Investment Rating - The investment rating for Marriott Hotels & Resorts is maintained at NEUTRAL with a target price of $255, indicating an 11.6% downside from the current price of $288.42 [2][7][17]. Core Insights - Marriott's 4Q24 performance exceeded market expectations, with total revenue increasing by 1.9% year-over-year to $1,725 million, driven by growth in base management fees and franchise fees [3][14]. - The guidance for 2025 non-RevPAR related revenue is below expectations due to several factors, including a return to normalcy in co-branded credit card fee revenue and a decline in long-stay brand fee revenue [3][14][17]. - Global RevPAR for 4Q24 grew by 5% to $126.26, surpassing previous guidance and expectations, with North America showing strong leisure demand during the holiday season [4][15]. Summary by Sections Financial Performance - In 4Q24, base management fees and franchise fees grew by 3.7% and 12.8% to $333 million and $795 million, respectively [3][14]. - Adjusted EBITDA for 4Q24 was $1,286 million, exceeding expectations [3][14]. - The effective tax rate was 23.9%, lower than the anticipated 26% [3][14]. Revenue and Profit Forecast - Revenue projections for 2025 are set at $6,899 million, reflecting a 4% increase from 2024 [2][7]. - Adjusted diluted EPS is expected to grow from $9.33 in 2024 to $10.18 in 2025, representing a 9.2% year-over-year increase [2][17]. Room Count and Membership Growth - By the end of 2024, Marriott had over 1.7 million rooms globally, a 6.6% increase year-over-year, with a significant contribution from franchised hotels [6][16]. - Marriott BONVOY membership reached 228 million, with a global member occupancy rate of 66% [6][16]. Market Outlook - The guidance for 2025 investor returns is approximately $4 billion, consistent with previous years [6][17]. - The report anticipates a 3.0% growth in RevPAR for 2025, with North America expected to grow by 2.1% [4][15].

Core Points - Marriott International, Inc. declared a quarterly cash dividend of 63 cents per share of common stock, payable on March 31, 2025, to shareholders of record as of February 27, 2025 [1] Company Overview - Marriott International is based in Bethesda, Maryland, and operates a portfolio of over 9,300 properties across more than 30 leading brands in 144 countries and territories [2] - The company operates, franchises, and licenses various lodging properties, including hotels, residential, and timeshare properties globally [2] - Marriott offers the Marriott Bonvoy® travel platform, which is highly awarded [2]

Core Insights - Business travel has largely returned to pre-pandemic levels, with the exception of early weekdays [2][7] - Marriott International reported that overall occupancy is higher than 2019 levels, but Monday to Wednesday occupancy has not fully recovered [3][7] - The return of business travel is uneven, with small- and medium-sized businesses recovering faster than larger corporates [5][6] Business Travel Trends - The traditional business travel model, characterized by consultants traveling from Monday to Thursday, has not returned due to flexible work policies [4] - Key segments of business travel remain below pre-COVID levels, particularly among the largest companies [4][5] - Marriott's revenue per available room (RevPAR) increased by 5% year-over-year in Q4, exceeding expectations, but group RevPAR growth was lower at 3% [5][6] Financial Performance - Marriott's Q4 results surpassed analysts' estimates, but the company's shares fell approximately 5% due to a cautious outlook on room growth and profitability [6][7] - Group RevPAR, which accounted for 23% of room nights, experienced its lowest growth quarter of the year, influenced by fewer group events and a decline in Greater China [6]

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The news team covers medium and small-cap markets, as well as blue-chip companies, commodities, and broader investment stories [3] - Proactive's content includes insights across various sectors such as biotech, pharma, mining, natural resources, battery metals, oil and gas, crypto, and emerging technologies [3] Group 2 - Proactive adopts technology enthusiastically, utilizing decades of expertise and experience among its content creators [4] - The company employs automation and software tools, including generative AI, while ensuring all content is edited and authored by humans [5]

