MAR Q2 2021 Earnings

Call Details

• Call Title: Marriott International Q2 2021 Earnings Call
• Date: August 3, 2021 at 12:30 PM UTC
• Management Team:
  • Jackie Burka (Senior Vice President, Investor Relations)
  • Tony Capuano (Chief Executive Officer)
  • Leeny Oberg (Executive Vice President and Chief Financial Officer)
  • Betsy Dahm (Vice President of Investor Relations)

Call Summary

Financial Performance

• Worldwide occupancy for Q2 2021 was 51%, representing an increase of 13 percentage points versus Q1 2021.
• Average daily rate for Q2 2021 was down 17% compared to Q2 2019 on a system-wide constant currency basis for comparable hotels.
• Global REVPAR declined 44% in Q2 2021 versus Q2 2019 on a comparable hotel basis.
• Gross fee revenues in Q2 2021 were $642 million and non-REVPAR-related fees totaled $160 million, which have recovered to Q2 2019 levels.
• Adjusted EBITDA for the quarter was $558 million, which included $22 million of German government support for leased and joint venture hotels.
• The company recorded a $41 million tax benefit in the quarter due to the release of $118 million of reserves related to pre-acquisition Starwood tax audits.
• The Punta Mita St. Regis joint venture sale is expected to produce at least $36 million of after-tax cash proceeds while the hotel will continue to be operated under a long-term management agreement.

Guidance

• A one-point change in full-year 2021 REVPAR versus 2019 is expected to impact fees by approximately $35 to $40 million, with the relationship noted as non-linear due to IMF variability.
• Full-year G&A is expected to be roughly $800 million, which is significantly lower than 2019 levels.
• Interest expense for full-year 2021 is anticipated to be around $430 million.
• Full-year cash taxes are expected to be $325 to $350 million.
• Total investment spending for 2021 is narrowed to a range of $575 to $625 million and includes capital and technology expenditures, loan advances, contract acquisition costs, and other investing activities.
• Cash flows from the loyalty program before reduced credit card payments could be positive, but after factoring in reduced payments (expected to effectively repay ~one-third of the $920 million received in 2020) cash flows from loyalty overall are expected to be modestly negative.
• No specific REVPAR or earnings numeric guidance was provided due to continued uncertainty from variant strains and travel restrictions.