MAR - Earnings call transcript Q2 2018 | Marriott International, Inc.

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Operator

Good morning. My name is Jennifer, and I will be your conference operator today. At this time, I would like to welcome everyone to the Marriott International's Second Quarter 2018 Earnings Conference Call. Thank you. I will now turn the conference over to Mr. Chief and President Sorenson, Executive Officer. Arne ahead go Please

Arne M. Sorenson

quarter Good call. conference second morning Welcome to everyone. XXXX earnings our

Joining are President, Financial Relations. Officer; Betsy me and Senior Laura President today Dahm, Paugh, Leeny Oberg, Senior of Vice Director Investor and Vice Relations; Investor Executive Chief

let securities many our filings, laws. risks are to are everyone These comments implied considered forward-looking and that and future comments. results from cause by materially in numerous described could SEC historical statements which facts are remind in uncertainties statements me today First differ of our not under our expressed as federal subject to those or

Forward-looking statements be actual events are we today effective last in only unfold. today, updated night as XXXX that not issued along August with will comments press the our X, release and

net today's can about on our In tax adjustment to related we merger-related today slides You gain. and at our XXXX in www.marriott.com/investor year-to-date expenses, X-K will the our for reimbursed U.S. to excluding statement, and discussion income filing. Jobs Act find to or talk about Cuts the charge adjustment the the discussion revenues Tax costs, the results related website of and year-to-date the Avendra

and can on in reconciliations you earnings referred website. all find course measures our our non-GAAP financial Of our of also release to remarks

get So started. let's

XX% than increased Our was EBITDA revenue, fee expected owned, nearly better cash XX% rose expenses. $X leased shareholders with Adjusted totaled quarter second and $X.XX terrific. Adjusted share returned earnings to billion. results G&A to per and

rose guidance. retail services increased the particularly RevPAR X.X% rose our X.X% and beverage X%. Group America strength comp improved associated Transient Easter in second group continue reflecting X.X% Group in with RevPAR rose holiday. up in high digit RevPAR food for X%. to in room we pace rates RevPAR North the demand, in mid-single attendance leisure of strength hotels hotels revenue at is sectors. a RevPAR with our the and to X.X% with compression. nearly North quarter America As in at system quarter XXXX for first worldwide higher shift professional up Group the energy, quarter In rose in rate. see an non-comp luxury quarter trends and System-wide at wide nearly corporate the end the and encore while

For comp digit rate. up single a alone hotels pace is low at

Orlando, Given high grow exceeded the in double-digit the XX%. South over RevPAR RevPAR and today's and special Houston York for At in higher arrivals. New rates, up increased quarter in and faster a we is and corporate expect than our Orleans, revenue occupancy all from year-to-date, Florida, X% in growth the time very transient periods will New Vancouver. group bookings Toronto in near-term. tech RevPAR group with X% same higher and nearly international San particularly rose Francisco companies retail demand, rate at future

RevPAR We increase XXXX comparable for X%. North hotels expect America X% will to system-wide

X.X% growth if half and reported For of lingering the would have the for roughly bit inauguration a of year's XXXX we XXXX, of been XXXX RevPAR we hurricanes. the in X.X%. first of We RevPAR believe first slower, the growth adjust last half impact

forecast steady tough we midweek she growth adjust Independence RevPAR to would we other year's the For and hurricanes, for will comparison we words, be line believe grow comparable North If last estimate X%. system-wide In growth top is second reported of expect half RevPAR to as RevPAR roughly goes. our similarly the second American XXXX, X.X% Day half again the X.X%. our

demand. as increased XX% Asia On Beijing dollar improvements. increased while retail demand, Greater The in the Indonesia on occupancy returned front, rose leisure X% strong second gateway increased Motor RevPAR RevPAR X%. the as particularly demand gains occupancies increased in price as our while in business India region constant quarter the retail Mainland to in with in Show China continues demand international growth from in in impressive demand, RevPAR be XXXX Pacific well System-wide on and city, to also while group China. strong X% Japan Kong XX% strong increased from in greater Hong benefited RevPAR Bali. cities Macau that by RevPAR very in

region. political just for shifted on dollar their many a a other Congratulations rose tension I properties Pacific likely will likely By returned Turkey. Europe, from flattish, we venues. In our nearly East Algeria, flat system-wide room In winning lingering growth. holiday and lot bit in to UK growth dollar RevPAR of continued and to second Algeria, we is to RevPAR visit expect Africa from there Nigeria in the of the to and Cup declined future Egypt there RevPAR first France Brexit. by be in World more region, concerns and in third MEA RevPAR albeit In their RevPAR increase expect strength with parts minute the title. at in second results quarter, Cup Russia, to X% constant Egypt. due to was lot enthusiasm Italy system-wide single-digit the the of the spring the in weaker in RevPAR time modestly due earlier timing World and a we the grow Across half. considerable at mid-single-digit was the of to continue the fourth way rose in timing and driven in For Spain second and about stays than for as half, RevPAR Europe, Ramadan quarter Africa rate, the strong team in Europeans Asia X% second to quarter, is benefiting French Marriott the Middle was RevPAR the region for high a quarter demand. of rate, saw played last in constant X% the in to at the first and region Ramadan, the modestly while Russia lower.

Europe year, increase the a in of rate. to at RevPAR half will second believe, mid-single-digit continue we the For

third While Turkey the and improve. weak, will expect Spain will strong to quarter. the continue hotels Latin the to rose a lower in increase in driven quarter American become and Caribbean fourth increase Italy will earthquake. we is and Mexico double-digit Caribbean benefit In roughly last as the likely hotels we RevPAR quarter expect to we will concerns reopen year's third to expect, X% increased region, hurricanes. reflecting In comparisons. RevPAR from supply the about easier tougher. from easy improve low in Worldwide, they continue last in X% stronger following and comparisons declined industry an Paris the be remain benefit RevPAR fourth in to rate, a should In traveler RevPAR at should moderate as rate year's results modestly, will by comparison at security. mid-single-digit for hurricane damaged X.X% X% region RevPAR X%. Mexico RevPAR quarter, and to RevPAR XXXX on

While across we're of excited more the never and term encouraged competitive viewpoint, been geographically a we and by in scales. industry our better From even about we've number results, are distribution, prospects. chain positioned. rooms XXXX longer We lead

Our brands are powerful.

continue index RevPAR to XX last basis already Our to and increased the likely is months premium points climb. in XXX

Our three are better. getting loyalty industry programs the and lead

our XX. on unify loyalty to August programs expect We

of over Pacific. they a our in properties, guests positioned of they amenities, than value them product are and virtually While breadth faster, sooner in points to will need great and or program achieve earn will loyalty take Also look until earning and as are redeem of retain to price, brand, program. may dates. any don't one without guests, August inventory as all more and call road to of properties This the full travel. a mobile Marriott's making points conveniently South XX, we three channels, distance, will program of portfolio number websites of and names for on increases elite a guests the interest. status nearby care anywhere brand blackout direct introduce redemption our enable on growing and tiers, Johannesburg transportation, attractions we next search apps, enjoying we on our our all Guests experience and whether Midwest easily luxury year, customers our loyalty a resort getaway sales X,XXX will hotels based trip, With points will opportunities on websites including apps which on further of growing

their first Marriott and In loyalty. seven motivating, luxury lives points programs hotels, particularly at addition luxury from the X% guest from loyalty Moments quarter local to and enhancing second sticky. revenue destinations and point guests The increasing make XXX tripled to of but represented levels, Loyalty activities Dreams luxury holidays lessons. meaningful worldwide, part and Moments the returns just a XX% in lodging with of Marriott who experiences tennis our In sporting our demand significant cooking and Hawaiian road. experiences travelers offers the to brands spend redemptions. quarter, rooms properties and earning for redeeming are engagement loyalty XXXX, and nearly about our is concerts on owners program In of our magnetic. events

with our our Our through bookings book fee in a In apps, more direct transient call our property one Guests to could hotels half on contribute our are websites apps. competitive and also booking through loyalty of XXXX. significant based websites, property. also these luxury gross engines brands booked two-thirds direct XX% equate or on was which nearly group luxury, our XXXX, of offices sales our our channels can of centers, million than business revenue Like $XXX of directly or advantage.

