What happened

Marriott International (MAR -0.67%) ended the week on a down note as its stock price fell 4.7% on Friday to $155 per share. The hotel giant's stock had fallen as much as 5.9% shortly after 2 p.m. ET before recovering slightly before the closing bell.

All of the major indexes were down, with the Dow Jones Industrial Average off 139 points (0.5%), the S&P 500 down 28 points (0.7%), and the Nasdaq down 104 points (0.9%).

So what

Some less-than-positive industry news managed to sink Marriott, along with other hospitality industry stocks, on Friday. For starters, Southwest Airlines reported Thursday that business travel demand has weakened a bit. Southwest said it expects revenue from business travel to be 26% to 28% lower this quarter than the third quarter of 2019, using pre-pandemic figures as a benchmark. That's worse than previous expectations.

Also, Smith Travel Research, the leading hotel industry information source, reported on Sept. 15 that occupancy rates were down 11.2% over the Labor Day holiday week, while revenue per available room (revPAR) was down 1.8% compared to the same week in 2019. In addition, the Baird/STR Hotel Stock Index, which tracks the performance of hotel stocks, came out with its August numbers, showing a 2.7% decline.

This beat the S&P 500 for the month, but Baird/STR analysts say that despite a strong summer for hotels, the negative August reflects a skepticism by investors for robust post-Labor Day travel, given macroeconomic conditions. As a result, Baird analyst Michael Bellisario removed Marriott from his bullish "fresh pick" list.

Now what

It was not all bad news this week for Marriott, however. Berenberg upgraded Marriott stock to buy from hold on Thursday, and boosted the price target to $185, up from $165.

Berenberg analyst Stuart Gordon doesn't think the recovery in the hotel industry has yet been reflected in the stock price, not just at Marriott, but among many of the large hotel chains. Even if there is a recession or economic downturn in 2023, he expects revPAR increases next year for Marriott and others.

Marriott expects flat to 3% growth in revPAR in the third quarter compared to the same period in 2019 worldwide, and 1% to 4% year-over-year growth in North America. For the full fiscal year, it expects revPAR to be down 3% to 6% compared to 2019 worldwide, and down 3% to flat in North America.