Marriott International Inc.

05/06/2026 | Press release | Distributed by Public on 05/06/2026 06:52

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Statement
All statements in this report are made as of the date this Form 10-Q is filed with the U.S. Securities and Exchange Commission (the "SEC"). We undertake no obligation to publicly update or revise these statements, whether as a result of new information, future events or otherwise. We make forward-looking statements in Management's Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this report based on the beliefs and assumptions of our management and on information available to us through the date this Form 10-Q is filed with the SEC. Forward-looking statements include information related to our development pipeline; our expectations regarding rooms growth; our expectations regarding our ability to meet our liquidity requirements; our capital expenditures and other investment spending and reimbursement expectations; our expectations regarding future dividends and share repurchases; our expectations regarding certain claims, legal proceedings, settlements or resolutions; our planned hotel sale; our anticipated investment in Lefay; our expectations about the conflict in the Middle East; and other statements that are preceded by, followed by, or include the words "believes," "expects," "anticipates," "intends," "plans," "estimates," "foresees," or similar expressions; and similar statements concerning anticipated future events and expectations that are not historical facts.
We caution you that these statements are not guarantees of future performance and are subject to numerous evolving risks and uncertainties that we may not be able to accurately predict or assess, including the risks and uncertainties we describe in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 ("2025 Form 10-K"); Part II, Item 1A of this report; and other factors we describe from time to time in our periodic filings with the SEC.
BUSINESS AND OVERVIEW
Overview
We are a worldwide franchisor, operator, and licensor of hotel, residential, timeshare, and other lodging properties under a broad portfolio of compelling brands at different price and service points. We discuss our operations in the following reportable business segments: (1) U.S. & Canada, (2) Europe, Middle East & Africa ("EMEA"), (3) Greater China, and (4) Asia Pacific excluding China ("APEC"). Our Caribbean & Latin America ("CALA") operating segment does not meet the applicable accounting criteria for separate disclosure as a reportable business segment, and as such, we include its results in "Unallocated corporate and other."
Under our asset-light business model and consistent with our focus on franchising, management, and licensing, we own or lease very few of our lodging properties. Under our hotel franchising arrangements, we generally receive an initial application fee and continuing royalty fees, which are typically based on a percentage of room revenues, plus for certain brands, a percentage of food and beverage revenues. Terms of our management agreements vary, but we earn a management fee that is typically composed of a base management fee, which is a percentage of the revenues of the hotel, and an incentive management fee, which is based on the profits of the hotel. In many cases (particularly in our U.S. & Canada, Europe, and CALA regions), incentive management fees are subject to a specified owner return. We also have license and other agreements with third parties for certain offerings, such as for our timeshare properties, MGM Collection with Marriott Bonvoy, Design Hotels, and The Ritz-Carlton Yacht Collection, under which we receive royalty and certain other fees. Additionally, we earn fees for other uses of our intellectual property, including primarily co-branded credit card fees, as well as residential branding fees and certain other licensing fees.
Performance Measures
We believe Revenue per Available Room ("RevPAR"), which we calculate by dividing property level room revenue by total rooms available for the period, is a meaningful indicator of our performance because it measures the period-over-period change in room revenues. RevPAR may not be comparable to similarly titled measures, such as revenues, and should not be viewed as necessarily correlating with our fee revenue. We also believe occupancy and average daily rate ("ADR"), which are components of calculating RevPAR, are meaningful indicators of our
performance. Occupancy, which we calculate by dividing total rooms sold by total rooms available for the period, measures the utilization of a property's available capacity. ADR, which we calculate by dividing property level room revenue by total rooms sold, measures average room price and is useful in assessing pricing levels. Unless otherwise stated, RevPAR, occupancy, and ADR statistics are on a systemwide basis for comparable properties, and all changes refer to year-over-year changes for the comparable period. Comparisons to prior periods are on a constant U.S. dollar basis, which we calculate by applying exchange rates for the current period to the prior comparable period. We believe constant dollar analysis provides valuable information regarding the performance of hotels in our system as it removes currency fluctuations from the presentation of such results.
