Marriott's Hotel Momentum Faces Drag From Slowdown in China and U.S. Election

Marriott International signaled confidence in continued growth on Wednesday, forecasting a strong overall global performance for the year despite noting some storm clouds on the horizon.

Executives highlighted a softening in China, rising caution by travelers in spending, and more-than-expected bookings weakness in November around the U.S. presidential election as developments they're watching.

The world's largest hotel operator said it expected its revenue per available room (RevPAR), a key sector metric, to grow between 3% and 4% this year. That represented a lowering of the top end from 5%, which had been the forecast in May.

Executives on an earnings call blamed the adjustment in outlook on greater-than-expected weakness in China. China's RevPAR fell 4% year-over-year in the quarter.

The company also said that group bookings for the first half of November faced headwinds because of the U.S. presidential election. They also noted some trends suggesting that travelers were being more "judicious" about travel splurges.

However, Marriott's management was broadly bullish.

"We delivered another strong quarter as travel demand remained robust in most markets around the world, and our net rooms grew by 6% year-over-year," said Anthony Capuano, president and CEO.

China drag: Between the lines China is the company's second-largest market outside of its home market and deals there typically generate a higher share of fees out of hotel owners' revenue. "The impact of change in our outlook for Greater China has a disproportionate impact," said Leeny Oberg, chief financial officer. China