MARRIOTT INTERNATIONAL REPORTS FIRST QUARTER 2023 RESULTS
AND RAISES FULL YEAR OUTLOOK
•First quarter 2023 comparable systemwide constant dollar RevPAR increased 34.3 percent worldwide, 25.6 percent in the U.S. & Canada, and 63.1 percent in international markets, compared to the 2022 first quarter;
•First quarter reported diluted EPS totaled $2.43, compared to reported diluted EPS of $1.14 in the year-ago quarter. First quarter adjusted diluted EPS totaled $2.09, compared to first quarter 2022 adjusted diluted EPS of $1.25;
•First quarter reported net income totaled $757 million, compared to reported net income of $377 million in the year-ago quarter. First quarter adjusted net income totaled $648 million, compared to first quarter 2022 adjusted net income of $413 million;
•Adjusted EBITDA totaled $1,098 million in the 2023 first quarter, compared to first quarter 2022 adjusted EBITDA of $759 million;
•The company added approximately 11,000 rooms globally during the first quarter, including roughly 5,800 rooms in international markets and more than 2,700 conversion rooms;
•At the end of the quarter, Marriott’s worldwide development pipeline totaled more than 3,050 properties and approximately 502,000 rooms, including more than 21,000 rooms approved, but not yet subject to signed contracts. Roughly 200,000 rooms in the pipeline were under construction as of the end of the first quarter;
•Marriott repurchased 6.8 million shares of common stock for $1.1 billion during the first quarter. Year to date through April 28, the company has returned $1.5 billion to shareholders through dividends and share repurchases.
BETHESDA, MD – May 2, 2023 - Marriott International, Inc. (NASDAQ: MAR) today reported first quarter 2023 results.
Anthony Capuano, President and Chief Executive Officer, said, “We are off to a great start in 2023. First quarter worldwide RevPAR1 grew 34 percent year over year, with meaningful gains in both occupancy and average daily rate. International markets were particularly robust, with RevPAR growth of 63 percent. The lifting of travel restrictions throughout Asia Pacific, particularly in Greater China, significantly boosted first quarter demand in the region.
1 All occupancy, Average Daily Rate (ADR) and RevPAR statistics and estimates are systemwide constant dollar. Unless otherwise stated, all changes refer to year-over-year changes for the comparable period. Occupancy, ADR and RevPAR comparisons between 2023 and 2022 reflect properties that are comparable in both years.
1
“In the U.S. & 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 percent year over year, aided by higher special corporate negotiated rates and 15 percent growth in group ADR.
“Our industry-leading pipeline grew to approximately 502,000 rooms, up 2.6 percent from the year-ago quarter end. Conversion activity remained healthy, accounting for 29 percent of rooms signed and 25 percent of rooms opened in the quarter. We still expect net rooms growth of 4 to 4.5 percent for full year 2023.
“We were thrilled to welcome City Express to our lineup 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 program, dedicated associates, and efficient asset-light business model position us very well for future growth.”
First Quarter 2023 Results
Marriott’s reported operating income totaled $951 million in the 2023 first quarter, compared to 2022 first quarter reported operating income of $558 million. Reported net income totaled $757 million in the 2023 first quarter, compared to 2022 first quarter reported net income of $377 million. Reported diluted earnings per share (EPS) totaled $2.43 in the quarter, compared to reported diluted EPS of $1.14 in the year-ago quarter.
Adjusted operating income in the 2023 first quarter totaled $941 million, compared to 2022 first quarter adjusted operating income of $605 million. First quarter 2023 adjusted net income totaled $648 million, compared to 2022 first quarter adjusted net income of $413 million. Adjusted diluted EPS in the 2023 first quarter totaled $2.09, compared to adjusted diluted EPS of $1.25 in the year-ago quarter. The 2023 first quarter adjusted results excluded a special tax item of $100 million ($0.32 per share). The 2022 first quarter adjusted results 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.
Adjusted results also excluded cost reimbursement revenue, reimbursed expenses and merger-related charges and other expenses. See pages A-2 and A-8 for the calculation of adjusted results and the manner in which the adjusted measures are determined in this press release.
2
Base management and franchise fees totaled $932 million in the 2023 first quarter, a 31 percent increase compared to base management and franchise fees of $713 million in the year-ago quarter. The increase is primarily attributable to RevPAR increases and unit growth. Other non-RevPAR related franchise fees in the 2023 first quarter totaled $197 million, a 16 percent increase compared to $170 million in the year-ago quarter, largely driven by higher co-branded credit card and residential branding fees.
Incentive management fees totaled $201 million in the 2023 first quarter, a 97 percent increase compared to $102 million in the 2022 first quarter. Managed hotels in international markets contributed 57 percent of the fees earned in the quarter.
Owned, leased, and other revenue, net of direct expenses, totaled $75 million in the 2023 first quarter, compared to $65 million in the year-ago quarter. The year-over-year change largely reflects improved performance at owned and leased hotels, partially offset by the $33 million of government subsidies received in the year ago quarter.
General, administrative, and other expenses for the 2023 first quarter totaled $202 million, a
3 percent decrease compared to $208 million in the year-ago quarter.
Interest expense, net, totaled $111 million in the 2023 first quarter, compared to $88 million in the year-ago quarter. The increase was largely due to higher interest expense associated with higher debt balances.
