(Reuters) - Marriott International Inc (MAR.O) on Monday cut its full-year outlook for a key revenue measure that indicates pricing power as the world’s largest hotel chain faces the impact of weakening business travel due to slowing global economic growth.
Shares of the company fell 3% in extended trading after the hotel chain said it now expected revenue per available room (RevPAR) to grow in the range of 1% to 2% in 2019 compared with the prior estimate of 1% to 3%.
RevPAR is a measure of a hotel’s financial performance and is calculated by multiplying the average daily room rate by occupancy rate.
Marriott’s outlook cut comes a week after U.S. President Donald Trump threatened to levy 10% duties on remaining $300 billion of Chinese goods from Sept. 1, prompting China to let the yuan hit its lowest level in more than a decade on Monday.
Businesses have turned increasingly cautious about capital spending and travel budgets as earnings take a hit and global economic growth slows with the U.S.-China trade spat getting worse.
Last month, Marriott’s smaller rival Hilton Worldwide Holdings Inc (HLT.N) cut its full-year outlook for a key revenue measure, citing eroding business confidence and weak growth in China.
Net income fell to $232 million, or 69 cents per share, in the second quarter ended June 30, from $667 million, or $1.87 per share, a year earlier.
Marriott recorded a $126 million non-tax accrual in the quarter for the fine proposed by the U.K. Information Commissioner’s Office in relation to the data breach in its Starwoods hotels reservation system.
On an adjusted basis, Marriott earned $1.56 per share, in line with the average analyst estimate.
Revenue fell to $5.31 billion from $5.41 billion a year earlier.
Reporting by Dominic Roshan K.L. in Bengaluru; Editing by Arun Koyyur