through bookings occupancy our rates our our booked member increased OTAs have nights and digital quarter. on been encouraging faster management on yield We the booked in and our branded Because pricing second using focused than are system mobile revenue materially apps loyalty when efforts direct revenue high. special websites next-generation the of

reduced profit for owners, group additional should in should synergy make which hotel owners reductions well we to best-in-class third our for as rates network further as convention continue rates. the In charge-out the we resorts business as recognize productivity recently margins quarter, see savings improve We house savings commission Starwood and loyalty hotels. most improve For acquisition. from intermediary

scale we a will sliding new redemptions, believe incentives at room reduce loyalty hosting last hotels the rates hotels For We for announced this cut approach. reimbursement to minute. have

to higher roughly be rooms the have And value XX,XXX to our in simpler, and lodging inventory our advanced rooms quarter XX,XXX rooms. the Worldwide, XX,XXX to and predictable sales pipeline Finally services the further and higher signed STR, We management same approved fee rooms our and to towards beginning next program emphasizes time, the including in rooms hotels. luxury. marketing, in or the our bundle this quarter. thousand world, the above rooms, reduce program under pipeline for also quarter-end, luxury services as competitors will tiers of property extend progress to second we The starts. should construction combined. of to of of services. pipeline added removed quarter more construction reservations, than on rooms few stood it of development. we we opened pipeline record upscale worldwide for XX,XXX we and more mid-scale last nearly than our leads rooms upper to According rooms than continue end the We largest more three we XXX,XXX At begin a including higher XXXX. quarter pipeline made at at the most At second a development during fee a not owners enough and flexible development costs guest believe had more mobile than charges, XXXX, and that roughly XXX,XXX plan second at revenue to rooms and implementing the under the

opportunity value, team's our industry XX% under of the play, North America. represent in pipeline. we both brands force of and success measured our worldwide to Of late is rooms luxury present growth. we we signed. strengths would XX% represent transaction as rooms XX% Marriott value combining to tiers development To acquisition behind we brands announced driving quickly and was industry Starwood are the in targets real noted net rooms as well in nearly a enhancing create When of ensure Our meeting under alone for of marketplace. on construction driving distribution construction which and provide evolving value our acquire number competitiveness the XXXX, by in The the of Starwood our an our intention

at that that since of accomplishments believe Marriott. realizing to accomplishments the we we people on significant the at our are are With to way promise. due efforts These Marriott many announcement,

this system With combined working day. information to Thank program, loyalty who the our to loyalty the entire the our been toward have and everyone on express upcoming launch gratitude technology our organization, of throughout marketing want you. team, group our property I

So Leeny. for to turn more about the the call quarter, over let's

Kathleen Kelly Oberg

Thank you, Arne.

expected expected of the outperformed the than better expected for XX% Worldwide gross expected per fees; from the in fees over For diluted year than earnings XX $X.XX, the $XX timeshare our while house to unit non-property came Europe. of termination of Roughly to hotel gains in midpoint second largely and than from Credit the by quarter higher X.X% $X.XX over revenue; share guidance. totaled fees, In the operated owned, weaker administrative expenses, than performance of from residential on franchise totaled than assets, America second better at $X.XX incentive year-over-year, fee the branding North from and than largely and fee RevPAR venture; $X.XX quarter from prior and revenue gains from Compared and gross fees million the sale $X. the favorable favorable fees. expectations, million to $XXX net our outperformance million better of midpoint, card to quarter a expected $XX from second revenues performance $XX joint hedges. X% million. leased on quarter XXXX branding prior came came adjusted profit-sharing including XX% in line, XX company came impact improved exchange a totaled fee U.S. hotels in alone in foreign general largely a of year of expected tax compared fee margins including profit $X.XX $X a from fees better came $X.XX fees dollar, hotels declined incentives on basis including timing; and discrete RevPAR. quarter, points lower increase With hotel million, the benefited and revenue million sale and and increase a managed items. $XX favorable due the stronger other growth, second contribution

of continue savings the around totaled the Our results from $XX expenses recognize Owned, leased productivity administrative year-over-year, leased to million was Property somewhat offset fees revenue quarter, to expenses higher a in other in by year. hotels level higher North revenue and merger fees. owned, other Starwood and fantastic done leased quarter property in teams dispositions million in than have world associated cost termination expectations X% reduced full Europe. as $X by quarter, of procurement, synergies. owned from acquisition. and with declined the job prior other service profits and and termination net and largely Owned, synergies the we a America and due million leased from X% higher second expenses higher General decline largely second the due to the net $XX

$XX than was better Second quarter G&A million guidance.

lagged would match in $XX million We The following quarter. recognized expected enrollments match million total in second of our the actual profit-sharing as quarter first the profit-sharing $X million amount quarter expectation. second $XX was

half to shift of some of of half We the second previously $XX profit-sharing spending total in expect the as related the year. the XXXX back anticipated will impact the of expenditures enrollments additional million and we

our the City the Hotels in in Tremont, sold Sheraton and Chicago parcels a in Orchid venture joint Fiji, we Mexico Dispositions this gain We million. $XX reminder, currently Sheraton the interest it in XXXX. This will in Montreal, cost owns program million and a estimate line owns the $XXX the $XXX a million. by of quarter totaled in is sales total XXXX. being our million expense One-half the joint Thailand Italy. of the asset recur which the of interest year sale As on exceeded in Royal gains in land and full and G&A is $XXX our W venture on with which Westin Avendra funded our impacting not the

share Ritz-Carlton, equities Another venture the of Toronto line The and and gain we on earnings recorded our joint sold our the transaction. of on that

that in target a end by recall billion asset we may You of recycling of outlined XXXX, year late XXXX. $X.X

long-term paper agreements higher totaled transaction $XX hotels, the periods, on reaching of on sales commercial higher million the $X.X Hotel. our included levels our commitments sale XXXX. joint due asset this secured gain and income. in completion the a of commitment loan earnings of Toronto a quarter million lower the balances, and sold and We've the $XX renovations the already expense surpassed also interest The Ritz-Carlton, Equity the needed this million along in of late billion. XX for quarter hotels of debt and renovation interest included This two-year X sales With Net with for for quarter has to both earlier increased interest other $XX property. and second rates management recycling interests significant venture these where repayments target, asset since nearly in

EBITDA a Second million, from $XX adjusted million despite rose sold XX% to quarter assets. impact $XXX negative

expect growth XXX,XXX the quarters, ahead, constant worldwide system-wide XX% year. to Looking yielding is in we each is for half outside is to pipeline luxury our of Nearly will full rooms' X.X% North and in upscale X% tiers. third under increase and X% dollar fourth construction. of half RevPAR America upper Over RevPAR the X% the or

shown not of return. owner an is the rooms' managed, company to less than the XX% XX% but pipeline on While XX, is priority subject slide pipeline of

to continue yield For full gross year, we about X% expect the to openings growth.