We define our comparable properties as hotels in our system that were open and operating under one of our brands since the beginning of the last full calendar year (since January 1, 2025 for the current period) and have not, in either the current or previous year: (1) undergone significant room or public space renovations or expansions, (2) been converted between company-operated and franchised, or (3) sustained substantial property damage or business interruption. Our comparable properties also exclude MGM Collection with Marriott Bonvoy, Design Hotels, The Ritz-Carlton Yacht Collection, residences, timeshare, and all-inclusive properties.
Business Trends
In the 2026 first quarter, worldwide RevPAR increased 4.2 percent, driven by ADR growth of 3.1 percent and occupancy improvement of 0.7 percentage points.
In the U.S. & Canada, RevPAR increased 4.0 percent in the 2026 first quarter, reflecting strong demand across all brand tiers, led by luxury.
In our International regions, RevPAR increased 4.6 percent in the 2026 first quarter, reflecting higher demand in most countries across our APEC, Europe, Greater China, and CALA regions. Beginning in March 2026, and continuing into the 2026 second quarter, conflict in the Middle East resulted in a sharp decline in RevPAR in our Middle East & Africa region and negatively impacted demand in certain countries in our APEC region. The continued operational and financial impact on our business depends on the duration and extent of travel disruption resulting from the conflict.
Starwood Data Security Incident
On November 30, 2018, we announced a data security incident involving unauthorized access to the Starwood reservations database (the "Data Security Incident"). We are currently unable to reasonably estimate the range of total possible financial impact to the Company from the Data Security Incident in excess of the expenses already recorded; however, we do not believe this incident will impact our long-term financial health. See Note 5 for additional information related to legal proceedings and investigations related to the Data Security Incident.
System Growth and Pipeline
At the end of the 2026 first quarter, our system had 9,926 properties (1,795,808 rooms), compared to 9,805 properties (1,779,936 rooms) at year-end 2025 and 9,463 properties (1,718,542 rooms) at the end of the 2025 first quarter. In the 2026 first quarter, we added roughly 15,900 net rooms.
At the end of the 2026 first quarter, we had over 4,100 properties and nearly 618,000 rooms in our development pipeline, which included nearly 34,000 rooms approved for development but not yet under signed contracts. At the end of the 2026 first quarter, our development pipeline included over 268,000 rooms, or 43 percent, that were under construction, including hotels that are in the process of converting to our system. Over half of the rooms in our quarter-end development pipeline were located outside U.S. & Canada.
We currently expect full year 2026 net rooms growth of approximately 4.5 to 5.0 percent.
Properties and Rooms
The following table shows our properties and rooms by ownership type.
Properties Rooms
March 31, 2026 March 31, 2025 vs. March 31, 2025 March 31, 2026 March 31, 2025 vs. March 31, 2025
Franchised/Licensed/Other (1)
7,781 7,293 488 7 % 1,204,223 1,120,634 83,589 7 %
Managed
1,948 1,981 (33) (2) % 560,658 567,896 (7,238) (1) %
Owned/Leased
51 51 - - % 14,406 14,312 94 1 %
Residential
146 138 8 6 % 16,521 15,700 821 5 %
Total
9,926 9,463 463 5 % 1,795,808 1,718,542 77,266 4 %
(1)Licensed and other properties include our timeshare properties, MGM Collection with Marriott Bonvoy, Design Hotels, and The Ritz-Carlton Yacht Collection.
Lodging Statistics
The following table presents RevPAR, occupancy, and ADR statistics for comparable properties. Systemwide statistics include data from our franchised properties, in addition to our company-operated properties.
