Marriott International Reports Third Quarter 2024 Results
Third quarter 2024 comparable systemwide constant dollar RevPAR increased 3.0 percent worldwide, 2.1 percent in the U.S. & Canada, and 5.4 percent in international markets, compared to the 2023 third quarter;
Third quarter reported diluted EPS totaled $2.07, compared to reported diluted EPS of $2.51 in the year-ago quarter. Third quarter adjusted diluted EPS totaled $2.26, compared to third quarter 2023 adjusted diluted EPS of $2.11;
Third quarter reported net income totaled $584 million, compared to reported net income of $752 million in the year-ago quarter. Third quarter adjusted net income totaled $638 million, compared to third quarter 2023 adjusted net income of $634 million;
Adjusted EBITDA totaled $1,229 million in the 2024 third quarter, compared to third quarter 2023 adjusted EBITDA of $1,142 million;
The company added roughly 16,000 net rooms during the quarter;
At the end of the quarter, Marriott's worldwide development pipeline totaled approximately 3,800 properties and 585,000 rooms, including roughly 34,000 pipeline rooms approved, but not yet subject to signed contracts. More than 220,000 rooms in the pipeline were under construction as of the end of the third quarter;
Marriott repurchased 4.5 million shares of common stock for $1.0 billion in the third quarter. Year to date through October 31, the company has returned $3.9 billion to shareholders through dividends and share repurchases.
For a summary of third quarter highlights, please visit: https://news.marriott.com/static-assets/component-resources/newscenter/earnings/2024/20241104-q3-2024-infographic.pdf
BETHESDA, Md., Nov. 4, 2024 /PRNewswire/ -- Marriott International, Inc. (NASDAQ:MAR) today reported third quarter 2024 results.
Anthony Capuano, President and Chief Executive Officer, said, "Marriott had another solid quarter, highlighted by strong net rooms and fee growth, robust development activity and a 3 percent increase in global RevPAR1. Third quarter international RevPAR rose 5.4 percent, led by meaningful gains in APEC and EMEA with resilient domestic and cross-border demand, as well as solid ADR growth. RevPAR in the U.S. & Canada increased more than 2 percent compared to the year-ago quarter, with ADR up 2.3 percent.
"Group remained the standout customer segment, with global group RevPAR rising 10 percent in the quarter and on pace to rise 8 percent for full year 2024. RevPAR for the business transient segment continued to grow nicely in the quarter, while leisure transient RevPAR was flat year over year, but still well ahead of pre-pandemic levels.
"Given the breadth and depth of our portfolio and the meaningful benefits we deliver to owners and franchisees, demand for our brands remains strong. Through the first three quarters of 2024, we signed over 95,000 organic rooms, more than half of which are outside the U.S. & Canada. More than 40 percent of signed rooms are conversions, where we continue to have a lot of momentum, particularly with multi-unit opportunities.
"Net rooms grew nearly 6 percent over the last four quarters, and our development pipeline reached a record 585,000 rooms at the end of September. Our teams remain keenly focused on expanding our industry leading global portfolio, and we now expect full year 2024 net rooms growth to be around 6.5 percent.
"Our business momentum is excellent, and we continue to evolve our business to support our numerous global growth opportunities. To that end, we have undertaken a comprehensive initiative to enhance our effectiveness and efficiency across the company. At this point in the process, we expect this initiative to yield $80 million to $90 million of annual general and administrative cost reductions beginning in 2025. In addition, we expect this work to deliver cost savings to our owners and franchisees.
"With our asset light business model generating meaningful cash and our solid financial performance, we returned $3.7 billion to shareholders through share repurchases and dividends in the first nine months of the year, and now expect to return approximately $4.4 billion for the full year 2024."
Third Quarter 2024 ResultsBase management and franchise fees totaled $1,124 million in the 2024 third quarter, a 7 percent increase compared to base management and franchise fees of $1,054 million in the year-ago quarter. The increase is primarily attributable to RevPAR increases and unit growth, as well as higher residential and co-branded credit card fees.
Incentive management fees totaled $159 million in the 2024 third quarter, an 11 percent increase compared to $143 million in the 2023 third quarter. Managed hotels in international markets contributed roughly 70 percent of the incentive fees earned in the quarter.
General, administrative, and other expenses for the 2024 third quarter totaled $276 million, compared to $239 million in the year-ago quarter. The year-over-year change largely reflects a $19 million operating guarantee reserve for a U.S. hotel, which was negotiated in connection with the company's acquisition of Starwood, and an $11 million litigation reserve.
