Marriott Surpasses Q1 2025 Expectations with Strong Global Demand and Luxury Segment Growth
Bethesda, MD – Global hospitality giant Marriott International (NASDAQ: MAR) exceeded Wall Street expectations in Q1 CY2025, reporting a 4.8% year-over-year increase in revenue to $6.26 billion, slightly ahead of the $6.21 billion estimate. Adjusted earnings per share (EPS) reached $2.32, outperforming analysts’ forecast of $2.25 by 3.1%.
Adjusted EBITDA came in at $1.22 billion, surpassing estimates by 2.9%, with a margin of 19.4%. The company maintained its full-year adjusted EPS guidance of $10.00 and EBITDA forecast of $5.36 billion, aligning with analyst expectations.
Despite maintaining a steady operating margin of 15.1%, free cash flow margin dipped to 8.2% from 11.2% a year earlier. RevPAR (Revenue per Available Room) stood at $119.38, marking a 1.1% rise year over year. Marriott’s market cap now totals approximately $74.84 billion.
CEO Anthony Capuano attributed the robust performance to sustained global demand, particularly in the luxury and premium segments, and strong growth in international markets like Asia-Pacific, EMEA, and CALA. However, the U.S. and Canada showed signs of softness, especially in select service and government business late in the quarter.
CFO Leeny Oberg highlighted ongoing weakness in U.S. government demand and macro uncertainty as factors behind the slightly reduced RevPAR growth forecast. Still, management expects international markets to remain a key growth engine.
Key Takeaways from Q1 Management Commentary:
- International Markets Lead RevPAR Growth:
Asia-Pacific, including India and Japan, saw double-digit RevPAR growth, compensating for softness in Greater China. - Luxury and Full-Service Dominate:
Premium offerings outpaced select service hotels, with strong demand from both group and transient travelers, and minimal signs of trading down. - Group Bookings Stay Resilient:
Global Group RevPAR increased 8%, with forward bookings pacing ahead, boosting revenue visibility for upcoming quarters. - Record Development & Brand Expansion:
Marriott reported record global signings, with conversions making up one-third of all new properties. The pending citizenM acquisition will further diversify its lifestyle brand portfolio. - Digital Transformation in Progress:
New property management and reservation systems are set to roll out in H2, aimed at improving efficiency, guest experience, and ancillary revenue.
Outlook for the Year Ahead:
While domestic softness may weigh on second-half performance, Marriott’s strategy is buoyed by:
- Sustained international demand
- Brand growth through conversions and citizenM acquisition
- Operational cost reductions, targeting an 8–10% cut in general and administrative expenses
As Marriott continues enhancing its digital infrastructure and expanding its global footprint, analysts will watch closely for:
- International RevPAR trends to offset U.S. softness
- Adoption of new digital systems
- Progress with citizenM integration and group booking momentum
Marriott currently trades at a forward P/E of 26.5×, prompting investors to evaluate if now is the right time to buy.
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News Source: Finance.yahoo.com
