Marriott's stronger hotel demand is flowing into fees as it pencils in less for next year

Much of Marriott International's fee income rises with what its hotels take in, so a number that moves its profits is RevPAR, revenue per available room: the company said higher RevPAR and rooms growth, along with credit card fees, drove last quarter's rise in its franchise and base management fees. In February the company guided for global RevPAR growth of 1.5% to 2.5% this year. On 2 November it lifted that range to 4.5% to 5%. Measured against the full-year range of the previous call, that was its third raise in the four calls held since February.

Each raise followed a quarter that finished above the top of the range set a call earlier. In the September 2026 quarter RevPAR rose 6.5%, against guidance of 3.5% to 4% given in August; the two quarters before had also beaten their guides. Last year's guidance moved the other way, starting wider and ending lower.

Some of that lift came from events that will not recur. The football World Cup in June and July added about 45 basis points to the year's RevPAR, a little more than the company had allowed for in May, and the Middle East has improved since the conflict there hit the second quarter. Demand was broader than those two events, though: in the US and Canada, RevPAR excluding the World Cup rose 6.2% last quarter, the company said.

In February the company put the value of each point of full-year RevPAR at $55m to $65m of fees. Applied to the rise in the top of the RevPAR range since then, even the low end of that rule of thumb accounts for most of the increase in the company's fee guidance, by Inve's calculation from the reported ranges.

Incentive fees, the share of hotel profits Marriott collects under management contracts, rose 22% last quarter, yet the company expects them to be about flat in the final quarter, as falls in the Middle East and Greater China cancel out growth elsewhere.

The other half of the record is what Marriott spends. Its guide for investment spending, which includes key money, the cash it pays owners to sign or convert hotels to its brands, has risen since February, and key money is expected to be 40% to 45% of it. Anthony Capuano, the chief executive, explained why: "Whether we like it or not, key money seems to be the weapon of choice against that competitive landscape." Conversions made up over 40% of openings in the first nine months; net rooms growth is still guided to the low end of its range, which the company put down mainly to construction delays in the Middle East.

It is also returning more. Marriott now expects to hand back at least $4.8bn through dividends and buybacks this year, up from the figure it gave in February, and total debt has risen since the end of last year. Jennifer Mason, the chief financial officer, tied the larger return to "strong year-to-date cash flow performance, and our higher adjusted EBITDA outlook".

That is why the first look at next year matters. Jennifer Mason, the chief financial officer, gave a preliminary range of 3.5% to 4.5% for global RevPAR growth, saying easier comparisons in Europe, the Middle East and Africa should offset the World Cup. The midpoint is below this year's guidance, and it comes from a company whose guides have trailed its results all year. Whether that makes the new range cautious or simply realistic, the evidence so far cannot say.