Marriott International, Inc. has released the company’s three-year financial model through 2025 at its meeting with institutional investors and security analysts at the W South Beach in Miami Beach, Florida.
In the presentation, the company reiterated its 2023 outlook given in August and introduced two-year compounded annual growth rates (CAGRs) from 2023 to 2025 for certain key performance metrics. Marriott will outline its plan to add 230,000 to 270,000 net rooms over three years, expanding its industry-leading global portfolio to nearly 1.8 million rooms by year-end 2025. This represents a three-year CAGR for net rooms of 5.0 to 5.5 percent. In addition, the company’s model assumes global RevPAR growth at a two-year CAGR of three to six percent from 2023 to 2025, after rising 12 to 14 percent this year.
President and Chief Executive Officer of Marriott International, Anthony Capuano, said with global travel poised for continued robust growth, Marriott’s strategy is to deliver the best brands and experiences for consumers, to attract and retain the most loyal guests and to be in more places around the world.
“As consumers continue to prioritize travel and experiences, we are focused on transforming our technology platform while leveraging our powerful revenue engines and our leading Marriott Bonvoy loyalty program to connect people through the power of travel. With our extraordinary associates around the world, I am incredibly optimistic about Marriott’s future,” said Capuano.
The company revealed that the total gross fee revenues could rise 16 to 18 percent year-over-year in 2023 and at a 6.5 to 9.5 percent two-year CAGR to reach $5.4 to $5.8 billion in 2025. Adjusted earnings before interest, taxes, depreciation, and amortisation could increase 18 to 21 percent year-over-year in 2023 and at a 7 to 10 percent two-year CAGR to reach $5.2 to $5.7 billion in 2025. The announcement also suggested that adjusted diluted earnings per share could rise 25 to 29 percent year-over-year in 2023 and at a 10 to 15 percent two-year CAGR to reach $10.10 to $11.45 in 2025. Shareholders could also see $1.9 to $2.0 billion in dividends, assuming a 25 percent payout ratio, and $9.8 to $11.6 billion in share repurchases, for total shareholder returns of $11.7 to $13.6 billion over the three-year period through 2025.
Chief Financial Officer and Executive Vice President of Development, Leeny Oberg, said that Marriott’s asset-light and resilient business model has driven powerful results.
“We expect to produce significant free cash flow and earnings growth over the next few years and create meaningful value for our shareholders,” said Oberg.
The company expects to follow a tailored development approach in its expansion in the affordable midscale segment, recognising differences by continent to accommodate regional customer and owner expectations. To date, Marriott has completed an acquisition (the City Express brand portfolio) in the Caribbean and Latin America region, created a midscale extended stay brand in the United States and Canada region (StudioRes), and has announced a new brand for its Europe, Middle East and Africa region (Four Points Express by Sheraton). The company also plans to further expand in the extended stay segment, having recently announced the launch of Apartments by Marriott Bonvoy.
