Marriott International, Inc. reported second quarter 2024 results. Highlights include:
- Second quarter 2024 comparable systemwide constant dollar RevPAR increased 4.9 percent worldwide, 3.9 percent in the United States and Canada, and 7.4 percent in international markets, compared to the 2023 second quarter;
- Second quarter reported diluted EPS totaled $2.69, compared to reported diluted EPS of $2.38 in the year-ago quarter. Second quarter adjusted diluted EPS totaled $2.50, compared to second quarter 2023 adjusted diluted EPS of $2.26;
- Second quarter reported net income totaled $772 million, compared to reported net income of $726 million in the year-ago quarter. Second quarter adjusted net income totaled $716 million, compared to second quarter 2023 adjusted net income of $690 million;
- Adjusted EBITDA totaled $1,324 million in the 2024 second quarter, compared to second quarter 2023 adjusted EBITDA of $1,219 million;
- The company added roughly 15,500 net rooms during the quarter;
- At the end of the quarter, Marriott’s worldwide development pipeline totaled approximately 3,500 properties and more than 559,000 rooms, including roughly 33,000 pipeline rooms approved, but not yet subject to signed contracts. Over 209,000 rooms in the pipeline were under construction as of the end of the second quarter;
- Marriott repurchased 1 million shares of common stock for $1.0 billion in the second quarter. Year to date through July 29, the company has returned $2.8 billion to shareholders through dividends and share repurchases.
Anthony Capuano, president and CEO, said, “Marriott reported strong second quarter results, with net rooms up 6 percent year over year and worldwide RevPAR growth of nearly 5 percent, as consumers continued to prioritize travel. International RevPAR increased more than 7 percent, with Asia Pacific excluding China leading the way, posting an impressive 13 percent RevPAR increase from the year-ago quarter.
“In the United States and Canada, second quarter RevPAR grew nearly 4 percent, with all customer segments growing versus the prior-year quarter. Group RevPAR rose nearly 10 percent year over year, with both rate and occupancy increasing in the mid-single digits.
“With a membership base of over 210 million members and growing, Marriott Bonvoy is a key competitive advantage. We remain focused on enhancing the loyalty program’s benefits and finding new ways to engage with our members both on and off-property. In June, we announced a collaboration with Starbucks. The number of members who have linked their accounts is already well exceeding our expectations.
“Owner preference for our brands remains strong. We signed nearly 31,000 rooms in the quarter, 75 percent of which were in international markets. Our momentum around conversions continued, accounting for 37 percent of room additions in the quarter. We continue to expand our industry-leading global portfolio, and our expectation for net rooms growth remains at 5.5 to 6 percent for full year 2024.
“With our solid financial results and strong cash generation, we have already returned $2.8 billion to shareholders year-to-date through July 29. We expect to return approximately $4.3 billion to our shareholders in 2024 through share repurchases and dividends.”
Second Quarter 2024 Results
Base management and franchise fees totaled $1,148 million in the 2024 second quarter, a 9 percent increase compared to base management and franchise fees of $1,057 million in the year-ago quarter. The increase is primarily attributable to RevPAR increases and unit growth. Non-RevPAR-related franchise fees in the 2024 second quarter totaled $234 million, compared to $206 million in the year-ago quarter. The increase was largely driven by a 10 percent increase in co-branded credit card fees, as well as $13 million of higher residential branding fees.
Incentive management fees totaled $195 million in the 2024 second quarter, compared to $193 million in the 2023 second quarter, and were impacted by weaker results in Greater China, as well as unfavorable foreign exchange. Managed hotels in international markets contributed more than 60 percent of the incentive fees earned in the quarter.
Owned, leased, and other revenue, net of direct expenses, totaled $99 million in the 2024 second quarter, compared to $103 million in the year-ago quarter.
General, administrative, and other expenses for the 2024 second quarter totaled $248 million, compared to $240 million in the year-ago quarter.
Interest expense, net, totaled $164 million in the 2024 second quarter, compared to $141 million in the year-ago quarter. The increase was largely due to higher interest expense associated with higher debt balances.
Marriott’s reported operating income totaled $1,195 million in the 2024 second quarter, compared to 2023 second quarter reported operating income of $1,096 million. Reported net income totaled $772 million in the 2024 second quarter, compared to 2023 second quarter reported net income of $726 million. Reported diluted earnings per share (EPS) totaled $2.69 in the quarter, compared to reported diluted EPS of $2.38 in the year-ago quarter.
Adjusted operating income in the 2024 second quarter totaled $1,120 million, compared to 2023 second quarter adjusted operating income of $1,043 million. Second quarter 2024 adjusted net income totaled $716 million, compared to 2023 second quarter adjusted net income of $690 million. Adjusted diluted EPS in the 2024 second quarter totaled $2.50, compared to adjusted diluted EPS of $2.26 in the year-ago quarter.
Adjusted results excluded cost reimbursement revenue, reimbursed expenses, merger-related charges, and other expenses.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled $1,324 million in the 2024 second quarter, compared to second quarter 2023 adjusted EBITDA of $1,219 million.
Selected Performance Information
The company added roughly 15,500 net rooms during the quarter.
At the end of the quarter, Marriott’s global system totaled nearly 9,000 properties, with roughly 1,659,000 rooms.
At the end of the quarter, the company’s worldwide development pipeline totaled 3,509 properties with more than 559,000 rooms, including 208 properties with roughly 33,000 rooms approved for development, but not yet subject to signed contracts. The quarter-end pipeline included 1,127 properties with over 209,000 rooms under construction. Fifty-seven percent of rooms in the quarter-end pipeline are in international markets.
In the 2024 second quarter, worldwide RevPAR increased 4.9 percent (a 4.0 percent increase using actual dollars) compared to the 2023 second quarter. RevPAR in the United States and Canada increased 3.9 percent (a 3.9 percent increase using actual dollars), and RevPAR in international markets increased 7.4 percent (a 4.2 percent increase using actual dollars).
Balance Sheet & Common Stock
At the end of the quarter, Marriott’s total debt was $13.1 billion and cash and equivalents totaled $0.3 billion, compared to $11.9 billion in debt and $0.3 billion of cash and equivalents at year-end 2023.
Year to date through July 29, the company has repurchased 10.4 million shares for $2.5 billion.
Company Outlook
The company’s updated outlook includes a narrowing of the RevPAR growth range for full year 2024, primarily as a result of a weaker operating environment in Greater China, as well as marginally softer expectations in the United States and Canada.