of we XX% has second than construction signings under increased than any continue new more and robust rooms XXXX under since the rooms more Our and remain to quarter the competitor. construction number have of

running are a For typical. XXXX, bit to deletions than higher X%, close

addressing are we more of While and completing being aggressive are there Legacy-Starwood workouts are hotel, in issues. product different stories for properties every quality

in basis will a growth XXXX. On roughly net in rooms worldwide net of pace slow the XXXX. expect this X% yields We deletions

revenue fee XX% $XXX increase prior for assumptions, Given million, to an unit the will our $XXX third over we total worldwide the to year. million gross and quarter XX% expect RevPAR growth

impact quarter. third favorable the $X nearly revenue estimates exchange Our assumes foreign in in million fee

leased We other roughly well quarter, a sold total expect million stronger as third $XX of results in hotels. higher and fees, termination which $XX will impact net direct owned, and as the reflects from negative expenses revenue hotel million

$X.XX. Our in our G&A the assumptions the third per million $X.XX guidance diluted quarter, than that completed. assumes no quarter $XXX These adjusted adjusted share quarter, roughly sales should further third contribution total $X.XX third XX% to yield $XX higher profit-sharing. beyond been million have those EPS earnings additional for to of for XXXX to $XXX for XX% including asset our million

revenue $XX from other For the fee million benefit sold as million exchange. $X Sheraton profit-sharing a expenses purchase should $XXX net owned, continued million merger, expect the fourth hotels. million, in fourth million to a from higher fees total in to termination $XXX from Grand quarter, million associated foreign Results as leased roughly $XX benefit the results, gross total quarter, including we roughly roughly $XXX the million total from direct an with the fourth will negative of $X revenue a and $XXX of and well quarter, million stronger impact offset by hotel our Phoenix, $XX reflecting synergies match. G&A reflecting million should

We tax increase which $X.XX quarter share XX% the items tax to EPS. expect will for rate per should Fourth some XX%. quarter XX% over should lower XXXX fourth from to total fourth in discrete to adjusted adjusted quarter a the $X.XX, diluted our earnings rate benefit that roughly quarter

million XXXX, fees credit roughly to million card gross could XX% Incentive fee year rate increase. total year. $XXX branding we to $X.XXX full XX% XX% believe the increase a total at for revenue fees $XXX could $X.XX could billion and the to billion, For

termination of estimate assets. impact negative the results, revenue higher includes of full stronger and hotel from Our sale an million net expenses owned, leased and of year $XX other fees direct

XXXX, earnings by compensation to yield of million from G&A million a prior impact offset share higher assumptions G&A EPS $X.XX costs workload our for XXXX, Compared per sale somewhat through of $X.XX for contribution for associated changes $XXX lower decreased XX% adjusted adjusted assumes total our guidance, the XXXX. Our adjusted with XXXX a Full These estimate rules for million assets. XXXX. modestly to increase XX% in has to negative over and higher $X.XX and EBITDA should profit-sharing $XXX diluted reflecting year to accounting $XX estimated expense.

$XXX Grand the We adjusted spending the a $XXX for last million yesterday, million capital we've adjusted XXXX through an billion, $XXX more EBITDA due $X.XXX spending the in by of million. and should increase from million, through from approximately billion XX% Sheraton $X.XX to over of repayments. XX will million $XXX expect other total million X, shares XX% increase total to billion. to Year-to-date total offset EBITDA. Investment $X.X January XXXX Maintenance forecast purchase Phoenix, of XXXX our to million in could than $XXX repurchased We $XXX reductions loan for recycled asset spending. sales over

over With and dividends earnings the benefit expect shareholders in through to of repurchase share billion now we higher return $X.X to flow, anticipated cash and XXXX.

remains our appreciate interest At levels targeted debt to adjusted of sheet times X.XX in credit times to EBITDAR. in X with consistent your balance were XX, Our our debt We great adjusted standard shape. June Marriott.

So that that we questions you can you many as follow-up. your speak to as yourself and limit we now. We'll possible, of ask one to take one question

Operator

Harry from is with Instinet. question first Your Curtis

Harry C. Curtis

Most sounds of NUG the in reduced me got I what deletion estimate. that you there? include, surround could that? the you to on us of but you you all, long do we've deletions, been which wonder of think things, give visibility a questions in How the have you And one-time is year, couple detail confidence have more first of a might this last? to rate kind feel if surge much like It degree this how growth do getting next normalizes

Arne M. Sorenson

and good Harry Thanks, morning.

think referring Let first to NUG brand. opposed growth another as say me unit you're maybe net I to

have ago all a it's that think, and what's We I important, this we that. one them. raise from a then. deletions we than NUG But did think, understand have obviously, to question, but level of of driving our higher is, brands, try not assumed quarter the quarter we you're guidance I right a few And

side affiliate should development, appetite does about owning about anything, to the is, core be and grow think but partners' to it I about I say, addressed think we're what if place start with because would with brands our that more much the rooms is new is signed us deals would the And which here a I anything the not what to us. seeing been example, XXX their In question you. is development we approved newly than QX, data hotels had deletions, not XX,XXX of newly counted in the strength of tell deals the pipeline, on for our before, powerful deletion added hotels. or that indication

desire. make for economic typically perspective. you hours. quarter sort keep there we're the at be count, out they, point the than those owners reenter of, that recent these hotels once If time, thought do because hurricanes hotels take earthquakes. obviously, and most the that XX additional a into second it's frequently math behind that often in left meaningful And be of system. And to the what the and own I estimate balance driven is our And out can increase back are but little of unique nine in And think while each are so from of by is in can they of the individual we've expire, respects a that up expirations. keep quality system. for adding for some its older to could them, standards, get brands or necessary order to or issue that, XX% our bring to to be just And put current before contract we years come some product saying renewed, in the with be perspective. in continued capital them story. them while be XX% The in from that's in number to they of the impact them a is every hotel does those only contracts, an And on driven brought when each circumstances sometimes substantial the things invested quarter they a lost of capital which to definition hotels, make that a our And at and we'd core about has shows we quarter ones let's usually, hotels last came at second in assume about quite it hotel. came like would that mix we question They the the course, deletions. unit so by And in that's up out. if in expiration, you that the About may to in of of it can't it's standards, more though that deletion left. by And, What's were than want they progress if sense point system, the see that year system assets, beyond them hotel our deletions the our or around rooms we could economics hotels happened ultimately affiliate prepared capital stay the we and they they looked while but the they are world the to are in issues. quarter the rather is, system are many

the Sometimes, of through resolution that we position with about assets and if work to owners point see these we a different have of the we and that come our makes view a most obviously, sense. can

going last the future. a I'd new experience this think to thing here, I we're say too, to question years suggested that rate not for think the in and come deletion in do we Harry, your is

this think mix pushing issues. quality is product I a of

unresolved mix the were I legacy closed portfolio within some that we some with extent workout it issues transaction. a is the Starwood when think of dealing to

range hopefully, towards deals back resolved of years about to been deletion Some of those through come. and to not the get X.X% kind more of years we'll resolution. to couple have we're we them the talked the And for working way our last X% that

Harry C. Curtis

or that just be That's a the us little of so? attention more help within brand. to by brand where to to XX the want Sheraton the the relative X Sheraton here, need seemed you do giving was to in your perspective on history is you helpful. you Perhaps a be acquired Maybe year most the you brand bit scale it where next when believe could Starwood of

Arne M. Sorenson

brand, which our We're the what sort to we And have this around of making towards lots world out on its see About brand. is with from a at on June the rolled new year we Sheraton Conference for the with franchisees have a brand those in settled on meeting Sheraton. and year obviously did is progress prototype the what of of In public we're brand. XX% we look at great the around tremendous the Xst dialogue portfolio owners the response owners the world. ago, Sheraton of space the about a for way in of portfolio regular New Sheraton doing York, we the June idea guest standards. our room When Sheraton had Lodging and we we for

fair going happy bit to some And the obviously it's deletions brand. certainly RevPAR that closed. those above a to for most it's Now it is there under system a even leaving renovation which the that see from to well now about those a that share as bring are place be the we up take renovation already to to we where scheduled bucket which is of in which that because brand going done includes maybe we're we quarter, index with long-term renovation hotels in to to get brand think which we're can standards. we're as the are we for since discussions strengthen moved or if have owners

a necessary. think capital I we deliver ahead it's of kind reinvention if the and of can the movement that's of it brand significant got

we So for I really about think feel the we've got the plans momentum hotels. for good

will before customer get actually and see to the of start of of average move available they to got renovations Sheraton's experience customers materially. terms the to the in more these experience think I completed we've

Harry C. Curtis

Appreciate helpful. it. Thank Very you.

