Marriott International (MAR) could face challenges in sustaining its mid-single-digit long-term unit growth target as competition for new deals intensifies and construction activity remains below pre-pandemic levels, UBS Securities said.
The hotel operator offered an early look at its 2027 outlook, indicating that revenue per available room could continue to grow, supported by a 45 basis-point benefit from the World Cup, partly offset by a 50 to 70 basis-point headwind from the Middle East, according to the note Monday.
Marriott's 2027 guidance does not include a fee growth rate, while 2026 fee revenue growth is guided to increase 13%, benefiting from a one-time 330 basis-point step-up as Marriott captures a larger share of credit card fees that were previously allocated to the loyalty program, UBS said.
The hotel operator noted that key money remains its preferred tool for competing in a challenging environment for unit growth. Marriott expects to spend $500 million to $607.5 million in 2026 and estimates higher contract acquisition costs next year, the note added.
Marriott raised its 2026 EPS outlook to between $12.07 and $12.14 from $11.64 to $11.81, above UBS's estimate of $11.67 and Street's estimate of $11.79.
UBS has a neutral rating and a $395 price target on Marriott International.
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