Three Months Ended March 31, 2026 and Change vs. Three Months Ended March 31, 2025
RevPAR Occupancy Average Daily Rate
2026 vs. 2025 2026 vs. 2025 2026 vs. 2025
Comparable Company-Operated Properties
U.S. & Canada $ 197.07 4.6 % 67.6 % 0.4 % pts. $ 291.48 3.9 %
Europe $ 174.01 7.0 % 61.2 % (0.6) % pts. $ 284.35 8.0 %
Middle East & Africa $ 138.45 (2.3) % 62.3 % (6.3) % pts. $ 222.36 7.5 %
Greater China $ 79.23 6.1 % 65.1 % 1.2 % pts. $ 121.63 4.1 %
Asia Pacific excluding China $ 136.26 7.6 % 71.3 % 2.5 % pts. $ 191.17 3.8 %
Caribbean & Latin America $ 255.61 (0.7) % 69.0 % (0.1) % pts. $ 370.60 (0.5) %
International - All (1)
$ 126.47 4.1 % 66.3 % 0.1 % pts. $ 190.69 4.1 %
Worldwide (2)
$ 155.02 4.4 % 66.8 % 0.2 % pts. $ 231.93 4.0 %
Comparable Systemwide Properties
U.S. & Canada $ 128.80 4.0 % 66.3 % 0.7 % pts. $ 194.15 3.0 %
Europe $ 118.31 6.6 % 61.2 % 1.5 % pts. $ 193.41 4.0 %
Middle East & Africa $ 128.54 (1.9) % 61.6 % (5.4) % pts. $ 208.78 6.7 %
Greater China $ 70.68 5.7 % 63.1 % 1.1 % pts. $ 111.99 3.9 %
Asia Pacific excluding China $ 130.93 7.3 % 70.2 % 2.2 % pts. $ 186.60 3.9 %
Caribbean & Latin America $ 139.29 2.0 % 63.0 % 1.4 % pts. $ 221.24 (0.3) %
International - All (1)
$ 112.01 4.6 % 64.1 % 0.7 % pts. $ 174.73 3.5 %
Worldwide (2)
$ 123.09 4.2 % 65.6 % 0.7 % pts. $ 187.70 3.1 %
(1)Includes Europe, Middle East & Africa, Greater China, Asia Pacific excluding China, and Caribbean & Latin America.
(2)Includes U.S. & Canada and International - All.
CONSOLIDATED RESULTS
The discussion below presents an analysis of our consolidated results of operations for the 2026 first quarter compared to the 2025 first quarter. Also see the "Business Trends" section above for further discussion.
Fee Revenues
Three Months Ended
($ in millions)
March 31, 2026 March 31, 2025 Change 2026 vs. 2025
Franchise fees $ 872 $ 746 $ 126 17 %
Base management fees 339 325 14 4 %
Incentive management fees 222 204 18 9 %
Gross fee revenues 1,433 1,275 158 12 %
Contract investment amortization (35) (28) (7) (25) %
Net fee revenues $ 1,398 $ 1,247 $ 151 12 %
The increase in franchise fees in the 2026 first quarter primarily reflected higher co-branded credit card fees ($60 million) as well as higher revenue related to our franchised properties due to higher RevPAR, rooms growth ($23 million), and other items.
Owned, Leased, and Other
Three Months Ended
($ in millions)
March 31, 2026 March 31, 2025 Change 2026 vs. 2025
Owned, leased, and other revenue $ 412 $ 361 $ 51 14 %
Owned, leased, and other expense
377 332 45 14 %
Owned, leased, and other revenue, net of owned, leased, and other expense
$ 35 $ 29 $ 6 21 %
Cost Reimbursements
Three Months Ended
($ in millions)
March 31, 2026 March 31, 2025 Change 2026 vs. 2025
Cost reimbursement revenue $ 4,844 $ 4,655 $ 189 4 %
Reimbursed expenses 4,936 4,722 214 5 %
Cost reimbursements, net $ (92) $ (67) $ (25) (37) %
Cost reimbursements, net (cost reimbursement revenue, net of reimbursed expenses) varies due to timing differences between the costs we incur for centralized programs and services and the related reimbursements we receive from hotel owners and certain other counterparties. Over the long term, our centralized programs and services are not designed to impact our economics, either positively or negatively.