In the 2023 first quarter, the provision for income taxes totaled $87 million, a 10 percent effective rate, compared to $99 million, a 21 percent effective rate, in the year ago quarter. The 2023 first quarter provision included a $103 million benefit primarily from the release of reserves due to the completion of a prior year tax audit.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled $1,098 million in the 2023 first quarter, compared to first quarter 2022 adjusted EBITDA of $759 million. See page A-8 for the adjusted EBITDA calculation.
Selected Performance Information
The company added 79 properties (11,015 rooms) to its worldwide lodging portfolio during the 2023 first quarter, including more than 2,700 rooms converted from competitor brands and roughly 5,800 rooms in international markets. Fourteen properties (2,351 rooms) exited the system during the quarter. At the end of the quarter, Marriott’s global lodging system totaled nearly 8,400 properties, with over 1,534,000 rooms.
3
At the end of the quarter, the company’s worldwide development pipeline totaled 3,060 properties with approximately 502,000 rooms, including 1,018 properties with roughly 200,000 rooms under construction, or 40 percent of the pipeline, and 127 properties with more than 21,000 rooms approved for development, but not yet subject to signed contracts.
In the 2023 first quarter, worldwide RevPAR increased 34.3 percent (a 32.6 percent increase using actual dollars) compared to the 2022 first quarter. RevPAR in the U.S. & Canada increased 25.6 percent (a 25.4 percent increase using actual dollars), and RevPAR in international markets increased 63.1 percent (a 55.1 percent increase using actual dollars).
Balance Sheet & Common Stock
At the end of the quarter, Marriott’s total debt was $10.7 billion and cash and equivalents totaled $0.6 billion, compared to $10.1 billion in debt and $0.5 billion of cash and equivalents at year-end 2022.
In the first quarter, the company issued $800 million of Series KK Senior Notes due in 2029 with a 4.9 percent interest rate coupon.
Year to date through April 28, the company has repurchased 8.2 million shares for $1.4 billion.
Company Outlook
The company is raising its guidance for full year 2023. One month into the second quarter, global booking trends remain robust.
Given short-term booking windows and a high level of macroeconomic uncertainty, there is less visibility in forecasting the company’s financial performance for the second half of 2023.
Second Quarter 2023
vs Second Quarter 2022
Full Year 2023
vs Full Year 2022
Comparable systemwide constant $ RevPAR growth
Worldwide
10% to 12%
10% to 13%
U.S. & Canada
5% to 7%
6% to 9%
International
27% to 29%
22% to 25%
Year-End 2023
vs Year-End 2022
Gross Rooms Growth
Approx. 5.5%
Deletions
1% to 1.5%
Net rooms growth
4% to 4.5%
4
($ in millions, except EPS)
Second Quarter 2023
Full Year 2023
Gross fee revenues
$1,205 to $1,225
$4,600 to $4,750
Owned, leased, and other revenue, net of direct expenses
Approx. $80
$300 to $310
General, administrative, and other expenses
$250 to $245
$935 to $915
Adjusted EBITDA1,2
$1,140 to $1,165
$4,360 to $4,540
Adjusted EPS – diluted2,3
$2.09 to $2.15
$7.97 to $8.42
Investment Spending4
$850 to $1,000
Capital Return to Shareholders5
$3,600 to $4,100
1See pages A-9 and A-10 for the adjusted EBITDA calculations.
2Adjusted EBITDA and Adjusted EPS – diluted for second quarter and full year 2023 do not include cost reimbursement revenue, reimbursed expenses, merger-related charges and other expenses, special tax items, or any asset sales that may occur during the year, each of which the company cannot forecast with sufficient accuracy and without unreasonable efforts, and which may be significant. Adjusted EPS – diluted for full year 2023 excludes a special tax item of $100 million reported in the first quarter of 2023. See page A-2 for the Adjusted EPS – diluted calculation for the first quarter of 2023.
3Assumes the level of capital return to shareholders noted above.
4Investment spending includes capital and technology expenditures, loan advances, contract acquisition costs, and other investing activities.
5 Assumes the level of investment spending noted above and that no asset sales occur during the remainder of the year.
Marriott International, Inc. (NASDAQ: MAR) will conduct its quarterly earnings review for the investment community and news media on Tuesday, May 2, 2023, at 8:30 a.m. Eastern Time (ET). The conference call will be webcast simultaneously via Marriott’s investor relations website at http://www.marriott.com/investor, click on “Events & Presentations” and click on the quarterly conference call link. A replay will be available at that same website until May 1, 2024.
The telephone dial-in number for the conference call is US Toll Free: 800-267-6316, or Global: +1 203-518-9783. The conference ID is MAR1Q23. A telephone replay of the conference call will be available from 1:00 p.m. ET, Tuesday, May 2, 2023, until 8:00 p.m. ET, Tuesday, May 9, 2023. To access the replay, call US Toll Free: 800-756-0554 or Global: +1 402-220-7213.
