Marriott’s first quarter results were shaped by continued strength in international markets and resilient performance in its luxury and full-service segments, even as select service hotels in the U.S. experienced softer demand. CEO Anthony Capuano pointed to a "robust development pipeline" and highlighted that "Luxury and Full-Service hotels meaningfully outperformed select service properties, thanks to solid demand across both group and transient guests." Management noted that group travel was a standout, with group revenue per available room (RevPAR) rising 8% globally, offsetting some of the challenges in domestic leisure and government demand.
Is now the time to buy MAR? Find out in our full research report (it’s free).
Marriott (MAR) Q1 CY2025 Highlights:
- Revenue: $6.26 billion vs analyst estimates of $6.22 billion (4.8% year-on-year growth, 0.6% beat)
- Adjusted EPS: $2.32 vs analyst estimates of $2.25 (3% beat)
- Adjusted EBITDA: $1.22 billion vs analyst estimates of $1.18 billion (19.4% margin, 2.9% beat)
- Management reiterated its full-year Adjusted EPS guidance of $10.00 at the midpoint
- EBITDA guidance for the full year is $5.36 billion at the midpoint, in line with analyst expectations
- Operating Margin: 15.1%, in line with the same quarter last year
- RevPAR: $119.38 at quarter end, up 1.1% year on year
- Market Capitalization: $72.85 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Marriott’s Q1 Earnings Call
- Michael Bellisario (Baird) asked about the drivers behind weaker select service performance in the U.S., to which CEO Anthony Capuano emphasized March softness was partly due to government segment declines and external shocks, while CFO Leeny Oberg attributed much of the reduction in guidance to ongoing lower government demand.
- Shaun Kelley (Bank of America) inquired about U.S. development risks, including the impact of tariffs and construction financing. Capuano and Oberg responded that while some owners are cautious, most remain committed to long-term growth, and signings were up significantly year-over-year.
- Stephen Grambling (Morgan Stanley) questioned trends in fees per room and capital support for new projects. Oberg noted that international growth and non-RevPAR fee streams are driving higher fees per key, and Capuano added that key money usage remains disciplined despite incremental increases for conversions.
- Ari Klein (BMO Capital Markets) sought details on international inbound travel to the U.S. Capuano highlighted that international room nights in the U.S. rose in Q1, more than offsetting Canadian softness, with a consistent upward trend each month.
- Lizzie Dove (Goldman Sachs) probed the status of Marriott’s digital transformation. Capuano shared that testing is underway, with pilot rollouts for select brand hotels expected later this year, and described “extraordinary” enthusiasm from property managers regarding operational benefits.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) the pace of international RevPAR growth versus U.S. select service trends, (2) execution and integration of the citizenM brand into Marriott’s global system, and (3) progress on the company’s digital transformation initiatives. Additional milestones include monitoring group booking momentum and the impact of ongoing cost-efficiency programs on overall margins.
Marriott currently trades at $269.60, up from $247.30 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
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