Marriott (MAR) outlines 3 year growth plan, says travel demand remains robust

Marriott (NASDAQ: MAR) reiterated its 2023 outlook and outlined its three-year growth plan in a press release and presentation Wednesday morning.

Presenting at its meeting with institutional investors and security analysts, MAR CEO Anthony Capuano told listeners that the company is experiencing solid momentum, with overall leisure travel remaining robust.

Capuano pointed to trends in Greater China, which he said have demonstrated the current travel strength.

In its three-year growth plan press release, Marriott outlined its strategy to add 230,000 to 270,000 net rooms over three years, expanding its global portfolio to nearly 1.8 million rooms by year-end 2025, representing a three-year CAGR for net rooms of 5% to 5.5%.

In addition, the company's model assumes global RevPAR growth at a two-year CAGR of 3% to 6% from 2023 to 2025, after rising 12% to 14% this year.

"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," commented Capuano.

MAR also said that total gross fee revenues could rise 16% to 18% year-over-year (YoY) in 2023 and at a 6.5% to 9.5% two-year CAGR to reach $5.4 to $5.8 billion in 2025.

Adjusted EBITDA could increase 18% to 21% YoY in 2023 and at a 7% to 10% two-year CAGR to reach $5.2 to $5.7 billion in 2025. In addition, adjusted earnings per share could rise 25% to 29% YoY in 2023 and at a 10% to 15% two-year CAGR to reach $10.10 to $11.45 in 2025, the company added.

Furthermore, Marriott believes its shareholders could see $1.9 to $2.0 billion in dividends, assuming a 25% payout ratio, and $9.8 to $11.6 billion in share repurchases, representing shareholder returns of $11.7 to $13.6 billion through 2025.

By Sam Boughedda

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