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MARRIOTT INTERNATIONAL INC /MD/ (MAR)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered solid fee growth and margin expansion: gross fee revenues rose to $1.334B, adjusted operating income margin reached 62%, and adjusted EBITDA increased 7% YoY to $1.286B .
  • Systemwide constant-$ RevPAR grew 5.0% worldwide (+4.1% U.S. & Canada; +7.2% international) on ADR and occupancy gains; leisure was the strongest segment in the quarter .
  • Management’s initial 2025 outlook guides worldwide RevPAR +2–4%, adjusted EPS $9.82–$10.19, adjusted EBITDA $5.295–$5.435B, and net rooms growth 4–5%—with G&A expected to decline 8–10% from efficiency initiatives .
  • Compared to Marriott’s Q3-2024 guidance for Q4, the company delivered beats on gross fee revenues, adjusted EPS, and adjusted EBITDA; G&A came in higher vs guidance, driven by expense timing .
  • Catalysts: broad-based international strength (APEC/EMEA), accelerating tech transformation (reservations/property management/loyalty) and owner cost savings, plus ~$4B capital return planned in 2025 .

What Went Well and What Went Wrong

  • What Went Well

    • International outperformance: APEC and EMEA led >7% RevPAR growth; sequential improvement in China with Tier 1 cities positive and Hainan less negative vs Q3 .
    • Fee growth and margins: gross fee revenues increased to $1.334B, adjusted EBITDA rose to $1.286B, and adjusted operating margin expanded to 62% .
    • Loyalty and digital engagement: Bonvoy membership reached ~228M with record penetration; co-brand fees grew nearly 10% in 2024; multiyear digital transformation starts rolling out in 2025 to drive revenue and efficiency (“meaningful revenue upside” from cross-category shopping) .

  • What Went Wrong

    • China headwinds: Q4 Greater China RevPAR declined ~2% YoY; 2025 RevPAR in China guided roughly flat given macro and outbound travel trends .
    • Incentive management fees mixed: APEC strength offset by declines in U.S. & Canada and Greater China; G&A was higher in Q4 vs the Q3 guidance range .
    • Owned/leased normalization: YoY decline in owned, leased, and other revenue due to prior-year termination fee benefit; 2025 outlook reflects renovation impacts (e.g., Elegant portfolio) before asset recycling .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Total Revenues ($USD Millions)$6,095 $6,255 $6,429
Operating Income ($USD Millions)$718 $944 $752
Operating Income Margin (%)12% 15% 12%
Adjusted Operating Income ($USD Millions)$992 $1,017 $1,072
Adjusted Operating Margin (%)59% 62% 62%
Net Income ($USD Millions)$848 $584 $455
Diluted EPS (Reported) ($)$2.87 $2.07 $1.63
Adjusted Net Income ($USD Millions)$1,055 $638 $686
Adjusted Diluted EPS ($)$3.57 $2.26 $2.45
Adjusted EBITDA ($USD Millions)$1,197 $1,229 $1,286

Segment/fee components:

MetricQ4 2023Q3 2024Q4 2024
Base Management Fees ($USD Millions)$321 $312 $333
Franchise Fees ($USD Millions)$705 $812 $795
Incentive Management Fees ($USD Millions)$218 $159 $206
Gross Fee Revenues ($USD Millions)$1,244 $1,283 $1,334
Contract Investment Amortization ($USD Millions)$(22) $(26) $(27)
Net Fee Revenues ($USD Millions)$1,222 $1,257 $1,307
Owned, Leased & Other Revenue ($USD Millions)$455 $381 $418
Cost Reimbursement Revenue ($USD Millions)$4,418 $4,617 $4,704

KPIs and system metrics:

KPIQ4 2023Q3 2024Q4 2024
Systemwide RevPAR YoY (Worldwide)—+3.0% +5.0%
Systemwide RevPAR YoY (U.S. & Canada)—+2.1% +4.1%
Systemwide RevPAR YoY (International)—+5.4% +7.2%
Systemwide Occupancy YoY change (Worldwide)—+0.3 pts +1.2 pts
Systemwide ADR YoY change (Worldwide)—+2.5% +3.2%
Net Rooms (Year-end)——~1,706,000 (+6.8% YoY)
Pipeline (Properties/Rooms)~3,802 / ~585,000 (Q3) —3,766 / >577,000 (YE)

Notes: Q4 owned/leased net decline vs prior year driven by a $63M termination fee in Q4-2023; leisure was strongest segment in Q4 .

Guidance Changes

Management guidance vs results (Q4 2024 actuals vs guidance given on Nov 4, 2024):

MetricPeriodPrevious Guidance (Nov 4)Current/ActualChange
Gross Fee Revenues ($USD Millions)Q4 2024$1,290–$1,310 $1,334 Raised vs guidance (beat)
Owned, Leased & Other Rev. net ($USD Millions)Q4 2024~$95 $100 Raised vs guidance (beat)
G&A ($USD Millions)Q4 2024$275–$265 $289 Higher than guidance (miss)
Adjusted EBITDA ($USD Millions)Q4 2024$1,235–$1,265 $1,286 Raised vs guidance (beat)
Adjusted EPS – diluted ($)Q4 2024$2.31–$2.39 $2.45 Raised vs guidance (beat)

Initial 2025 guidance:

