.4% year over year but flat sequentially.
Owners and developers remain bullish on long-term growth opportunities in the hotel sector, Capuano noted, pointing to Marriott’s record first-quarter signings of more than 34,000 rooms.
“The vast majority of our owner and franchisee community are long-term investors in the sector, not necessarily getting spooked by some of this short-term turbulence,” Capuano said, adding that these individuals believe in travel’s long-term demand trends.
Conversions remained a key growth driver for Marriott in Q1, representing around a third of its room signings and openings in the quarter. In March, Marriott opened the first U.S. hotel under its conversion-friendly transient midscale City Express brand.
Marriott competitors Hyatt Hotels and Wyndham Hotels & Resorts similarly lowered their RevPAR growth expectations for 2025 in Q1 reports.