Note on forward-looking statements: All statements in this press release and the accompanying schedules are made as of May 2, 2023. We undertake no obligation to publicly update or revise these statements, whether as a result of new information, future events or otherwise. This press release and the accompanying schedules contain "forward-looking statements" within the meaning of federal securities laws, including statements related to our RevPAR, rooms growth and other financial metric estimates, outlook and assumptions; our growth prospects; the effect of changes in global economic conditions; travel and lodging demand trends and expectations; booking, occupancy, ADR and RevPAR trends and expectations; our development pipeline, deletions, and growth expectations; our expectations regarding opportunities to expand the City Express brand portfolio; and similar statements concerning anticipated future events and expectations that are not historical facts. We caution you that these statements are not guarantees of future performance and are subject to numerous evolving risks and uncertainties that we may not be able to accurately predict or assess, including the risk factors that we identify in our Securities and Exchange Commission filings, including our most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q. Any of these factors could cause actual results to differ materially from the expectations we express or imply in this press release.
5
Marriott International, Inc. (NASDAQ: MAR) is based in Bethesda, Maryland, USA, and as of March 31, 2023 encompassed a portfolio of nearly 8,400 properties under 30 leading brands spanning 138 countries and territories. Marriott operates and franchises hotels and licenses vacation ownership resorts all around the world. The company offers Marriott Bonvoy®, its highly-awarded travel program. For more information, please visit our website at www.marriott.com, and for the latest company news, visit www.marriottnewscenter.com. In addition, connect with us on Facebook and @MarriottIntl on Twitter and Instagram.
Marriott encourages investors, the media, and others interested in the company to review and subscribe to the information Marriott posts on its investor relations website at www.marriott.com/investor or Marriott's news center website at www.marriottnewscenter.com, which may be material. The contents of these websites are not incorporated by reference into this press release or any report or document Marriott files with the SEC, and any references to the websites are intended to be inactive textual references only.
1 Franchise fees include fees from our franchise agreements, application and relicensing fees, timeshare and yacht fees, co-branded credit card fees, and residential branding fees.
2 Contract investment amortization includes amortization of capitalized costs to obtain contracts with our owner and franchisee customers, and any related impairments, accelerations, or write-offs.
3 Owned, leased, and other revenue includes revenue from the properties we own or lease, termination fees, and other revenue.
4 Cost reimbursement revenue includes reimbursements from properties for property-level and centralized programs and services that we operate for the benefit of our hotel owners. Reimbursed expenses include costs incurred by Marriott for certain property-level operating expenses and centralized programs and services.
5 Owned, leased, and other - direct expenses include operating expenses related to our owned or leased hotels, including lease payments and pre-opening expenses.
6 Depreciation, amortization, and other expenses include depreciation for fixed assets, amortization of capitalized costs incurred to acquire management, franchise, and license agreements, and any related impairments, accelerations, or write-offs.
7 General, administrative, and other expenses include our corporate and business segments overhead costs and general expenses.
8 Gains and other income, net includes gains and losses on the sale of real estate, the sale of joint venture interests and other investments, and adjustments from other equity investments.
9 Equity in earnings include our equity in earnings or losses of unconsolidated equity method investments.
A-1
MARRIOTT INTERNATIONAL, INC.
NON-GAAP FINANCIAL MEASURES
($ in millions except per share amounts)
The following table presents our reconciliations of Adjusted operating income, Adjusted operating income margin, Adjusted net income, and Adjusted diluted earnings per share, to the most directly comparable GAAP measure. Adjusted total revenues is used in the determination of Adjusted operating income margin.
Three Months Ended
Percent
March 31,
March 31,
Better/
2023
2022
(Worse)
Total revenues, as reported
$
5,615
$
4,199
Less: Cost reimbursement revenue
(4,147)
(3,146)
Add: Impairments1
—
5
Adjusted total revenues**
1,468
1,058
Operating income, as reported
951
558
Less: Cost reimbursement revenue
(4,147)
(3,146)
Add: Reimbursed expenses
4,136
3,179
Add: Merger-related charges and other
1
9
Add: Impairments1
—
5
Adjusted operating income**
941
605
56
%
Operating income margin
17
%
13
%
Adjusted operating income margin**
64
%
57
%
Net income, as reported
757
377
Less: Cost reimbursement revenue
(4,147)
(3,146)
Add: Reimbursed expenses
4,136
3,179
Add: Merger-related charges and other
1
9
Add: Impairments2
—
11
Less: Gain on investee's property sale3
—
(8)
Income tax effect of above adjustments
1
(9)
Less: Income tax special items
(100)
—
Adjusted net income**
$
648
$
413
57
%
Diluted earnings per share, as reported
$
2.43
$
1.14
Adjusted diluted earnings per share**
$
2.09
$
1.25
67
%
** Denotes non-GAAP financial measures. Please see pages A-11 and A-12 for information about our reasons for providing these alternative financial measures and the limitations on their use.
1 Three months ended March 31, 2022 includes impairment charges reported in Contract investment amortization of $5 million.
2 Three months ended March 31, 2022 includes impairment charges reported in Contract investment amortization of $5 million and Equity in earnings of $6 million.
3 Gain on investee's property sale reported in Equity in earnings.
A-2
MARRIOTT INTERNATIONAL, INC.