Property and Development - As of year-end 2024, the company operated 9,361 properties with a total of 1,706,331 rooms across 144 countries and territories, and has nearly 3,800 hotels (over 577,000 rooms) in its development pipeline[15] - The company reported 2,032 company-operated properties, totaling 586,201 rooms, which includes properties under long-term management agreements[21] - The brand portfolio includes over 30 brand names categorized into four quality tiers: Luxury, Premium, Select, and Midscale, with expectations to open additional properties under new brands in 2025[17] - The U.S. & Canada segment accounted for a significant portion of the total properties, with 6,235 properties and 1,043,224 rooms[20] - The company anticipates continued growth in its development pipeline, with expectations for new brands and offerings to enhance market presence[15] - At year-end 2024, the company had 7,192 franchised, licensed, and other properties, totaling 1,104,446 rooms and timeshare units[28] Business Strategy and Market Presence - The company emphasizes a focus on franchising and licensing, owning or leasing less than 1% of its lodging properties[15] - The company plans to continue expanding its market presence through strategic initiatives, including potential acquisitions and new technology developments[15] - The company’s Loyalty Program is central to its business strategy, encompassing over 30 brands and generating substantial repeat business[31] - In 2024, 72% of U.S. hotel room nights and 65% of global hotel room nights were booked by Loyalty Program members[32] - The company has approximately 17% share of the U.S. hotel market and a 4% share of the hotel market outside the U.S. based on the number of rooms[40] Financial Performance - Net income for 2024 was $2,375 million, a decrease of 22.9% from $3,083 million in 2023[218] - Total revenues increased to $25,100 million in 2024, up 5.8% from $23,713 million in 2023[216] - Net fee revenues rose to $5,067 million, reflecting an increase of 7% compared to $4,736 million in 2023[216] - Earnings per share (diluted) decreased to $8.33 in 2024 from $10.18 in 2023, a decline of 18.1%[216] - Comprehensive income for 2024 was $1,959 million, down from $3,165 million in 2023, representing a decrease of 38.0%[218] - Cash provided by operating activities was $2,749 million, a decrease of 13.2% from $3,170 million in 2023[223] - Long-term debt increased to $13,138 million in 2024, up from $11,320 million in 2023, an increase of 16.1%[221] - The company repurchased $3,761 million in treasury stock during 2024, compared to $3,953 million in 2023[225] Operational Efficiency and Risks - The company aims to enhance operational efficiency and effectiveness through comprehensive initiatives, including anticipated cost reductions[13] - Future performance is subject to various risks and uncertainties, as outlined in the risk factors section of the report[13] - The company faces operational risks from potential premature terminations of agreements with hotel owners, which could adversely impact financial performance[62] - Economic conditions, including pandemics and geopolitical events, have historically affected the company's financial results and growth potential[60] - Compliance with complex and frequently changing laws and regulations is crucial, as failures could lead to increased costs and reputational damage[67] Sustainability and Social Responsibility - The company has set near-term and long-term science-based emissions reduction targets, verified by the Science Based Targets initiative in 2024[54] - The company’s sustainability strategy includes designing resource-efficient hotels and increasing the use of renewable energy[53] - The company has a commitment to pay equity, conducting annual audits and making adjustments as needed[50] Cybersecurity and Data Protection - The company incurred a $52 million monetary payment as part of the resolution with the AG Offices related to the Data Security Incident[93] - The company has experienced numerous lawsuits and investigations due to the Data Security Incident, which could lead to further financial liabilities[93] - Management resources are heavily allocated to address issues stemming from the Data Security Incident, affecting overall operational efficiency[94] - The company has enhanced security measures but acknowledges that these may not fully eliminate risks associated with cybersecurity incidents[95] - Future changes in privacy and data security laws could increase operating costs and litigation exposure, adversely affecting business operations[97] Marketing and Brand Management - The company’s marketing strategies focus on building awareness, increasing demand, and promoting the Loyalty Program[37] - The Loyalty Program is crucial for business, facing competition that could affect member acquisition and retention[79] Accounting and Financial Reporting - The Company's internal control over financial reporting was assessed as effective as of December 31, 2024, based on the COSO criteria[188] - The independent auditor issued an unqualified opinion on the effectiveness of the Company's internal control over financial reporting as of December 31, 2024[192] - The consolidated financial statements present fairly the financial position of the Company at December 31, 2024, and 2023, in conformity with U.S. generally accepted accounting principles[201] - The complexity of accounting for the Loyalty Program involves significant judgment in estimating the standalone selling price per point and breakage of points[209] Legal and Regulatory Compliance - The company operates under various global regulations affecting employment practices, consumer protection, and data privacy, among others[56] - The company is subject to intellectual property claims, which could result in significant legal costs and impact business operations[68] - The company evaluates legal contingencies and records an accrual when it is probable that a liability has been incurred, with revisions made based on changes in facts and circumstances[283]

