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Marriott International Inc., for the second quarter, reported systemwide RevPAR growth of 4.9% worldwide, 3.9% in the U.S. & Canada and 7.4% in international markets, compared to the 2023 second quarter. Net income totaled $772 million, compared to net income of $726 million in the year-ago quarter.
“Marriott reported strong second quarter results, with net rooms up 6% year-over-year and worldwide RevPAR growth of nearly 5%, as consumers continued to prioritize travel. International RevPAR increased more than 7%, with Asia-Pacific excluding China leading the way, posting an impressive 13% RevPAR increase from the year-ago quarter,” said Anthony Capuano, president/CEO, Marriott International Inc. “In the U.S. & Canada, second-quarter RevPAR grew nearly 4%, with all customer segments growing versus the prior year quarter. Group RevPAR rose nearly 10% year-over-year, with both rate and occupancy increasing in the mid-single digits.
Second-quarter highlights
Diluted EPS totaled $2.69, compared to reported diluted EPS of $2.38 in the year-ago quarter. Adjusted diluted EPS totaled $2.50, compared to second quarter 2023 adjusted diluted EPS of $2.26.
Second-quarter adjusted net income totaled $716 million, compared to second-quarter 2023 adjusted net income of $690 million.
Adjusted EBITDA totaled $1.324 billion in the quarter, compared to second-quarter 2023 adjusted EBITDA of $1.219 million.
The company added roughly 15,500 net rooms during the quarter.
At the end of the quarter, Marriott’s worldwide development pipeline totaled approximately 3,500 properties and more than 559,000 rooms, including roughly 33,000 pipeline rooms approved, but not yet subject to signed contracts. Over 209,000 rooms in the pipeline were under construction as of the end of the second quarter.
“With a membership base of over 210 million members and growing, Marriott Bonvoy is a key competitive advantage,” added Capuano. “We remain focused on enhancing the loyalty program’s benefits and finding new ways to engage with our members both on and off property. In June, we announced a collaboration with Starbucks. The number of members who have linked their accounts is already well exceeding our expectations.”
Second-quarter results
Base management and franchise fees totaled $1.148 billion in the second quarter, a 9% increase compared to base management and franchise fees of $1.057 billion in the year-ago quarter. The increase is primarily attributable to RevPAR increases and unit growth. Non-RevPAR-related franchise fees in the quarter totaled $234 million, compared to $206 million in the year-ago quarter. The increase was largely driven by a 10% increase in co-branded credit card fees, as well as $13 million of higher residential branding fees.
Incentive management fees totaled $195 million in the quarter, compared to $193 million in the 2023 second quarter, and were impacted by weaker results in Greater China, as well as unfavorable foreign exchange. Managed hotels in international markets contributed more than 60% of the incentive fees earned in the quarter.
Owned, leased and other revenue, net of direct expenses, totaled $99 million in the quarter, compared to $103 million in the year-ago quarter.
General, administrative and other expenses for the quarter totaled $248 million, compared to $240 million in the year-ago quarter.
Interest expense, net, totaled $164 million in the quarter, compared to $141 million in the year-ago quarter. The increase was largely due to higher interest expense associated with higher debt balances.
Marriott’s reported operating income totaled $1.195 billion in the quarter, compared to 2023 second-quarter reported operating income of $1.096 billion. Reported net income totaled $772 million in the quarter, compared to 2023 second-quarter reported net income of $726 million. Reported diluted earnings per share (EPS) totaled $2.69 in the quarter, compared to reported diluted EPS of $2.38 in the year-ago quarter.
Adjusted operating income in the quarter totaled $1.120 billion, compared to 2023 second-quarter adjusted operating income of $1,043 million. Second-quarter 2024 adjusted net income totaled $716 million, compared to 2023 second-quarter adjusted net income of $690 million. Adjusted diluted EPS in the 2024 second quarter totaled $2.50, compared to adjusted diluted EPS of $2.26 in the year-ago quarter.
Adjusted results excluded cost reimbursement revenue, reimbursed expenses and merger-related charges and other expenses.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled $1.324 billion in the quarter, compared to second quarter 2023 adjusted EBITDA of $1.219 billion.
Selected performance information
The company added roughly 15,500 net rooms during the quarter.
At the end of the quarter, Marriott’s global system totaled nearly 9,000 properties, with roughly 1.659 million rooms.
At the end of the quarter, the company’s worldwide development pipeline totaled 3,509 properties with more than 559,000 rooms, including 208 properties with roughly 33,000 rooms approved for development, but not yet subject to signed contracts. The quarter-end pipeline included 1,127 properties with over 209,000 rooms under construction, and 57% of rooms in the quarter-end pipeline are in international markets.
Company outlook
The company’s updated outlook includes a narrowing of the RevPAR growth range for full year 2024, primarily as a result of a weaker operating environment in Greater China, as well as marginally softer expectations in the U.S. & Canada.
Systemwide RevPAR growth of 3% to 4% for both the third quarter and full year
Net rooms growth of 5.5% to 6% for the full year
The post Marriott reports 4.9% Q2 global RevPAR growth appeared first on hotelbusiness.com.
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