TOTAL LODGING PRODUCTS BY OWNERSHIP TYPE
As of March 31, 2023
US & Canada
Total International
Total Worldwide
Properties
Rooms
Properties
Rooms
Properties
Rooms
Managed
627
214,699
1,366
346,498
1,993
561,197
Marriott Hotels
103
57,233
169
52,551
272
109,784
Sheraton
25
20,383
183
61,867
208
82,250
Courtyard
167
27,077
114
24,446
281
51,523
Westin
40
21,865
79
24,498
119
46,363
JW Marriott
21
12,724
71
25,108
92
37,832
The Ritz-Carlton
40
12,076
73
17,572
113
29,648
Renaissance
24
10,607
54
17,327
78
27,934
Four Points
1
134
84
23,216
85
23,350
Le Méridien
1
100
73
20,355
74
20,455
W Hotels
23
6,516
39
10,406
62
16,922
Residence Inn
73
11,857
9
1,116
82
12,973
St. Regis
10
1,977
43
9,780
53
11,757
Delta Hotels by Marriott
25
6,770
27
4,956
52
11,726
The Luxury Collection
6
2,296
46
8,064
52
10,360
Gaylord Hotels
6
10,220
—
—
6
10,220
Aloft
2
505
43
9,431
45
9,936
Fairfield by Marriott
6
1,431
66
8,263
72
9,694
AC Hotels by Marriott
7
1,165
68
8,466
75
9,631
Autograph Collection
8
2,508
23
3,514
31
6,022
Marriott Executive Apartments
—
—
35
5,030
35
5,030
SpringHill Suites
25
4,241
—
—
25
4,241
EDITION
5
1,379
10
2,216
15
3,595
Element
3
810
13
2,551
16
3,361
Protea Hotels
—
—
25
3,081
25
3,081
Tribute Portfolio
—
—
8
1,150
8
1,150
Moxy
—
—
6
1,092
6
1,092
TownePlace Suites
6
825
—
—
6
825
Bulgari
—
—
5
442
5
442
Franchised
5,172
742,406
926
181,819
6,098
924,225
Courtyard
880
117,564
115
21,389
995
138,953
Fairfield by Marriott
1,137
106,880
48
8,510
1,185
115,390
Residence Inn
780
93,055
26
3,482
806
96,537
Marriott Hotels
234
74,506
63
18,167
297
92,673
Sheraton
147
46,348
72
20,857
219
67,205
SpringHill Suites
510
59,116
—
—
510
59,116
Autograph Collection
138
27,170
110
23,955
248
51,125
TownePlace Suites
486
49,296
—
—
486
49,296
Westin
91
30,818
27
7,858
118
38,676
Four Points
158
23,922
63
10,604
221
34,526
Aloft
157
22,453
22
3,607
179
26,060
AC Hotels by Marriott
104
17,187
47
8,388
151
25,575
Renaissance
64
18,074
29
7,487
93
25,561
Moxy
29
5,532
89
16,831
118
22,363
Delta Hotels by Marriott
63
14,272
11
2,557
74
16,829
The Luxury Collection
11
3,112
53
9,672
64
12,784
Tribute Portfolio
55
8,754
30
3,508
85
12,262
Element
80
10,712
2
269
82
10,981
Le Méridien
25
5,749
18
4,636
43
10,385
JW Marriott
12
6,072
11
2,714
23
8,786
Design Hotels
10
1,385
50
4,074
60
5,459
Protea Hotels
—
—
35
2,705
35
2,705
The Ritz-Carlton
1
429
—
—
1
429
W Hotels
—
—
1
246
1
246
Bulgari
—
—
2
161
2
161
Marriott Executive Apartments
—
—
2
142
2
142
A-3
MARRIOTT INTERNATIONAL, INC.
TOTAL LODGING PRODUCTS BY OWNERSHIP TYPE
As of March 31, 2023
US & Canada
Total International
Total Worldwide
Properties
Rooms
Properties
Rooms
Properties
Rooms
Owned/Leased
14
4,656
38
9,209
52
13,865
Marriott Hotels
2
1,308
6
2,064
8
3,372
Courtyard
7
987
4
894
11
1,881
Sheraton
—
—
4
1,830
4
1,830
W Hotels
2
779
2
665
4
1,444
Westin
1
1,073
—
—
1
1,073
Protea Hotels
—
—
5
912
5
912
Renaissance
1
317
2
505
3
822
The Ritz-Carlton
—
—
2
550
2
550
JW Marriott
—
—
1
496
1
496
The Luxury Collection
—
—
3
383
3
383
Autograph Collection
—
—
5
361
5
361
Residence Inn
1
192
1
140
2
332
Tribute Portfolio
—
—
2
249
2
249
St. Regis
—
—
1
160
1
160
Residences
67
7,158
49
4,733
116
11,891
The Ritz-Carlton Residences
40
4,426
16
1,443
56
5,869
St. Regis Residences
10
1,196
12
1,562
22
2,758
W Residences
10
1,089
7
547
17
1,636
Bulgari Residences
—
—
5
514
5
514
Sheraton Residences
—
—
2
282
2
282
Westin Residences
3
266
1
9
4
275
Marriott Hotels Residences
—
—
2
246
2
246
The Luxury Collection Residences
1
91
3
115
4
206
EDITION Residences
3
90
—
—
3
90
Le Méridien Residences
—
—
1
15
1
15
Timeshare*
72
18,839
21
3,906
93
22,745
Yacht*
—
—
1
149
1
149
Grand Total
5,952
987,758
2,401
546,314
8,353
1,534,072
*Timeshare and Yacht counts are included in this table by geographical location. For external reporting purposes, these offerings are captured within “Unallocated corporate and other.”
In the above table, The Luxury Collection, Autograph Collection and Tribute Portfolio include seven total properties that we acquired when we purchased Elegant Hotels Group plc in December 2019 which we currently intend to re-brand under such brands after the completion of planned renovations.
