Marriott International Inc.For the second quarter of 2018, reported an unprecedented global development piplijne with more than 590,000. This is a record for the company. RevPAR increased 1.5% worldwide, with 5.3% growth in international markets and U.S. & Canada RevPAR in line with the year-ago quarter
“Marriott delivered another solid quarter, highlighted by strong financial results and robust net rooms growth despite heightened macro-economic uncertainty,” said Anthony Capuano, president/CEO. “Global RevPAR increased 1.5% in the second quarter, primarily driven by the leisure segment. International RevPAR increased by more than 5% with strong growth across APEC and EMEA. In the U.S. & Canada, RevPAR was flat year over year with continued strength in the luxury segment offset by a decline in select-service demand, largely reflecting reduced government travel and weaker business transient demand. Adjusting for the Easter holiday shift, U.S. & Canada RevPAR increased by nearly 1%.”
He added, “Development activity remained robust. Over 70% of our rooms were signed in international markets. At the end of quarter, we had a record number of rooms. In the first six months of this year, conversions accounted for about 30% of room signings and new openings. We still expect full year net rooms growth to approach 5% this year.”
Second-quarter highlights:
- Adjusted diluted EPS was $2.65 and diluted EPS of $2.78.
- Net income was $763 million, and adjusted net profit was $728 million
- The adjusted EBITDA was $1.415 billion
- The company added approximately 17,300 net room during the quarter. Net rooms increased 4.7% since the end of second quarter 2024.
- At the end of the quarter, Marriott’s worldwide development pipeline reached a new record and totaled approximately 3,900 properties and more than 590,000 rooms
“With our strategy to be everywhere our guests want us to be, we expanded our industry-leading global brand portfolio with the launch of Series by Marriott, a new regional collection brand targeting the midscale and upscale segments,” said Capuano. “We are excited about our founding deal to affiliate the Fern portfolio of brands in India with Series by Marriott, and by the strong interest from owners around the world in this extension of our successful soft brand model. Also, we recently acquired the innovative lifestyle-brand citizenM. This acquisition will further broaden our offerings to guests, Marriott Bonvoy owners and Marriott Bonvoy members. We believe both of these new brands have meaningful global growth potential.”
He added, “We continue to enhance our powerful Marriott Bonvoy travel platform. At the end of June we had nearly 248 millions members. We are enhancing engagement by offering unique experiences and strategic partnerships.
Second-quarter results
In the third quarter, base management and franchising fees amounted to $1.200 billion. This is a nearly 5% rise compared with the $1.148 billion of fees collected in the previous quarter. Increased RevPAR and room growth, as well as co-branded credit cards fees, were the main contributors.
Incentive management fees in the second quarter of 2024 totaled $195 million, while they reached $200 million this quarter. This was due to strong hotel results in international markets. The incentive fees for hotels managed in international markets accounted for nearly two thirds.
Net of direct expenses, owned, leased, and other revenues totaled $113 millions in the second quarter 2024, as opposed to $99 in the first quarter. The Sheraton Grand Chicago Riverwalk was added to the company’s portfolio, which accounted for the majority of the increase.
The quarter’s general, administrative, and other expenses totaled 245 million dollars, compared with $248 million the previous quarter. The decrease in compensation costs accounts for most of the change from year to year.
Net interest expense for the quarter was $191 million, up from $164 million the previous quarter. The increase in interest costs was due primarily to the higher debt levels.
Marriott’s reported operating income totaled $1.236 billion in the quarter, compared to 2024 second-quarter reported operating income of $1,195 million. In the second quarter of 2024, reported net income was $772 million. This is a 1% drop. The reported earnings per share totaled 2.78, compared with the $2.69 reported in the prior quarter.
Operating income adjusted for the quarter totaled 1.186 billion dollars, compared with 2024’s second quarter operating income adjusted of $1.120 trillion. The adjusted net loss was $728 millions, compared to the 2024 second quarter adjusted net loss of $716million. Adjusted dilute EPS was $2.65 as compared with adjusted diluted profits of $2.50 for the quarter prior.
The adjusted earnings before interest taxes, depreciation & amortization (EBITDA), totaled $1,415 billion for the quarter. This represents a 7 % increase over the second-quarter EBITDA in 2024, which was $.,324 trillion.
Select performance information
In the third quarter, Marriott added approximately 17,300 net room additions. This includes more than 8,500 rooms on international markets. At the end of the quarter, Marriott’s global system totaled more than 9,600 properties, with approximately 1,736,000 rooms.
At the end of the quarter, the company’s worldwide development pipeline totaled 3,858 properties with more than 590,000 rooms, including 234 properties with more than 37,000 rooms approved for development, but not yet subject to signed contracts. In the quarter-end pipeline, 1,447 properties had more than 238,000 room under construction. This included hotels in the process to convert to the system. Over half of the rooms included in the pipeline for the quarter-end are located in international markets. The quarter-end room pipeline does not include any rooms acquired from the citizenM brand, or launched from Series by Marriott.
Company Overview
The company’s updated outlook generally assumes the continuation of the current macro-economic environment.
- The growth in system-wide constant dollar RevPAR is expected to be flat or 1% by Q3 2025. It will range from 1.5% to 2.5% during the entire year 2025.
- Net rooms to grow by 5% in 2025
- Gross fee revenues between $1.310 and $1.325 billions in Q3 of 2025. And $5.365 to 5.420 billions in full-year.
- For Q3 2025, adjusted EBITDA will be between $1.288 and $1.318 billion and $5.310 and $5.395 billion for the full year 2025
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