Marriott International reports first quarter 2023 results and raises full year outlook

“In the U.S. & Canada, we saw solid demand across the leisure and group segments in the quarter, while business transient demand continued to improve. ADR in the region rose 10 per cent year over year, aided by higher special corporate negotiated rates and 15 per cent growth in group ADR. Our industry-leading pipeline grew to approximately 502,000 rooms, up 2.6 per cent from the year-ago quarter end. Conversion activity remained healthy, accounting for 29 per cent of rooms signed and 25 percent of rooms opened in the quarter. We still expect net room growth of 4 to 4.5 per cent for the full year 2023,” says Anthony Capuano, president and chief executive officer.

First Quarter 2023 Results

Marriott’s reported operating income totalled $951 million in the 2023 first quarter, compared to the 2022 first quarter reported operating income of $558 million. Reported net income totalled $757 million in the 2023 first quarter, compared to the 2022 first quarter reported net income of $377 million. Reported diluted earnings per share (EPS) totalled $2.43 in the quarter, compared to reported diluted EPS of $1.14 in the year-ago quarter.

Adjusted operating income in the 2023 first quarter totalled $941 million, compared to 2022 first quarter adjusted operating income of $605 million. First quarter 2023 adjusted net income totalled $648 million, compared to 2022 first quarter adjusted net income of $413 million. Adjusted diluted EPS in the 2023 first quarter totalled $2.09, compared to adjusted diluted EPS of $1.25 in the year-ago quarter. The 2023 first quarter adjusted results excluded a special tax item of $100 million ($0.32 per share.) The 2022 first quarter adjusted results excluded $11 million after-tax ($0.03 per share) of impairment charges and a $6 million after-tax ($0.02 per share) gain on an investees property sale.

Base management and franchise fees totalled $932 million in the 2023 first quarter, a 31 per cent increase compared to base management and franchise fees of $713 million in the year-ago quarter. The increase is primarily attributable to RevPAR increases and unit growth. Other non-RevPAR related franchise fees in the 2023 first quarter totalled $197 million, a 16 per cent increase compared to $170 million in the year-ago quarter, largely driven by higher co-branded credit card and residential branding fees.

In the 2023 first quarter, worldwide RevPAR increased 34.3 per cent (a 32.6 per cent increase using actual dollars) compared to the 2022 first quarter. RevPAR in the U.S. & Canada increased 25.6 per cent (a 25.4 per cent increase using actual dollars), and RevPAR in international markets increased 63.1 per cent (a 55.1 per cent increase using actual dollars).

Balance Sheet & Common Stock

Given short-term booking windows and a high level of macroeconomic uncertainty, there is less visibility in forecasting the company’s financial performance for the second half of 2023.