Marriott Stock Dips. Time to Buy?

Marriott International (NASDAQ: MAR) shares slipped after management told investors at a Barclays conference last week that fourth-quarter revenue per available room (RevPAR) will likely land at the low end of its guidance range. And the stock's downtrend since then has largely persisted, with shares down about 8% over the last week. Management's update highlighted a softer backdrop in the U.S. as 2025 winds down, even while business elsewhere looks more resilient.

The hotel operator, whose portfolio stretches from midscale brands to high-end luxury resorts, had already been dealing with slower RevPAR growth in recent quarters. Global RevPAR was barely positive in the third quarter of 2025, and U.S. and Canada RevPAR actually declined. International markets, however, continued to post modest growth.

But there are positives, too. Investors now have to weigh near-term softness in U.S. travel against a still-healthy development pipeline and impressive cash generation.

All of this leads to the main question likely on many investors' minds: Is this a buying opportunity? Or is this a sign to stay away?

Image source: Getty Images.

Softness in the U.S.

Management's remarks at Barclays fit with a pattern that has been emerging all year. Marriott's third-quarter global RevPAR increased just 0.5% year over year, with U.S. and Canada RevPAR down 0.4% and international RevPAR up 2.6%. That was a sharp slowdown from the 4.1% worldwide RevPAR growth the company delivered in Q1 and even the 1.5% growth it reported in Q2.

Management has been clear that the pressure is concentrated in the lower-priced chains in the U.S., where reduced government travel has weighed on demand. On the flipside, luxury has been consistently strong. In the third-quarter earnings release, Marriott CEO Anthony Capuano noted that global luxury RevPAR rose 4% in the quarter.

Management's update at Barclays' investor conference reinforced recent demand themes, but with one slight negative shift in tone: There has been a further deterioration in its U.S. market, including sub-luxury chains.

Marriott chief financial officer Leeny Oberg told investors last week that the company now expects its fourth-quarter global RevPAR growth is likely to come in at the low end of its guidance for 1% to 2% growth, "and that's really overwhelmingly because of the U.S.," she explained. Getting more specific, Oberg said that U.S. RevPAR actually declined 20 basis points year over year for the month of October, suggesting a rough start to the period. She suggested that the government shutdown is partly to blame.

Key growth drivers

Zooming out, however, the recent demand woes need to be viewed alongside Marriott's broader growth drivers.

Third-quarter 2025 revenue rose 4% year over year to $6.49 billion, while adjusted net income increased from $638 million to $674 million, and adjusted earnings per share climbed 9.2% to $2.47. Room growth, higher co-branded credit card fees, and strong performance in higher-end hotels did much of the heavy lifting.

Room growth remains a central part of the story. In Q3, Marriott added roughly 17,900 net rooms, lifting net rooms 4.7% from the end of the third quarter of 2024. At quarter-end, the company's global system topped 9,700 properties with about 1.75 million rooms. Management still expects net rooms growth to approach 5% for the full year 2025 and to stay in the mid-single-digit range over the next few years.

The development pipeline helps support that outlook. At the end of the third quarter, Marriott's worldwide development pipeline reached a new record of roughly 3,900 properties with more than 596,000 rooms.

Additionally, the company's lucrative business model means that cash generation remains robust -- and it's enabling meaningful dividends and share repurchases. Management plans to return roughly $4 billion to shareholders through dividends and repurchases this year -- not bad for a company with a market capitalization of $77 billion.

With these positives in mind, I don't believe that recent weakness in the U.S. is a thesis-breaker for the stock. Travel is a cyclical business, and there appears to be some weakness in the U.S. currently with Marriott's more affordable chains. But continued strength in international markets and luxury remains encouraging.

Still, shares aren't cheap. The stock currently has a forward price-to-earnings multiple of 24 -- a fair valuation multiple for a stock with Marriott's brand power and growth drivers.

So, is the stock a buy today? I think starting a small position may make sense. But investors should watch U.S. demand closely. Without a recovery in the U.S. market, the stock could underperform over the long haul. However, I believe it's unlikely the U.S. market won't pick up speed at some point.

Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool recommends Barclays Plc and Marriott International. The Motley Fool has a disclosure policy.