Marriott International reported full-year 2023 and Q4 2023 financial results. Highlights include:
- Fourth quarter 2023 comparable systemwide constant dollar RevPAR increased 7.2 percent worldwide, 3.3 percent in the United States and Canada, and 17.4 percent in international markets, compared to the 2022 fourth quarter;
- Fourth quarter reported diluted EPS totaled $2.87, compared to reported diluted EPS of $2.12 in the year-ago quarter. Fourth quarter adjusted diluted EPS totaled $3.57, compared to fourth quarter 2022 adjusted diluted EPS of $1.96;
- Fourth quarter reported net income totaled $848 million, compared to reported net income of $673 million in the year-ago quarter. Fourth quarter adjusted net income totaled $1,055 million, compared to fourth quarter 2022 adjusted net income of $622 million;
- Adjusted EBITDA totaled $1,197 million in the 2023 fourth quarter, compared to fourth quarter 2022 adjusted EBITDA of $1,090 million;
- The company added nearly 81,300 rooms globally during 2023, including approximately 17,500 rooms associated with the City Express transaction and more than 43,000 other rooms in international markets. Net rooms grew 4.7 percent from year-end 2022;
- At the end of the year, Marriott’s worldwide development pipeline totaled nearly 3,400 properties and roughly 573,000 rooms, including over 21,000 pipeline rooms approved, but not yet subject to signed contracts. More than 232,000 rooms in the pipeline were under construction as of the end of 2023;
- For full-year 2023, Marriott repurchased 21.5 million shares of common stock for $3.9 billion, including 4.7 million shares for $965 million in the fourth quarter. The company returned over $4.5 billion to shareholders through dividends and share repurchases in 2023.
Anthony Capuano, president and CEO, said, “Our team delivered excellent results in 2023, as demand for our industry-leading portfolio of properties and offerings around the world continued to grow. Full-year global RevPAR rose 15 percent, net rooms grew 4.7 percent, and our fee-driven, asset-light business model generated record levels of cash.
“In the fourth quarter, worldwide RevPAR rose 7 percent. International RevPAR grew 17 percent, with particular strength in Asia Pacific and Europe.
“In the United States and Canada, fourth quarter RevPAR rose over 3 percent. Group revenue at our hotels increased 7 percent compared to the 2022 fourth quarter, driven by solid rate increases. While already significantly above 2019 levels, hotel leisure revenue rose again, up 2 percent. Business transient revenue at our hotels grew 3 percent from the year-ago quarter, with demand from large corporate customers continuing to make gains.
“Our development team had a stellar 2023, signing a record 164,000 organic rooms globally, including 37,000 rooms from our deal with MGM Resorts International, and our development pipeline reached a new high of roughly 573,000 rooms at year end. During the year, we added nearly 81,300 rooms to our distribution, with one in four organic rooms from conversions.
“The power of our unparalleled Marriott Bonvoy loyalty program continues to increase, with 196 million members at year end. We’ve continued to leverage our global portfolio and have expanded our co-brand credit card offerings, with 31 cards now across 11 countries. In 2023, global card spend increased a remarkable 11 percent over the prior year.
“In 2024, we expect another year of solid growth and significant shareholder returns. With normalizing RevPAR growth around the world, we anticipate a worldwide full-year RevPAR increase of 3 to 5 percent and net rooms growth of 5.5 to 6 percent. We expect this should yield adjusted EBITDA of approximately $4.9 billion to $5.0 billion for the year and enable us to return $4.1 billion to $4.3 billion to shareholders after factoring in $500 million to purchase the Sheraton Grand Chicago.”
Fourth Quarter 2023 Results
Base management and franchise fees totaled $1,026 million in the 2023 fourth quarter, a 9 percent increase compared to base management and franchise fees of $945 million in the year-ago quarter. The increase is primarily attributable to RevPAR increases and unit growth. Non-RevPAR-related franchise fees in the 2023 fourth quarter totaled $220 million, compared to $215 million in the year-ago quarter. The increase was largely driven by higher co-brand credit card fees.
