Marriott International said a sharp decline in government travel resulted in zero growth in revenue per available room (RevPAR) in the U.S. and Canada in the fourth quarter.
During Tuesday's Q4 earnings call, CEO Anthony Capuano said leisure RevPAR was up 2% and group RevPAR increased 1%, but that those gains were offset by a 3% decline in business transient RevPAR, largely due to a decline in government travel.
Capuano said government RevPAR plummeted more than 30% during the 43-day U.S. government shutdown, though it has since moderated to down around 15% for the year. According to Marriott CFO Leeny Oberg, the government decline primarily impacted Marriott's midscale and select-service hotels.
Globally, fourth-quarter RevPAR rose 1.9%, driven by 6.1% growth in international markets.
The company's global performance also highlighted continued bifurcation across the chain scales. Leisure and luxury led the way, with leisure RevPAR up 3% for the full year. Group RevPAR rose 2% and business transient was flat.
Luxury RevPAR increased 6% for the year, while select-service RevPAR declined 0.3%.
"Our portfolio is well positioned to benefit from continued expected strength at the upper end, as higher-end consumers remain resilient and continue to prioritize spending on experience and travel over goods," said Capuano, adding that around 10% of Marriott's room are in the luxury segment.
Oberg said she expects disparity between the top end and bottom end of the market to continue this year, "although perhaps not quite as wide as it was in '25."
For the quarter, Marriott reported adjusted EBITDA (earnings before taxes, interest, taxes, depreciation and amortization) of $1.40 billion, up from $1.29 billion in the same period last year. Fourth-quarter revenue was $6.69 billion, up from $6.43 billion.
For 2026, the company is forecasting global RevPAR growth of 1.5% to 2.5%.
Marriott's AI update
During the call, Capuano provided an update on Marriott's AI partnerships with Google and OpenAI, though he cautioned that the technology is still in its earliest stages.
"Often in our industry, people talk about various facets of the business through the lens of what inning we're in," said Capuano. "I would suggest to you that we're pulling into the players' parking lot. We're not even in uniform or on the field, so it is quite early."
Still, he expressed optimism about AI's potential to "redefine the customer-acquisition paradigm that has governed our industry for the past several decades."
The company has been working with Google since last November to design a property search on Google's AI Mode. The tool allows users to describe what they're looking for in plain language, compare hotels, browse photos and amenities, and refine their options before booking through AI Mode.
With OpenAI, Marriott is participating in the early stages of the company's Ad Pilot Program.
Capuano added that Marriott plans to deploy natural-language search on Marriott.com and the Marriott Bonvoy mobile app within the first half of this year.
"Philosophically, we are working very closely and very collaboratively with the subject matter experts, the biggest, most innovative and creative companies in the space, both to learn from them, but also to shape -- or have some word in shaping -- this evolving distribution landscape," said Capuano.