Marriott CEO says Mideast revenue drag eased in July as war risks persist

Marriott International's Middle East hotel revenue declines narrowed significantly in July despite ongoing regional conflicts that continue to cause development project delays, chief executive Anthony Capuano said on Wednesday.

Steady leisure and summer travel demand have helped travel firms offset some of the impact of the Middle East conflict, but a fresh wave of U.S.-Iran tit-for-tat attacks this week has heightened uncertainty, hurting revenue at hotel operators and online travel agencies and clouded their outlook.

• Speaking at the Bank of America Gaming and Lodging Conference, Capuano said revenue per available room (RevPAR) in the Middle East dropped 12% year-over-year in July, beating Marriott's own expectations and marking a sharp recovery from the 43% plunge recorded during the second quarter.
• While the Middle East accounts for roughly 3% of Marriott's global fees, it represents 6% of its development pipeline.
• Capuano said supply chain bottlenecks and capital flow interruptions stemming from the regional conflict have triggered project delays, prompting Marriott to forecast toward the lower end of its full-year net unit growth targets.
• Nevertheless, a shift towards experience-based spending is sustaining one of the strongest travel demand environments in nearly a decade, he said.
• "Consumers are, across demographics, prioritizing travel and experiences over consumption of hard goods," Capuano said.
• Marriott said global room revenue rose 7% in July, led by an 8% gain in the U.S. and Canada. RevPAR grew 5% in luxury, 4% in premium and select brands, and 5% in mid-scale.
• Capuano dismissed the idea that current travel strength is merely a fleeting post-pandemic "revenge travel" spike, pointing to broad-based momentum across age groups and brands.