Marriott Intl (NASDAQ:MAR) released first-quarter financial results and hosted an earnings call on Wednesday. Read the complete transcript below.
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Watch the full earnings call below:
Summary
Marriott Intl reported strong Q1 2026 performance, with RevPAR and financial results exceeding guidance. Global RevPAR rose 4.2%, with notable increases in luxury and select service segments.
The company announced a robust development pipeline, including new multi-unit deals in Vietnam and Europe, and introduced a new luxury wellness brand, lafay.
Full-year guidance was raised, expecting 2-3% global RevPAR growth, despite anticipated impacts from the Middle East conflict.
Marriott Bonvoy loyalty program reached 283 million members, and tech transformation efforts continue, including AI integration for improved customer service and direct booking channels.
Management expressed optimism about AI’s potential to enhance customer engagement and efficiency, while maintaining strong shareholder value through capital returns.
Full Transcript
Jackie McConaugh (Senior Vice President of Investor Relations)
Thank you. Good morning everyone and welcome to Marriott’s first quarter 2026 earnings call. On the call with me today are Tony Capilano, our President and Chief Executive Officer, Jen Mason, our new Executive Vice President and Chief Financial Officer and Pilar Fernandez, Senior Director of Investor Relations. Before we begin, I would like to remind everyone that many of our comments today are not historical facts and are considered forward looking statements under federal securities laws. These statements are subject to numerous risks and uncertainties as described in our U.S. Securities and Exchange Commission filings which could cause future results to differ materially from those expressed in or implied by our comments. Unless otherwise stated, our RevPAR (Revenue Per Available Room) occupancy average daily rate and property level revenue comments reflect system wide constant currency results for comparable hotels and all changes refer to year over year changes for the comparable period. Statements in our comments and the press release we issued earlier today are effective only today and will not be updated as actual events unfold. You can find our earnings release and reconciliation of all non GAAP financial measures referred to in our remarks today on our investor relations website. And now I will turn the call over to Tony.
Tony Capilano (President and Chief Executive Officer)
Thanks Jackie and good morning everyone. We reported excellent first quarter performance this morning with RevPAR (Revenue Per Available Room) and financial results above the top end of our guidance ranges. Development activity remained robust with record first quarter global signings and net rooms growth of 4.5% over the trailing 12 months through March. First quarter global RevPAR (Revenue Per Available Room) rose 4.2%. RevPAR (Revenue Per Available Room) in the US and Canada region rose 4%. Luxury and resort hotels continued to lead in the region though strength was broad based across segments and chain scales. While Luxury RevPAR (Revenue Per Available Room) rose nearly 7%. Select Service RevPAR (Revenue Per Available Room) increased 3.5%, a meaningful improvement from the fourth quarter when Select Service was down more than 1% year over year. While the conflict in the Middle east weighed on results in March, first quarter international RevPAR (Revenue Per Available Room) increased 4.6%. First quarter RevPAR (Revenue Per Available Room) in Asia-Pacific Economic Cooperation rose over 7%, driven by strong ADR growth and an increase in demand from Chinese guests. Beginning in March, Middle east travel corridor disruption started to impact select Asia-Pacific Economic Cooperation markets including India and the Maldives. In Greater China, our hotels continued to gain market share and stronger leisure demand drove first quarter RevPAR (Revenue Per Available Room) up nearly 6%. RevPAR (Revenue Per Available Room) growth was led by Hong Kong and Hainan island which were both up around 20% year over year. On the back of very strong ADR growth, Revpar in CALA (Caribbean and Latin America) rose 2%, led by record leisure results in the Caribbean, partially offset by a decline in RevPAR (Revenue Per Available Room) at Mexican luxury resorts. First quarter RevPAR (Revenue Per Available Room) in EMEA increased over 3% with increases in Europe and Africa, partially offset by a decline in the Middle east. In March, RevPAR (Revenue Per Available Room) in the Middle east declined over 30% while RevPAR (Revenue Per Available Room) in Europe rose 4%. As the impact of the conflict in the Middle east on European markets was relatively minimal and largely contained to countries near the Middle east such as