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Investing.com - Marriott International (NASDAQ:MAR) narrowed its full-year earnings outlook on Tuesday, as the hotel operator flagged ongoing headwinds from federal government spending cuts and weaker business travel, although second-quarter earnings still topped expectations.
Revenue per available room, a key metric that gauges how effectively a hotelier is filling up rooms, was flat in the U.S. and Canada compared to a year ago, as these trends were somewhat offset by "continued strength" in luxury expenditures. Domestic travel in the U.S. has also been weighed down by ongoing murkiness surrounding U.S. tariffs, which have led many consumers to rein in expenditures.
But globally, the measure, known as RevPAR, increased by 1.5% during the quarter, thanks to resilient leisure travel demand. Outside of the United States, growth was particularly solid in the Asia-Pacific and Europe, Middle East, and Africa regions, Marriott said.
The comment mirrors recent statements from some airlines, who have suggested that improvements in the geopolitical outlook have helped to boost bookings. Despite worries around the impact of President Donald Trump’s trade war on travel activity, executives in the airline industry have said demand has started to show signs of stabilizing after slipping earlier this year.
In a statement, Marriott CEO Anthony Capuano said the firm’s quarterly results were "strong" despite "heigtened macro-economic uncertainty."
Adjusted earnings per share for the period came in at $2.65, up from $2.50 a year earlier and above estimates of $2.61. Revenue grew by 4.7% to $6.74 billion, exceeding expectations as well.
Shares in Marriott were slightly lower in premarket U.S. trading on Tuesday, handing back earlier gains.
For the full year, Marriott said it now expects adjusted earnings before interest, taxes, depreciation and amortization to be between $5.31 billion and $5.40 billion. It had previously guided for $5.29 billion to $5.43 billion.