Marriott Earnings: Demand and Brand Advantages Remain Stout in Uncertain Macro Landscape

Marriott International’s third quarter saw strong demand. Revenue per available room was up 9%, ahead of management’s 6%-8% guidance, driven by all segments and key regions. As a result, Marriott raised its 2023 revPAR growth estimate to 15% from 14%; we plan to lift our prior 14% estimate to the new target. That said, while we have been steadfast on travel demand resiliency since the summer of 2020, we expect Marriott’s revPAR growth to decelerate to 3%-4% in 2024 (compared with its 3%-6% guidance), driven by mounting headwinds like lasting inflation and depleted consumer savings. Taking this together, we don’t plan much change to our $187 fair value estimate.