The decrease in cost reimbursements, net in the 2026 first quarter primarily reflected higher expenses, net of revenues for many of our centralized programs and services, partially offset by lower Loyalty Program expenses.
Other Operating Expenses
Three Months Ended
($ in millions)
March 31, 2026 March 31, 2025 Change 2026 vs. 2025
Depreciation, amortization, and other $ 54 $ 51 $ 3 6 %
General and administrative
219 209 10 5 %
Restructuring and merger-related charges, and other
4 1 3 300 %
Non-Operating Income (Expense)
Three Months Ended
($ in millions)
March 31, 2026 March 31, 2025 Change 2026 vs. 2025
Gains (losses) and other income, net $ 3 $ (2) $ 5 250 %
Interest expense (214) (192) (22) (11) %
Interest income 10 9 1 11 %
Equity in (losses) earnings
(5) 1 (6) (600) %
Interest expense increased in the 2026 first quarter primarily due to higher debt balances driven by Senior Notes issuances, net of maturities ($28 million).
Income Taxes
Three Months Ended
($ in millions)
March 31, 2026 March 31, 2025 Change 2026 vs. 2025
Provision for income taxes $ (210) $ (99) $ (111) (112) %
Provision for income taxes increased in the 2026 first quarter primarily due to the prior year release of tax reserves ($86 million) and higher pre-tax income ($26 million).
BUSINESS SEGMENTS
The following discussion presents an analysis of the operating results of our reportable business segments for the 2026 first quarter compared to the 2025 first quarter. Also see the "Business Trends" section above for further discussion.
Three Months Ended
($ in millions)
March 31, 2026 March 31, 2025 Change 2026 vs. 2025
U.S. & Canada
Segment net fee revenues
$ 752 $ 689 $ 63 9 %
Segment profit 646 644 2 - %
EMEA
Segment net fee revenues
127 114 13 11 %
Segment profit 72 74 (2) (3) %
Greater China
Segment net fee revenues
68 60 8 13 %
Segment profit 45 45 - - %
APEC
Segment net fee revenues
102 97 5 5 %
Segment profit 71 80 (9) (11) %
Properties
Rooms
March 31, 2026 March 31, 2025 vs. March 31, 2025 March 31, 2026 March 31, 2025 vs. March 31, 2025
U.S. & Canada
6,422 6,280 142 2 % 1,073,530 1,048,111 25,419 2 %
EMEA 1,398 1,320 78 6 % 253,460 236,698 16,762 7 %
Greater China
709 606 103 17 % 193,186 175,114 18,072 10 %
APEC 748 637 111 17 % 158,648 144,447 14,201 10 %
In the 2026 first quarter, segment net fee revenues grew in the U.S. & Canada, compared to the same period in 2025, primarily due to higher RevPAR and rooms growth (see the Lodging Statistics and Properties and Rooms tables above for more information).
Additionally, U.S. & Canada segment profits in the 2026 first quarter compared to the same period in 2025 reflected lower cost reimbursement revenue, net of reimbursed expenses ($72 million).
LIQUIDITY AND CAPITAL RESOURCES
Our long-term financial objectives include maintaining diversified financing sources, optimizing the mix and maturity of our long-term debt, and reducing our working capital. At the end of the 2026 first quarter, including the effect of interest rate swaps, our total long-term debt (current and noncurrent) had a weighted average interest rate of 4.6 percent, a weighted average maturity of approximately 5.8 years, and a ratio of fixed-rate to total long-term debt of 0.9 to 1.0.
