APAC And EMEA Expansion Will Shape Future Hospitality Trends

Key Takeaways

• Global and mid-scale expansion, buoyed by loyalty program growth, is driving long-term occupancy gains, revenue diversification, and increased customer lifetime value.
  
• Investment in technology and luxury/lifestyle offerings is improving operational efficiency, deepening guest engagement, and supporting sustained earnings and margin growth.
  
• Slowing revenue and earnings growth, increased regional volatility, and margin pressure stem from macroeconomic uncertainty, pipeline risks, technology gaps, and rising operational costs.

Catalysts

Engages in operation, franchising, and licensing of hotel, residential, timeshare, and other lodging properties worldwide.

• Global expansion continues to accelerate, with net rooms growth approaching 5% and a record pipeline (over 590,000 rooms, 40% under construction), reflecting strong demand for Marriott's brands in international markets-particularly APAC and EMEA, where a rising middle class is driving double-digit RevPAR increases; provides a foundation for multi-year revenue growth.
  
• The rapid growth and deepening engagement of the Marriott Bonvoy loyalty program (now at nearly 248 million members and record global penetration) enables more direct bookings, reduces costs from third-party channels, and increases lifetime customer value, supporting expanding net margins and higher-quality revenue.
  
• Strategic expansion into mid-scale and extended stay brands (e.g., City Express, Series by Marriott, citizenM) targets value-conscious and "work from anywhere" travelers, tapping into long-term shifts towards blended leisure/business trips and the democratization of travel-key drivers of future occupancy and RevPAR growth.
  
• Ongoing investments in next-generation technology-cloud-based reservations and property management systems, plus AI-driven guest service enhancements-are expected to increase operational efficiency, attract tech-savvy guests, offer incremental merchandising opportunities, and further boost net margin and revenue per guest over time.
  
• Diversification of high-margin, luxury/lifestyle offerings and alternate revenue streams (e.g., branded residences, Marriott Media Network, co-branded credit cards) leverages consumer preference for experiences over goods, expanding ADR and introducing new, capital-light earnings streams for sustained earnings and margin growth.

Marriott International Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Marriott International's revenue will grow by 63.3% annually over the next 3 years.
• Analysts assume that profit margins will shrink from 36.4% today to 12.1% in 3 years time.
• Analysts expect earnings to reach $3.6 billion (and earnings per share of $14.65) by about September 2028, up from $2.5 billion today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $3.0 billion.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 25.9x on those 2028 earnings, down from 29.0x today. This future PE is greater than the current PE for the US Hospitality industry at 23.9x.
• Analysts expect the number of shares outstanding to decline by 2.32% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 9.03%, as per the Simply Wall St company report.

Marriott International Future Earnings Per Share Growth

Risks

• Persistent macroeconomic uncertainty, weaker leisure and government demand in North America, and softening in select service and business transient segments are likely to moderate RevPAR (Revenue Per Available Room) growth, leading to slower revenue and fee expansion.
  
• High dependency on conversions and mid-scale deals to maintain net rooms growth may signal challenges in the new construction pipeline, potentially straining long-term unit and revenue growth if conversion activity slows or becomes less profitable.
  
• Flat or declining RevPAR in key international markets such as Greater China, combined with reliance on select service brands for pipeline growth, exposes Marriott to increased regional volatility and demographic/economic risks, which could pressure future earnings.
  
• Technology investment remains heavy through 2026, with several hundred million in elevated spend and risk that Marriott may lag competitors in implementing next-generation guest-facing and digital systems; failure to meet technological expectations could result in higher costs and increased OTA reliance, impacting net margins.
  
• Ongoing labor shortages, rising wage pressures, and renovation-related disruptions at large properties continue to impact operating costs and fee streams, potentially resulting in lower net margins and more volatile earnings over time.

Valuation

• The analysts have a consensus price target of $281.375 for Marriott International based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $332.0, and the most bearish reporting a price target of just $205.0.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $29.5 billion, earnings will come to $3.6 billion, and it would be trading on a PE ratio of 25.9x, assuming you use a discount rate of 9.0%.
• Given the current share price of $264.0, the analyst price target of $281.38 is 6.2% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.