Cyprus and Azerbaijan. Since day one of the conflict, our top priority has been the safety of our associates and our guests. While we expect continued volatility and ongoing impact from the conflict, we particularly at our Middle east hotels Looking ahead as Jen will discuss further, we are raising our full year global RevPAR (Revenue Per Available Room) guidance and now expect growth of 2 to 3%. Now let’s turn to results by customer segment. In the first quarter leisure RevPAR (Revenue Per Available Room) rose 6% globally and 5% in the US and Canada. Group RevPAR (Revenue Per Available Room) rose 5% both globally and in the US and Canada and first quarter business transient RevPAR (Revenue Per Available Room) rose 1% globally and 2% in the US and Canada with mid single digit declines in government room nights and slight declines in other BT room nights partially offset by higher adr. We remain focused on steadily expanding our industry leading portfolio and presence to reach new markets and new travelers worldwide. Global signings are off to an excellent start this year with first quarter deal signings up 9% year over year. Key recent multi unit deals signed include another agreement with sun group to add 10 hotels across eight brands in Vietnam over the next few years. We also signed deals to bring our regionally rooted Collection brand series by Marriott to Europe, signing six projects in Italy and five in the United Kingdom. Additionally, we announced that lafay, our first brand dedicated exclusively to luxury wellness, is expected to enter our portfolio later this year. Our global pipeline rose over 5% year over year to a new record of nearly 618,000 rooms at the end of the quarter. With 43% of pipeline rooms under construction including rooms that are pending conversion. Marriott has more rooms in its pipeline and more pipeline rooms under construction than any other global lodging company. Conversions, including multi unit deals, remain a significant driver of growth representing over 35% of signings and over 40% of openings in the quarter. With our growing pipeline and strong momentum in conversions, we still expect net rooms growth between 4.5 and 5%, including our typical assumption of between 1 and 1.5% room deletions. Our powerful industry leading Marriott Bonvoy loyalty program had nearly 283 million members at the end of March. As we focus on enhancing engagement with our members, we’ve continued to roll out new co branded credit cards around the world. Today we have 37 cards in 13 countries after recently launching cards in Indonesia and Brazil. Our scale combined with strong engagement helps drive more direct bookings, more repeat stays and value for owners across our worldwide system. And our multi year technology transformation is well underway. Just yesterday we transitioned our thousandth hotel over to our new tech ecosystem. Our new technology platforms automate multiple processes that used to be done manually and are expected to enhance owner returns while positioning our hotel associates to focus more time on quality of service to deliver on customer expectations. We’re also excited about increasingly leveraging Artificial Intelligence across the company to assist our associates serve our guests and drive results for our owners. Some examples are rolling out Artificial Intelligence powered desktop assistance at our customer engagement centers and using Artificial Intelligence for guest pre arrival communications. As Artificial Intelligence platforms continue to enrich the trip planning experience, we believe our unparalleled depth of inventory and global reach are significant competitive advantages. While it is early days for travel searching and planning in Artificial Intelligence, we believe Artificial Intelligence presents an exciting opportunity to connect directly and in a more personalized manner with our customers and we’re optimistic about the potential for Artificial Intelligence to help strengthen our lower cost direct booking channels. We continue to optimize our content for Genai services and are working with multiple players across the space. We’re also very excited about beginning a phased rollout of robust natural language search experience on Marriott.com and our app. Planned by the end of the second quarter, this experience will leverage real time inventory to respond to guest inquiries and help them explore our portfolio more easily from answering hotel level questions to supporting multi destination searches. Before I end my prepared remarks, I want to express my sincere admiration and gratitude to all of our associates around the world for their hard work and dedication with a special thanks and recognition for those who have been impacted by the conflict in the Middle East. And now I will turn the call over to Jen for more details on our financial results.
