Marriott International reports strong financial results in the first quarter of 2025, driven by continued travel demand, the strength of its brands and its fee-driven business model.
“Despite heightened macro-economic uncertainty, global RevPAR rose over 4 per cent, primarily driven by higher ADR, and our development momentum remained positive. Our international markets experienced particularly robust growth, with RevPAR increasing nearly 6 per cent, led by double-digit gains in APAC. RevPAR in the U.S. & Canada rose over 3 per cent in the first quarter, although we did see slower growth in March,” says Anthony Capuano, president and chief executive officer.
“The strong momentum in our development activity continued, with record first quarter signings of over 34,000 rooms, of which two-thirds were in international markets. Conversions remained a key driver of growth, representing around a third of our room signings and openings,” Capuano adds.
“Despite uncertainty about the macro-economic outlook, we are confident that the power of our industry-leading global portfolio, the strength of our Marriott Bonvoy travel platform and loyalty program, our dedicated associates, and resilient asset-light business model, position us very well for sustainable, long-term growth.”
Financial performance
Base management and franchise fees total US$1.071 billion in the first quarter, a 7 per cent increase from US$1.001 billion in the same period last year. The increase is attributed to RevPAR growth, unit additions, and higher fees from residential and co-branded credit card activity.
Incentive management fees fall to US$204 million, down from US$209 million in the first quarter of 2024. Nearly two-thirds of these fees come from international markets.
Owned, leased and other revenue, net of direct expenses, totals US$65 million, compared to US$71 million in the prior year. The decline is primarily due to lower termination fees.
General, administrative and other expenses drop to US$245 million from US$261 million last year, largely due to lower compensation costs following a company-wide efficiency initiative.
Net interest expense rises to US$183 million from US$153 million, reflecting higher debt balances.
The provision for income taxes totals US$99 million, down from US$163 million. The decrease reflects an US$86 million favourable impact from the release of certain tax reserves.
Reported operating income is US$948 million, compared to US$876 million in Q1 2024. Net income rises 18 per cent to US$665 million from US$564 million.
Reported diluted earnings per share (EPS) total US$2.39, up from US$1.93 a year ago.
Adjusted operating income is US$1.016 billion, compared to US$952 million last year. Adjusted net income is US$645 million, compared to US$620 million. Adjusted diluted EPS is US$2.32, compared to US$2.13. The adjusted results exclude a US$71 million income tax benefit, equal to US$0.25 per share.
Adjusted EBITDA increases 7 per cent to US$1.217 billion, up from US$1.142 billion in Q1 2024.
Development and pipeline activity
Marriott adds approximately 12,200 net rooms during the quarter, including more than 7,300 in international markets. Its global system totals nearly 9,500 properties with approximately 1,719,000 rooms.
The worldwide development pipeline includes 3,808 properties with more than 587,000 rooms. This includes 171 properties with over 27,000 rooms approved for development but not yet subject to signed contracts. Of the total, 1,447 properties with nearly 244,000 rooms are under construction.
Over half the rooms in the pipeline are located in international markets. Marriott expects additional properties to join its system following the planned acquisition of the citizenM brand. The citizenM portfolio currently includes 36 hotels with 8,544 rooms and three hotels in the pipeline with over 600 rooms.
RevPAR performance
Global RevPAR increases 4.1 per cent (2.7 per cent in actual dollars) compared to the first quarter of 2024. In the U.S. and Canada, RevPAR grows 3.3 per cent (3.0 per cent in actual dollars). International RevPAR increases 5.9 per cent (2.2 per cent in actual dollars).
Balance sheet and share repurchases
At quarter-end, total debt stands at US$15.1 billion. Cash and equivalents total US$500 million, up from US$400 million at the end of 2024. Marriott repurchases 2.8 million shares in the first quarter for US$800 million. As of April 29, the company has repurchased 3.9 million shares for US$1 billion.
Outlook
Marriott updates its full-year RevPAR guidance to a range of 1.5 to 3.5 per cent, down from the previously expected range of 2 to 4 per cent. The revised outlook reflects softer expectations in the U.S. and Canada, primarily due to a decline in government-related travel.
The company continues to expect full-year net rooms growth to approach 5 per cent, assuming completion of the citizenM acquisition.
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