Marriott International, Inc. (MAR Quick QuoteMAR - Free Report) raised its 2026 outlook after second-quarter earnings exceeded expectations, supported by broader demand, higher fees and stronger U.S. performance.

The central question is whether those gains can absorb severe Middle East weakness. Management’s revised forecast suggests confidence, but the regional disruption still affects RevPAR, hotel openings and the second-half comparison base.

Marriott Lifts Its 2026 Operating Outlook

Marriott now expects worldwide revenue per available room, or RevPAR, to increase 3-3.5% in 2026. Gross fee revenues are projected at $6.03-$6.06 billion, while adjusted EBITDA is expected between $5.97 billion and $6.03 billion.

The increase followed a quarter in which worldwide RevPAR rose 3.4%, gross fee revenues advanced 13% to $1.58 billion and adjusted EBITDA increased 13% to $1.59 billion. Management also cited a stronger second-half outlook across regions and continued broad-based demand.

MAR’s U.S. Strength Offsets International Pressure

RevPAR in the United States and Canada increased 5%, the region’s best quarterly gain in 13 quarters. Leisure RevPAR rose 7%, group advanced 4% and business transient increased 3%, showing that the improvement was not limited to one demand category.

Luxury RevPAR increased more than 9%, while select-service RevPAR rose more than 4%. World Cup-related demand added further support, with Marriott estimating a roughly 45-basis-point benefit to full-year global RevPAR, above its earlier expectation of 30-35 basis points.

Marriott International, Inc. Price and EPS Surprise

Marriott International, Inc. price-eps-surprise | Marriott International, Inc. Quote

Marriott’s Middle East Exposure Remains Material

Middle East RevPAR declined 43% in the second quarter. That drop outweighed gains in Europe and helped push international RevPAR down 0.5%, even as Asia Pacific excluding China, Greater China, Europe and the Caribbean and Latin America posted growth.

Management expects the conflict to reduce full-year global RevPAR growth by about 100 basis points. Construction delays in the region also moved expected 2026 net room growth toward the low end of the prior 4.5-5% range.

MAR’s Guidance Still Depends on Execution

The outlook assumes continued demand growth, rising fee revenues and progress on openings. Marriott ended June with about 629,000 rooms in its pipeline, while conversions accounted for 40% of first-half openings and 34% of signings.

Execution matters because the fourth quarter carries added risk. Middle East demand has greater seasonal weight then, comparisons are difficult after major events lifted rates in late 2025, and the World Cup benefit will no longer support U.S. results.

Industry peers face similar pressure to convert demand and development pipelines into fee growth. Hilton Worldwide Holdings Inc. (HLT Quick QuoteHLT - Free Report) ended June with a 541,300-room pipeline and projected 3-3.5% RevPAR growth for 2026. Hyatt Hotels Corporation (H Quick QuoteH - Free Report) raised its 2026 RevPAR growth outlook to 3.5-4.5% and continued to emphasize the strength and expansion of its core fee business.

Marriott’s Ratings Reflect a Balanced Setup

Marriott’s raised guidance improves the earnings outlook, but Middle East volatility and a premium valuation keep the setup balanced. The shares trade at 27.5X forward 12-month earnings, above the hotel sub-industry and S&P 500 benchmarks.

MAR currently carries a Zacks Rank #3 (Hold). Its Momentum Score of A and Growth Score of B support the stock’s price trend and operating-growth profile, while the Value Score of D points to a less favorable valuation. Those signals support patience as investors weigh the stronger forecast against execution and regional risks. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.