Anthony Capuano, President and Chief Executive Officer, said, “Marriott reported strong second quarter results, with net rooms up 6 percent year over year and worldwide RevPAR1 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 U.S. & 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 and merger-related charges and other expenses. See page A-3 and page A-11 of 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 $1,324 million in the 2024 second quarter, compared to second quarter 2023 adjusted EBITDA of $1,219 million. See page A-11 of the press release schedules for the adjusted EBITDA calculation.
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 U.S. & 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 U.S. & Canada.
| Third Quarter 2024vs Third Quarter 2023 | Full Year 2024vs Full Year 2023 | |
| Comparable systemwide constant $RevPAR growth | ||
| Worldwide | 3% to 4% | 3% to 4% |
| Year-End 2024vs Year-End 2023 | ||
| Net rooms growth | 5.5% to 6% | |
| ($ in millions, except EPS) | Third Quarter 2024 | Full Year 2024 |
| Gross fee revenues | $1,275 to $1,290 | $5,130 to $5,180 |
| Owned, leased, and other revenue, net of direct expenses | Approx. $75 | $345 to $350 |
| General, administrative, and other expenses | $250 to $240 | $1,030 to $1,020 |
| Adjusted EBITDA1,2 | $1,225 to $1,250 | $4,950 to $5,015 |
| Adjusted EPS – diluted2,3 | $2.27 to $2.33 | $9.23 to $9.40 |
| Investment spending4 | $1,000 to $1,200 | |
| Capital return to shareholders5 | Approx. $4,300 |
| 1 | See page A-12 and page A-13 of the press release schedules for the adjusted EBITDA calculations. | |
| 2 | Adjusted EBITDA and Adjusted EPS – diluted for third quarter and full year 2024 do not include cost reimbursement revenue, reimbursed expenses, merger-related charges and other expenses, 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. | |
| 3 | Assumes the level of capital return to shareholders noted above. | |
| 4 | Includes capital and technology expenditures, loan advances, contract acquisition costs, and other investing activities. | |
| 5 | Factors 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. |