Jen Mason (Executive Vice President and Chief Financial Officer)
Jim thank you Tony. Very happy and honored to be here with you all this morning. While I have listened to over 130 earnings calls over my 33 years with Marriott, this is of course my first time on the call as CFO. I will start by reviewing our strong first quarter results. As Tony noted, global RevPAR (Revenue Per Available Room) rose 4.2% first quarter total gross fee revenues increased 12% year over year to 1.43 billion reflecting higher RevPAR (Revenue Per Available Room) rooms growth. A 37% increase in CO branded credit card fees and an over 70% increase in residential branding fees. Incentive management fees OR IMFs rose 9% to 222 million in the first quarter led by a 13% increase in the US and Canada. Own leased and other revenue net of owned, leased and other expenses rose 21% due to higher termination fees and strong results at the Elegance hotels in Barbados and certain other portfolio hotels. First quarter G&A rose 5% year over year primarily due to timing of compensation costs partially offset by lower litigation expenses. Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) increased 15% to 1.4 billion and adjusted diluted EPS rose 17% to $2.72. Now let’s talk about the outlook for quarter two and full year. For the full year we now expect 2 to 3% global RevPAR (Revenue Per Available Room) growth. This outlook incorporates our outperformance in the first quarter as well as higher than previously anticipated RevPAR (Revenue Per Available Room) growth in the US and Canada with the strength seen across chain scales in the first quarter continuing into April. We are also raising our outlook in Greater China where we now expect full year RevPAR (Revenue Per Available Room) growth in the low single digit range primarily reflecting strong first quarter performance. We expect lower than previously anticipated RevPAR (Revenue Per Available Room) growth in the near term in Asia-Pacific Economic Cooperation driven by softer long haul demand into certain markets that rely on Gulf Hub connectivity. Additionally, we are slightly reducing our outlook versus prior expectations in Caribbean and Latin America for the rest of the year primarily due to Mexico. Turning to emea, we assume that air capacity and travel sentiment will continue to be impacted particularly in the Middle east through the end of the year. As a reminder, the Middle east accounts for 3% of open rooms, 7% of pipeline rooms and for full year 2025 3% of global gross fees. We are lowering our revar outlook in Europe, Middle East, and Africa reflecting continued year over year declines in our Middle east properties with the most severe decline expected to occur in the second quarter. Our guidance assumes the conflict in the Middle east could impact full year global red PAR growth by 100 to 125 basis points. Finally, I’ll note that The World cup is still expected to add 30 to 35 basis points to global RevPAR (Revenue Per Available Room) growth this year. We are raising our 2026 gross fee guidance to 5.93 to 5.99 billion up 9 to 10%. IMFs are expected to be around flat year over year as outperformance in the first quarter is expected to be offset by year over year IMF declines in the Middle east in the last three quarters of the year. The sensitivity of 1 percentage point in full year 2026 RevPAR (Revenue Per Available Room) versus 2025 could be around 55 to 65 million in RevPAR (Revenue Per Available Room) related fees. Co branded credit card fees are still expected to increase around 35%. As you know this does not include any impact from new deals in the United States. Our discussions with Visa Chase and American Express are going well and we still expect to have new deals in place later this year. Full year residential branding fees are now expected to increase around 45 to 50%. Timeshare fees are still expected to be relatively in line with prior year at 110 to 115 million. Owned lease and other revenue net of owned lease and other expenses is now expected to total 215 to 225 million. Results are expected to be impacted by renovations at certain large hotels in the portfolio including W Barcelona and the Frankfurt Marriott as well as the expected sale later this quarter of a long held hotel in the United States that will stay in the portfolio under a new long term management agreement. 2020 expense is anticipated to increase just 1 to 3% compared to 2025 levels as year over year comparisons are expected to benefit from timing later this year, particularly in the fourth quarter. Full year adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) could increase 9 to 11% to roughly 5.88 to 5.97 billion. Our 2026 adjusted effective tax rate is expected to …
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