Core Insights - Marriott International, Inc. reported strong fourth-quarter 2024 results, with adjusted earnings and revenues exceeding expectations, although the bottom line declined year over year [1][5]. Financial Performance - Adjusted earnings per share (EPS) for Q4 2024 were $2.45, surpassing the Zacks Consensus Estimate of $2.38, while the prior-year quarter's adjusted EPS was $3.57 [5]. - Quarterly revenues reached $6.42 billion, beating the consensus mark of $6.39 billion, reflecting a 5% year-over-year increase [5]. - Total revenues for 2024 amounted to $25.1 billion, up from $23.7 billion in 2023, while adjusted EBITDA for the year was $4.98 billion compared to $4.7 billion in the previous year [13]. Revenue Breakdown - Revenues from base management and franchise fees were $333 million and $795 million, representing year-over-year increases of 4% and 13%, respectively [6]. - Incentive management fees decreased by 6% to $206 million from $218 million in the prior-year quarter [6]. RevPAR and Margins - Worldwide comparable system-wide RevPAR increased by 5% year over year, supported by a 3.2% rise in average daily rate (ADR) and a 1.2% increase in occupancy [7]. - In the Asia Pacific (excluding China), comparable system-wide RevPAR rose by 12.5%, with occupancy up 2.3% and ADR increasing by 9.1% [8]. Development and Expansion - The company signed a record number of new deals, with a development pipeline totaling 577,000 rooms, and conversions accounted for over one-third of signings [3][4]. - Marriott launched 28 Four Points Flex hotels in EMEA and APEC and introduced City Express by Marriott in the U.S. & Canada, expanding into outdoor lodging through partnerships [4]. Balance Sheet and Share Repurchase - As of the end of Q4, total debt was $14.4 billion, up from $13.6 billion in the prior quarter, while cash and cash equivalents increased to $0.4 billion [11]. - Year to date, the company repurchased 1.2 million shares worth $350 million [11]. Outlook - For Q1 2025, management anticipates gross fee revenues between $1.24 billion and $1.26 billion, with adjusted EBITDA expected to be between $1.17 billion and $1.2 billion [14]. - For the full year 2025, Marriott reduced its gross fee revenue expectations to $5.37-$5.48 billion and projected adjusted EBITDA between $5.3 billion and $5.43 billion [15].

