“The combination of continued travel demand, the strength of our brands and our fee-driven business model drove strong financial results in the first quarter,” said Anthony Capuano, president/CEO. “Despite heightened macro-economic uncertainty, global RevPAR rose more than 4%, primarily driven by higher ADR, and our development momentum remained positive. Our international markets experienced particularly robust growth, with RevPAR increasing nearly 6%, led by double-digit gains in APEC. RevPAR in the U.S. & Canada rose over 3% in the first quarter, although we did see slower growth in March.”
He added, “The strong momentum in our development activity continued, with record first quarter signings of more than 34,000 rooms, of which two-thirds were in international markets. Conversions remained a key driver of growth, representing around a third of our room signings and openings.”
First-quarter highlights include:
- Net income totaled $665 million and adjusted net income totaled $645 million.
- Adjusted EBITDA totaled $1.217 billion.
- Diluted EPS totaled $2.39 and adjusted diluted EPS totaled $2.32.
- The company added roughly 12,200 net rooms during the quarter and net rooms grew 4.6% from the end of the first quarter of 2024.
- At the end of the quarter, Marriott’s worldwide development pipeline totaled approximately 3,800 properties and more than 587,000 rooms, up 7.4% year-over-year.
First-quarter 2025 results
Base management and franchise fees totaled $1.071 billion in the quarter, a 7% increase compared to base management and franchise fees of $1.001 billion in the year-ago quarter. The increase is primarily attributable to RevPAR increases and unit growth, as well as higher residential and cobranded credit card fees.
Incentive management fees totaled $204 million in the quarter, compared to $209 million in the 2024 first quarter. Managed hotels in international markets contributed nearly two-thirds of the incentive fees earned in the quarter.
Owned, leased and other revenue, net of direct expenses, totaled $65 million, compared to $71 million in the 2024 first quarter. The decrease was primarily driven by lower termination fees.
General, administrative and other expenses totaled $245 million, compared to $261 million in the year-ago quarter. The year-over-year decline largely reflects lower compensation costs primarily resulting from our enterprise-wide initiative to enhance effectiveness and efficiency across the company.
Interest expense, net, totaled $183 million, compared to $153 million in the year-ago quarter. The increase was largely due to higher interest expense associated with higher debt balances.
The provision for income taxes totaled $99 million compared to $163 million in the 2024 first quarter. The year-over-year change primarily reflects an $86 million favorable impact from the release of certain tax reserves.
Marriott’s reported operating income totaled $948 million, compared to 2024 first quarter reported operating income of $876 million. Reported net income totaled $665 million, an 18% increase compared to 2024 first quarter reported net income of $564 million.
Adjusted operating income in the 2025 first quarter totaled $1.016 billion, compared to 2024 first quarter adjusted operating income of $952 million. Adjusted net income totaled $645 million, compared to 2024 first quarter adjusted net income of $620 million.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $1.217 million, a 7% increase compared to first-quarter 2024 adjusted EBITDA of $1.142 million.
Select performance information
The company added roughly 12,200 net rooms during the quarter, including more than 7,300 net rooms in international markets. At the end of the quarter, Marriott’s global system totaled nearly 9,500 properties, with approximately 1,719,000 rooms.
At the end of the quarter, the company’s worldwide development pipeline totaled 3,808 properties with more than 587,000 rooms, including 171 properties with more than 27,000 rooms approved for development, but not yet subject to signed contracts. The quarter-end pipeline included 1,447 properties with nearly 244,000 rooms under construction, including hotels that are in the process of converting to the Marriott system. Over half of the rooms in the quarter-end pipeline are in international markets. The company also expects additional properties to join the system upon closing of the planned acquisition of the citizenM brand. The citizenM portfolio currently includes 36 open hotels with 8,544 rooms and three pipeline hotels with more than 600 rooms.
“We are committed to growing our global portfolio and enhancing offerings for our guests, Marriott Bonvoy members and hotel owners. Last week, we announced that we have reached an agreement to acquire the citizenM brand, an innovative lifestyle lodging offering in the select-service segment. We are excited about the global growth prospects for this brand, given the unique and differentiated nature of the offering and our successful track record with other acquired brands like AC Hotels. Our net rooms growth outlook remains strong, and we now expect our full year 2025 net rooms growth to approach 5%, assuming the purchase closes before year-end.
Company outlook
The company’s updated outlook generally assumes the continuation of current booking trends. Compared to prior expectations, it incorporates somewhat softer expectations in the U.S. & Canada region.
- Worldwide RevPAR growth of 1.5% to 2.5% for Q2 and 1.5% to 3.5% for FY2025
- Net rooms growth approaching 5% for FY2025
- Adjusted EBITDA of $1.370 billion to $1.390 for Q2 and $5,285 to $5,425 billion for FY2025
“Despite uncertainty about the macro-economic outlook, we are confident that the power of our industry-leading global portfolio, the strength of our Marriott Bonvoy travel platform and loyalty program, our dedicated associates and resilient asset-light business model position us very well for sustainable, long-term growth,” said Capuano.
