Dear Stockholder,
The company had a terrific year in 2022 as travel demand continued to recover. Our associates led the way — taking care of our guests and each other, embracing change, and focusing on the details — and what we accomplished is a source of pride. We strengthened our operations, grew our portfolio, expanded our powerful loyalty program, captured growing global demand, and gave back to the communities where we do business. We look forward with great optimism to our next chapter of innovation and growth.
Last year marked a significant milestone in our company’s history, as we celebrated Marriott International’s 95th anniversary. We also paid tribute to J.W. Marriott, Jr. for his inspiring and transformative 65+ year career as well as his incredible contributions to the company and the industry, as he transitioned from Executive Chairman to Chairman Emeritus in May. David Marriott was elected Chairman of our Board of Directors, and it has been a true honor to partner with David and our Board as we transition out of recovery mode and focus on positioning the company for the future.
2022 Financial Highlights
Two years after experiencing the sharpest downturn in our company’s history, we reported record financial results in 2022. We achieved full global revenue per available room (RevPAR) recovery to pre-pandemic levels in June. Fourth quarter global RevPAR rose 5 percent compared to 2019, with occupancy down just 5 percentage points, and average daily rate (ADR) up 13 percent. One of the highlights was our group business, which experienced significant improvement last year. We’re excited that our outlook for group in 2023 remains strong. Leisure demand has also remained incredibly robust. Business travel is still lagging 2019 levels, but also improved meaningfully during 2022. Rising cross-border travel and the blending of business and leisure trips have also continued to help spur overall demand. For the full year 2022, gross fee revenues totaled $4.1 billion, a significant increase of more than 50 percent compared to 2021 which reflects higher RevPAR, rooms additions, and significant growth in our non-RevPAR related franchise fees, primarily driven by our co-branded credit card fees. Full year incentive management fees rose impressively over the prior year, reaching $529 million. Adjusted EBITDA reached nearly $3.9 billion in 2022, up almost 70 percent year over year. Full year adjusted diluted earnings per share (EPS) more than doubled from 2021, totaling $6.69. Our fee-driven, asset-light business model generated significant cash during the year, allowing us to both invest in the growth of our business and return $2.9 billion to stockholders.
At the hotel level, we have continued to work closely with our owners and franchisees to provide superior customer service while containing operating costs. Importantly, our guest surveys indicate that customer satisfaction continues to rise.
Booking trends at the beginning of 2023 were robust. We see additional runway for RevPAR growth in 2023, particularly with the reopening of borders in China and more cross-border travel.
Global Growth Trends
We grew the system in 2022 with new hotel openings and conversions. We added more than 65,000 rooms on a gross basis, achieving 3.1 percent net rooms growth year over year. We continue to see strong interest in conversions, with those rooms accounting for 27 percent of our room additions in the year. At the end of 2022, we had nearly 8,300 properties — about 1,000 more hotels than were in our portfolio pre-pandemic — and roughly 1.5 million rooms in 138 countries and territories.
Owners and franchisees continue to show preference for our brands and we have a strong development pipeline. Our development team had an excellent 2022, signing nearly 108,000 rooms globally, almost half of which were in markets outside the U.S. Nearly 40 percent of rooms signed were in high-value luxury and premium brands, and nearly 20 percent of rooms signed were conversions. The company’s industry-leading global development pipeline totaled over 3,000 properties representing more than 496,000 hotel rooms at the end of the year.
The company is continuing to focus on expanding the breadth of travel offerings available to its customers. In October, we were pleased to announce our planned entry into the popular affordable midscale segment with an agreement to acquire the highly regarded City Express brand portfolio, comprised of around 17,000 rooms in Mexico and three additional countries in Latin America. We are expanding our all-inclusive platform to meet rising guest demand, and we have received a great deal of initial interest from owners and developers in Apartments by Marriott Bonvoy, a new serviced apartment brand in the upper-upscale and luxury segments. In 2022, we also celebrated the inaugural sailing of Evrima, the first yacht in The Ritz-Carlton Yacht Collection, offering intimate yachting experiences around the world and contributing to the company’s growth in areas beyond traditional lodging.
Marriott Bonvoy
With more than 177 million members at year-end 2022, our powerful Marriott Bonvoy program has been a key driver of demand for our hotels and other lodging offerings, and for adjacent products such as our co-branded credit cards. Our growing portfolio of co-branded credit cards, now in nine countries following our November card launch in Saudi Arabia, had record global cardmember acquisitions and card spend last year.