Financial Data and Key Metrics Changes - For the full year 2024, Marriott achieved net rooms growth of 6.8% and global RevPAR rose over 4% [6] - Fourth quarter worldwide RevPAR increased by 5%, with ADR rising by 3% and occupancy increasing over 1 percentage point [7] - Fourth quarter total gross fee revenues grew by 7% to $1.3 billion, driven by higher RevPAR and room additions [23] - Fourth quarter adjusted EBITDA grew by 7% to $1.29 billion, with hotel-level profit margins rising by 110 basis points [25] - For the full year, gross fees and adjusted EBITDA both increased by 7% [26] Business Line Data and Key Metrics Changes - Leisure RevPAR, which comprises 44% of global room nights, had its strongest growth quarter of the year at 6% globally [11] - Business transient RevPAR rose by 3% globally, with solid gains in ADR [12] - Group RevPAR, which comprised 23% of room nights, rose by 3% in the quarter [12] - For the full year 2024, group RevPAR increased by 8%, while leisure and business transient both rose by 3% [13] Market Data and Key Metrics Changes - U.S. and Canada saw fourth quarter RevPAR growth of over 4%, primarily driven by higher ADR [8] - International RevPAR rose over 7% in the quarter, driven by a 4% rise in ADR and a 2 percentage point gain in occupancy [8] - APAC RevPAR increased by 12.5%, led by strong growth in Japan, India, and Thailand [9] - RevPAR in the EMEA region rose by 8%, with broad-based growth across the region [9] - RevPAR in Greater China declined by 2%, better than prior expectations [9] Company Strategy and Development Direction - The company plans to continue expanding its global portfolio, with a focus on conversions and new builds [14] - Marriott aims for net rooms growth of 4% to 5% in 2025, with a compound annual growth rate of 5% to 5.5% from 2022 to 2025 [27] - The company is enhancing its digital transformation, which is expected to improve customer engagement and operational efficiency [21][65] - Marriott is committed to maintaining its investment-grade rating while returning excess capital to shareholders [39] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong demand for travel and the company's performance in 2024 [6] - The company anticipates global RevPAR growth of 2% to 4% in 2025, with expectations for international regions to outperform the U.S. and Canada [28] - Management noted that the recovery of business transient travel is ongoing, with small- and medium-sized businesses recovering faster than large corporates [120] - The company remains cautious about the macroeconomic environment impacting leisure travel [108] Other Important Information - Marriott added over 31 million new members to its loyalty program, growing to nearly 228 million members by year-end [19] - The company plans to invest $1 billion to $1.1 billion in 2025, focusing on technology, owned lease portfolio renovations, and new unit contracts [36] - The company expects to see a decline in G&A expenses by 8% to 10% in 2025 [32] Q&A Session Summary Question: Update on cost transformation and efficiency program - Management indicated that the impact of the organizational changes is still early, but there is positive energy and enthusiasm from both internal teams and the owner/franchisee community [44][45] Question: Appetite for additional tuck-in acquisitions - Management stated that while they remain open to tuck-in acquisitions, the majority of growth will be organic [55] Question: Impact of political tensions on Canadian and Mexican travelers - Management noted that it is too early to see significant impacts, as U.S. and Canada travel is primarily driven by domestic travelers [58] Question: Insights on tech migration and its implementation - Management explained that the tech transformation will roll out over several quarters, enhancing efficiency and guest engagement [65] Question: Composition of RevPAR and expectations for 2025 - Management expects group RevPAR to lead growth in 2025, with a focus on ADR rather than occupancy [68] Question: Factors affecting gross fee growth - Management highlighted FX headwinds and lower residential brand fees as key factors impacting fee growth [71][72] Question: Unit growth expectations from conversions versus new construction - Management indicated that approximately 30% to 40% of unit growth in 2025 is expected to come from conversions [78] Question: Key money and its role in growth - Management confirmed that key money remains a valuable tool for driving growth, particularly in high-value tiers [101] Question: Recovery of business transient travel - Management noted that business transient travel has recovered to 2019 levels, with small- and medium-sized businesses leading the recovery [120] Question: Outlook for international RevPAR growth - Management indicated that international RevPAR is expected to outperform the U.S., driven by strong GDP growth in certain markets [151]

Key TakeawaysMarriott International gave weaker-than-expected guidance, and shares fell from their record closing high set yesterday.The hotelier's current-quarter profit and room-growth outlook were below analysts' forecasts.The news offset better-than-anticipated fourth-quarter earnings and revenue. Marriott International (MAR) shares fell 4% Tuesday as the hotel operator's guidance missed forecasts on slower room growth. The company sees current-quarter adjusted earnings per share (EPS) in the range of $ ...

Marriott International (MAR) reported $6.43 billion in revenue for the quarter ended December 2024, representing a year-over-year increase of 5.5%. EPS of $2.45 for the same period compares to $3.57 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $6.4 billion, representing a surprise of +0.46%. The company delivered an EPS surprise of +2.94%, with the consensus EPS estimate being $2.38.While investors scrutinize revenue and earnings changes year-over-year and how they compare wit ...

Marriott International delivers Q4 earnings beat, boosted by strong demand, despite facing regional and cost-related challenges.Lodging services giant Marriott International (MAR -4.49%) reported fourth-quarter and full-year 2024 earnings on Tuesday, Feb. 11, that exceeded analysts' consensus estimates. Adjusted EPS of $2.45 outperformed analysts' estimates of $2.39 while total revenue reached $6.43 billion, slightly higher than the anticipated $6.4 billion. The results suggest a positive overall quarter, d ...