Marriott trims 2024 profit forecast on sluggish China domestic travel demand

(Reuters) -Marriott International cut its annual profit forecast on Monday as weak domestic travel in China overshadows strong group and international demand.

Hotel operators have signaled demand remained flat during the reported quarter in the U.S. and soft in China, despite U.S. consumer spending increasing at its fastest pace in 1-1/2 years and as wealthy Chinese preferred to travel abroad.

The company now expects full-year adjusted profit of between $9.19 and $9.27 per share, compared with the $9.23 to $9.40 it had previously forecast.

System-wide revenue per available room (RevPAR), or room revenue, an important metric in the hospitality industry, fell 7.9% in Greater China in the third quarter. It was flat in the U.S. and Canada.

"Group remained the standout customer segment, with global group RevPAR rising 10 percent in the quarter and on pace to rise 8 percent for full year 2024," said CEO Anthony Capuano in a statement.

Leisure room revenue remained flat year-over-year.

The company's shares were last down 1.4% in premarket trading. They have gained about 16% this year through Friday's close.

The Ritz-Carlton hotel operator expects fourth-quarter room revenue growth of 2% to 3% and its 2024 full-year guidance remain unchanged at 3% to 4%.

Marriott said that 220,000 rooms were under construction in the third quarter, a drop from 238,000 rooms during the same period last year.

"We expect upside if, like Hilton, Marriott can give a confident message on net unit growth for full-year 2025, however a drop in rooms under construction year-over-year makes that less likely than we previously expected," wrote Richard Clarke, analyst at Bernstein.



Adjusted profit was $2.26 per share for the quarter ended Sept. 30, compared with analysts' average expectation of $2.31

Total quarterly revenue came in at $6.26 billion, compared with estimates of $6.27 billion, according to data compiled by LSEG.

Source: Investing.com