Q4 2024 Earnings Summary
- Strong growth in Marriott Bonvoy membership globally, including younger demographics, driven by strategic partnerships like Starbucks and MGM, which enhances customer loyalty and potential revenue growth.
- Robust international RevPAR growth, especially in markets like India with double-digit room growth, benefiting from strong cross-border travel due to the strong dollar. This trend is expected to continue, driving higher RevPAR growth internationally compared to the U.S.
- Early signs of recovery in Greater China, with positive performance in Tier 1 cities and record deal volume in 2024, indicating long-term growth prospects in the region despite short-term challenges.
- Marriott expects certain non-RevPAR fees to decline in 2025, including residential branding fees dropping from $80 million in 2024 to likely roughly half, and timeshare fees remaining essentially flat, while credit card fee growth is anticipated to be a couple of hundred basis points lower than the nearly 10% growth in 2024.
- Leisure travel segment growth may be slowing, with Marriott's guidance reflecting expectations of leisure RevPAR being "flat to slightly up" in 2025, and the company noting shorter booking windows of under three weeks, which reduces visibility and predictability in this segment.
- Continued uncertainty in the Greater China market, with Marriott anticipating Greater China's RevPAR to be "roughly flat" year-over-year in 2025, and acknowledging that government stimulus programs have had minimal impact on demand patterns so far.
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Global RevPAR growth | Q4 2024 | 2% to 3% | no current guidance | no current guidance |
U.S. & Canada RevPAR growth | Q4 2024 | generally in line with Q3, negative election impact | no current guidance | no current guidance |
Greater China RevPAR | Q4 2024 | negative growth | no current guidance | no current guidance |
Gross Fee Growth | Q4 2024 | 4% to 5% | no current guidance | no current guidance |
Owned/Leased/Other | Q4 2024 | $95 million | no current guidance | no current guidance |
Global RevPAR growth | FY 2024 | 3% to 4% | no current guidance | no current guidance |
Gross Fee Growth | FY 2024 | 6% to 7%, $5.13B to $5.15B | no current guidance | no current guidance |
Owned/Leased/Other | FY 2024 | $346 million | no current guidance | no current guidance |
G&A Expense | FY 2024 | up 4% to 5% | no current guidance | no current guidance |
Adjusted EBITDA | FY 2024 | $4.93B to $4.96B | no current guidance | no current guidance |
Adjusted EPS | FY 2024 | $9.19 to $9.27 | no current guidance | no current guidance |
Investment Spending | FY 2024 | $1.1B to $1.2B | no current guidance | no current guidance |
Global RevPAR growth | Q1 2025 | no prior guidance | 3% to 4% | no prior guidance |
Gross Fee Revenue Growth | Q1 2025 | no prior guidance | 2% to 3.5% | no prior guidance |
Owned/Leased/Other | Q1 2025 | no prior guidance | $55 million | no prior guidance |
Adjusted EBITDA | FY 2025 | no prior guidance | 6% to 9%, $5.3B to $5.4B | no prior guidance |
Adjusted Diluted EPS | FY 2025 | no prior guidance | $9.82 to $10.19 | no prior guidance |
Net Rooms Growth | FY 2025 | no prior guidance | 4% to 5% | no prior guidance |
Global RevPAR growth | FY 2025 | no prior guidance | 2% to 4% | no prior guidance |
Gross Fee Revenue | FY 2025 | no prior guidance | 4% to 6%, $5.4B to $5.5B | no prior guidance |
Co-Brand Credit Card Fee | FY 2025 | no prior guidance | couple hundred bps lower than 10% | no prior guidance |
Residential Branding Fees | FY 2025 | no prior guidance | -50% yoy | no prior guidance |
Timeshare Fees | FY 2025 | no prior guidance | $110 million | no prior guidance |
FX Impact on Gross Fees | FY 2025 | no prior guidance | -$25 million | no prior guidance |
Owned/Leased/Other | FY 2025 | no prior guidance | $345M to $355M | no prior guidance |
G&A Expense | FY 2025 | no prior guidance | -8% to -10%, $965M to $985M | no prior guidance |
Investment Spending | FY 2025 | no prior guidance | $1B to $1.1B | no prior guidance |