Arne M. Sorenson

You bet.

Operator

David is question with next Research. Beckel from Your Bernstein

David James Beckel

Thanks Hey. for question. the

Arne M. Sorenson

David. Hey,

David James Beckel

Hey. about high question ask relative more you has would to Thanks. you relative happened about I'll half the spoke? just this cause executives a to last concerned anything level last to we a Obviously, RevPAR lot geopolitically. that Are quarter. expectations from be time time hearing back

Arne M. Sorenson

Yeah.

using goes, phrase, good steady question were the about we deliberate very So as prepared remarks. and in the she

bad news describe probably and could we think here. I good news

are United QX okay should up QX. GDP had build even faster in should that your who in States drive growth Maybe and RevPAR this that showing you optimists the So numbers. in we call a for QX or X% maybe QX the into print saying

higher We in our up have or industry. growth not the either higher demand seen in system show that in GDP

which In was Smith demand, X.X%. data, sold fact at up States, QX QX United look in Travel the demand in in rooms you demand was X, is up obviously

the last balance we're X.X% U.S. of was So those our many when growth, adjust same shifting in and X.X% our think, quarters, RevPAR tougher calendar identical the for is so companies the Florida, about the this first said softening. heard is shows things, the remarks, built-in essentially X% a already growth number of significant a the in prepared you and if of strength you for Xth to the from X.X% at some very in seeing not hurricane comparisons this other And two recovery QX, what sign our of much the identical. the in the we repeating anomalies, one particularly is the Similarly, When much thing. half is RevPAR we was very one numbers. guidance that And the It obviously, or impact most because about adjust of X.X% what and holidays, comparison essentially system-wide is RevPAR but of July when don't. system probably get and in Houston you're I mid-week, for but respects in is worried look QX It the calendar pain back anomalies. an efforts concerning, we've year. year space, year. got you've

much corporate strength middle. the segment. group And greater the In somewhat group space, is the than associate she corporate in that, the in very steady under so, leisure it's group. the still right stronger probably transient see probably the We is goes. as And

David James Beckel

in helpful. commissions folks just follow-up that relates that, that and That's remarks, you've group that seen a quick reduction activity called much your strength change? wanting of try to of to advance book very as and the in in to Thanks. the to And booking group prepared out how

Arne M. Sorenson

a really raise. important That's to Yeah. point

in strong. group periods very, future the for first quarter Our all bookings were very

our X. of reasons, took commission reason for was reduced April One that the effect perhaps rates significant the most

rates them. they to impacted their the make commission with And they sure intermediaries, were group of before number efforts were accelerating lower booking so,

they I yet, across companies a year. in group place that reduce levels would first similarly effective I commissions in look industry fall of are too, think of the commission group and other think when the the or rolling companies of number you decide you've in those none the had lower be will they some for other

levels the consumers about the bit many will maybe booked. business have but hold compete they a to that, of more business that that is said not services and group in be way the they're we in much in interested I little well to to group of for we'll of and a space. Having facilities are, terms their ambivalent commission think, dynamic group what going so end very are think And meeting, continue where both should

David James Beckel

much. so Thanks

Arne M. Sorenson

bet. You

Operator

Citi. question Rose Your next from Smedes is with

Smedes Rose

wanted I Thanks. Hi. to...

Arne M. Sorenson

Hey Smedes.

Smedes Rose

phase be now. like a the it just wanted which side, with the revenue side by next path going happens behind the measured it's the of loyalty expense what to be maybe fully I acquisition is largely I on kind ask you more versus consumer program from on Hi. the to seems to guess perspective, you of on now the Starwood integrated

kind so now we Street you think So gains baseline – market is that how can that communicating you your the can a talk can something from about now share where of measure sort you about index? of presumably year kind you RevPAR will in or or as a is? Or of provide can that to that

Arne M. Sorenson

it be going as channel same all of system. and will Yeah. question a We the apps of to optimism. websites XX, platform, we set August so think We love have the optimism the that's of positive well and program, loyalty the as which one the rest the happens one and for in your powerful

some the I'd a contribution thing be we're at loyalty of at status one looking upside credit of elite or being very Hotels. hard like get drive market we hotels of the basis got between the of to be, into other. status also the customers members. Leeny course to RevPAR going to your RevPAR we'll of which in program, As hotels to looking that our going course number one It U.S. see and loyalty to for and international we very until It to balance can is in our the both of growth in loyalty a of on That the in relatively earn think XXXX Starwood that know XXXX or sometime is We'll that see in to Previously, we're strong it predict and We'll and that XXXX. website measures strength between what need points program and That and optimistic of of portfolios. cost index. for program should stays but accounts. is having looking the given we strength And but means loyalty get had further in markets means We done synergies points transferred being program the be in performance of greater the on earned don't actual members think with the we maybe also one whole you powerfully, the the We've will modest mention. that this levels. other and platform to toggle means they mentioned, two rolling different be up stronger Marriott We increased early all program we will name the cost best thing don't we'll XXth the at August. and about QX. be results side. of the we achieve. will from communicate redeemed XX instead those we'll back do points as XXXX we're won't portfolio will have we loyalty the efficiencies margin most greater you size show and out be to wallet loyalty deliver mentioned One share program. think forth to

we for in couple So both portfolio very want of top the much of and margin next years. improvement hotels line to drive the

Smedes Rose

Okay. I ask question. That's helpful. to wanted then one just And

managed Or can process add any finished largely guys' owners, force. that REITs around And talked have just at from sales additional Some owners? now? Hotels about core transitions sales is your formerly maybe we've Starwood of I'm bookings there that versus what is the wondering heard kind the from perspective you detail

Arne M. Sorenson

Yeah.

I the of sure to And index long a years want performance best six of hotel's rollup about seen try for we've are the positioned Typically talk in similarly few seen of make RevPAR performing in as most on is references or last little hotels RevPAR talked few not we've couple obviously five are early those geographic some competitive in The that a typically bit. going numbers. And I'll are same those way scales the published. the and this the set. of chain notes So but each that a to relevant in to indication is that this about index to a their against market. comments be the about were hotels go too we here, the

luxury this little remarks, this in work a get that the our of But think got upside we us. the the at merged order in have the size strong other germane by be in prepared hotels been And program that things which, picked that space all Sometimes, group about bit similar. again, space, are okay, hotels could if is they're index they're broader geography performance has or the said so we is been yet, the Marriott by underway to portfolio in that underway basis we've of XXX increased hotel. the on not the over points results. loyalty is ahead the here fabulously months, assessing last this with to have group owners the integration and as a Marriott is most that's to of relative say, we been XX of the and kind And and they're

to companies. are made been numbers even growth posting by Legacy-Starwood other look Legacy-Starwood have Legacy-Marriott can if but bit for that before RevPAR RevPAR less a little comments are a thing precise note Hotels higher the little Hotels. you at not, that the getting interesting the some than to One the Legacy-Marriott that comparable, data, growth the look last and also, Hotels, at think, because Hotels I you can

of we the full reliant force, point most describe look And hotels. a the both they And months Hotels, the in the bit last group. We have Legacy-Marriott see and performance a They of XX Legacy-Starwood memory RevPAR network. on tend a to most the hotels, hotels, as big up index because about months. reliant if XX our sales and are ones a last portfolio we we more the convention three at be those hotels, resort on than are that in when they point full serves,

integration all we say systemically that of the of system. would nothing would suggest that negatively impacting that the sort see is is So there

of before times. bookings the compared that's that of comments prior XXXX. quarter first integrated made. in talked And and We to these but its name we've the XX% know them well in one when hotel I'm had through QX. in hotel books of force the an in backwards weak thought group was specific it. in about, of even I bookings Starwood on had one for each future quarter they that I the hotel it companies seen go hotel going won't interesting sales looking about Now, to not and relatively working for by new And the for increase that I'm periods talking a which soft had that acquired Marriott XXXX the second fact periods performance

a is so, the a which been had, which the other be change in reverse, circumstances integration that just an each been or to there or different not for not second performance a there remarkable has We're saying again, midst strength is across been done story. that's the that to staffing distractions we've couldn't what going have And generally the system the but is we hotel have there the to underway. all But see impact been of issues. there integration implications have in

