Marriott International(MAR)2024-02-12 16:00Property and Brand Portfolio - At year-end 2023, the company operated 2,096 properties with a total of 589,078 rooms[12]. - The company had 6,563 franchised and licensed properties, totaling 994,354 rooms and timeshare units[17]. - The brand portfolio includes Classic and Distinctive brands, categorized into four quality tiers: Luxury, Premium, Select, and Midscale[19][20][21]. - The company reported a total of 121 JW Marriott properties with 48,430 rooms across various regions[23]. - The Ritz-Carlton brand had 113 properties and 31,179 rooms at year-end 2023[23]. - The Luxury Collection brand included 71 properties with a total of 23,428 rooms[23]. Business Structure and Strategy - The company plans to modify its segment structure starting Q1 2024, reporting four operating segments: U.S. & Canada, Europe, Middle East and Africa, Asia Pacific excluding China, and Greater China[11]. - The company has a long-term focus on management, franchising, and licensing, owning or leasing less than 1% of its lodging properties[10]. - The company’s management agreements typically span 20 to 30 years, with options for renewal[13]. - Marriott's growth strategy relies on attracting third-party owners and franchisees, with future arrangements potentially being less favorable due to competitive market conditions[55]. Customer Engagement and Loyalty - The company operates a loyalty program, Marriott Bonvoy, which is central to its marketing and customer engagement strategies[14]. - Over 60% of global room nights in 2023 were booked by Marriott Bonvoy members, indicating strong loyalty program engagement[26]. - Marriott operates 19 customer engagement centers globally, with 7 located in the U.S.[29]. - Marriott's loyalty program and co-branded credit cards create a diverse revenue stream, contributing significantly to the company's financial performance[27]. - The company has multi-year agreements for co-branded credit cards with JPMorgan Chase and American Express in the U.S.[27]. Financial Performance - In 2023, the company recognized 7,006 million associated with the Marriott Bonvoy guest loyalty program[178]. - The company reported general and administrative expenses of 17,424 million in 2023[180]. - Gross fee revenues increased to 4,078 million in 2022, representing a growth of approximately 18.3%[182]. - Net fee revenues reached 3,989 million in 2022, marking an increase of about 18.7%[182]. - The company achieved operating income of 3,462 million in 2022, reflecting a growth of approximately 11.6%[182]. - Net income for 2023 was 2,358 million in 2022, indicating a year-over-year increase of about 30.7%[182]. - Earnings per share (EPS) for 2023 were 10.18 (diluted), up from 7.24 in 2022, respectively[182]. - Comprehensive income for 2023 totaled 1,971 million in 2022, showing a significant increase[185]. Employment and Workforce - Approximately 411,000 associates were employed by Marriott at year-end 2023, including 148,000 directly employed by the company[35]. - Marriott's associate engagement scores exceeded the "Best Employer" external benchmark in 2023, reflecting strong employee satisfaction[37]. - The company aims to maintain its position as an employer of choice by targeting new labor pools and optimizing recruiting practices[36]. - In 2023, Marriott launched a new Leadership Framework to enhance leadership at all levels, integrating refreshed competencies into performance management and development programs[38]. - Marriott provides comprehensive compensation and benefits to U.S. associates, including health care, retirement savings, and employee stock purchase plans, while regularly evaluating competitiveness in global markets[39]. Sustainability and Social Responsibility - Marriott's sustainability strategy includes a commitment to set near-term and long-term science-based emissions reduction targets, aiming for net-zero greenhouse gas emissions by 2050[43]. - The company aims to reduce environmental impacts and enhance community resilience through its sustainability and social impact platform, Serve 360[42]. - The company has trained 1.2 million associates in human trafficking awareness from 2016 to 2023 and donated training programs to the broader lodging industry, with 1.6 million completions by non-Marriott individuals[44]. Risks and Challenges - The company is subject to various global regulations affecting employment practices, marketing, and data privacy, which could impact operations and financial results[56]. - Currency exchange rate fluctuations may significantly affect Marriott's financial results, as revenues and expenses are incurred in foreign currencies[57]. - Labor disputes and collective bargaining activities could disrupt operations and increase labor costs, adversely affecting the company's financial condition[60]. - The company is exposed to risks from extreme weather and climate change, which have previously led to declines in travel demand and increased operating costs[64]. - The company relies on franchisees and licensees for brand management, and any failure by these parties to adhere to brand standards could harm the company's reputation[59]. - The availability of capital for hotel development and refurbishment is crucial for the company’s growth, and constraints in capital markets could hinder this[69]. - The company’s owned and leased properties are subject to various risks, including market conditions and regulatory changes, which could adversely affect revenue[71]. - The company may face challenges in attracting and retaining associates, which could impact operations and guest satisfaction[63]. - The company’s development pipeline includes numerous hotels, but delays or cancellations could negatively affect growth prospects[73]. Financial Reporting and Compliance - The company's internal control over financial reporting was assessed as effective as of December 31, 2023[162]. - The independent auditor issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting[165]. - The consolidated financial statements present fairly the financial position of the company at December 31, 2023, in conformity with U.S. GAAP[172]. - The company has maintained effective internal control over financial reporting in all material respects as of December 31, 2023[165]. - The report includes consolidated statements of income, comprehensive income, stockholders' equity, and cash flows for the three years ended December 31, 2023[172]. Tax and Regulatory Matters - The effective income tax rate for 2023 was 8.7%, significantly lower than 24.3% in 2022[266]. - Cash paid for income taxes in 2023 was 476 million in 2022[267]. - The company made no provision for U.S. income taxes on certain undistributed earnings of non-U.S. subsidiaries, which could be subject to additional taxes if distributed[263].