Marriott International, Inc. has reported its first quarter 2024 results.
Anthony Capuano, president and CEO, says, “We were pleased with our results in the quarter, which included both excellent net rooms growth and cash generation. Worldwide RevPAR grew over 4 per cent, with gains in both occupancy and ADR. Our international markets were particularly strong, posting RevPAR gains of 11 percent, led by nearly 17 per cent year-over-year (YOY) growth in Asia Pacific excluding China.
“In the U.S. & Canada, demand has normalized, with RevPAR increasing 1.5 per cent. The group segment was the stand-out in the quarter. Group RevPAR in the region rose nearly 5 per cent year-over-year, with growth in both rate and occupancy.
First quarter 2024 results
Base management and franchise fees totaled $1,001 million in the 2024 first quarter, a 7 per cent 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 2024 first quarter totaled $208 million, compared to $197 million in the year-ago quarter. The increase was largely driven by a 10 percent increase in co-brand credit card fees, partially offset by lower residential branding fees.
Incentive management fees totaled $209 million in the 2024 first quarter, a 4 per cent 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 2024 first quarter, compared to $75 million in the year-ago quarter.
General, administrative, and other expenses for the 2024 first 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 unfavourable timing of expenses during 2024. The 2023 first quarter expenses included $20 million of favourable one-time items.
Interest expense, net, totaled $153 million in the 2024 first quarter, compared to $111 million in the year-ago quarter. The increase was largely due to higher interest expense associated with higher debt balances. In the 2024 first quarter, the provision for income taxes totaled $163 million, a 22 per cent effective rate, compared to $87 million, a 10 per cent 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 2024 first quarter, compared to 2023 first quarter reported operating income of $951 million. Reported net income totaled $564 million in the 2024 first 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 2024 first 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 2024 first 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 million in the 2024 first quarter, compared to first quarter 2023 adjusted EBITDA of $1,098 million.
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. 57 per cent of rooms in the quarter-end pipeline are in international markets.
In the 2024 first quarter, worldwide RevPAR increased 4.2 per cent (a 3.9 per cent increase using actual dollars) compared to the 2023 first quarter. RevPAR in the U.S. & Canada increased 1.5 per cent (a 1.5 per cent increase using actual dollars), and RevPAR in international markets increased 11.1 per cent (a 9.8 per cent increase using actual dollars).
Balance Sheet & Common Stock
At the end of the quarter, Marriott’s total debt was $12.7 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 April 26, the company has repurchased 6.2 million shares for $1.5 billion.
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