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MARRIOTT INTERNATIONAL INC /MD/ (MAR)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered solid topline and fee growth as global RevPAR rose 4.1% (U.S. & Canada +3.3%; International +5.9%), driving adjusted EPS of $2.32 and adjusted EBITDA of $1.217B; management cited robust APEC and luxury demand, offset by March softness and U.S. government-related weakness .
  • EPS beat consensus: adjusted EPS $2.32 vs S&P Global $2.25*, while adjusted EBITDA $1.217B exceeded consensus $1.18B*; revenue comparisons require care given Marriott’s cost reimbursement accounting (consensus “Revenue” often differs from adjusted total revenues) .
  • Guidance trimmed: full‑year worldwide RevPAR growth lowered to 1.5–3.5% (from 2–4%), full‑year adjusted EBITDA nudged down to $5.285–$5.425B, while adjusted EPS range unchanged at $9.82–$10.19; Q2 adjusted EPS guided to $2.57–$2.62 .
  • Strategic catalysts: record signings (>34k rooms), pipeline >587k rooms, Bonvoy ~237M members, and acquisition of citizenM (expected $355M funding, stabilized fees ~$30M annually), positioning portfolio for mid‑single‑digit net rooms growth; dividend increased to $0.67 per share .
  • Narrative: luxury/full‑service outperformance and international strength continue; U.S. select‑service softness and government demand decline temper near‑term RevPAR, but conversions and technology transformation underpin medium‑term margin and growth resilience .

What Went Well and What Went Wrong

What Went Well

  • International momentum led by APEC with double‑digit RevPAR gains; India and Japan up 16–17% YoY, supporting nearly 6% international RevPAR growth .
  • Development strength: record Q1 signings (>34k rooms), ~12.2k net rooms added; pipeline ~3,808 properties and >587k rooms (+7.4% YoY); conversions ~⅓ of signings/openings .
  • Fee model leverage and efficiency: gross fee revenues up 5% YoY; G&A down to $245M (−6% YoY), reflecting enterprise‑wide efficiency initiatives; adjusted EBITDA +7% YoY to $1.217B .
    Quote: “The combination of continued travel demand, the strength of our brands and our fee driven business model drove strong financial results in the first quarter.” — CEO Anthony Capuano .

What Went Wrong

  • U.S. select‑service softness and government demand declines pressured March; CFO noted a ~10% YoY decline in U.S. government RevPAR and reduced H2 outlook for U.S./Canada .
  • Incentive management fees dipped to $204M (−2% YoY) as Greater China/EMEA faced headwinds and some managed‑to‑franchise conversions; two‑thirds of IMFs remain international .
  • Guidance lowered: full‑year worldwide RevPAR reduced by 50 bps and full‑year adjusted EBITDA midpoint trimmed due to U.S./Canada macro uncertainty and shorter booking window dynamics .

Financial Results

Core P&L and Margins (USD Millions unless noted)

MetricQ3 2024Q4 2024Q1 2025
Reported Net Income$584 $455 $665
Reported Diluted EPS$2.07 $1.63 $2.39
Adjusted Net Income$638 $686 $645
Adjusted Diluted EPS$2.26 $2.45 $2.32
Adjusted EBITDA$1,229 $1,286 $1,217
Gross Fee Revenues$1,283 $1,334 $1,275
G&A Expense$276 $289 $245
Interest Expense (net)$168 $170 $183

Fee & Segment Details (Q1 2025)

MetricQ1 2025
Base Management + Franchise Fees$1,071
Incentive Management Fees$204
Gross Fee Revenues$1,275
Net Fee Revenues$1,247
Owned, Leased & Other (net of direct)$65
Adjusted Total Revenues$1,608
Adjusted Operating Income Margin63%

KPIs and Operating Metrics

KPIQ3 2024Q4 2024Q1 2025
Worldwide RevPAR YoY+3.0% +5.0% +4.1%
U.S. & Canada RevPAR YoY+2.1% +4.1% +3.3%
International RevPAR YoY+5.4% +7.2% +5.9%
Net Rooms Added (period)~16k —~12.2k
Pipeline (properties/rooms)~3,802 / ~585k ~3,766 / >577k ~3,808 / >587k
Bonvoy Members—~228M ~237M
Share Repurchases (period)$1.0B $0.5B $0.8B
Debt / Cash & Equivalents (end period)$13.6B / $0.4B $14.4B / $0.4B $15.1B / $0.5B

