Marriott International reported third-quarter earnings on Monday, revealing challenges in the China market that impacted overall performance and led to a lowered full-year outlook.
The hotel giant posted an adjusted EPS of $2.26, falling short of the anticipated $2.31. Quarterly revenue reached US$6.26 billion (A$9.49 billion), narrowly missing the consensus of $6.27 billion.
RevPAR (revenue per available room) grew in key regions, with a 2.1% rise in the U.S. and Canada and a 5.4% increase internationally. However, a 7.9% drop in Greater China RevPAR tempered these gains, reflecting ongoing market headwinds in the region.
Marriott’s adjusted EBITDA rose to $1.23 billion from $1.14 billion in the same period last year. The company also saw fee revenue growth, with base management and franchise fees up 7% at $1.12 billion, while incentive management fees increased to $159 million from $143 million a year earlier.
As of the quarter’s close, Marriott's development pipeline included approximately 3,800 properties and over 585,000 rooms. This total encompasses about 34,000 rooms approved but not yet contracted, with over 220,000 rooms under construction.
Marriott’s debt stood at $13.6 billion, with cash reserves totaling $0.4 billion.
CEO Anthony Capuano underscored the quarter's strengths, noting robust net room and fee growth, active development, and a 3% increase in global RevPAR. Capuano attributed international RevPAR growth of 5.4% to strong performance in the APEC and EMEA regions, bolstered by consistent demand across both domestic and cross-border bookings, along with improved ADR (average daily rate).
Capuano noted: “Our business momentum is excellent, and we continue to evolve our business to support our numerous global growth opportunities.”
Marriott forecasts fourth-quarter 2024 gross fee revenue between $1.29 billion and $1.31 billion, with adjusted EPS expected to range from $2.31 to $2.39. For the full year, the company has revised its adjusted EPS projection to $9.19-$9.27, down from a previous forecast of $9.23-$9.40. Gross fee revenue for 2024 is now estimated at $5.126 billion-$5.146 billion, slightly down from the prior range of $5.13 billion-$5.18 billion.
As of 7:45 am (AEDT), Tuesday, November 5, Marriott International (MAR) stock was trading at $225.2, a decrease of 2% from the previous close of $260.57. The stock reached a day low of $249.55 and a day high of $256.68. Marriott International's market cap stands at $71.86 billion.