Business Context and Reporting Period
Company: Marriott International, Inc.
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Three months ended March 31, 2026
Business Model: Worldwide franchisor, operator, and licensor of lodging properties utilizing an asset-light model.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenues | $6,654 million | $6,263 million |
| Net Fee Revenues | $1,398 million | $1,247 million |
| Operating Income | $1,064 million | $948 million |
| Net Income | $648 million | $665 million |
| Diluted EPS | $2.43 | $2.39 |
| Operating Cash Flow | $858 million | $647 million |
| Total Debt (Current + Long-term) | $16,530 million | $16,204 million (Dec 31, 2025) |
| Cash and Equivalents | $454 million | $358 million (Dec 31, 2025) |
Material Changes vs. Prior Period
- Revenue Growth: Total revenues increased 6.2% year-over-year, driven by a 12% increase in net fee revenues. Franchise fees rose 17% due to higher co-branded credit card fees ($60 million) and RevPAR growth.
- Net Income Decline: Despite higher operating income, Net Income decreased 2.6% to $648 million. This was primarily due to a higher effective tax rate (24.5% vs. 13.0% in Q1 2025) caused by the absence of a prior-year tax reserve release.
- Interest Expense: Increased 11% to $214 million due to higher debt balances from recent Senior Notes issuances.
- Segment Performance: U.S. & Canada segment profit remained flat ($646 million vs. $644 million). International segments saw mixed results; EMEA profit declined slightly, while APEC profit dropped 11% due to Middle East conflict impacts.
Guidance, Outlook, and Risks
- Outlook: Management expects full-year 2026 net rooms growth of approximately 4.5% to 5.0%. Capital expenditures and investments are projected to total $1,050 million to $1,150 million for the full year.
- Planned Disposition: A U.S. & Canada hotel designated as held for sale is expected to result in an impairment charge of $65 million to $70 million in Q2 2026.
- Geopolitical Risks: Conflict in the Middle East beginning in March 2026 caused a sharp decline in RevPAR in the Middle East & Africa region and negatively impacted demand in certain APEC countries.
- Legal Contingencies: Ongoing litigation related to the 2018 Starwood Data Security Incident remains. While an accrual has been recorded, the company notes it is reasonably possible that losses could exceed recorded amounts, though a range cannot be estimated.
- Capital Allocation: The company repurchased $700 million of treasury stock in Q1 2026 and paid $178 million in dividends. A quarterly dividend of $0.67 per share was declared.
Investor Verification Checklist
- Verify the impact of the Q2 2026 planned hotel sale and the associated $65–$70 million impairment charge on future earnings.
- Monitor the duration and financial impact of the Middle East conflict on RevPAR in the EMEA and APEC regions.
- Review the status of the Starwood Data Security Incident litigation and potential for losses exceeding current accruals.
- Assess the sustainability of the effective tax rate, noting the one-time benefit from tax reserve releases in the prior year.
- Confirm the execution of the $1.425 billion debt issuance (Series WW and XX Notes) and its effect on interest expense and liquidity.