Incentive management fees totaled $218 million in the 2023 fourth quarter, a 17 percent increase compared to $186 million in the 2022 fourth quarter. Managed hotels in international markets contributed two-thirds of the incentive fees earned in the quarter.
Owned, leased, and other revenue, net of direct expenses, totaled $151 million in the 2023 fourth quarter, compared to $101 million in the year-ago quarter. Results in the 2023 quarter included a $63 million ($47 million after-tax and $0.16 per share) termination fee related to a development project.
General, administrative, and other expenses for the 2023 fourth quarter totaled $330 million, compared to $236 million in the year-ago quarter. The year-over-year change reflects a $27 million ($20 million after-tax and $0.07 per share) litigation reserve related to an international hotel, as well as higher performance-related compensation expenses, professional fees, and bad debt reserves.
Interest expense, net, totaled $144 million in the 2023 fourth quarter, compared to $107 million in the year-ago quarter. The increase was largely due to higher interest expense associated with higher debt balances.
In the 2023 fourth quarter, the provision for income taxes totaled a $267 million benefit, compared to a $218 million expense in the 2022 fourth quarter. The favorable year-over-year change is primarily due to international intellectual property restructuring transactions completed in the quarter resulting in $228 million ($0.77 per share) of benefits and a $223 million ($0.75 per share) favorable impact from the release of a tax valuation allowance.
Marriott’s reported operating income totaled $718 million in the 2023 fourth quarter, compared to 2022 fourth quarter reported operating income of $996 million. Reported net income totaled $848 million in the 2023 fourth quarter, a 26 percent increase compared to 2022 fourth quarter reported net income of $673 million. Reported diluted earnings per share (EPS) totaled $2.87 in the quarter, compared to reported diluted EPS of $2.12 in the year-ago quarter.
Adjusted operating income in the 2023 fourth quarter totaled $992 million, compared to 2022 fourth quarter adjusted operating income of $926 million. Fourth quarter 2023 adjusted net income totaled $1,055 million, compared to 2022 fourth quarter adjusted net income of $622 million. Adjusted diluted EPS in the 2023 fourth quarter totaled $3.57, compared to adjusted diluted EPS of $1.96 in the year-ago quarter.
Adjusted results excluded cost reimbursement revenue, reimbursed expenses and merger-related charges, and other expenses.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled $1,197 million in the 2023 fourth quarter, a 10 percent increase compared to fourth quarter 2022 adjusted EBITDA of $1,090 million.
Selected Performance Information
Marriott added 558 properties (81,281 rooms) to its worldwide portfolio during 2023, including approximately 17,500 rooms associated with the City Express transaction and more than 43,000 other rooms in international markets. Sixty-three properties (9,430 rooms) exited the system during the year. At the end of the year, Marriott’s global system totaled nearly 8,800 properties, with more than 1,597,000 rooms.
At the end of the year, the company’s worldwide development pipeline totaled 3,379 properties with roughly 573,000 rooms, including 126 properties with over 21,000 rooms approved for development, but not yet subject to signed contracts. The year-end pipeline included 1,066 properties with more than 232,000 rooms under construction, or 41 percent, including approximately 37,000 rooms from the MGM deal.
In the 2023 fourth quarter, worldwide RevPAR increased 7.2 percent (a 7.6 percent increase using actual dollars) compared to the 2022 fourth quarter. RevPAR in the United States and Canada increased 3.3 percent (a 3.3 percent increase using actual dollars), and RevPAR in international markets increased 17.4 percent (an 18.7 percent increase using actual dollars).
Balance Sheet & Common Stock
At year-end 2023, Marriott’s total debt was $11.9 billion and cash and equivalents totaled $0.3 billion, compared to $10.1 billion in debt and $0.5 billion of cash and equivalents at year-end 2022.
The company repurchased 4.7 million shares of common stock in the 2023 fourth quarter for $965 million. For full-year 2023, Marriott repurchased 21.5 million shares for $3.9 billion. Year to date through Feb. 9, the company has repurchased 1.3 million shares for $300 million.