Interest expense, net, totaled $168 million in the 2024 third quarter, compared to $139 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 $944 million in the 2024 third quarter, compared to 2023 third quarter reported operating income of $1,099 million. Reported net income totaled $584 million in the 2024 third quarter, compared to 2023 third quarter reported net income of $752 million. Reported diluted earnings per share (EPS) totaled $2.07 in the quarter, compared to reported diluted EPS of $2.51 in the year-ago quarter.
Adjusted operating income in the 2024 third quarter totaled $1,017 million, compared to 2023 third quarter adjusted operating income of $959 million. Third quarter 2024 adjusted net income totaled $638 million, compared to 2023 third quarter adjusted net income of $634 million. Adjusted diluted EPS in the 2024 third quarter totaled $2.26, compared to adjusted diluted EPS of $2.11 in the year-ago quarter.
Adjusted results excluded cost reimbursement revenue, reimbursed expenses and restructuring and merger-related charges. See the press release schedules for the calculation of adjusted results and the manner in which the adjusted measures are determined in this press release.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled $1,229 million in the 2024 third quarter, compared to third quarter 2023 adjusted EBITDA of $1,142 million. See the press release schedules for the adjusted EBITDA calculation.
Selected Performance InformationThe company added roughly 16,000 net rooms during the quarter.
At the end of the quarter, Marriott's global system totaled nearly 9,100 properties, with roughly 1,675,000 rooms.
At the end of the quarter, the company's worldwide development pipeline totaled 3,802 properties with approximately 585,000 rooms, including 232 properties with roughly 34,000 rooms approved for development, but not yet subject to signed contracts. The quarter-end pipeline included 1,320 properties with more than 220,000 rooms under construction. Fifty-six percent of rooms in the quarter-end pipeline are in international markets.
In the 2024 third quarter, worldwide RevPAR increased 3.0 percent (a 2.3 percent increase using actual dollars) compared to the 2023 third quarter. RevPAR in the U.S. & Canada increased 2.1 percent (a 1.9 percent increase using actual dollars), and RevPAR in international markets increased 5.4 percent (a 3.3 percent increase using actual dollars).
Balance Sheet & Common StockAt the end of the quarter, Marriott's total debt was $13.6 billion and cash and equivalents totaled $0.4 billion, compared to $11.9 billion in debt and $0.3 billion of cash and equivalents at year-end 2023.
Year to date through October 31, the company has repurchased 14.2 million shares for $3.4 billion.
In the third quarter, the company issued $500 million of Series PP Senior Notes due in 2030 with a 4.80 percent interest rate coupon and $1.0 billion of Series QQ Senior Notes due in 2035 with a 5.35 percent interest rate coupon.
Company Outlook
Fourth Quarter 2024
Full Year 2024
vs Fourth Quarter 2023
vs Full Year 2023
Comparable systemwide constant $
RevPAR growth
Worldwide
2% to 3%
3% to 4%
Year-End 2024
vs Year-End 2023
Net rooms growth
Approx. 6.5%
($ in millions, except EPS)
Fourth Quarter 2024
Full Year 2024
Gross fee revenues
$1,290 to $1,310
$5,126 to $5,146
Owned, leased, and other revenue, net of direct expenses
Approx. $95
Approx. $346
General, administrative, and other expenses
$275 to $265
$1,060 to $1,050
Adjusted EBITDA1,2
$1,235 to $1,265
$4,930 to $4,960
Adjusted EPS, diluted2,3
$2.31 to $2.39
$9.19 to $9.27
Investment spending4
$1,100 to $1,200
Capital return to shareholders5
Approx. $4,400
1See the press release schedules for the adjusted EBITDA calculations.
2Adjusted EBITDA and Adjusted EPS, diluted for fourth quarter and full year 2024 do not include cost reimbursement revenue, reimbursed expenses, restructuring and merger-related charges, or any asset sales that may occur during the year, each of which the company cannot forecast with sufficient accuracy and without unreasonable efforts, and which may be significant.
3Assumes the level of capital return to shareholders noted above.
4Includes capital and technology expenditures, loan advances, contract acquisition costs, and other investing activities.
5Factors in the purchase of the Sheraton Grand Chicago and underlying land for $500 million, $200 million of which is included in investment spending. Assumes the level of investment spending noted above and that no asset sales occur during the year.