A-4
MARRIOTT INTERNATIONAL, INC.
TOTAL LODGING PRODUCTS BY TIER
As of March 31, 2023
US & Canada
Total International
Total Worldwide
Total Systemwide
Properties
Rooms
Properties
Rooms
Properties
Rooms
Luxury
195
54,252
406
92,816
601
147,068
JW Marriott
33
18,796
83
28,318
116
47,114
The Ritz-Carlton
41
12,505
75
18,122
116
30,627
The Ritz-Carlton Residences
40
4,426
16
1,443
56
5,869
The Luxury Collection
17
5,408
102
18,119
119
23,527
The Luxury Collection Residences
1
91
3
115
4
206
W Hotels
25
7,295
42
11,317
67
18,612
W Residences
10
1,089
7
547
17
1,636
St. Regis
10
1,977
44
9,940
54
11,917
St. Regis Residences
10
1,196
12
1,562
22
2,758
EDITION
5
1,379
10
2,216
15
3,595
EDITION Residences
3
90
—
—
3
90
Bulgari
—
—
7
603
7
603
Bulgari Residences
—
—
5
514
5
514
Premium
1,066
359,726
1,088
290,050
2,154
649,776
Marriott Hotels
339
133,047
238
72,782
577
205,829
Marriott Hotels Residences
—
—
2
246
2
246
Sheraton
172
66,731
259
84,554
431
151,285
Sheraton Residences
—
—
2
282
2
282
Westin
132
53,756
106
32,356
238
86,112
Westin Residences
3
266
1
9
4
275
Autograph Collection
146
29,678
138
27,830
284
57,508
Renaissance
89
28,998
85
25,319
174
54,317
Le Méridien
26
5,849
91
24,991
117
30,840
Le Méridien Residences
—
—
1
15
1
15
Delta Hotels by Marriott
88
21,042
38
7,513
126
28,555
Tribute Portfolio
55
8,754
40
4,907
95
13,661
Gaylord Hotels
6
10,220
—
—
6
10,220
Design Hotels
10
1,385
50
4,074
60
5,459
Marriott Executive Apartments
—
—
37
5,172
37
5,172
Select
4,619
554,941
885
159,393
5,504
714,334
Courtyard
1,054
145,628
233
46,729
1,287
192,357
Fairfield by Marriott
1,143
108,311
114
16,773
1,257
125,084
Residence Inn
854
105,104
36
4,738
890
109,842
SpringHill Suites
535
63,357
—
—
535
63,357
Four Points
159
24,056
147
33,820
306
57,876
TownePlace Suites
492
50,121
—
—
492
50,121
Aloft
159
22,958
65
13,038
224
35,996
AC Hotels by Marriott
111
18,352
115
16,854
226
35,206
Moxy
29
5,532
95
17,923
124
23,455
Element
83
11,522
15
2,820
98
14,342
Protea Hotels
—
—
65
6,698
65
6,698
Timeshare*
72
18,839
21
3,906
93
22,745
Yacht*
—
—
1
149
1
149
Grand Total
5,952
987,758
2,401
546,314
8,353
1,534,072
*Timeshare and Yacht counts are included in this table by geographical location. For external reporting purposes, these offerings are captured within “Unallocated corporate and other.”
In the above table, The Luxury Collection, Autograph Collection and Tribute Portfolio include seven total properties that we acquired when we purchased Elegant Hotels Group plc in December 2019 which we currently intend to re-brand under such brands after the completion of planned renovations.
A-5
MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS
In Constant $
Comparable Company-Operated US & Canada Properties
Three Months Ended March 31, 2023 and March 31, 2022
REVPAR
Occupancy
Average Daily Rate
Brand
2023
vs. 2022
2023
vs. 2022
2023
vs. 2022
JW Marriott
$
249.84
31.9
%
71.2
%
15.2
%
pts.
$
350.87
3.8
%
The Ritz-Carlton
$
336.13
9.1
%
65.1
%
7.6
%
pts.
$
516.26
-3.7
%
W Hotels
$
227.23
9.5
%
59.2
%
9.0
%
pts.
$
384.13
-7.2
%
Composite US & Canada Luxury1
$
309.13
17.7
%
67.4
%
10.9
%
pts.
$
458.97
-1.4
%
Marriott Hotels
$
155.42
43.5
%
65.6
%
13.3
%
pts.
$
237.01
14.4
%
Sheraton
$
149.02
36.6
%
64.2
%
13.0
%
pts.
$
232.23
8.9
%
Westin
$
153.71
35.0
%
64.0
%
10.9
%
pts.
$
240.12
12.1
%
Composite US & Canada Premium2
$
153.03
42.8
%
65.5
%
14.5
%
pts.
$
233.72
11.2
%
US & Canada Full-Service3
$
186.91
32.7
%
65.9
%
13.7
%
pts.
$
283.70
5.0
%
Courtyard
$
100.38
29.4
%
62.3
%
7.3
%
pts.
$
161.23
14.2
%
Residence Inn
$
143.69
18.4
%
74.8
%
4.2
%
pts.
$
192.14
11.9
%
Composite US & Canada Select4
$
114.84
24.8
%
66.4
%
6.4
%
pts.
$
172.87
12.8
%
US & Canada - All5
$
169.53
31.3
%
66.0
%
12.0
%
pts.
