Marriott International ((MAR)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Marriott International’s Q4 2024 earnings call reflected a generally positive sentiment, underscoring strong net rooms growth, robust international RevPAR, and increased loyalty program engagement. Despite facing challenges in Greater China and a decline in certain fee segments, the company’s financial performance and development momentum were highlighted as key strengths.
Strong Net Rooms Growth
Marriott reported an impressive net rooms growth of 6.8% for the full year 2024. This growth was accompanied by a global RevPAR increase of over 4%, showcasing the company’s ability to expand its footprint while maintaining revenue strength.
International RevPAR Growth
International RevPAR saw a notable rise of over 7% in Q4 2024. This growth was driven by a 4% increase in ADR and a 2 percentage point gain in occupancy, with significant contributions from the APAC and EMEA regions and robust cross-border demand.
Robust Pipeline and Development
Marriott ended the year with a pipeline of over 577,000 rooms and signed a record number of over 1,200 deals. The company also expanded its luxury portfolio with several new hotel openings, underscoring its commitment to growth and development.
Increased Loyalty Program Engagement
The Marriott Bonvoy program saw a substantial increase, adding over 31 million new members in 2024, bringing the total to nearly 228 million. This reflects a 30% increase in app downloads, indicating heightened customer engagement.
Strong Financial Performance
Fourth quarter results were strong, with total gross fee revenues growing 7% to $1.3 billion, and adjusted EBITDA also increasing by 7% to $1.29 billion. These results were bolstered by higher RevPAR and room additions.
Challenges in Greater China
The company faced challenges in Greater China, where RevPAR declined by 2% in Q4 2024. This was largely due to weak domestic leisure demand, particularly in Hainan Island, highlighting regional market vulnerabilities.
Decline in Incentive Management Fees
There was a year-over-year decline in incentive management fees, driven by downturns in Greater China and the U.S. and Canada, signaling potential areas for improvement in fee structures.
Residential Branding Fees Expected to Decline
Marriott anticipates a nearly 50% decline in residential branding fees in 2025, primarily due to the timing of unit sales, which could impact future revenue streams.
Forward-Looking Guidance
Looking ahead to 2025, Marriott expects net rooms growth of 4% to 5% and global RevPAR growth of 2% to 4%. The company forecasts gross fees to rise by 4% to 6%, reaching approximately $5.4 billion to $5.5 billion, with adjusted EBITDA projected to increase between 6% and 9%. Despite challenges, Marriott is optimistic about its growth trajectory and plans to return approximately $4 billion to shareholders.
In conclusion, Marriott International’s Q4 2024 earnings call conveyed an overall positive outlook, bolstered by strong net rooms growth and financial performance. While challenges remain, particularly in Greater China, the company’s robust pipeline, international expansion, and increased loyalty program engagement provide a solid foundation for future growth.
