Marriott International, Inc. laid out its three-year financial model until 2025 at a recent meeting with institutional investors and security analysts in Miami Beach, Florida. The presentation reiterated the 2023 outlook and introduced two-year compounded annual growth rates (CAGRs) for 2023 to 2025.
The company aims to add 230,000 to 270,000 net rooms over three years, expanding its global portfolio to nearly 1.8 million rooms by 2025. This represents a three-year CAGR for net rooms of 5.0 to 5.5 percent. The model assumes a global RevPAR growth of 3 to 6 percent from 2023 to 2025, following a 12 to 14 percent rise this year.
Marriott’s President and CEO, Anthony Capuano, outlined the strategy, stating, “With global travel poised for continued robust growth, our 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. These are our three paths to win.”
Given the assumptions, potential results include rising total gross fee revenues, adjusted EBITDA, and adjusted diluted EPS. Shareholders could see $1.9 to $2.0 billion in dividends and $9.8 to $11.6 billion in share repurchases, totaling $11.7 to $13.6 billion over the three years.
Leeny Oberg, CFO, emphasized their resilient business model, stating, “Our asset-light and resilient business model drives 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.”
In the growth areas, Marriott prioritizes global rooms growth, focusing on midscale, extended stay, leisure, luxury, and conversions. The company plans a tailored approach, recognizing regional differences. Recent developments include acquisitions in the Caribbean and Latin America, a new extended stay brand in the U.S. & Canada, and a brand launch in Europe, the Middle East, and Africa.
Marriott continues to lead in luxury distribution globally, with plans to add 225 luxury properties. Conversions, especially multi-unit conversions, play a crucial role in the growth strategy. In the first half of 2023, conversions accounted for 63 percent of room signings.
The company anticipates enhanced fee growth through branded residential business, co-brand credit card offerings, and other adjacencies. Marriott remains committed to disciplined capital investment in value-enhancing projects that drive cash flow growth.