$
256.81
7.5
%
Comparable Systemwide US & Canada Properties
Three Months Ended March 31, 2023 and March 31, 2022
REVPAR
Occupancy
Average Daily Rate
Brand
2023
vs. 2022
2023
vs. 2022
2023
vs. 2022
JW Marriott
$
240.19
25.8
%
71.7
%
13.3
%
pts.
$
335.23
2.5
%
The Ritz-Carlton
$
329.14
9.7
%
64.7
%
8.0
%
pts.
$
508.62
-3.9
%
W Hotels
$
227.23
9.5
%
59.2
%
9.0
%
pts.
$
384.13
-7.2
%
Composite US & Canada Luxury1
$
286.97
17.5
%
67.7
%
10.8
%
pts.
$
423.67
-1.2
%
Marriott Hotels
$
128.50
37.0
%
63.1
%
12.0
%
pts.
$
203.57
11.0
%
Sheraton
$
108.09
34.8
%
60.1
%
11.3
%
pts.
$
179.95
9.3
%
Westin
$
147.01
33.2
%
65.4
%
11.1
%
pts.
$
224.89
10.5
%
Composite US & Canada Premium2
$
131.65
35.2
%
63.3
%
12.1
%
pts.
$
207.87
9.3
%
US & Canada Full-Service3
$
149.33
30.9
%
63.8
%
12.0
%
pts.
$
233.94
6.3
%
Courtyard
$
98.81
24.3
%
64.8
%
6.9
%
pts.
$
152.42
11.1
%
Residence Inn
$
117.74
16.3
%
73.0
%
3.2
%
pts.
$
161.32
11.2
%
Fairfield by Marriott
$
79.83
16.3
%
64.1
%
4.5
%
pts.
$
124.45
8.2
%
Composite US & Canada Select4
$
98.71
20.4
%
67.4
%
5.4
%
pts.
$
146.40
10.7
%
US & Canada - All5
$
119.74
25.6
%
65.9
%
8.2
%
pts.
$
181.61
10.1
%
1 Includes JW Marriott, The Ritz-Carlton, W Hotels, The Luxury Collection, St. Regis, and EDITION.
2 Includes Marriott Hotels, Sheraton, Westin, Renaissance, Autograph Collection, Delta Hotels by Marriott, and Gaylord Hotels.
Systemwide also includes Le Méridien and Tribute Portfolio.
3 Includes Composite US & Canada Luxury and Composite US & Canada Premium.
4 Includes Courtyard, Residence Inn, Fairfield by Marriott, SpringHill Suites, TownePlace Suites, Four Points, Aloft, Element,
and AC Hotels by Marriott. Systemwide also includes Moxy.
5 Includes US & Canada Full-Service and Composite US & Canada Select.
A-6
MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS
In Constant $
Comparable Company-Operated International Properties
Three Months Ended March 31, 2023 and March 31, 2022
REVPAR
Occupancy
Average Daily Rate
Region
2023
vs. 2022
2023
vs. 2022
2023
vs. 2022
Greater China
$
81.68
77.8
%
64.0
%
23.5
%
pts.
$
127.63
12.6
%
Asia Pacific excluding China
$
116.36
116.2
%
68.0
%
24.2
%
pts.
$
171.21
39.3
%
Caribbean & Latin America
$
195.21
41.4
%
66.1
%
10.5
%
pts.
$
295.22
19.0
%
Europe
$
126.48
67.2
%
60.8
%
18.8
%
pts.
$
208.12
15.4
%
Middle East & Africa
$
140.62
17.0
%
70.0
%
3.8
%
pts.
$
200.79
10.6
%
International - All1
$
115.77
61.3
%
65.8
%
18.6
%
pts.
$
175.90
15.6
%
Worldwide2
$
139.84
43.5
%
65.9
%
15.6
%
pts.
$
212.19
9.5
%
Comparable Systemwide International Properties
Three Months Ended March 31, 2023 and March 31, 2022
REVPAR
Occupancy
Average Daily Rate
Region
2023
vs. 2022
2023
vs. 2022
2023
vs. 2022
Greater China
$
76.06
78.3
%
62.9
%
23.3
%
pts.
$
120.98
12.2
%
Asia Pacific excluding China
$
114.64
112.8
%
67.4
%
23.1
%
pts.
$
170.20
39.9
%
Caribbean & Latin America
$
165.67
40.9
%
67.4
%
11.7
%
pts.
$
245.80
16.4
%
Europe
$
98.61
75.6
%
57.2
%
19.5
%
pts.
$
172.32
15.8
%
Middle East & Africa
$
129.77
19.1
%
68.2
%
4.0
%
pts.
$
190.18
12.0
%
International - All1
$
108.80
63.1
%
63.9
%
18.3
%
pts.
$
170.39
16.4
%
Worldwide2
$
116.45
34.3
%
65.3
%
11.2
%
pts.
$
178.31
11.3
%
1 Includes Greater China, Asia Pacific excluding China, Caribbean & Latin America, Europe, and Middle East & Africa.
2 Includes US & Canada - All and International - All.
A-7
MARRIOTT INTERNATIONAL, INC.
