Marriott International has reported its first quarter 2023 results. Due to the stronger than expected results of the first quarter, the company has decided to raise its guidance for full year 2023.
In the 2023 first quarter, worldwide RevPAR increased 34.3% (a 32.6% increase using actual dollars) compared to the 2022 first quarter. Regionally, RevPAR increased by 25.6% in the US and Canada and by 63.1% in international markets respectively.
Marriott’s first quarter reported net income totalled $757 million, compared to reported net income of $377 million in the year-ago quarter. Its first quarter adjusted net income amounted to $648 million, compared to first quarter 2022 adjusted net income of $413 million.
In first quarter 2023, Marriott’s reported operating income totalled $951 million, compared to $558 million in the same period 2022. For 2023, its reported net income totalled $757 million, versus $377 million in quarter one 2022. Finally, reported diluted earnings per share (EPS) reached $2.43 this year, up from $1.14 in the year-ago quarter.
Adjusted operating income amounted to $941 million in first quarter 2023, versus $605 million in 2022. The 2023 period adjusted net income totalled $648 million, compared to 2022 first quarter adjusted net income of $413 million. Finally, adjusted diluted EPS in the 2023 first quarter amounted to $2.09, compared to adjusted diluted EPS of $1.25 in the 2022 quarter.
2023’s first quarter adjusted results excluded a special tax item of $100 million ($0.32 per share). 2022’s 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 investee’s property sale.
Base management and franchise fees reached $932 million in the 2023 first quarter, a 31% increase compared to base management and franchise fees of $713 million in the year-ago quarter. According to Marriott, this growth is primarily attributable to RevPAR increases and unit growth.
Marriott added 79 properties (11,015 rooms, including 2,700+ conversion rooms) to its worldwide lodging portfolio during the 2023 first quarter. Over the same period, 14 properties (2,351 rooms) exited the system. The global system now stands at 8,400 properties (1,534,000+ rooms).
At the end of the 1Q 2023, the company’s worldwide development pipeline totalled 3,060 properties with approximately 502,000 rooms.
Adjusted EBITDA totalled $1,098 million in the 2023 first quarter, compared to first quarter 2022 adjusted EBITDA of $759 million.
Marriott repurchased 6.8 million shares of common stock for $1.1 billion during the first quarter. Year to date through 28th April, the company has returned $1.5 billion to shareholders.
The company’s total debt at the end of 1Q 2023 stands at $10.7 billion and cash and equivalents totalled $0.6 billion, compared to $10.1 billion in debt and $0.5 billion of cash and equivalents at year-end 2022.
Due to these results, Marriott has announced that it is raising its guidance for full year 2023:
- Gross fee revenues = $4,600 to $4,750
- Adjusted EBITDA = $4,360 to $4,540
- Adjusted diluted EPS = $7.97 to $8.42
On 12th May 2023, Marriott announced that its board of directors had declared a quarterly cash dividend of 52 cents per share of common stock. This represents an increase of 30% over the previous quarterly dividend amount of 40 cents per share. The dividend will be payable on 30th June 2023 to shareholders of record, as of close of business on 26/05/2023.
We are off to a great start in 2023. First quarter worldwide RevPAR grew 34% year over year, with meaningful gains in both occupancy and average daily rate. International markets were particularly robust, with RevPAR growth of 63%. The lifting of travel restrictions throughout Asia Pacific, particularly in Greater China, significantly boosted first quarter demand in the region. In the US & 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% year over year, aided by higher special corporate negotiated rates and 15% growth in group ADR. Our industry-leading pipeline grew to approximately 502,000 rooms, up 2.6% from the year-ago quarter end. Conversion activity remained healthy, accounting for 29% of rooms signed and 25% of rooms opened in the quarter. We still expect net rooms growth of 4 to 4.5% for full year 2023. We were thrilled to welcome City Express to our line-up as our 31st brand yesterday, further broadening our brand portfolio into the midscale space. With roughly 17,000 rooms joining our system, we are now the largest hotel company in the Caribbean & Latin America region. Demand for the mid-scale segment is growing rapidly, and we see meaningful opportunity to both expand the brand further in CALA and introduce it in other regions. While the global economic picture is uncertain, demand remains strong, and we are not seeing signs of a slowdown. With the faster than expected recovery in international markets and continued solid booking trends globally to date in the second quarter, we are raising our RevPAR guidance for the full year. We believe our broad portfolio of brands, award-winning Marriott Bonvoy loyalty programme, dedicated associates, and efficient asset-light business model position us very well for future growth.
Anthony Capuano, President & CEO of Marriott International
United-States
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