Marriott International Reports Mixed Q3 2024 Results with Revenue Growth, Decreased Profitability

Marriott International, Inc. reported its financial results for the third quarter and the first nine months of 2024, highlighting a mixed performance in revenue and profitability compared to the previous fiscal period.

For Q3 2024, total revenues reached $6,255 million, a 5.5% increase from $5,928 million in Q3 2023. Gross fee revenues also rose to $1,283 million, up 7% from $1,197 million year-over-year. Net fee revenues followed suit, increasing to $1,257 million from $1,174 million, reflecting a similar 7% growth. However, operating income decreased to $944 million from $1,099 million in the prior year, and net income fell to $584 million from $752 million, resulting in diluted earnings per share of $2.07, down from $2.51.

For the nine months ended September 30, 2024, total revenues increased to $18,671 million from $17,618 million, with gross fee revenues rising to $3,836 million from $3,580 million. Net income for this period was $1,920 million, down from $2,235 million in 2023, leading to diluted earnings per share of $6.69, compared to $7.32 in the previous year.

The company’s cost reimbursement revenue for Q3 2024 was $4,617 million, up from $4,391 million, while general, administrative, and other expenses increased by 15% to $276 million, attributed to higher guarantee reserves and compensation costs. Interest expense also rose due to increased debt balances from Senior Notes issuances.

Marriott's strategic developments included a significant increase in its long-term debt, which rose to $26,071 million as of September 30, 2024, from $24,814 million at the end of 2023. The company issued several series of notes throughout the year, raising approximately $1.48 billion for general corporate purposes. Additionally, a restructuring initiative is underway, with anticipated charges of around $100 million for employee termination benefits expected to be recorded in Q4 2024.

The company reported a net rooms growth of approximately 6.5% for the full year 2024, with 9,068 properties and 1,674,600 rooms as of September 30, 2024. The development pipeline includes about 3,800 hotels and 585,000 rooms, with a significant portion under construction outside the U.S. & Canada.

Marriott's RevPAR (Revenue Per Available Room) increased by 3.0% in Q3 2024, driven by a 2.5% growth in Average Daily Rate (ADR) and a slight improvement in occupancy. The U.S. & Canada segment reported a RevPAR of $174.62, while EMEA saw a notable increase to $265.98. In contrast, Greater China experienced a decline in RevPAR to $84.71.

Overall, while Marriott International demonstrated growth in revenue and room expansion, profitability faced challenges due to rising expenses and increased debt levels.