Marriott International sets aggressive growth, capital allocation targets at investor event
Justin Sullivan
Marriott International (NASDAQ:MAR) will present the company's three-year financial model at a meeting on Wednesday with institutional investors and security analysts in Miami Beach, Florida.
The hotel operator will reiterate its 2023 outlook given in August and outline its plan to add 230,000 to 270,000 net rooms over three years, expanding its global portfolio to nearly 1.8 million rooms by the end of 2025. The projected hotel growth represents a three-year CAGR for net rooms of 5.0% to 5.5%. 
Marriott's (MAR) 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.
CEO update: "As consumers continue to prioritize travel and experiences, we are focused on transforming our technology platform while leveraging our powerful revenue engines and our leading Marriott Bonvoy loyalty program to connect people through the power of travel."
Marriott's (MAR) outlook also factors in total gross fee revenue growth of 16% to 18% in 2023 and at a 6.5% to 9.6% two-year CAGR to reach $5.4B to $5.8B in 2025. Adjusted EBITDA is projected to increase 18% to 21% in 2023 and at a 7% to 10% two-year CAGR to reach $5.2B to $5.7B in 2025. Adjusted EPS is seen at a 10% to 15% two-year CAGR to reach $10.10 to $11.45 in 2025. On the capital allocation front, shareholders could see $1.9B to $2.0B in dividends, assuming a 25% payout ratio, and $9.8B to $11.6B in share repurchases over the three-year period through 2025.
Looking ahead, the hotel operator expects to follow a tailored development approach in its expansion in the affordable midscale segment, recognizing differences by continent to accommodate regional customer and owner expectations. The company also plans to further expand in the extended stay segment, having recently announced the launch of Apartments by Marriott Bonvoy. Marriott (MAR) is also emphasizing luxury and leisure offerings. It is currently leading in luxury distribution globally, with nearly 500 open luxury hotels and 17% of the market. Marriott (MAR) remains focused on extending its leading position with another 225 luxury properties in the pipeline. Continued robust growth in Marriott's branded residential business, cobrand credit card offerings and other adjacencies such as The Ritz-Carlton Yacht Collection are also expected to enhance the company's fee growth. 
Shares of Marriott International (MAR) are up 29.6% on a year-to-date basis.

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