Smedes Rose

that detail. Thanks for a lot

Arne M. Sorenson

bet. You

Operator

Felicia is question with from Hendrix Barclays. next Your

Felicia Hendrix

Hi. Good morning.

Arne M. Sorenson

Hi, Felicia.

Kathleen Kelly Oberg

Hi, Felicia.

Felicia Hendrix

What in the were kind they like to looked the or of takes And half? quarter, what just to for So, sales for as kind also, and force RevPAR third extent you're you then second the have in of wanted would second transition? just terms have guidance for of your in those you along how impacted? much smooth quarter, RevPAR you for if the results maybe that about lines, accounted the puts the just out of thinking

Arne M. Sorenson

Okay.

Felicia everything repeat but... said I won't just I So

Felicia Hendrix

No you want to. I don't

Arne M. Sorenson

think there We any not was impact... do

Felicia Hendrix

Okay.

Arne M. Sorenson

mean QX. do in ...I impact not we is QX or any think there

are the the to the anybody's not out case. somehow is we've So put QX than integration extent be or they would there lower thinking QX that numbers of guidance concerns, because

Felicia Hendrix

Okay.

translate about different index and You're about just I I talking you – all that. way there a it. was talk if to heard didn't heard of I know

Okay.

on move Let's then.

– in wanted April, I net just happened unit was – Just right. I because growth, so you in get to to quarter just gave seemed again the guidance on there quarter the in something the

also back due X.X% that Dubai to that of we you get expected deletions the XXXX, to of growth then unit greater hotels So than can expect just to the was how to X%? closer wondering and much to net looking

Arne M. Sorenson

Yeah.

we QX. questions maybe were interestingly experienced and in a the ironically, QX few in bit a rooms there. in half as actually deletions experienced But little as we many So

X, in de-flagged we're – not hotels at higher are higher and number if And July so QX, happened Dubai based actually The what they the now you to you that guidance, it QX. Actually the be and look on to deletion as anticipate – at until what able would as or we numbers given August August QX really right. more QX in in concrete much were might is we X the remember right because deletion we're I XX. be we've referenced not actually in July

So and a that reasons a I quality QX some this, going so on anticipating The certainly it much being as and a and will What little for maybe made we're – we to discussions July, based and and in that two we're decisions of piece QX tried tougher have and that. product but call to see too babbled long on bit clouded underway QX implemented on as is a yeah, be number. of are bit is higher end been of deletions. already that it's we've a mix out

Pollyannaish number is discussions resolved, workout And that pendency of or point a sometimes to – I opposed of have thing another last because as out had of happened we think be think were to lead be simply fairly in that each proud about Dubai, try say, that The and confident think those Starwood product system but the three in a something there part don't working with very in. the be the like our that I and owners of have you this, discussions not with of replaced we will I hotels in resolved. called market look And when those in deal sale that to the company. our of to brands near-term. what get can represented I I'd teams at staying only leaving been the we had are there we that want

Felicia Hendrix

are you've in Okay. That's more purposes helpful. been you X% But with as for XXXX more we modeling comfortable or just with recently? that where number

Arne M. Sorenson

don't for right you a XXXX We number now. have

Felicia Hendrix

Okay.

Arne M. Sorenson

X% view as We think likely do sort are X% into at to the X% our obviously you expectation. I that haven't should the new that being of deletions built to not XXXX back X.X% and down range budget. go

Felicia Hendrix

Great. Okay. you. Thank

Arne M. Sorenson

You bet.

Kathleen Kelly Oberg

Thanks.

Operator

question with from Jefferies. David next Katz Your is

David Katz

morning. Hi. Good

Arne M. Sorenson

David. Hi,

David Katz

Can each is Sheraton the at sits degree the – covered we've around repositioning and to which progressing? give with hierarchy was unit us we've there issues bumping early just a Marriott fairly the think Westin either I up the rather growth are and I in those to brand community. Marriott well. some the wanted Sheraton that on? overlapping around and you know early it how But other address color the is of always So discussion or in one where little against on I development looked

Arne M. Sorenson

I JW Dave. those Delta come Obviously, service they Westin, got, and different got legacy mean, Marriott And full I we've Yeah. were in the understand from we've competing Marriott, obviously, question, space. Sheraton, hope head-to-head. often upscale all two I brands and your also upper portfolios

getting where needed than at about probably, the our buy-in Now that's of most, do definition, part and portfolio. have we is, making have owners this. because they with the overlap, get by both franchise this also, our would I – think that across to a can we feel fraction quality some could is and to hard and our you flavor say, in what is And are loyalty to because what a it. brands if been heritage space. what deliver brand we guess, have bit same and And of portfolio Sheraton a true essentially of and lifestyle got and on obviously, up and on say stress an we at the too. that from target you're choice to teams of average, extraordinary partners. customers at at distribution on they brands acquisition and Sheraton a owners the now than And product full really hard think have that an hotels the significant what little have got the kind average, when monumental that's the and, Starwood. on the depending some a progress our look we core it's – I we're the that But positioned be market It our franchisees and space the it That's quite good group really is. have one meaningfully with had. of in look more space also will has good seeing average Sheraton move can differently that and closed brands the space in economically that will to was full most. this words bit from it But lower how over kind Marriott than a one on these have them. to it's each competitors' we're of confusion task ours customer that's at. members the service opportunity many to decades services those applied work it the better the talked to distinctions said brands of brands being will important to each They're we've were the those at And important a still for are another. work and Renaissance which minimize is between this of can the brand they're at opened be And Méridien each they've both, comment We've and I this again, developed and service positioned that easily location are them all

to brands. we wouldn't one without of be So these single want any

David Katz

Great. Thank very much. you

Arne M. Sorenson

You bet.

Operator

with question SunTrust. next is Your Scholes Patrick from

Patrick Scholes

Good Hi. morning.

a Just quick question.

was earnings group up revenue What noted On pace X% and for you figure booking today? the stand at previous the upscales does call half that your had to second for of this luxury X% that upper year. comparable

Arne M. Sorenson

the same. about It's

Patrick Scholes

Unchanged?

Arne M. Sorenson

Yeah.

Patrick Scholes

Thank Okay. you.

Operator

Your next is question with from UBS. Farley Robin

Robin M. Farley

Great. Thanks.

Arne M. Sorenson

Hi Robin.

