Marriott International, the titan of the global hotel industry, is sounding the alarm on faltering travel demand in the U.S. market. This isn’t just a hiccup—it’s a signal of deeper economic unease that could ripple through hospitality and beyond.
According to the New York Post, based in Bethesda, Md., Marriott, the world’s largest hotel company, announced on Tuesday a significant cut to its full-year forecasts for both revenue growth and profit, citing a slowdown in U.S. travel demand.
This downturn isn’t hitting evenly. Lower-cost brands like Marriott Courtyard, Fairfield Inn, and SpringHill Suites are bearing the brunt, while luxury properties and international operations show resilience.
In the second quarter, total room revenue in the U.S. and Canada remained flat, inching up just 1% compared to last year. Bookings from government workers at budget hotels dropped a staggering 17%.
Compare that to luxury brands like Ritz-Carlton, St. Regis, and JW Marriott, which posted a 4.1% revenue increase in the same markets. Room rates tell the story: $417 on average for luxury stays versus $161 for budget properties.
Marriott’s revised outlook reflects this split. The company now projects revenue growth of 1.5% to 2.5% for 2025, down from an earlier range of 1.5% to 3.5%, while profit guidance dropped to $9.82 to $10.08 per share from $9.85 to $10.08.
The company points to “heightened macro-economic uncertainty” tied to trade policy shifts as a key driver of the revision. This uncertainty isn’t just a corporate buzzword—it’s squeezing the budgets of everyday travelers.
Analyst Dan Wasiolek from Morningstar noted the broader trend affecting the industry. “The low end of the travel segment is underperforming across the board right now,” he said.
“There is still elevated inflation in areas of the economy that is impacting budget-conscious customers,” Wasiolek added. This inflation bite is hitting Marriott’s value-focused guests hardest.
Yet, not all is gloom. Marriott’s total revenue climbed 5% to $6.74 billion, buoyed by upscale properties and strong overseas performance.
International tourism to the U.S., however, faces headwinds. Reports highlight a pullback from travelers in Canada, Mexico, and elsewhere, partly due to backlash over recent tariff policies.
Marriott’s CEO, Capuano, offered a silver lining tied to recent legislative action. “In some ways, the best thing about [the bill] is that it’s done,” he said.
“The level of uncertainty, both among consumers and among our owners and franchisees, improves meaningfully with the signature on that bill,” Capuano continued. This suggests that policy clarity, even if imperfect, can stabilize business planning.
For investors, Marriott’s story is a microcosm of broader economic tensions. Trade policies and inflation are distorting travel markets, but luxury and international segments offer a hedge—consider reallocating portfolios toward firms with global exposure. Stay frugal, save diligently, and watch how policy ripples affect discretionary spending sectors like hospitality.