Marriott International, Inc. (NASDAQ:MAR) will conduct its quarterly earnings review for the investment community and news media on Monday, November 4, 2024, at 8:30 a.m. Eastern Time (ET). The conference call will be webcast simultaneously via Marriott's investor relations website at http://www.marriott.com/investor, click on "Events & Presentations" and click on the quarterly conference call link. A replay will be available at that same website until November 4, 2025.
The telephone dial-in number for the conference call is US Toll Free: 800-274-8461, or Global: +1 203-518-9843. The conference ID is MAR3Q24. A telephone replay of the conference call will be available from 1:00 p.m. ET, Monday, November 4, 2024, until 8:00 p.m. ET, Monday, November 11, 2024. To access the replay, call US Toll Free: 800-688-4915 or Global: +1 402-220-1319.
Note on forward-looking statements: All statements in this press release and the accompanying schedules are made as of November 4, 2024. We undertake no obligation to publicly update or revise these statements, whether as a result of new information, future events or otherwise. This press release and the accompanying schedules contain "forward-looking statements" within the meaning of federal securities laws, including statements related to our RevPAR, rooms growth and other financial metric estimates, outlook and assumptions; shareholder returns; our growth prospects and our development pipeline; owner and franchisee demand for our brands; our comprehensive initiative to enhance our effectiveness and efficiency across the company, including related plans and goals, anticipated charges and cost reductions, and other expected or potential benefits and outcomes; and similar statements concerning anticipated future events and expectations that are not historical facts. We caution you that these statements are not guarantees of future performance and are subject to numerous evolving risks and uncertainties that we may not be able to accurately predict or assess, including the risk factors that we describe in our Securities and Exchange Commission filings, including our most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and risks related to the comprehensive initiative referenced above. Any of these factors could cause actual results to differ materially from the expectations we express or imply in this press release.
Marriott International, Inc. (NASDAQ:MAR) is based in Bethesda, Maryland, USA, and encompasses a portfolio of nearly 9,100 properties across more than 30 leading brands in 142 countries and territories. Marriott operates and franchises hotels and licenses vacation ownership resorts all around the world. The company offers Marriott Bonvoy®, its highly awarded travel program. For more information, please visit our website at www.marriott.com, and for the latest company news, visit www.marriottnewscenter.com. In addition, connect with us on Facebook and @MarriottIntl on X and Instagram.
Marriott encourages investors, the media, and others interested in the company to review and subscribe to the information Marriott posts on its investor relations website at www.marriott.com/investor or Marriott's news center website at www.marriottnewscenter.com, which may be material. The contents of these websites are not incorporated by reference into this press release or any report or document Marriott files with the SEC, and any references to the websites are intended to be inactive textual references only.
1All occupancy, Average Daily Rate (ADR) and Revenue Per Available Room (RevPAR) statistics and estimates are systemwide constant dollar. Unless otherwise stated, all changes refer to year-over-year changes for the comparable period. Occupancy, ADR and RevPAR comparisons between 2024 and 2023 reflect properties that are comparable in both years.
IRPR#1
Tables follow
MARRIOTT INTERNATIONAL, INC.