Robin M. Farley

Two questions. – just hi. is One

conversions your big just or don't one you On And two that's pipeline, about differently shows conversions thoughts but metrics? if conversions large I the pipeline. effacement in (XX:XX) XX% why and unit these not is in know ways, or you're looking of in you just the different where other at – their measuring competitors you it of I percent conversion don't sort have something as difference. a growth, if your they it of any about you know being X%. about talking measuring show a your on are it of such are slides capturing

Kathleen Kelly Oberg

Sure.

not included. think to certainly definitionally to know I they're I'm how pretend going

year-and-a-half, or to can meaningful for work there's overnight. that literally if know you there pipeline your a conversions a As it wander needs done be it and into amount flip opens of can stay before

the the when openings soft as that where you come pipeline. terrific been, consistent a are still a in time of don't to from Autograph those and often that's us. which we again XX% conversions, our about brand we're over just been brands our they terrific situations land pipeline think in has enter the for So think example other our But it's into XX% room way very

Robin M. Farley

around driven guidance And the then you're the you've it even my and comps look as maybe was what adjusting shifts QX holiday just helpful. previously you and color hurricane from though year what what or I you in give prior you the for impact guidance an that? you driving impact don't be QX. think back That's gives acceleration would in the just same the second question that that for expecting giving the can demand other if Okay. half at you're quantified QX when of like know Thanks. demand, RevPAR for the of any out underlying you do looks if

Arne M. Sorenson

much What the as we're she at XXXX expecting first calendar RevPAR for steady we've an and two we as wouldn't I two is comparison expecting issues what goes. very of about Adjusted equivalent said quarters acceleration. and essentially interpret as see the quarters for X.X%. last

Robin M. Farley

I'm And just QX I thinking QX. versus guess

about guess hurricane understand second half. were half versus you're So I definitely the in driven of QX. I impact what shifts saying greater demand holiday first and But

that we for at back same rate as QX out, if the to be QX? So

Arne M. Sorenson

our QX X.X a is in than the there to which and calculation can't pinpoint QX Well, exactly may some know are fair Jewish we've gap accuracy. be our got the July hitting remember be holidays and Xth QX hitting. apart timing – and are smaller where how they're for I

Robin M. Farley

good. That's That's Okay. helpful. you. Thank

Arne M. Sorenson

bet. You

Kathleen Kelly Oberg

can how And also there there a believe is are also nights in bit of and there Tuesday just day or and shift many that week a not, are a Sunday nights it between versus terms little quarter-to-quarter how of be many QX QX. factor of

Robin M. Farley

Sure.

Thanks. Okay.

Operator

question is James. next Raymond Crow Your from Bill with

Bill A. Crow

Thanks. morning. Good

Arne M. Sorenson

Bill. Hey,

Bill A. Crow

I out the hotels pipeline the I the out in that I'm – Starwood's something there. that portfolio I'm to mentioned phantom wondering just the – in issue pipeline you've called a days were just pipeline of construction called deals on timely in recall that actual taking of of you peers And any strength matter. was and had think that the pipeline. commence remarks or back about were yet weighed Arne, was formal a of part of lot to the pulled when whether their the Starwood fully the maybe suspicious

Arne M. Sorenson

Yeah. And portfolio. I wouldn't attribute that to Legacy-Starwood a mostly

and as I one. pretty and found were going aggressive not XX,XXX and the last won't through out had think pipeline XX,XXX in brands But the enough. is deleted should projects this I quarter in pulled pull that. say the through we rooms think or we – think the of that I we the calls that that our out. what XX,XXX I team necessarily quarter moved fast in were as in Legacy-Marriott every that we there that intense both Legacy-Starwood that brands quarter?

invest some And – meaningfully pulled them to it's quarter does few portfolio. the this it's – not in we unusual that, I coming probably maybe the And bit bigger But plans so, to think an that And out bit fruition a than but in it higher bigger. a typical would little got thing debt of the little are capital Availability is laid plentiful, little a in bit than they maybe were requirements construction are still respects costs discover before. of new higher best totally available to not with owner not they be, are a equity today, a of number maybe than someplace. And in a plenty we're projects. environment we've were still before. is

on pursue up and signed out deal not moved that assume, end forward they a-year-or-two just that they're somebody us you with who it. tell else. planning to move so folks they ultimately market with haven't We forward it and ago maybe to that so And call got we've some

Bill A. Crow

into up, to the great. going follow Hotels progress ready then now such Starwood, your specifically thought consolidation in Okay, just you the theme you get play. a to for while? made I'm I not ask you've but do the that are to NH back or appears you integration guess, be set about think of And that, on Marriott's

Arne M. Sorenson

We will look that continue are to at available. opportunities

as discovered Heinecke NH like it relates particular, what in Hyatt think looks has Bill – well company I up. to tied reasonably that is

don't as point that one, much there's we would talking in if think about I So anyway.

Bill A. Crow

Sure.

Arne M. Sorenson

growth far. here the way gone We're deal also hotel business global of the is Starwood of as the so we see. huge. But particularly we'll obviously, not appreciative very story way share of the has still We're, today, organic But appreciative the our going. is sit

continue And think so, plenty opportunity to of to grow. there's I

Bill A. Crow

Great. Thank you.

Operator

JPMorgan. question Your with Joe next from is Greff

Joseph R. Greff

everybody. morning, Good

Arne M. Sorenson

Joe. Hi,

Kathleen Kelly Oberg

Hi, Joe.

Joseph R. Greff

that fees Two relative imagine is ago the the amount the break but questions I that for say could it? forgone fees to you, if workout you the on incremental amount quarter the incremental perspective, low, is would and that fees, category category? and commentary. could fees of forgone to deletions what room lost Relative out couldn't other deletion relatively or between be a

Arne M. Sorenson

management specific the may the but lose fees, termination hotel on fees. on or in Leeny term a gain system, short may may something have we me franchise say, we short-term just the let this, leaving

sure much impact. it, for so, in look example, And you when I'm at XXXX there's not

there system. look is you've impact You the got Leeny, at the left have term, longer it if know, obviously, numbers. I those because fees don't

Kathleen Kelly Oberg

that versus whole we're as you different couple fees million But – kind reasons. is So have year. And how Joe. workouts generally diving from for don't you, of host into And numbers broadly. are level down a much product, kind of detail. have of $XX it, we certainly there talk of run, $XX know, let's a million to call Termination a of just

today. that, that are a numbers talk double this the be as based you bit think more likely even year to I about much little maybe we as on heard us

getting from this half terminations kick. the fees to perspective we have expect year. the close did of back the you're result as that to that the we year, $X by So clearly a of In extra million reduce our

When of So about impact. what that terminations then you could the year is give full a XXXX you just impacting this to year's full think year sense broad earnings.

year. roughly fees, a it talking you're year somewhere a so call bit hotels then of terminations impact it could that lost fees as fees because to that that X% lot of could X% of between If these be result you X% about will X% less giving by hotel necessarily this some imagine hotel a aren't next again very than of

Joseph R. Greff

Understood. for Marriott legacy legacy and Starwood there or this difference huge meaningful properties? And properties a is group difference the pace then on year, between

Arne M. Sorenson

No. The numbers are very close.

Joseph R. Greff

Great. Thank you.

Operator

next from Your Thomas Stanley. question Morgan is Allen with

Thomas G. Allen

Two me. for morning. questions Good Hey.

First synergies that times. you How $XXX tracking a the versus million G&A, highlighted your of on couple is Starwood guidance?

Kathleen Kelly Oberg

Sure.

for terms and our million, inflation then company of of to combined take for the using expectation XXXX the close full the year and million. pretty $XXX adjusted kind much of hitting you $XX in full for it's the XXXX adjust if out year the button on So current

Thomas G. Allen

incremental on your how is second be my you just And Leeny. follow-up could there question sale goal. to that it guess Thanks G&A synergies? I to throw outperformed think now, asset you've touched we then do

we what's You with think Hotels. Legacy-Starwood should some How still plans own about you. the left? Thank

Kathleen Kelly Oberg

right. All Sure.

