Marriott International Inc., for the first quarter ended March 31, reported comparable systemwide constant-dollar RevPAR increased 4.2% worldwide—1.5% in the U.S. & Canada and 11.1% in international markets—compared to the 2023 first quarter.
“We were pleased with our results in the quarter, which included both excellent net rooms growth and cash generation,” said Anthony Capuano, president/CEO. “Worldwide RevPAR grew more than 4%, with gains in both occupancy and ADR. Our international markets were particularly strong, posting RevPAR gains of 11%, led by nearly 17% year-over-year [YOY] growth in Asia-Pacific excluding China.
“In the U.S. & Canada, demand has normalized, with RevPAR increasing 1.5 %. The group segment was the standout in the quarter. Group RevPAR in the region rose nearly 5% YOY, with growth in both rate and occupancy.”
First-quarter highlights:
- Reported diluted EPS totaled $1.93, compared to reported diluted EPS of $2.43 in the year-ago quarter.
- Adjusted diluted EPS totaled $2.13, compared to first-quarter 2023 adjusted diluted EPS of $2.09.
- Reported net income totaled $564 million, compared to reported net income of $757 million in the year-ago quarter. Adjusted net income totaled $620 million, compared to first-quarter 2023 adjusted net income of $648 million.
- Adjusted EBITDA totaled $1.142 billion, compared to first-quarter 2023 adjusted EBITDA of $1.098 billion.
- The company added roughly 46,000 net rooms during the quarter, including approximately 37,000 rooms under its agreement with MGM Resorts International.
- At the end of the quarter, Marriott’s worldwide development pipeline totaled more than 3,400 properties and nearly 547,000 rooms, including roughly 27,000 pipeline rooms approved but not yet subject to signed contracts. More than 202,000 rooms in the pipeline were under construction as of the end of the quarter;
“In February we celebrated the fifth anniversary of Marriott Bonvoy, our powerful, award-winning travel and loyalty program,” Capuano said. “With our steadfast focus on growing our membership base and enhancing engagement with our members both on and off property, the program now boasts around 203 million global members and remains a key competitive advantage.
He continued, “We are excited about the launch of MGM Collection with Marriott Bonvoy during the quarter, which added nearly 37,000 rooms to our system from our strategic agreement with MGM Resorts International. We have seen outstanding initial booking pace and loyalty point redemptions across the collection. Our results in the first quarter highlight the resiliency of our asset-light business model and the strength of our brands. We are raising our full-year earnings guidance and now expect to return between $4.2 billion to $4.4 billion to shareholders in 2024.”
First-quarter 2024 results
Base management and franchise fees totaled $1.001 billion in the quarter, a 7% increase compared to base management and franchise fees of $932 million in the year-ago quarter. The increase is primarily attributable to RevPAR increases and unit growth. Non-RevPAR-related franchise fees in the quarter totaled $208 million, compared to $197 million in the year-ago quarter. The increase was largely driven by a 10% increase in cobrand credit card fees, partially offset by lower residential branding fees.
Incentive management fees totaled $209 million in the quarter, a 4% increase compared to $201 million in the 2023 first quarter. Managed hotels in international markets contributed nearly two-thirds of the incentive fees earned in the quarter.
Owned, leased and other revenue, net of direct expenses, totaled $71 million in the quarter, compared to $75 million in the year-ago quarter.
General, administrative and other expenses for the quarter totaled $261 million, compared to $202 million in the year-ago quarter. The YOY change largely reflects higher compensation and litigation expenses, as well as some unfavorable timing of expenses during 2024. The 2023 first-quarter expenses included $20 million of favorable one-time items.
Interest expense, net, totaled $153 million in the quarter, compared to $111 million in the year-ago quarter. The increase was largely due to higher interest expense associated with higher debt balances.
The provision for income taxes in the quarter totaled $163 million, a 22% effective rate, compared to $87 million, a 10% effective rate, in the year-ago quarter. The 2023 first-quarter provision included a $103 million benefit primarily from the release of reserves due to the completion of a prior year tax audit.
Marriott’s reported operating income totaled $876 million in the quarter, compared to 2023 first-quarter reported operating income of $951 million. Reported net income totaled $564 million in the quarter, compared to 2023 first-quarter reported net income of $757 million. Reported diluted earnings per share (EPS) totaled $1.93 in the quarter, compared to reported diluted EPS of $2.43 in the year-ago quarter.
Adjusted operating income in the quarter totaled $952 million, compared to 2023 first-quarter adjusted operating income of $941 million. First-quarter 2024 adjusted net income totaled $620 million, compared to 2023 first-quarter adjusted net income of $648 million. Adjusted diluted EPS in the quarter totaled $2.13, compared to adjusted diluted EPS of $2.09 in the year-ago quarter. The 2023 first-quarter adjusted results excluded a special tax item of $100 million ($0.32 per share).
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled $1.142 billion in the quarter, compared to first-quarter 2023 adjusted EBITDA of $1.098 billion.
Selected performance information
The company added roughly 46,000 net rooms during the quarter, including approximately 37,000 rooms from its agreement with MGM Resorts International.
At the end of the quarter, Marriott’s global system totaled nearly 8,900 properties, with more than 1,643,000 rooms.
At the end of the quarter, the company’s worldwide development pipeline totaled 3,419 properties with nearly 547,000 rooms, including 155 properties with roughly 27,000 rooms approved for development but not yet subject to signed contracts. The quarter-end pipeline included 1,089 properties with more than 202,000 rooms under construction. Fifty-seven percent of rooms in the quarter-end pipeline are in international markets.
Company outlook
The company forecasts:
- Second-quarter worldwide RevPAR growth between 4% and 5%
- Full-year worldwide RevPAR growth between 3% and 5%
- Full-year net rooms growth between 5.5% and 6%
- Second-quarter gross fee revenues between $1.340 billion and $1.355 billion
- Full-year gross fee revenues between $5.180 billion and $5.280 billion
- Second-quarter adjusted EBITDA between $1.295 billion and $1.315 billion
- Full-year adjusted EBITDA between $4.960 billion and $5.090 billion