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Worldwide RevPAR Growth (constant $)Full Year 20252% to 4% 1.5% to 3.5% Lowered
Net Rooms GrowthYear‑End 2025 vs 20244% to 5% Approaching 5% Slightly Raised (leaning higher)
Gross Fee Revenues ($)Full Year 2025$5,370–$5,480 $5,365–$5,475 Slightly Lowered (tightened)
Adjusted EBITDA ($)Full Year 2025$5,295–$5,435 $5,285–$5,425 Lowered
Adjusted EPS – Diluted ($)Full Year 2025$9.82–$10.19 $9.82–$10.19 Maintained
Effective Tax RateFull Year 2025~26% ~26% Maintained
Investment Spending ($)Full Year 2025$1,000–$1,100 $1,355–$1,455 (incl. $355M citizenM) Raised (citizenM)
Capital Return ($)Full Year 2025~$4,000 ~$4,000 Maintained
Adjusted EPS – Diluted ($)Q2 2025—$2.57–$2.62 New
Adjusted EBITDA ($)Q2 2025—$1,370–$1,390 New
Gross Fee Revenues ($)Q2 2025—$1,380–$1,395 New
G&A ($)Q2 2025—$245–$240 New
Effective Tax RateQ2 2025—~27% New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
AI/Technology & Digital TransformationEfficiency initiative; future margin benefits Multi‑year reservations/property mgmt/loyalty platform rollout begins H2 2025; strong GM enthusiasm Accelerating deployment; expected revenue/efficiency uplift
Supply Chain/Construction & FinancingOwners watching costs; financing tight; new starts below 2019 Similar dynamics; conversions supported by brand set and dedicated teams Conversions steady; cautious on new‑build financing
Tariffs/Macro & GovernmentMacro uncertainty noted March softness tied to government layoffs/tariff announcements; U.S. government RevPAR −10% U.S./Canada outlook reduced; international unchanged
Product Performance (Luxury vs Select)Luxury strength Luxury has strongest occupancy and ADR growth; no trade‑down observed Luxury outperformance persistent
Regional TrendsInternational > U.S.; Greater China mixed APEC +11% RevPAR; India/Japan +16–17%; Greater China −2% YoY but improved vs plan APEC robust; China flat for year per outlook
Regulatory/Legal—citizenM transaction pending regulatory approvals Acquisition integration ahead
Loyalty/B2CBonvoy ~228M (FY24) Bonvoy ~237M; new global ad campaign Membership growth, engagement up
Conversions & Key MoneyConversions ~30% of signings Conversions steady; disciplined key money; avg per deal declined in 2024 Steady state; portfolio conversions rising

Management Commentary

  • “Global RevPAR rose over 4 percent, primarily driven by higher ADR… International markets experienced particularly robust growth… led by double‑digit gains in APEC.” — Anthony Capuano, CEO .
  • “We are lowering our guidance for full year RevPAR growth by 50 basis points due to a more cautious outlook in our U.S. & Canada region.” — Anthony Capuano, CEO .
  • “Demand in the U.S. did soften in March, primarily due to a 10% year‑over‑year decline in U.S. government RevPAR… We have limited visibility into the back half of the year.” — Leeny (Kathleen) Oberg, CFO .
  • “We signed more rooms in Q1 than in any Q1 in our history… owners are long‑term investors… bullish on the long term.” — Anthony Capuano, CEO .
  • “We expect our new technology platform to further strengthen our efficient operating model… unlock new revenue opportunities.” — Anthony Capuano, CEO .

Q&A Highlights

  • Select‑service softness: March U.S./Canada softness primarily government; normalization when excluding Easter; no trade‑down observed .
  • Group pace: 2025 pacing +6% (slight moderation); 2026 pacing +7% (split between occupancy and ADR) .
  • China strategy: Domestic ownership and teams underpin long‑term positioning; pipeline >400 hotels, ~600+ operating, driven by local demand .
  • Conversions: Expected to remain resilient across cycles; brands optimized for quick conversions; portfolio deals accelerating .
  • Co‑brand credit card: Spend prioritizes travel; no notable shift away from travel categories; non‑RevPAR fee growth expected over time .
  • Inbound travel: U.S. international mix ~6% in Q1, +70 bps vs FY24; Canadian inbound down ~5% but offset elsewhere .

Estimates Context

  • Q1 2025 adjusted EPS: Actual $2.32 vs consensus $2.25* → beat (driven by fee growth, G&A efficiencies, and tax reserve release) .
  • Q1 2025 adjusted EBITDA: Actual $1.217B vs consensus $1.182B* → beat .
  • Revenue note: Marriott reports cost reimbursement revenue and reimbursed expenses; adjusted total revenues exclude these. Consensus “Revenue” definitions may differ; we reference adjusted total revenues ($1.608B) for comparability .
  • Q2 2025 outlook vs consensus: Guidance EPS $2.57–$2.62 vs consensus $2.62*; adjusted EBITDA $1.370–$1.390B vs consensus $1.381B* — broadly in line .
    Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Luxury/international skew remains the earnings engine: APEC strength and luxury ADR/occupancy outperformance support fee growth despite U.S. select‑service softness .
  • Near‑term caution in U.S./Canada: Guidance lowered for full‑year RevPAR; monitor government demand and select‑service transient trends through Q2/Q3 .
  • Structural growth intact: Record signings, conversions ≈⅓, pipeline >587k rooms, and Bonvoy 237M underpin mid‑single‑digit net rooms growth and durable fee trajectory .
  • citizenM acquisition (expected close H2’25): $355M funding, stabilized fees ~$30M annually, adds lifestyle select exposure; expect incremental fee contribution and brand expansion runway .
  • Efficiency tailwinds: G&A down; enterprise initiatives expected $80–$90M above‑property savings in 2025; supports margin resilience through cycles .
  • Trading lens: Q2 guide broadly in line with consensus; EPS/EBITDA beats in Q1 and dividend increase ($0.67) provide support; watch macro headlines (tariffs, government) as potential volatility catalysts .
  • Medium‑term thesis: Asset‑light model, technology platform rollout, and conversions/portfolio deals should sustain high‑60s adjusted operating margins and consistent capital returns (~$4B FY25) .