Marriott CEO: Mideast RevPAR Fall Narrows to 12% in July, Pipeline Risks Remain

Marriott International's revenue decline in the Middle East eased substantially in July, a significant improvement from the second quarter, though ongoing regional conflicts are creating delays in the company's development pipeline, CEO Anthony Capuano said Wednesday.

Speaking at the Bank of America Gaming and Lodging Conference, Capuano provided an update on the hotel operator's performance amid persistent geopolitical uncertainty.

Middle East Performance Improves

Revenue per available room (RevPAR), a key industry metric, fell 12% year-over-year in the Middle East in July, according to Capuano. While still a decline, this marked a sharp recovery from the 43% plunge the region experienced during the second quarter and beat the company's internal expectations.

Steady leisure and summer travel demand helped offset some of the negative impact from the conflict. However, the situation remains a headwind for operators with exposure to the region.

Development Pipeline Faces Headwinds

While the Middle East currently accounts for about 3% of Marriott's global fees, it represents a more significant 6% of its future development pipeline. Capuano noted that these growth projects are facing delays due to supply chain bottlenecks and interruptions to capital flows stemming from the conflict.

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As a result, Marriott now anticipates its full-year net unit growth will be toward the lower end of its previously stated targets. The delays highlight the operational risks for companies expanding in the volatile region.

Broader Travel Demand Remains Robust

Globally, Marriott's performance remains strong, with a consumer shift toward experiences supporting travel demand. Capuano dismissed the idea that current trends are a temporary post-pandemic spike, pointing to broad-based momentum.

• Global room revenue rose 7% in July.
• The U.S. and Canada led growth with an 8% increase.
• RevPAR grew across brand tiers: 5% in luxury, 4% in premium and select, and 5% in mid-scale.

"Consumers are, across demographics, prioritizing travel and experiences over consumption of hard goods," Capuano said, adding that the notion of growth being "almost singularly led by luxury is just inaccurate."