NON-GAAP FINANCIAL MEASURES
ADJUSTED EBITDA
($ in millions)
Fiscal Year 2023
First Quarter
Net income, as reported
$
757
Cost reimbursement revenue
(4,147)
Reimbursed expenses
4,136
Interest expense
126
Interest expense from unconsolidated joint ventures
1
Provision for income taxes
87
Depreciation and amortization
44
Contract investment amortization
21
Depreciation and amortization classified in reimbursed expenses
31
Depreciation, amortization, and impairments from unconsolidated joint ventures
4
Stock-based compensation
37
Merger-related charges and other
1
Adjusted EBITDA **
$
1,098
Change from 2022 Adjusted EBITDA **
45
%
Fiscal Year 2022
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Total
Net income, as reported
$
377
$
678
$
630
$
673
$
2,358
Cost reimbursement revenue
(3,146)
(3,920)
(3,931)
(4,420)
(15,417)
Reimbursed expenses
3,179
3,827
3,786
4,349
15,141
Interest expense
93
95
100
115
403
Interest expense from unconsolidated joint ventures
1
2
2
1
6
Provision for income taxes
99
200
239
218
756
Depreciation and amortization
48
49
50
46
193
Contract investment amortization
24
19
22
24
89
Depreciation and amortization classified in reimbursed expenses
26
29
32
31
118
Depreciation, amortization, and impairments from unconsolidated joint ventures
13
3
7
4
27
Stock-based compensation
44
52
48
48
192
Merger-related charges and other
9
—
2
1
12
Gains on investees' property sales
(8)
(13)
(2)
—
(23)
Gain on asset dispositions
—
(2)
—
—
(2)
Adjusted EBITDA **
$
759
$
1,019
$
985
$
1,090
$
3,853
** Denotes non-GAAP financial measures. Please see pages A-11 and A-12 for information about our reasons for providing these alternative financial measures and the limitations on their use.
A-8
MARRIOTT INTERNATIONAL, INC.
NON-GAAP FINANCIAL MEASURES
ADJUSTED EBITDA FORECAST
SECOND QUARTER 2023
($ in millions)
Range
Estimated Second Quarter 2023
Second Quarter 2022 **
Net income excluding certain items 1
$
636
$
655
Interest expense
138
138
Interest expense from unconsolidated joint ventures
1
1
Provision for income taxes
206
212
Depreciation and amortization
48
48
Contract investment amortization
22
22
Depreciation and amortization classified in reimbursed expenses
30
30
Depreciation, amortization, and impairments from unconsolidated joint ventures
4
4
Stock-based compensation
55
55
Adjusted EBITDA **
$
1,140
$
1,165
$
1,019
Increase over 2022 Adjusted EBITDA **
12
%
14
%
** Denotes non-GAAP financial measures. See pages A-11 and A-12 for information about our reasons for providing these alternative financial measures and the limitations on their use.
1Guidance excludes cost reimbursement revenue, reimbursed expenses, and merger-related charges and other expenses, each of which the company cannot forecast with sufficient accuracy and without unreasonable efforts, and which may be significant, except for depreciation and amortization classified in reimbursed expenses, which is included in the caption "Depreciation and amortization classified in reimbursed expenses" above. Guidance does not reflect any asset sales that may occur during the year, which the company cannot forecast with sufficient accuracy and without unreasonable efforts, and which may be significant.
A-9
MARRIOTT INTERNATIONAL, INC.
NON-GAAP FINANCIAL MEASURES
ADJUSTED EBITDA FORECAST
FULL YEAR 2023
($ in millions)
Range
Estimated Full Year 2023
Full Year 2022**
Net income excluding certain items 1
$
2,523
$
2,659
Interest expense
554
554
Interest expense from unconsolidated joint ventures
6
6
Provision for income taxes
660
704
Depreciation and amortization
191
191
Contract investment amortization
90
90
Depreciation and amortization classified in reimbursed expenses
120
120
Depreciation, amortization, and impairments from unconsolidated joint ventures
17
17
Stock-based compensation
199
199
Adjusted EBITDA **
$
4,360
$
4,540
$
3,853
Increase over 2022 Adjusted EBITDA **
13
%
18
%
** Denotes non-GAAP financial measures. See pages A-11 and A-12 for information about our reasons for providing these alternative financial measures and the limitations on their use.
1Guidance excludes cost reimbursement revenue, reimbursed expenses, and merger-related charges and other expenses, each of which the company cannot forecast with sufficient accuracy and without unreasonable efforts, and which may be significant, except for depreciation and amortization classified in reimbursed expenses, which is included in the caption "Depreciation and amortization classified in reimbursed expenses" above. Guidance does not reflect any asset sales that may occur during the year, which the company cannot forecast with sufficient accuracy and without unreasonable efforts, and which may be significant.
A-10
MARRIOTT INTERNATIONAL, INC.
EXPLANATION OF NON-GAAP FINANCIAL AND PERFORMANCE MEASURES
In our press release and schedules, and on the related conference call, we report certain financial measures that are not required by, or presented in accordance with, United States generally accepted accounting principles (“GAAP”). We discuss the manner in which the non-GAAP measures reported in this press release and schedules are determined and management’s reasons for reporting these non-GAAP measures below, and the press release schedules reconcile the most directly comparable GAAP measure to each non-GAAP measure that we refer to. Although management evaluates and presents these non-GAAP measures for the reasons described below, please be aware that these non-GAAP measures have limitations and should not be considered in isolation or as a substitute for revenue, operating income, net income, earnings per share or any other comparable operating measure prescribed by GAAP. In addition, we may calculate and/or present these non-GAAP financial measures differently than measures with the same or similar names that other companies report, and as a result, the non-GAAP measures we report may not be comparable to those reported by others.
