Somewhere around the 14th question on Marriott International's second-quarter earnings call this week, an analyst finally asked the thing the luxury trade has been circling for two years now: Can the high end keep outrunning everything else, or is this the top?
Marriott International CEO Anthony Capuano dispensed with the premise entirely. While he acknowledged the chatter that the segment will eventually "run out of steam in terms of luxury demand," Capuano emphasized the momentum Marriott keeps seeing across its portfolio remains encouraging.
"To get to almost double-digit RevPAR growth in our luxury business in U.S. and Canada is a great illustration of that continued strength," Capuano said.
He has the results to prove it. Luxury hotels in the U.S. and Canada posted a 9 percent increase in RevPAR, or revenue per available room — the hotel industry's key performance metric — roughly double what Marriott's select-service brands delivered. Rate did most of that work, with the average luxury room in the company-operated portfolio going for just under $500 a night and The Ritz-Carlton averaging closer to $600 systemwide. The encouraging part for anyone selling those rooms is that occupancy rose alongside the rates, so the increases stuck rather than pricing guests out, according to data released in the company's latest earnings filing.
W Hotels turned in the strongest six-month showing of any luxury brand Marriott breaks out, with revenue per available room up nearly 11 percent through June. That growth came entirely from rate, since occupancy at the brand slipped a fraction of a point, which suggests the repositioning is landing with guests willing to pay for it.
Anyone tempted to credit the World Cup should know that Capuano said the tournament lifted results across all chain scales rather than concentrating at the top, and that regional growth still came in at 4 percent with the event stripped out.
Destination intel points to strong leisure activity. Europe's growth traced back to the Mediterranean, with Italy, Spain, and Greece all singled out for leisure strength. The Caribbean and Latin America region rose 3 percent on what Capuano described as strong luxury and leisure demand across the Caribbean, enough to offset continued softness in Mexico. Performance in Greater China climbed more than 3 percent on what Capuano described as an inbound leisure recovery, with Marriott's hotels gaining share in an uneven consumer environment.
"Luxury, Hong Kong, Taiwan and Hainan remain the key drivers," he said.
The Middle East remains the hole in the floor due to the ongoing conflict with Iran. Regional hotel performance fell 43 percent in the quarter, and the underlying figures show occupancy down more than 15 points across the Middle East and Africa while average rates fell 12 percent, a combination that points to genuine discounting in a region that has bet heavily on luxury inventory. Marriott figures the conflict will shave roughly a full percentage point off its worldwide growth this year, slightly less damage than it predicted three months ago, and executives said bookings come back quickly every time the situation calms. The same disruption has stalled hotel construction across the region, enough that the company trimmed how many new rooms it expects to open in 2026.
Two developments outside the earnings figures deserve your attention as well: Marriott closed its joint venture with Italy's Leali family in June for Lefay, the first brand in its portfolio dedicated exclusively to luxury wellness, with Marriott Bonvoy integration expected late this year and three additional resorts in development in Tuscany, southern Italy, and the Swiss Alps. The company also raised its full-year forecast for residential branding fees to a 55 to 65 percent increase on the timing of unit sales, a reminder of how much revenue branded residences now generate.
What all of it adds up to is a quarter that gave luxury demand several chances to wobble and got none. Rates climbed at the top of the market and the rooms filled anyway, in the U.S. and Canada, across the Mediterranean, and around the Caribbean. Clients who might have spent that money in Dubai or Doha a year ago appear to be spending it in Italy, Spain, Greece, and the islands instead, and Marriott expects the pattern to hold long enough that it raised its full-year global forecast on the strength of it.
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