Capital Returns | FY 2025 | no prior guidance | $4B | no prior guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Group travel demand | In Q1–Q3, Group was consistently the best-performing segment, with RevPAR growth ranging from 6% in Q1 to 10% in Q2 and Q3. For full-year 2024, pacing was up 9% in Q1, 9% in Q2, and 7% in Q3. | In Q4, Group RevPAR rose 8% globally for 2024 but only 3% in Q4 due to fewer events around the U.S. election and a decline in Greater China. For 2025, global group revenues are pacing up 6%. | Still strong overall but growth slowed in Q4 |
Greater China performance | From Q1 to Q3, performance ranged from +6% RevPAR in Q1 to -8% in Q3. Headwinds included weak domestic demand, macro pressures, and outbound travel by higher-end guests. | Q4 RevPAR declined 2%, better than expected. Tier 1 cities showed positive growth while Hainan remained weak. 2025 RevPAR in Greater China is projected to be roughly flat. | Still lagging but showing some improvement |
Marriott Bonvoy membership growth | Membership rose from 203M in Q1 to 210M in Q2 and 219M in Q3. Partnerships (e.g., co-brand cards, Rakuten, Starbucks) and promotions drove growth. | By Q4 2024, membership reached 228M, with Starbucks and MGM partnerships highlighted. Penetration of room nights hit record highs. | Continues to increase with new partnerships |
Mid-scale brand expansion | Q1 highlighted 17K City Express rooms and strong interest in StudioRes. Q2 showed robust pipeline growth for these mid-scale offerings. Q3 saw official launches of City Express in new markets amid strong franchise demand. | In Q4, Marriott noted 300+ open and pipeline properties in the mid-scale tier (e.g., City Express, StudioRes), attributing growth to low bundled costs and revenue engine advantages. | Steady expansion and continued owner interest |
Leisure travel segment slowdown | Q1 leisure in the U.S. was flat but +4% globally, Q2 grew 2%, Q3 was flat again year-over-year. Collectively, still above 2019 levels but showing slower gains. | In Q4, leisure RevPAR increased 6% globally and 4% in the U.S., the best quarter for leisure in 2024. However, 2025 leisure is expected to be flat to slightly up. | After flatter growth, Q4 outperformed but 2025 is expected to normalize |
Cost-saving initiatives | Not discussed in Q1–Q2. In Q3, Marriott introduced $80–$90M in sustainable annual G&A cost reductions, with charges primarily taken in Q4. | Q4 call reiterated $80–$90M in above-property savings for 2025, with positive feedback from internal teams and franchisees. G&A expenses are expected to decline 8%–10%. | Remains a focus area, carried forward from Q3 |
Declining non-RevPAR fees | Q2 noted slightly lower non-RevPAR fees than forecast; Q3 emphasized residential branding fees were growing then, with no sign of a decline. | During Q4, residential fees are projected to fall from $80M to about half in 2025, and credit card fee growth is slowing. Overall gross fee growth is guided at 4%–6% in 2025, partly due to non-RevPAR fee declines. | Newly introduced declines in residential and credit card fees |
Elevated construction costs and limited debt availability | Q1 and Q2 calls noted a constrained lending environment and higher construction costs but also an uptick in new construction starts. In Q3, these factors were cited as bigger impediments to new builds than interest rates. | Q4 had no explicit mention of elevated costs or debt limits for Q3, but there was caution around financing. Marriott retained the leading share of new builds as lenders prefer Marriott-branded deals. | Continues to pose challenges, less direct Q4 commentary |
Upcoming U.S. presidential election impact | Q1 noted historical softness around election week. Q2 cited less group business in early November. Q3 highlighted a flat Q4 group pace due to election-related caution. | In Q4, the drop in occupancy was not as severe as feared, and demand rebounded quickly. The U.S. & Canada saw a 4% RevPAR lift in Q4, partially benefiting from a quick post-election recovery. | Negative effect was milder than expected |
Development pipeline and net rooms growth targets | Q1–Q2 forecasted 5.5%–6% net rooms growth for 2024. Q3 raised it to the top end (6.5%) with a pipeline of 585K rooms. | Q4 ended with 577K rooms in the pipeline. For 2025, Marriott projects 4%–5% net rooms growth. Conversions remain a big driver, with 30%–40% of openings expected from conversions. | Pipeline remains robust, but 2025 growth guidance is slightly lower |
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RevPAR Outlook
Q: How will RevPAR grow in 2025 between ADR and occupancy?
