Release Date: May 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Marriott International Inc (MAR, Financial) reported a 4.2% increase in global RevPAR, with occupancy reaching nearly 66%, indicating a solid start to 2024.
- The company experienced strong growth across all customer segments, with Group RevPAR rising 6% globally and leisure and business transient segments also showing positive trends.
- Marriott International Inc (MAR) added a record 46,000 net rooms, growing its distribution by 7.1% compared to the previous year, highlighting robust development activity.
- Marriott Bonvoy membership grew significantly, adding nearly 7 million members during the quarter, reaching around 203 million members globally, enhancing customer loyalty and engagement.
- The company raised its full-year 2024 earnings and capital returns guidance based on the strength of its diverse global portfolio and resilient demand for travel.
Negative Points
- The financing environment in the U.S. and Europe remains challenging, which could impact the pace of new developments and expansions.
- Despite overall growth, the business transient segment showed a modest 1% increase in RevPAR, indicating slower recovery in this segment.
- Marriott International Inc (MAR) noted a slowdown in RevPAR growth in Greater China due to weaker macroeconomic conditions and increased outbound travel, which could affect future performance in this key market.
- First quarter leisure RevPAR was flat in the U.S. & Canada, with more customers opting for international destinations, potentially impacting domestic market performance.
- The company faces ongoing expenses related to its multiyear digital and technology transformation, which, while necessary for long-term growth, could impact short-term financial performance.
Q & A Highlights
Q: Can you provide insights into the slowdown observed in China and its impact on development?
A: (Kathleen Kelly Oberg - CFO & Executive VP of Development) The slowdown in China has not affected our development front. In fact, we saw a significant increase in signings in Greater China and APAC in the first quarter. The demand for our brands remains strong among owners there.
Q: What are the main drivers behind the increased fee guidance?
A: (Kathleen Kelly Oberg - CFO & Executive VP of Development) About 75% of the fee increase is attributed to Incentive Management Fees (IMF), primarily from international markets. The remaining growth reflects non-RevPAR-related fee increases, such as strong food and beverage sales and the ramp-up of fast-growing segments in Asia Pacific.
Q: How is the U.S. leisure RevPAR expected to perform for the rest of the year?
A: (Kathleen Kelly Oberg - CFO & Executive VP of Development) U.S. leisure RevPAR is expected to be at the lower end of growth but still positive. Group and business transient segments are anticipated to perform stronger.
Q: Can you elaborate on the performance and expectations from the MGM licensing deal?
A: (Anthony G. Capuano - President, CEO & Director) The early performance of the MGM licensing deal has exceeded our expectations. While it's still early days, the initial booking pace and Marriott Bonvoy room contribution have been very encouraging.
Q: What is the outlook for group revenue pace in 2025 and 2026?
A: (Anthony G. Capuano - President, CEO & Director) For 2025, group revenue pace is tracking up about 13%, driven by increases in both demand and ADR. It's too early to provide detailed insights for 2026.
Q: How is the construction activity and developer mood, particularly in the U.S.?
A: (Anthony G. Capuano - President, CEO & Director) There's been a 25% increase in construction starts in the U.S. compared to a year ago, reflecting more confidence in a steadier economic outlook. The pipeline growth, excluding MGM, is also a positive sign of strong developer interest.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
