Anthony Capuano, President and Chief Govt Officer, mentioned, “With continued momentum in demand for world journey, we
posted one other quarter of excellent outcomes. Second quarter worldwide RevPAR elevated 13.5 %, aided by important progress in all of our worldwide areas, the place RevPAR rose 39 %. Better China rebounded rapidly as soon as journey restrictions have been lifted in January, with second quarter RevPAR surpassing pre-pandemic ranges.
“Within the U.S. & Canada, RevPAR elevated 6 %, with many city markets displaying spectacular progress within the second quarter. Inside buyer segments, group as soon as once more carried out extraordinarily nicely, with income rising 10 % above 2022. Enterprise transient income additionally noticed sturdy year-over-year progress, pushed by strong common each day fee progress. Leisure transient income rose as nicely, albeit extra slowly, as extra vacationers from the area selected to go to abroad locations.
“Our progress methods are proving profitable. In the course of the quarter, we added roughly 33,100 rooms to our system, together with 17,300 Metropolis Specific rooms within the Caribbean & Latin America area, and our industry-leading pipeline grew to just about 547,000 rooms, with greater than 240,000 world rooms beneath development. In June, we introduced our deliberate entry into the reasonably priced midscale prolonged keep area within the U.S. & Canada. Preliminary proprietor curiosity in our new providing has been large.
“Just some weeks in the past, we introduced our long-term strategic licensing settlement with MGM Resorts Worldwide and the creation of MGM Assortment with Marriott Bonvoy. This transaction is in step with our technique to pursue offers that meet buyer wants, enhance our distribution, and improve the worth of Marriott Bonvoy, our highly effective loyalty platform. We’re excited to have 17 iconic MGM Resorts properties accessible on our sturdy digital channels starting later this fall and to dramatically enhance our footprint in Las Vegas, an essential, high-barrier-to-entry U.S. market. With this deal, our 2023 full 12 months web rooms progress expectation is now 6.4 % to six.7 %.
“Whereas circumstances may change quickly, reserving traits stay strong. We’re elevating our full 12 months rooms progress and earnings steering and now anticipate to return $4.1 billion to $4.5 billion to shareholders in 2023.”
Second Quarter 2023 Outcomes
Marriott’s reported working revenue totaled $1,096 million within the 2023 second quarter, in comparison with 2022 second quarter reported working revenue of $950 million. Reported web revenue totaled $726 million within the 2023 second quarter, in comparison with 2022 second quarter reported web revenue of $678 million. Reported diluted earnings per share (EPS) totaled $2.38 within the quarter, in comparison with reported diluted EPS of $2.06 within the year-ago quarter.
Adjusted working revenue within the 2023 second quarter totaled $1,043 million, in comparison with 2022 second quarter adjusted working revenue of $857 million. Second quarter 2023 adjusted web revenue totaled $690 million, in comparison with 2022 second quarter adjusted web revenue of $593 million. Adjusted diluted EPS within the 2023 second quarter totaled $2.26, in comparison with adjusted diluted EPS of $1.80 within the year-ago quarter. The 2022 second quarter adjusted outcomes excluded $13 million ($11 million after-tax and $0.03 per share) of positive aspects on investees’ property gross sales and a $2 million ($2 million after-tax and $0.01 per share) acquire on an asset disposition.
Adjusted outcomes additionally excluded price reimbursement income, reimbursed bills and merger-related prices and different bills. See pages A-3 and A-11 for the calculation of adjusted outcomes and the style during which the adjusted measures are decided on this press launch.
Base administration and franchise charges totaled $1,057 million within the 2023 second quarter, a 13 % enhance in comparison with base administration and franchise charges of $938 million within the year-ago quarter. The rise is primarily attributable to RevPAR will increase and unit progress.
Incentive administration charges totaled $193 million within the 2023 second quarter, a 43 % enhance in comparison with $135 million within the 2022 second quarter. Managed motels in worldwide markets contributed 61 % of the charges earned within the quarter.
Owned, leased, and different income, web of direct bills, totaled $103 million within the 2023 second quarter, in comparison with $83 million within the year-ago quarter. The year-over-year change largely displays improved efficiency at owned and leased motels. Leads to the 2022 quarter included a $12 million expense accrual associated to a portfolio of 12 leased motels within the U.S. & Canada.
Basic, administrative, and different bills for the 2023 second quarter totaled $240 million, in comparison with $231 million within the year-ago quarter.
Curiosity expense, web, totaled $141 million within the 2023 second quarter, in comparison with $89 million within the year-ago quarter. The rise was largely on account of greater curiosity expense related to greater debt balances.
Fairness in earnings for the second quarter totaled $7 million, in comparison with $15 million within the year-ago quarter. Fairness in earnings within the 2022 second quarter included $13 million of positive aspects on joint ventures’ gross sales of motels.