Let and I'll second Legacy-Starwood. half me and Today, we synergies. hotels. the own then about and half do MI split first between Legacy XX They're the talk one

We are still as not hotels. predictable continue you the selling be to are those of They in to completely imagine model devoted those. and terms asset-light you in might as engaged timing know our of

going as that's certainly usual are why it. guidance we forward, So still going leave but those at out we of any

G&A not I you definitely that pressure continuing forward – when you when has chunks of $XX but look million When clearly think next quarter's to kind million go out $XX take world you economy I continuing think synergies hanging than global been also how you of about last have more talked probably low it if you you think wage we that include is. this the strong, of you the at consideration got to synergy efficient XXXX. finding big But year to at more side, the look be and I lower stay other imagine the I when realistic, On taken. Certainly, fruit the kind number. year's G&A is this printed can call around in into some the a you've look take as might is on year

go So we after will that. continue to

Thomas G. Allen

you. Thank Perfect.

Operator

Kelley Bank of is next question with America. from Your Shaun

Shaun C. Kelley

Hey, good guys. morning,

been here. I has lot everything of think a covered

high think something one, do one it's level some. just So that's but I come up

of, a on combination loyalty side. kind August So into there's the reports lot XX, program going been the of press recently

a of, think have highest this doing when say consumer kind but to the Arne, you act, a just constituents from asset you a of So Starwood what core a kind multiple mean, about very consumer talk would I pleased difficult happy whole SPG I side I the members, balancing was level you're but from obviously of, know, at level through you think process? that high keep and side that and them. the could of, that acquired of I here, maybe it's kind to

kind just, throughout happy are keep that to what transition? throughout program the the customer you of, So of kind doing

Arne M. Sorenson

Yeah.

than of send we Program the we message say rather of the late the going actually fall and sure just checkout, And clear side simply things were And the we SPG focused set love loud this good if very doing since deal. we at from it's at they existed sort on Rewards heard did decisions So not do a have we of to were we we before deal, did to on said announced SPG but that. we the conversations which to Starwood, been they which the closed make loyalists, similar some steady program And a we more before, believe timeframe. made to Rewards loyalists question. us. couple decisions other there much had SPG Marriott in would and for the it, protect Marriott going included it on to closed been since It's on, a that it moment of it that And Marriott since you the the something benefits. like that we've protect to XXXX, the has in we're we Even their and then, of obviously side. it it things that not Rewards but been aimed we announced the folks

we day also got things. when of a did of we I think to closing number the

million basic up much I the it Marriott probably us members intensively, hotel the has at of deliver single owners would in that programs. be therefore last, both the focused think and And we one then And experience too increase obviously the credit in looked most was it stood and to on which much for while benefiting of of important of have loyalty elite to I franchisees. and nine I think we the at P&L. and credit Rewards, the the Marriott say an we points that can contribution the SPG reduced the also expense to card on we the members most credit conversion hotels, months cards. have well said, applauded, the it program, does and think better member that's very or card every can value I that what, of deliver We we'll that its you've which we've and found the Rewards with members or own what great growing. so the good economics heard ultimately between can depend collection fair SPG the well economics deals you to know very way a feel that. very And X:X is XXX to that the And conversion ratio a SPG Marriott and appreciate over is about intended from bulk it think what that's And I decisions us it and used that made think caused members by our community we've prove of and program. in so

Shaun C. Kelley

guys these it as articulate, there – some you the And high maybe super level, hard think instance, people? value idea the kind like, of I this to value ultimate sort very of because also kind kind I other they elite Because of balancing the think more the but when member? are of they've that's as maybe to and the is long the everything we of highest the the when for blogs things up. the Starwood, exceptional you is as the like been and how where take of the same that guest some of just to – like kind cost Like that most reviews guest read is So and about some that program just Ambassador to it comes some – from there that or stay frequent articles program and of is of extreme and kind of some for your probably about things? discussion of it's is side guess on written at service some

Arne M. Sorenson

the the expanded love into kind of Yeah, for think customers. we've Marriott equation elite no. of too exactly We right the step Ambassador folks most program those these and side because is the we valuable it

until doing so won't I time extraordinarily to well have are at we it. day And a and again, proven think we're in I community program ones. get that the responding take is it right But think you ways a exactly and that. have the working. really as it And this some And have made one the to whole been we decisions a

Shaun C. Kelley

Thank you much. very

Arne M. Sorenson

You bet.

Operator

Your is with Jared from question Research. Wolfe next Shojaian

Arne M. Sorenson

morning. Good

Jared Shojaian

Thanks everyone. morning, taking questions. for Good my

And is the ask the you, million Sheraton out us the for so just XXXX like in and look asset you XXXX, called purchase, can right? but Phoenix a the based impact give the number that assuming includes what that's to year? sales this you've would $XX you want for I net far sales that on done So I'm number

Kathleen Kelly Oberg

I can on the of haven't But you. would leased. say interesting get have – so be we overall yet actual expectation that number. this we you So for year, owned, XXXX, we're to budgets hotels don't selling I'll to it that first the you for it total our We'll it the done give here. work get on for revenue all, a lost an and

Jared Shojaian

Okay. Thank Phoenix? does is, you. the that number and include And Sheraton net

Kathleen Kelly Oberg

no. Yeah,

Jared Shojaian

Okay. to And just ask China. gears then I want on switching

you're trade you goes I can you're of Asia-Pacific But the But if now. business. about just you're talk maybe still your comment all comment she seeing as on talking RevPAR especially light pretty guidance seeing think maybe on you in entire know right I is in China. just anything can throughout what strong. steady the

Arne M. Sorenson

think it many all obviously, in producing anxiety to Yes I and we're talk, the trade listening is respects.

that we by been continues has is has we've seen sign for think Remember hotels of our appetite is existing development a not been performance hotel investors. performance. trading conversation for we've China that's conditions open Chinese opened no undoubtedly owned for the in open in there hotels one be can terms what substantially well. Chinese in strong trade seen real-estate a of to equally And of that I company. and have that in hotels, comforting, business China, of Chinese think the development in what There's I reassuring, in the performing impacting on part side very because

are but are the may very a industry. much And of different investors, trade the as They somewhat the we always. in the of not typical companies affiliated economics Chinese be consequence, than in place government often a book so And investors. kind real-estate a conversation of for driven benefit

certainly think that U.S. seemed that And but the the in process, itself trade to it numbers. do States and itself GDP what construction, to in manifest about my is growth fear it materials around to have see It has world. for in I to markets how could the other of that war the personally not do States manifest are it probably is we'll starting evolves. United used in to for what terms it's early construction to yet GDP some cost United larger the in could in potential extent materials some and on

Jared Shojaian

All right. you much. Thank very

Arne M. Sorenson

bet. You

Operator

Hightower question is next Your from Evercore from Rich ISI.

Rich Allen Hightower

morning, Good Hi. everybody.

Arne M. Sorenson

Good morning.

Rich Allen Hightower

We've covered a lot obviously. of ground,

question taking here. So thanks the for

that's... owners, I course largest last at the heard of owner really integration a your We've of at two, force Starwood So so or least, to back we but a and hit sales hear least want not the handful have quarter. on yet issues one from from, handful to from so just

Arne M. Sorenson

Yeah.

Rich Allen Hightower

that. ...granted

Arne M. Sorenson

That's tomorrow presumably, right?