PRESS RELEASE SCHEDULES
TABLE OF CONTENTS
QUARTER 3, 2024
Consolidated Statements of Income - As Reported
A-2
Non-GAAP Financial Measures
A-4
Total Lodging Products by Ownership Type
A-5
Total Lodging Products by Tier
A-7
Key Lodging Statistics
A-8
Adjusted EBITDA
A-12
Adjusted EBITDA Forecast - Fourth Quarter 2024
A-13
Adjusted EBITDA Forecast - Full Year 2024
A-14
Explanation of Non-GAAP Financial and Performance Measures
A-15
A-1
MARRIOTT INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME - AS REPORTED
THIRD QUARTER 2024 AND 2023
($ in millions except per share amounts, unaudited)
As Reported
As Reported
Percent
Three Months Ended
Three Months Ended
Better/(Worse)
September 30, 2024
September 30, 2023
Reported 2024 vs. 2023
REVENUES
Base management fees
$ 312
$ 306
2
Franchise fees1
812
748
9
Incentive management fees
159
143
11
Gross Fee Revenues
1,283
1,197
7
Contract investment amortization2
(26)
(23)
(13)
Net Fee Revenues
1,257
1,174
7
Owned, leased, and other revenue3
381
363
5
Cost reimbursement revenue4
4,617
4,391
5
Total Revenues
6,255
5,928
6
OPERATING COSTS AND EXPENSES
Owned, leased, and other - direct5
300
293
(2)
Depreciation, amortization, and other6
45
46
2
General, administrative, and other7
276
239
(15)
Restructuring and merger-related charges
9
13
31
Reimbursed expenses4
4,681
4,238
(10)
Total Expenses
5,311
4,829
(10)
OPERATING INCOME
944
1,099
(14)
Gains and other income, net8
7
28
(75)
Interest expense
(179)
(146)
(23)
Interest income
11
7
57
Equity in earnings9
3
1
200
INCOME BEFORE INCOME TAXES
786
989
(21)
Provision for income taxes
(202)
(237)
15
NET INCOME
$ 584
$ 752
(22)
EARNINGS PER SHARE
Earnings per share - basic
$ 2.08
$ 2.52
(17)
Earnings per share - diluted
$ 2.07
$ 2.51
(18)
Basic Shares
281.5
298.6
Diluted Shares
282.4
300.1
1 Franchise fees include fees from our franchise and license agreements, application and relicensing fees, timeshare and yacht fees, co-branded credit card fees, and residential branding fees.
2 Contract investment amortization includes amortization of capitalized costs to obtain management, franchise, and license contracts and any related impairments.
3 Owned, leased, and other revenue includes revenue from the properties we own or lease, termination fees, and other revenue.
4 Cost reimbursement revenue includes reimbursements from properties for property-level and centralized programs and services that we operate for the benefit of our property owners. Reimbursed expenses include costs incurred by Marriott for certain property-level operating expenses and centralized programs and services.
5 Owned, leased, and other - direct expenses include operating expenses related to our owned or leased hotels, including lease payments and pre-opening expenses.
6 Depreciation, amortization, and other expenses include depreciation for fixed assets, amortization of capitalized costs incurred to acquire management, franchise, and license agreements, and any related impairments, accelerations, or write-offs.
7 General, administrative, and other expenses include our corporate and business segments overhead costs and general expenses.
8 Gains and other income, net includes gains and losses on the sale of real estate, the sale of joint venture interests and other investments, and adjustments from other equity investments.
9 Equity in earnings include our equity in earnings or losses of unconsolidated equity method investments.
A-2
MARRIOTT INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME - AS REPORTED
THIRD QUARTER YEAR-TO-DATE 2024 AND 2023
($ in millions except per share amounts, unaudited)
As Reported
As Reported
Percent
Nine Months Ended
Nine Months Ended
Better/(Worse)
September 30, 2024
September 30, 2023
Reported 2024 vs. 2023
REVENUES
Base management fees
$ 955
$ 917
4
Franchise fees1
2,318
2,126
9
Incentive management fees
563
537
5
Gross Fee Revenues
3,836
3,580
7
Contract investment amortization2
(76)
(66)
(15)
Net Fee Revenues
3,760
3,514
7
Owned, leased, and other revenue3
1,133
1,109
2
Cost reimbursement revenue4
13,778
12,995
6
Total Revenues
18,671
17,618
6
OPERATING COSTS AND EXPENSES
Owned, leased, and other - direct5
882
861
(2)
Depreciation, amortization, and other6
137
138
1
General, administrative, and other7
785
681
(15)
Restructuring and merger-related charges
25
52
52
Reimbursed expenses4
13,827
12,740
(9)
Total Expenses
15,656
14,472
(8)
OPERATING INCOME
3,015
3,146
(4)
Gains and other income, net8
15
33
(55)
Interest expense
(515)
(412)
(25)
Interest income
30
21
43
Equity in earnings9
8
9
(11)
INCOME BEFORE INCOME TAXES
2,553
2,797
(9)
Provision for income taxes
(633)
(562)
(13)
NET INCOME
$ 1,920
$ 2,235
(14)
EARNINGS PER SHARE
Earnings per share - basic
$ 6.71
$ 7.36
(9)
Earnings per share - diluted
$ 6.69
$ 7.32
(9)
Basic Shares
285.9
303.9
Diluted Shares
286.9
305.3
1 Franchise fees include fees from our franchise and license agreements, application and relicensing fees, timeshare and yacht fees, co-branded credit card fees, and residential branding fees.
2 Contract investment amortization includes amortization of capitalized costs to obtain management, franchise, and license contracts and any related impairments.