Adjusted earnings earlier than curiosity, taxes, depreciation, and amortization (EBITDA) totaled $1,219 million within the 2023 second quarter, in comparison with second quarter 2022 adjusted EBITDA of $1,019 million. See web page A-11 for the adjusted EBITDA calculation.
Chosen Efficiency Data
Marriott added 254 properties (33,097 rooms) to its worldwide lodging portfolio throughout the 2023 second quarter, together with 17,300 rooms related to the Metropolis Specific transaction and roughly 11,200 different rooms in worldwide markets. The corporate additionally added greater than 2,800 conversion rooms. Seventeen properties (1,995 rooms) exited the system throughout the quarter. On the finish of the quarter, Marriott’s world lodging system totaled practically 8,600 properties, with over 1,565,000 rooms.
On the finish of the quarter, the corporate’s worldwide improvement pipeline totaled 3,149 properties with practically 547,000 rooms, together with 199 properties with roughly 31,500 rooms accredited for improvement, however not but topic to signed contracts. The pipeline consists of 1,066 properties with greater than 240,000 rooms beneath development, or 44 %, together with roughly 37,000 rooms from the MGM Resorts deal.
Within the 2023 second quarter, worldwide RevPAR elevated 13.5 % (a 12.7 % enhance utilizing precise {dollars}) in comparison with the 2022 second quarter. RevPAR within the U.S. & Canada elevated 6.0 % (a 5.7 % enhance utilizing precise {dollars}), and RevPAR in worldwide markets elevated 39.1 % (a 36.0 % enhance utilizing precise {dollars}).
Stability Sheet & Frequent Inventory
On the finish of the quarter, Marriott’s complete debt was $11.3 billion and money and equivalents totaled $0.6 billion, in comparison with $10.1 billion in debt and $0.5 billion of money and equivalents at year-end 2022.
Yr up to now by July 28, the corporate has repurchased 13.6 million shares for $2.3 billion.
Firm Outlook
The corporate’s up to date steering for full 12 months 2023 displays comparatively regular world financial circumstances by the rest of 2023, with continued resilience in journey demand. RevPAR progress is predicted to stay greater internationally than within the U.S. & Canada, the place there was a return to extra regular seasonal patterns, and year-over-year RevPAR progress is stabilizing.
Adjusted EBITDA and Adjusted EPS – diluted for third quarter and full 12 months 2023 don’t embrace price reimbursement income, reimbursed bills, merger-related prices and different bills, particular tax objects, or any asset gross sales which will happen throughout the 12 months, every of which the corporate can’t forecast with enough accuracy and with out unreasonable efforts, and which can be important. Adjusted EPS – diluted for full 12 months 2023 excludes a particular tax merchandise of $100 million reported within the first half of 2023. See web page A-3 for the Adjusted EPS – diluted calculation for the primary half of 2023.
Assumes the extent of capital return to shareholders famous above.
Funding spending consists of capital and know-how expenditures, mortgage advances, contract acquisition prices, and different investing actions.
Assumes the extent of funding spending famous above and that no asset gross sales happen throughout the the rest of the 12 months.
Marriott Worldwide, Inc. (NASDAQ: MAR) will conduct its quarterly earnings assessment for the funding group and information media on Tuesday, August 1, 2023, at 8:30 a.m. Japanese Time (ET). The convention name might be webcast concurrently through Marriott’s investor relations web site at http://www.marriott.com/investor, click on on “Occasions & Shows” and click on on the quarterly convention name hyperlink. A replay might be accessible at that very same web site till August 1, 2024.
The phone dial-in quantity for the convention name is US Toll-Free: 800-267-6316, or World: +1 203-518-9783. The convention ID is MAR2Q23. A phone replay of the convention name might be accessible from 1:00 p.m. ET, Tuesday, August 1, 2023, till 8:00 p.m. ET, Tuesday, August 8, 2023. To entry the replay, name US Toll Free: 800-839-3736 or World: +1 402-220-2978.
All occupancy, Common Day by day Price (ADR) and RevPAR statistics and estimates are systemwide fixed {dollars}. Except in any other case said, all modifications discuss with year-over-year modifications for the comparable interval. Occupancy, ADR and RevPAR comparisons between 2023 and 2022 mirror properties which are comparable in each years. Occupancy, ADR and RevPAR comparisons between 2023 and 2019 mirror properties which are outlined as comparable as of June 30, 2023, even when they weren’t open and working for the total 12 months 2019 or they didn’t meet all the opposite standards for comparable in 2019. Except in any other case said, all comparisons to pre-pandemic or 2019 are evaluating to the identical time interval every year.