A: Marriott expects RevPAR growth in 2025 to be driven more heavily by Average Daily Rate (ADR), with some occupancy gains as well. Group business pace is up 6% for 2025, likely leading RevPAR growth, while business transient is expected to grow in the low single digits, and leisure to be flat to slightly up. -
Fee Growth vs RevPAR
Q: Why is fee growth only 5% despite 7.5% RevPAR plus unit growth?
A: Fee growth is impacted by several factors, including a $25 million foreign exchange headwind and a 15% reduction in residential branding fees due to timing of project closings. Additionally, incentive management fees are affected by RevPAR headwinds in Greater China and renovations in the U.S. and Canada. -
EBITDA and Free Cash Flow Outlook
Q: How does the 2025 outlook compare to prior guidance?
A: The basic equation of rooms growth and RevPAR laid out in September 2023 has held up well. Despite some FX headwinds and regional RevPAR variations, Marriott is confident in delivering 5% to 5.5% net unit growth CAGR. The effective tax rate has been updated to approximately 26% going forward. -
Capital Allocation and Key Money
Q: What's the impact of key money on returns and contract terms?
A: Key money remains a valuable tool, mainly used in upper upscale and luxury tiers, which represent 40% of the pipeline. The amount invested in key money in 2025 is not materially different from 2024, and contracts involving key money continue to deliver strong returns on invested capital. -
Technology Transformation
Q: How will the tech migration impact the business?
A: The tech transformation, involving reservations, property management systems, and the loyalty program, will start rolling out later in 2025. It is expected to enhance efficiency, improve guest experiences, and create revenue opportunities through a new reservations platform that simplifies shopping across all products and services. -
Growth Strategy
Q: What's the outlook on acquisitions versus organic growth?
A: Marriott plans to focus on organic growth but will consider tuck-in acquisitions to fill gaps in the brand portfolio or geographic footprint when opportunities arise. The vast majority of growth is expected to be organic. -
Leisure Segment Outlook
Q: How is the leisure segment performing?
A: Leisure RevPAR has improved by 40% since 2019. While Q4 numbers were encouraging, with RevPAR at luxury and resort hotels up 6%, the booking window remains short, and growth is expected to normalize. -
Business Transient Recovery
Q: Has business transient travel recovered to 2019 levels?
A: Business transient overall has recovered to 2019 levels. Small and medium-sized businesses have returned faster than large corporates, which are still meaningfully behind 2019 levels. -
China Impact
Q: How is China affecting RevPAR and fees?
A: Greater China continues to face RevPAR headwinds, with Q1 particularly challenging due to a strong comparative quarter in 2024. As a result, incentive management fees from China are expected to decline in 2025. -
Capital Spending on New Units
Q: How should we think about returns on capital spent for new units?
A: Investments in growth are overwhelmingly in the form of key money. While key money is becoming more prevalent across more tiers, the per-deal key money investment is slightly less than in 2019. Marriott maintains long-term stable contracts with strong returns on invested capital.
Research analysts covering MARRIOTT INTERNATIONAL INC /MD/.