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Comparable Systemwide RevPAR (YoY)FY 2025—+2% to +4% New
Comparable Systemwide RevPAR (YoY)Q1 2025—+3% to +4% New
Net Rooms GrowthYE 2025 vs YE 2024—4% to 5% New
Gross Fee Revenues ($USD Millions)FY 2025—$5,370–$5,480 New
Owned, Leased & Other net ($USD Millions)FY 2025—$345–$355 New
G&A ($USD Millions)FY 2025—$985–$965 (−8% to −10%) New
Adjusted EBITDA ($USD Millions)FY 2025—$5,295–$5,435 New
Adjusted EPS – diluted ($)FY 2025—$9.82–$10.19 New
Effective Tax RateFY 2025—~26% New
Investment Spending ($USD Millions)FY 2025—$1,000–$1,100 New
Capital Return ($USD Millions)FY 2025—~$4,000 New
DividendQ1 2025—$0.63/share declared (payable Mar 31) New

Earnings Call Themes & Trends

TopicQ2 2024 (Prev)Q3 2024 (Prev)Q4 2024 (Current)Trend
Digital transformation (reservations/PM/loyalty)Elevated tech spend; reimbursement over time Continued tech investment; construction starts +40% U.S. Rollout begins later in 2025; revenue and efficiency upside for owners and guests Progressing
Cost-efficiency program (G&A, owner savings)—$80–$90M annual G&A savings from 2025; owner charge reductions G&A −8–10% guided for 2025; loyalty charge-out −~5% Improving
Leisure demandRevPAR +2%; luxury resorts strong Leisure flat YoY; ancillary spend modestly softer Leisure strongest segment in Q4; luxury/resort +6% RevPAR Improving
Business transient (BT)RevPAR +4%; SMB strength Continued growth; election impacted group in Nov BT ADR strength (+3–4%); nights recovered to 2019 levels overall Stable
Group paceStrong; pacing +9% FY24 Standout; Nov softness around election Q4 group +3%; 2025 pacing +6%, 2026 +10% Moderating growth
Greater ChinaRevPAR −~4% Q3 declines; 2025 IMF/RevPAR headwinds Q4 RevPAR −~2%; sequential improvement in Hainan; FY25 ~flat RevPAR Stabilizing
Development pipeline & NUGPipeline >559k; NUG ~6% Pipeline ~585k; Q3 net +16k rooms YE pipeline >577k; net rooms +6.8%; 2025 NUG 4–5% guided Strong
Key money/capital toolsSelective use; lower per-deal vs 2019 Returns premium; use concentrated in upper upscale/luxury Mix skews to high-value tiers; disciplined ROIC focus Steady
Lending environmentGlobal starts +40%; financing tight ex-U.S. —Slow improvement; regulatory uncertainty; Marriott over-indexing in new builds Improving
Co-brand cards+10% fees ~10% fees; avg spend moderating slightly Fees +~10% in 2024; 2025 growth slightly lower Slightly moderating

Management Commentary

  • “Worldwide RevPAR rose 5 percent, driven by gains in both ADR and occupancy… APEC and EMEA leading the way… U.S. & Canada rose more than 4 percent” — CEO Anthony Capuano .
  • “Fourth quarter adjusted EBITDA grew 7% to $1.29 billion… hotel-level profit margins rose 110 bps in the quarter” — CFO Leeny Oberg .
  • “We added over 31 million new [Bonvoy] members… app downloads rose nearly 30% YoY… multiyear digital transformation will begin rolling out later this year” — CEO Anthony Capuano .
  • “We expect net rooms growth of 4% to 5% [2025]… global RevPAR growth of 2% to 4%… Full year adjusted EBITDA could increase between 6% and 9%” — CFO Leeny Oberg .
  • “Owner enthusiasm is high… streamlined decision-making and empowerment in the continents… improving relationships with owners/franchisees” — CEO Anthony Capuano (cost-efficiency program) .

Q&A Highlights

  • Cost transformation: Early internal and owner enthusiasm; expected to streamline decisions and reduce costs; loyalty charge-outs cut ~5% for owners .
  • Investment spending and asset recycling: Elevated tech and owned/leased spend in 2025 (Elegant portfolio, Sheraton Chicago), with planned asset sales post-renovations; tech reimbursements flow through reimbursed depreciation .
  • Key money usage: Concentrated in upper upscale/luxury; disciplined ROIC; per-deal key money down vs 2019; selective extension into lower tiers .
  • Leisure trajectory: Q4 leisure the fastest-growing segment; luxury/resort +6% RevPAR; booking windows remain short .
  • Lending/regulatory: Hospitality loans performing well; construction lending constrained by regulatory uncertainty; slow improvement; Marriott capturing leading share of new builds .

Estimates Context

  • Wall Street consensus (S&P Global) could not be retrieved due to a daily request limit error; as a result, we cannot compare Q4 results to S&P Global consensus for EPS, revenue, or EBITDA at this time. Values would normally be retrieved from S&P Global; consensus data was unavailable in this session.

Key Takeaways for Investors

  • International strength and net unit growth are intact; 2025 guidance implies continued asset-light compounding via fees despite China normalization .
  • Q4 beat versus management guidance on gross fees, adjusted EPS, and adjusted EBITDA underscores resilient demand and operating discipline; monitor G&A trajectory as efficiency savings ramp in 2025 .
  • The multiyear tech upgrade is a 2025–2026 earnings lever (efficiency + ancillary revenue capture), with reimbursements supporting cash dynamics; expect staggered rollout .
  • Owner value proposition improving (lower loyalty charge-outs and anticipated above-property savings), supporting conversion momentum and pipeline execution .
  • China remains a swing factor; sequential improvement but FY25 RevPAR guided ~flat—APEC/EMEA offset should continue to drive mix and fee growth .
  • Capital return remains robust with ~$4B targeted in 2025, supported by strong cash generation and modest dividend (recent $0.63/share declaration) .
  • Without consensus comparisons, focus near term on progress vs management guidance (Q1 and FY25) and demand indicators (leisure/group, international cross-border) for trading setups .