3 Owned, leased, and other revenue includes revenue from the properties we own or lease, termination fees, and other revenue.
4 Cost reimbursement revenue includes reimbursements from properties for property-level and centralized programs and services that we operate for the benefit of our property owners. Reimbursed expenses include costs incurred by Marriott for certain property-level operating expenses and centralized programs and services.
5 Owned, leased, and other - direct expenses include operating expenses related to our owned or leased hotels, including lease payments and pre-opening expenses.
6 Depreciation, amortization, and other expenses include depreciation for fixed assets, amortization of capitalized costs incurred to acquire management, franchise, and license agreements, and any related impairments, accelerations, or write-offs.
7 General, administrative, and other expenses include our corporate and business segments overhead costs and general expenses.
8 Gains and other income, net includes gains and losses on the sale of real estate, the sale of joint venture interests and other investments, and adjustments from other equity investments.
9 Equity in earnings include our equity in earnings or losses of unconsolidated equity method investments.
A-3
MARRIOTT INTERNATIONAL, INC.
NON-GAAP FINANCIAL MEASURES
($ in millions except per share amounts)
The following table presents our reconciliations of Adjusted operating income, Adjusted operating income margin, Adjusted net income, and Adjusted diluted earnings per share, to the most directly comparable GAAP measure. Adjusted total revenues is used in the determination of Adjusted operating income margin.
Three Months Ended
Nine Months Ended
Percent
Percent
September 30,
September 30,
Better/
September 30,
September 30,
Better/
2024
2023
(Worse)
2024
2023
(Worse)
Total revenues, as reported
$ 6,255
$ 5,928
$ 18,671
$ 17,618
Less: Cost reimbursement revenue
(4,617)
(4,391)
(13,778)
(12,995)
Adjusted total revenues†
1,638
1,537
4,893
4,623
Operating income, as reported
944
1,099
3,015
3,146
Less: Cost reimbursement revenue
(4,617)
(4,391)
(13,778)
(12,995)
Add: Reimbursed expenses
4,681
4,238
13,827
12,740
Add: Restructuring and merger-related charges
9
13
25
52
Adjusted operating income†
1,017
959
6 %
3,089
2,943
5 %
Operating income margin
15 %
19 %
16 %
18 %
Adjusted operating income margin†
62 %
62 %
63 %
64 %
Net income, as reported
584
752
1,920
2,235
Less: Cost reimbursement revenue
(4,617)
(4,391)
(13,778)
(12,995)
Add: Reimbursed expenses
4,681
4,238
13,827
12,740
Add: Restructuring and merger-related charges
9
13
25
52
Less: Gain on asset dispositions1
—
(24)
—
(24)
Income tax effect of above adjustments
(19)
46
(20)
64
Less: Income tax special items
—
—
—
(100)
Adjusted net income†
$ 638
$ 634
1 %
$ 1,974
$ 1,972
0 %
Diluted earnings per share, as reported
$ 2.07
$ 2.51
$ 6.69
$ 7.32
Adjusted diluted earnings per share†
$ 2.26
$ 2.11
7 %
$ 6.88
$ 6.46
7 %
† Denotes non-GAAP financial measures. Please see Explanation of Non-GAAP Financial and Performance Measures in these Press Release Schedules for information about our reasons for providing these alternative financial measures and the limitations on their use.
1 Gain on asset dispositions reported in Gains and other income, net.
A-4
MARRIOTT INTERNATIONAL, INC.
TOTAL LODGING PRODUCTS BY OWNERSHIP TYPE
As of September 30, 2024
US & Canada
Total International1
Total Worldwide
Properties
Rooms
Properties
Rooms
Properties
Rooms
Managed
619
214,577
1,380
358,154
1,999
572,731
Marriott Hotels
101
56,736
188
58,827
289
115,563
Sheraton
26
20,860
181
61,342
207
82,202
Courtyard
156
25,372
129
28,189
285
53,561
Westin
41
22,486
78
23,727
119
46,213
JW Marriott
23
13,189
75
27,073
98
40,262
The Ritz-Carlton
42
12,798
77
18,047
119
30,845
Renaissance
21
9,065
53
16,391
74
25,456
Four Points
1
134
90
24,885
91
25,019
Le Méridien
—
—
71
19,841
71
19,841
W Hotels
23
6,521
42
11,805
65
18,326
Residence Inn
73
12,002
9
1,116
