Core Viewpoint - Marriott International has reduced its full-year revenue growth and profit forecasts due to a slowdown in travel demand in the US, particularly affecting its lower-cost hotel segments [1][2][5]. Revenue and Profit Forecast - The company now expects 2025 revenue growth of 1.5% to 2.5%, down from a previous guidance of 1.5% to 3.5% [3]. - Profit guidance has been lowered to $9.82 to $10.08 per share, compared to the previous range of $9.85 to $10.08 [3]. Impact of Economic Factors - The slowdown is attributed to "heightened macro-economic uncertainty" and elevated inflation affecting budget-conscious travelers [4][3]. - A significant decline of 17% in bookings from government workers has also impacted lower-cost hotels [2]. Performance by Segment - Luxury hotel brands, including Ritz-Carlton and JW Marriott, experienced a 4.1% increase in room revenue in the US and Canada during the second quarter [7]. - The average room rate for luxury properties was reported at $417, while budget properties averaged $161 [7]. Overall Revenue Growth - Marriott's total revenue rose by 5% to $6.74 billion, driven by upscale properties and international business [8]. - The company did not comment on international tourism trends but noted a pullback in visitors from Canada and Mexico due to trade policy changes [8]. Legislative Impact - The signing of Trump's "One Big Beautiful Bill" is seen as a factor that reduced uncertainty in the industry, positively impacting consumer and franchisee confidence [10][11].

Core Insights - Sunstone Hotel Investors, Inc. (SHO) sold the Hilton New Orleans St. Charles for a gross sale price of $47 million, equating to approximately $187,000 per room [1][8] Financial Metrics - The sale price reflects a multiple of 10.1 times the 2024 Hotel Adjusted EBITDAre and an 8.7% cap rate on 2024 Hotel Net Operating Income (NOI) [2] - Including estimated near-term capital expenditures, the gross sale price reflects a multiple of 13.4 times the Hotel Adjusted EBITDAre and a 6.6% cap rate on 2024 Hotel NOI [2] Capital Allocation - Proceeds from the hotel sale were fully reinvested into share repurchases, taking advantage of favorable market conditions [3][8] - From early 2025 to June 6, the company repurchased 6.8 million shares at an average price of $8.84 per share, totaling $60 million before expenses [4] - Since the start of 2022, the company has allocated $252 million to repurchase 25.8 million shares, representing nearly 12% of shares outstanding at the beginning of the period, at an average price of $9.77 per share [4] Shareholder Value - The repurchase activity has resulted in an accretive allocation of capital, creating significant value for shareholders through an implied cash flow multiple and discount to net asset value [5] - The company anticipates that the hotel will require periodic renovations to maintain its competitive position and earnings level [5] Management Commentary - CEO Bryan Giglia stated that the company divested the hotel at attractive pricing, eliminated near-term capital expenditures, and reinvested proceeds into higher-yielding investments through stock repurchases [6] - The company continues to view New Orleans as an attractive lodging market for group events and leisure travel, maintaining exposure through ownership of the JW Marriott [6] Company Strategy - Sunstone's strategy focuses on creating long-term shareholder value through the acquisition, active ownership, and disposition of well-located hotel and resort real estate [7] - Despite a challenging macroeconomic environment, the company remains engaged in capital allocation opportunities [7]