Bernstein: Marriott beats third-quarter earnings expectations, raises full-year profit and shareholder return guidance

Why did third-quarter results exceed expectations?

In the third quarter of 2026, Marriott’s adjusted EBITDA was 1.512 billion dollars, up 12.1% year on year and 2.7% above market consensus; adjusted earnings per share were 3.00 dollars, above market expectations of 2.85 dollars.
Fee revenue was the main support: total quarterly fee revenue rose 13.8% year on year, including growth of 22.3% in incentive management fees, which were 11% above market expectations. Bernstein believes the stronger fee performance helped translate hotel revenue growth into earnings growth.

Global revenue per available room (RevPAR) rose 6.5% year on year in the third quarter, with the United States and Canada up 7.4% and serving as the main driver. RevPAR combines room rates and occupancy and is a measure of hotel room revenue performance.
Ritz-Carlton’s RevPAR rose 14.6% year on year, and all US brands disclosed by Marriott grew more than 5%. The company expects global RevPAR to grow 4.5% to 5% year on year in the fourth quarter and raised its full-year growth guidance from 3%–3.5% to 4.5%–5%.
Full-year net rooms growth guidance remains at the low end of the 4.5%–5% range; year-on-year growth had already reached 4.6% in the third quarter, so Bernstein believes no significant acceleration in expansion is needed in the fourth quarter to meet guidance.

Marriott raised its 2026 adjusted EBITDA guidance from 5.965 billion–6.025 billion dollars to 6.075 billion–6.098 billion dollars. Bernstein noted that, at the guidance midpoints, the full-year earnings outlook rose by about 1.5%, slightly more than the 1.25 percentage-point increase in RevPAR growth guidance, showing effective conversion of revenue growth into profit.
Not all businesses saw increases: full-year operating profit guidance for owned, leased and other businesses fell from 175 million–185 million dollars to 170 million–175 million dollars, a reduction of 7.5 million dollars at the midpoint; strong fee revenue performance offset the impact.
The company’s fourth-quarter adjusted EBITDA guidance is 1.573 billion–1.596 billion dollars, about 2% above the market consensus cited in the report at the midpoint.

Marriott raised its 2026 guidance for capital returned to shareholders from more than 4.5 billion dollars to at least 4.8 billion dollars, an increase of about 7%, equivalent to approximately 79% of its full-year EBITDA guidance. Bernstein believes this is consistent with its view that the company’s cash generation is improving.
Full-year investment spending guidance remains at 1.25 billion–1.35 billion dollars; the company had already raised this guidance substantially in the second quarter.
Bernstein rates Marriott Outperform, with a price target of 402 dollars. The firm noted that slower hotel construction or slower growth in travel demand could affect net rooms growth and incentive management fees, respectively.