Product innovation and engagement with our members remain key focus areas, especially through investments in our Marriott Bonvoy app and other digital offerings. In 2022, our mobile app users were up 32 percent year over year, digital room nights rose 27 percent and digital revenues climbed 41 percent. We have made great gains in contributions from our digital platforms, which are highly profitable channels for our owners, and anticipate many additional enhancements over the next few years.
Serve Our World
Environmental, Social, and Governance (ESG) is an integral part of our company’s culture and strategy, and we are focused on making a positive and sustainable impact wherever we do business.
One of our core values, Serve Our World, guides our efforts to support communities and manage our environmental impact. During tragic humanitarian crises, including the war in Ukraine and the aftermath of the devastating earthquakes in Türkiye and Syria, we provided support to impacted associates and their families and assisted with relief efforts in the community — efforts that continue today.
Our climate action efforts include committing to set a near-term science-based emissions reduction target and a long-term science-based target to reach net-zero value chain greenhouse gas emissions by no later than 2050. Our sustainability strategy and initiatives focus on a wide range of issues, including designing resource-efficient hotels, implementing technologies to track and reduce energy and water consumption, as well as waste and food waste, increasing the use of renewable energy, managing climate and water-related risks, supporting ecosystem restoration initiatives, and focusing on responsible and local sourcing.
Last year, we launched Marriott’s Bridging The Gap, a multi-year program designed to meaningfully increase diverse hotel ownership. As part of the program, Marriott allocated an initial commitment of $50 million to offer financial and other incentives to qualified historically underrepresented owners and franchisees who will have a controlling equity interest in select branded projects. In 2022, Marriott’s Bridging the Gap program resulted in nine signed deals.
We have taken the lead in the fight against one of the industry’s most pressing human rights issues — human trafficking — and in December 2022, we reached a milestone of training one million Marriott associates in human trafficking awareness. We donated our human trafficking awareness training for use in the broader hospitality workforce, and by December, nearly 850,000 hotel workers outside of Marriott had completed the training. In addition, Marriott partnered with the Global Fund to End Modern Slavery to create a hospitality training curriculum for survivors of human trafficking. All of these efforts are part of our sustainability and social impact platform, Serve 360: Doing Good in Every Direction, which guides our efforts to make a difference in the communities where we operate.
Leadership Update
Stephanie Linnartz, a long-time Marriott veteran and President of the company since 2021, stepped down in February 2023 to take on a leadership role outside of the hospitality industry. Craig Smith, Group President, International Division, recently retired after 35 years with the company. I wish Stephanie and Craig much success and every happiness in the next chapters of their lives. They have both left an indelible mark on Marriott.
These transitions have allowed me and my executive team to make changes to reflect our current environment and position us for future growth. To support the company’s international growth, the importance of our loyalty program, contributions of our luxury brands, new business opportunities, and emphasis on driving revenue and leveraging technology, the following leaders have joined my leadership team, now directly reporting to me:
- Satya Anand, President, Europe, Middle East & Africa (EMEA)
- Tina Edmundson, President, Luxury
- Brian King, President, Caribbean & Latin America (CALA)
- Yibing Mao, President, Greater China (GC)
- Raj Menon, President, Asia Pacific Excluding China (APEC)
- Drew Pinto, Executive Vice President and Chief Revenue & Technology Officer
- Peggy Fang Roe, Executive Vice President and Chief Customer Officer
In addition, Leeny Oberg now leads our Global Development organization in her new role as Chief Financial Officer and Executive Vice President, Development. Liam Brown takes on expanded oversight for the Global Operations function in his role as Group President, U.S. & Canada. My executive team also includes Ty Breland, Executive Vice President and Chief Human Resources Officer, Tricia Primrose, Executive Vice President and Chief Global Communications & Public Affairs Officer, and Rena Reiss, Executive Vice President and General Counsel. With this leadership team in place, I couldn’t be more energized about our future.
Our Commitment
I would like to thank our associates around the world for their hard work and commitment in navigating through the last few challenging years and in helping the company achieve our record 2022 financial results. Our associates continue to show a tremendous amount of resilience and dedication in taking care of the company, our guests and each other, and demonstrating their commitment to service excellence.
With our industry-leading brand portfolio, powerful loyalty program, the largest global rooms distribution, and our incredibly dedicated associates, we believe Marriott is well-positioned for strong growth over the coming years as we fulfill our purpose of connecting people through the power of travel.
Thank you for your support of Marriott International. We look forward to welcoming you at one of our hotels in the near future.
Anthony Capuano
President and Chief Executive Officer
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