Adjusted Operating Income and Adjusted Operating Income Margin. Adjusted operating income and Adjusted operating income margin exclude cost reimbursement revenue, reimbursed expenses, merger-related charges and other expenses, and certain non-cash impairment charges. Adjusted operating income margin reflects Adjusted operating income divided by Adjusted total revenues. We believe that these are meaningful metrics because they allow for period-over-period comparisons of our ongoing operations before these items and for the reasons further described below.
Adjusted Net Income and Adjusted Diluted Earnings Per Share. Adjusted net income and Adjusted diluted earnings per share reflect our net income and diluted earnings per share excluding the impact of cost reimbursement revenue, reimbursed expenses, merger-related charges and other expenses, certain non-cash impairment charges, gains and losses on asset dispositions made by us or by our joint venture investees (when applicable), the income tax effect of these adjustments, and income tax special items. The income tax special items primarily related to the resolution of a prior year tax audit. We calculate the income tax effect of the adjustments using an estimated tax rate applicable to each adjustment. We believe that these measures are meaningful indicators of our performance because they allow for period-over-period comparisons of our ongoing operations before these items and for the reasons further described below.
Adjusted Earnings Before Interest Expense, Taxes, Depreciation and Amortization (“Adjusted EBITDA”). Adjusted EBITDA reflects net income excluding the impact of the following items: cost reimbursement revenue and reimbursed expenses, interest expense, depreciation and amortization (including depreciation and amortization classified in “Reimbursed expenses,” as discussed below), provision for income taxes, merger-related charges and other expenses, and stock-based compensation expense for all periods presented. When applicable, Adjusted EBITDA also excludes certain non-cash impairment charges related to equity investments and gains and losses on asset dispositions made by us or by our joint venture investees.
In our presentations of Adjusted operating income and Adjusted operating income margin, Adjusted net income and Adjusted diluted earnings per share, and Adjusted EBITDA, we exclude a one-time cost in the 2022 first quarter related to certain property-level adjustments related to compensation and transition costs associated with the Starwood merger, which we record in the “Merger-related charges and other” caption of our Condensed Consolidated Statements of Income (our “Income Statements”), to allow for period-over period comparisons of our ongoing operations before the impact of these items. We also exclude non-cash impairment charges (if above a specified threshold) related to our management and franchise contracts (if the impairment is non-routine), leases, equity investments, and other capitalized assets, which we record in the “Contract investment amortization,” “Depreciation, amortization, and other,” and “Equity in earnings” captions of our Income Statements to allow for period-over period comparisons of our ongoing operations before the impact of these items. We exclude cost reimbursement revenue and reimbursed expenses, which relate to property-level and centralized programs and services that we operate for the benefit of our hotel owners. We do not operate these programs and services to generate a profit over the long term, and accordingly, when we recover the costs that we incur for these programs and services from our hotel owners, we do not seek a mark-up. For property-level services, our owners typically reimburse us at the same time that we incur expenses. However, for centralized programs and services, our owners may reimburse us before or after we incur expenses, causing timing differences between the costs we incur and the related reimbursement from hotel owners in our operating and net income. Over the long term, these programs and services are not designed to impact our economics, either positively or negatively. Because we do not retain any such profits or losses over time, we exclude the net impact when evaluating period-over-period changes in our operating results.
We believe that Adjusted EBITDA is a meaningful indicator of our operating performance because it permits period-over-period comparisons of our ongoing operations before these items. Our use of Adjusted EBITDA also facilitates comparison with results from other lodging companies because it excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company’s capital structure, debt levels, and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provisions for income taxes can vary considerably among companies. Our Adjusted EBITDA also excludes depreciation and amortization expense, which we report under “Depreciation, amortization, and other” as well as depreciation and amortization classified in “Contract investment amortization,” “Reimbursed expenses,” and “Equity in earnings” of our Income Statements, because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. Depreciation and amortization classified in “Reimbursed expenses” reflects depreciation and amortization of Marriott-owned assets and software, for which we receive cash from owners to reimburse the company for its investments made for the benefit of the system. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies. We exclude stock-based compensation expense in all periods presented to address the considerable variability among companies in recording compensation expense because companies use stock-based payment awards differently, both in the type and quantity of awards granted.
A-11
MARRIOTT INTERNATIONAL, INC.
EXPLANATION OF NON-GAAP FINANCIAL AND PERFORMANCE MEASURES
RevPAR. In addition to the foregoing non-GAAP financial measures, we present Revenue per Available Room (“RevPAR”) as a performance measure. We believe RevPAR is a meaningful indicator of our performance because it measures the period-over-period change in room revenues for comparable properties. RevPAR relates to property level revenue and may not be comparable to similarly titled measures, such as revenues, and should not be viewed as necessarily correlating with our fee revenue. We calculate RevPAR by dividing room sales (recorded in local currency) for comparable properties by room nights available for the period. We present growth in comparative RevPAR on a constant dollar basis, which we calculate by applying exchange rates for the current period to each period presented. We believe constant dollar analysis provides valuable information regarding our properties’ performance as it removes currency fluctuations from the presentation of such results.
