Marriott's quarterly profit forecast falls short of estimates as Middle East revenue drops

Aug. 3 (Reuters) - Marriott International forecast third-quarter profit below Wall Street expectations on Monday, as lower hotel room revenue from the Middle East eclipsed gains elsewhere from the soccer World Cup and summer travel demand.

Shares of the hotel operator fell more than 4.5% in premarket trading.

The travel industry's outlook remains uncertain for the rest of the year, as trade-related uncertainty and the prolonged U.S.-Israeli war on Iran threaten consumer spending.

Airlines have scaled back operations in the Middle East, a key hub for global travel, dampening tourist demand across the region.

Room revenue in Marriott's luxury segments, including at brands such as Ritz-Carlton and Sheraton, was up 9.1%, as affluent travelers shrugged off economic uncertainties.

Last week, peers Hilton and Hyatt also raised 2026 room revenue forecasts, while flagging a hit from the Middle East.

The Sheraton-parent reported second-quarter adjusted profit of $3.19 per share, above analysts' estimate of $3.09 apiece. Revenue for the quarter ended was $7.07 billion, below expectations of $7.2 billion.

Marriott shares have broadly outpaced peer Hilton, S&P 500 benchmark over the past six months.

CEO Anthony Capuano said RevPAR — a key lodging metric that tracks average daily rate and occupancy — in Europe, Middle East and Africa (EMEA) fell over 5% as an increase in Europe was outweighed by a 43% decline in the Middle East.

Marriott expects adjusted earnings per share for the current quarter to be in the range of $2.74 to $2.82, below analysts' estimates of $2.87, according to data compiled by LSEG.