Sources of Liquidity
Our Credit Facility
We are party to a $4.5 billion multicurrency revolving credit agreement (as amended, the "Credit Facility"). Available borrowings under the Credit Facility support our commercial paper program and general corporate needs. U.S. dollar borrowings under the Credit Facility bear interest at SOFR (the Secured Overnight Financing Rate) plus a spread based on our public debt rating. We also pay quarterly fees on the Credit Facility at a rate based on our public debt rating. We classify outstanding borrowings under the Credit Facility and outstanding commercial paper borrowings (which generally have short-term maturities of 45 days or less) as long-term based on our ability and intent to refinance the outstanding borrowings on a long-term basis. The Credit Facility expires on December 14, 2027.
The Credit Facility contains certain covenants, including a single financial covenant that limits our maximum leverage (consisting of the ratio of Adjusted Total Debt to EBITDA, each as defined in the Credit Facility) to not more than 4.5 to 1.0. Our outstanding public debt does not contain a corresponding financial covenant or a requirement that we maintain certain financial ratios. We currently satisfy the covenants in our Credit Facility and public debt instruments, including the leverage covenant under the Credit Facility, and do not expect the covenants will restrict our ability to meet our anticipated borrowing and liquidity needs.
We monitor the status of the capital markets and regularly evaluate the effect that changes in capital market conditions may have on our ability to fund our liquidity needs. We believe the Credit Facility, and our access to capital markets, together with cash we expect to generate from operations, remain adequate to meet our liquidity requirements over the next 12 months and thereafter for the foreseeable future.
Commercial Paper
We issue commercial paper in the U.S. Because we do not have purchase commitments from buyers for our commercial paper, our ability to issue commercial paper is subject to market demand. We do not expect that fluctuations in the demand for commercial paper will affect our liquidity, given our borrowing capacity under the Credit Facility and access to capital markets.
Sources and Uses of Cash
Cash, cash equivalents, and restricted cash totaled $468 million at March 31, 2026, an increase of $97 million from year-end 2025, primarily due to long-term debt issuances, net of repayments ($1,422 million) and net cash provided by operating activities ($858 million), partially offset by net commercial paper repayments ($1,085 million), share repurchases ($700 million), dividends paid ($178 million), capital and technology expenditures ($130 million), and financing outflows for employee stock-based compensation withholding taxes ($124 million).
Our ratio of current assets to current liabilities was 0.5 to 1.0 at the end of the 2026 first quarter. We have significant borrowing capacity under our Credit Facility should we need additional working capital.
Capital Expenditures and Other Investments
We made capital and technology expenditures of $130 million in the 2026 first quarter and $135 million in the 2025 first quarter. We expect capital expenditures and other investments will total approximately $1,050 million to $1,150 million for the 2026 full year, including capital and technology expenditures, loan advances, contract acquisition costs, and other investing activities (including our planned investment in Lefay, which we assume will occur later this year), but excluding any potential property or brand acquisitions, which we cannot forecast with sufficient accuracy and which may be significant. Our anticipated capital and technology expenditures include higher than typical spending on our worldwide technology systems transformation, the overwhelming portion of which we expect to be reimbursed over time, and renovations of hotels in our owned and leased portfolio.
Share Repurchases and Dividends
We repurchased 2.1 million shares of our common stock for $0.7 billion in the 2026 first quarter. Year-to-date through April 29, 2026, we repurchased 3.1 million shares for $1.1 billion. For additional information, see "Issuer Purchases of Equity Securities" in Part II, Item 2.
On February 12, 2026, our Board of Directors declared a quarterly cash dividend of $0.67 per share, which was paid on March 31, 2026 to stockholders of record on February 26, 2026.
We expect to continue to return cash to stockholders through a combination of share repurchases and cash dividends.
Material Cash Requirements
As of the end of the 2026 first quarter, there have been no material changes to our cash requirements as disclosed in our 2025 Form 10-K. See Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," of our 2025 Form 10-K for more information about our cash requirements. Also, see Note 6 for information on our long-term debt.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our preparation of financial statements in accordance with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect reported amounts and related disclosures. We have discussed those policies and estimates that we believe are critical and require the use of complex judgment in their application in our 2025 Form 10-K. We have made no material changes to our critical accounting policies or the methodologies or assumptions that we apply under them.
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