Marriott's Profit Forecast Impacted by China Slowdown
By Aishwarya Jain
(Reuters) -Marriott International forecast 2025 profit below Wall Street estimates on Tuesday, hurt by poor performance at its hotels in Greater China, sending the hospitality chain's shares down nearly 5%.
Marriott forecast a full-year adjusted profit of $9.82 to $10.19 per share, below analysts' expectations of $10.65 per share, according to data compiled by LSEG.
Domestic travel demand in China has been weak as people have tightened their purse strings due to poor macroeconomic conditions in the world's second-largest economy and worry over wage and job security. During the fourth quarter, systemwide room revenue in Greater China declined 1.7%.
Marriott expects room revenue in Greater China to be roughly flat this year compared to last, showing a slight improvement from a decline in the last two quarters.
Meanwhile, outbound travel from China to other Asian countries, particularly in Southeast Asia, remained strong and was driven by wealthy Chinese consumers.
Demand in the Asia-Pacific region was also aided by strong growth in Japan, India and Thailand, a company executive said on its post-earnings conference call.
The Bethesda, Maryland-based hotel chain's systemwide quarterly room revenue in the Asia-Pacific region, excluding China, rose 12.5%.
In 2025, the hotel chain expects room revenue growth for international markets, apart from Greater China, to be higher than that of the U.S. and Canada, Marriott added.
Marriott also addressed the pullback from some Canadian and Mexican travelers in response to tariff tensions, saying that those customers make up only about 1%-2% of booked room nights in the U.S., with the market being overwhelmingly driven by domestic travelers.
The hotel chain's adjusted profit of $2.45 per share for the quarter beat estimates by 7 cents.
Marriott posted a quarterly revenue of $6.43 billion, compared with analysts' average estimate of $6.38 billion.
(Reporting by Aishwarya Jain in Bengaluru; Editing by Tasim Zahid and Leroy Leo)
