Major hotel operators reported significant headwinds in the Middle East during the second quarter, attributing weakness to the Iran war and regional instability. Marriott International disclosed a 43% decline in Middle East revenue per available room for the period, marking a substantial deterioration in performance for one of its key markets.
Marriott’s chief financial officer noted that the company continues to experience strong global demand outside the Middle East region. However, executives cautioned that the full extent of the conflict’s impact remains unclear, particularly given the timing of seasonal demand patterns. The Middle East typically accounts for approximately 35% of Marriott’s full-year revenue in that region during Q4, which represents the Gulf’s busiest travel season.
The regional uncertainty is also affecting development activity in the hospitality sector. Marriott disclosed that construction delays on new hotel properties in the Middle East will constrain its annual net room growth, pushing expansion to the lower end of its previous guidance range of 4.5% to 5%. Industry executives indicated that Q4 will serve as a critical barometer for whether the operational challenges observed in Q2 will persist or moderate as the year progresses.
While second quarter results came in better than some had anticipated due to resilient domestic demand in key markets, hospitality leaders emphasized that the trajectory of the conflict and its effect on travel patterns warrant continued monitoring through the remainder of the year.
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