Marriott CEO says Mideast revenue drag eased in July as war risks persist

Sept 9 (Reuters) - Marriott International Chief Executive Anthony Capuano stated Wednesday that the company's Middle East hotel revenue decline slowed appreciably in July, although ongoing regional armed conflicts still interfere with development timelines.

Sustained leisure and summer travel interest has helped travel companies cushion some of the Middle East conflict's blow, but a fresh wave of reciprocal U.S.-Iran attacks this week has magnified instability, undercutting revenue for hotel operators and online travel agencies and darkening their outlooks.

The following points provide further insight from Capuano's remarks.

At the Bank of America Gaming and Lodging Conference, Capuano said Middle East RevPAR declined 12% year over year in July, surpassing the company's internal projections and representing a sharp rebound from the 43% drop seen in the second quarter.

Although the Middle East accounts for about 3% of Marriott's worldwide fee income, it makes up 6% of the company's hotel development pipeline.

Capuano attributed project delays to supply chain bottlenecks and disrupted capital flows caused by the regional conflict, prompting Marriott to guide toward the lower end of its full-year net unit growth targets.

Nevertheless, he said, a shift toward experience-based spending is helping sustain one of the strongest travel demand environments in nearly a decade.

Capuano asserted: “Consumers are, across demographics, prioritizing travel and experiences over consumption of hard goods.”

Marriott indicated that global room revenue climbed 7% in July, supported by an 8% gain in the United States and Canada. RevPAR rose 5% in the luxury segment, 4% in premium and select-service brands, and 5% in midscale hotels.

Capuano brushed aside the suggestion that present travel strength is simply a short-lived post-pandemic “revenge travel” surge, emphasizing that momentum is consistent across age groups and brand tiers.

“This notion that the RevPAR trends are almost singularly led by luxury is just inaccurate,” he stated.