Rich Allen Hightower

Exactly.

sort whichever second same a guess, if the is, view clarity the quarter of you have weakness what during everybody's had period what to to get of think we're of those on of respect with may owners kind about. really so just issue, fair fairly mean, or their version time, the to talking this led I we I hotels articulate you at do So the own individual got of point? representation this

Arne M. Sorenson

views companies I their Well, from speak them, mean, directly, – be I and all because for me are for you've of think monolithic. to heard be not them obviously, one to I'd of inappropriate Interesting we heard call their performance never note with call this they the us. that that had hotel the the talk raised of about in the in public raised

a hadn't the to So with them. dialogue team as really in engage consequence, had chance our a

I impact transaction we've week what think Legacy-Starwood Hotels with this and believe respect Starwood a the think They even, of two, conversations viewed deliver this as to of though, the said, those comments disproportionately I number you line that the to in has remain seen over value concern going synergies. is I think, that supportive transaction. last generally Hotels is and top those together. from bottom the or a even notion them see, raised Marriott coming the that transitory. significant in supportive generally, Legacy-Starwood They to even of still of the from and And have line folks benefit we may more and remain been

as the with to in have used the deal shouldn't make to hotels decision be well and can't words hotels want in – say, we'll be concerns needs called we hear obviously, we meantime they And We within continues that as as that sure as year-over-year numbers. sure make they're the a this about case. instances we in everything it is so, be we to telling to what hear system we we'll the you the data. our do us see make it make We the at are that be to not understand this whole, when see made let's up don't perform being there well there power growth to the are see look and don't RevPAR respect or index hear some we booking. owners the customers with something. who sure don't in see those whatever we there perform. But We and showing understand numbers. don't in in impact our order say that don't then understand the as way which do particular possibly can conversations We out RevPAR as can And it. it in And them to it

Rich Allen Hightower

Thanks it. that color. Got for

Arne M. Sorenson

bet. You

Operator

Bank. next Santarelli with question Carlo Your Deutsche is from

Carlo Santarelli

Hey. one quick Thank one. just you. have I

March possible? XXXX your were pertains of that to change seeing, expectations and it deletions deletions Analyst the at your Day go kind you of you're magnitude talked As what you the from frame to back that point relative in the of about, of maybe what currently if the to that is kind

Arne M. Sorenson

Yeah. sure is. it I'm not

can that deletions X.X% to talking I a think for we've been X% about while. say we

X% closer X.X%. think last actually than we to were year I

of were say can what in maybe sure, a reversion But not in a and so mean I'm we to a said. And XXXX. already than we've surprised we little sense, positively this is bit much the more

we multiyear get to expectation we point still I until get should all we to a at with conference, some future. your the for a until or to X% X.X% be get X.X% share But plan to budget year's where here. next analyst and think point again to a again you foreseeable think now X% we will I for

Carlo Santarelli

right And follow-up you the that group stated I could one that's is Thank for quick ask the plus you. pace all Great. future the if comparable periods number XX% just XX%? that on

Arne M. Sorenson

group No, for all no, periods. future year-to-date no that is bookings

Carlo Santarelli

it. much. Got future. all Thanks very For

Arne M. Sorenson

is not from for all future first pace bookings booking in six that all But time for done that's XXXX for the periods. months,

Carlo Santarelli

Understood. Thank you.

Operator

Your next question with is Research. from Vince Cleveland Ciepiel

Vince Ciepiel

as the my for think for to touch last wanted weeks a it's you're Tribute in something; I today, Thanks come know if but don't taking on of I few in. I the booking up question. Portfolio homes London call, only

your a to would have that now you outside curious platform time what early next maybe surprise are have learnings this other by cities And more then few Just months, London on there? that of it year? you

Arne M. Sorenson

Yeah.

it. raising for thanks So

products. launched days for a name as under are are they small there hotel home studio pilot the to XXX They're XX pilot they're about than reminder homes that It in Homes. Just about whole connected bigger maybe that apartments. a London a in rooms, system. ago we to sense bigger a everybody Tribute XXX And is than relatively our are

a focused and are promise we both hotel the home-sharing it's set typical in traditional which So companies predictable from will. product number services consistent more feels what us on. have to that that sort product if what wanted different space of loyalty the to to with a it and the a would provide you And we and linkage more of make provide we brand wanted a is of

of but allows quality core by the small London. us and our and home thing, a designing both delivered sharing bit though. think services pilot it distinguish are which terms in And partner size of average services not delivery in services, housekeeping little So, just key in from sort we to the

far going it's great. So

surprisingly, seem bit obviously it's predominantly leisure than Not only surprisingly, stay it is buy, it customers London longer it. like we loyalty a a Our Not because leisure to it's a is anticipated. buy.

So to the feedback good. quite been on little customer And stay closer generally nights which bit anticipated. experiencing we're a five average than is longer we is has the

other but announce yet anything markets, to terms don't we at. something we'll look in of a take have it's certainly So

Vince Ciepiel

of and second each you SPG.com that made which what I are apps platform, accelerate when year think bookings And expecting all the in currently Great. roll percentage it are the up? percent And then you through as to growth? marriott.com, that move combined you is growing to one

Arne M. Sorenson

Maybe our property at our through coming you XX% look business. our three-quarters It's add to about you When if of – channels. it, it's would be channel.

the be calling whether the sites be would hotel, the our centers that So calling and dotcom digital our or apps. platforms they'd call

I one the number our voice do last have will we that have the those trends digital everything there. The declined, likely over a earlier growth think you for drive platform channels be channels platforms about forecast share hotels and to is channels we've we're of numbers seen think the we wallet are having including that see where we continue have of to what substantially. be the going. years grown the in reasons for all voice enhanced own digital We able don't because show should on those in discussed up

Vince Ciepiel

Thanks.

Operator

final your Gordon And Berenberg. is question with Stuart from

Stuart J. Gordon

the been Good side both and proportion and of you've the morning. on sides materially the increased the on gross wondering of equation everybody's obviously growth was Net number unit two rooms deletions. construction. of I focused there's But

XXX,XXX an addition Markets So to the to you better Capital XXX,XXX there than gave Day? you opportunity is for do number at gross the

Arne M. Sorenson

a there. surprised positively that say, pipeline few strong we've the is. been development would there's I how in first, questions by Well,

there's they thought been XXXX to the The today. be I are organic but the years, is with having we're a up the would as States world growth. is for but numbers don't that would that there, to us conversation obviously do a when organic probably have as necessarily United of the want quite thought more been to think big – a we approvals sort our good. growth really we've strong that's probably U.S. see We partners and I peak still signings continue few was going place. in peak not and deals think from move and

to quite markets continue perform Some robustly.

reasons either Some moribund the or geopolitical essentially are reasons. development in economic for space for

a openings I a we have of have to cause we think what and look latter bit you is XXX,XXX Analyst quarter at to the room that deletions would years. higher shifted go when cycle. to back the XXX,XXX construction and life likely I that those ago, that might two year-and-a-half or just of Conference, conference? be three compare And we'd number was look at all back used to because little think at more And had it by we say a than that's those shared before, averages that factor to and but we us miss

Kathleen Kelly Oberg

XXXX. March of

Arne M. Sorenson

we to of miss XXXX. it it. are than More likely March exceed to

Stuart J. Gordon

better Thanks. customers how cross-selling us group? in Okay. larger Could got. credit have with given just update you color you've a also some that has the number as the the opportunities And that on you've of card a follow-up, before improved you terms and an give

Arne M. Sorenson

its Amex in JPMorgan roll rolled new customer out the the has been not in still response great. Visa product new Card new this later has They're it's Well, process. market. and Chase until the month. out will

end think I the precisely date. August. remember roughly the I don't of

likelihood in and to And the we yet. customer considered the so, going the it's there things good we of strength have feel the about that grow But reaction the program future. don't all quite

Arne M. Sorenson

Thank wherever Well, much. everybody right. you the takes and your thank look you on your forward into your time All Marriott you. in travel appreciate attention for very We hotels you our interest and welcoming to call.

Operator

does This conference today's gentlemen. call. and ladies you, Thank conclude

You may now disconnect.

Marriott International (MAR) 7 Aug 182018 Q2 Earnings call transcript