Travel demand remains resilient! Marriott (MAR.US) Q3 profit and RevPAR beat expectations, full-year outlook raised.

Hotel operator Marriott (MAR.US) released its fiscal 2026 third-quarter (ended September 30) earnings report before the U.S. market opened on Monday. The report showed adjusted diluted earnings per share of $3.02 for the quarter, up 22% year-over-year and significantly above the consensus estimate of $2.85; GAAP net income was $794 million ($3.04 per share), up 9% year-over-year. Analysts noted that despite elevated inflation and uncertainty surrounding GEO Group Inc, leisure travel demand remained resilient: high-income groups increased spending on premium experiences, while demand for midscale and economy hotels also recovered this quarter. Business travel demand also remained strong, benefiting hotel operators such as Marriott. As a core indicator of the hotel industry's health, global RevPAR (revenue per available room) rose 6.5% year-over-year in the quarter, far exceeding the company's prior quarterly guidance of 3.5%4.0%, driven by both higher average daily rate (ADR) and occupancy. By region, U.S. & Canada RevPAR grew 7.4%, with broad-based strength across customer segments and chain scales; international markets grew 4.4%, led by Asia Pacific (APEC) with growth of more than 9%, supported by strong international inbound demand; Europe, the Middle East & Africa (EMEA) grew more than 4%, with solid performance in Europe, while the Middle East continued to be affected by conflict but trends improved markedly from the second quarter. Fee revenue continued double-digit growth. Total fee revenue for the quarter was $1.522 billion, up 14% year-over-year, including franchise fees of $1.007 billion (+15%, benefiting from higher co-branded credit card fees, RevPAR growth and room growth), base management fees of $334 million (+6%), and incentive management fees of $181 million (+22%, with positive growth in all regions). Adjusted EBITDA was $1.512 billion, up 12% year-over-year. GAAP total revenue was $7.005 billion, up 8% year-over-year, including substantial cost reimbursement revenue passed through to hotel owners. In terms of scale expansion, the company added approximately 20,100 net rooms in the quarter, with total rooms up 4.6% year-over-year net, and the global system surpassed 10,200 hotels and nearly 1.834 million rooms across 148 countries and territories; the development pipeline reached a record 4,209 hotels and more than 634,000 rooms, with international markets accounting for more than half of pipeline rooms. Conversions (brand conversions) continued to be an important growth engine, accounting for more than one-third of signings and more than 40% of openings in the first nine months. Chief Executive Officer Anthony Capuano said: "Our outstanding third-quarter results reflect the continued momentum of our business, the strength of our global scale, and the power of our brands and revenue engines." He also noted that Marriott Bonvoy membership reached approximately 309 million at quarter-end, with partnerships with the likes of Uber Technologies, Inc. and Starbucks Corporation continuing to drive member growth. In terms of outlook, given the strong third-quarter performance and continued healthy demand expectations, the company raised its full-year guidance, betting that strong travel demand will drive booking growth at its properties. The company said it raised its 2026 global RevPAR growth guidance to 4.5%5.0% from the previous 3%3.5%; full-year adjusted diluted earnings per share guidance is $12.07$12.14, and adjusted EBITDA is $6.075$6.098 billion; full-year net room growth is expected to be at the low end of the 4.5%5.0% range. The company expects to return at least $4.8 billion of capital to shareholders for the full year. Fourth-quarter adjusted diluted EPS guidance is $3.14$3.21. Following the earnings release, Marriott shares rose nearly 3% in premarket trading.