MAR - Earnings call transcript Q3 2018 | Marriott International, Inc.

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Operator

Good morning and welcome to the Marriott International's Third Quarter 2018 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. I will now turn the call over to Arne Sorenson. sir. ahead, go Please

Arne M. Sorenson

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

are Vice which not Relations; Oberg, Financial me our I Leeny Joining today many that Executive and Senior Investor Paugh, of Vice should note Dahm, today Officer; Senior President facts President, Betsy results as Investor laws. to numerous are subject differ considered are and described comments Director, our Relations. historical those or statements Laura in These Chief and expressed forward-looking future statements comments. implied under are could SEC from materially by filings and to federal uncertainties cause securities in risks our

excluding talk and and the expenses, adjustment release unfold. statement, to with statements gain. today today, today are year-to-date net our about the will press last XXXX and the updated issued the only year-to-date discussion income revenues, our not actual as Tax that we tax to will related Forward-looking In results XXXX costs, about Avendra and be events comments the Act along related of night the U.S. the effective merger-related to in X, adjustment reimbursed charge Jobs Cuts we November

of Of our our release course, all to earnings you referred non-GAAP remarks and can measures reconciliations financial www.marriott.com/investor. find in at

started. get let's So,

have we powerful the organizations benefits and our set upon they cost our They we remain Starwood When were supportive higher integrated We finance two are from Conference. integration. more owners impact owners Today of and with the loyalty the satisfaction, second completion provided now feedback in great North largely last are met program. systems. Over Full-Service XXXX, the of deal our anniversary the Owners American hotel acquisition now last intention throughout as and development, have years upcoming just hotel a those at past sales, guest our we our we efficiencies, of Starwood operations, of and to improved so. marketing, our reaping week, the priorities process and upbeat announced a for acquire

both Starwood operational Marriott the through We product Starwood deep guest well. and scores. as applying legacy on progress and Costs by and Marriott's very properties, reduced solid loyalty cost process are satisfaction made Marriott program We've moving on have captured platform savings. halfway been the realized charge-out savings know-how across reservations enhanced to is and legacy hotels going for synergy rates our legacy reduced hotels we procurement at system,

loyalty After new years integrated a an across We redeem also extremely we X,XXX unified creating lowered meaningfully. two earn, to on expenses hotels. complicated created This as we than our more of loyalty our planning, August corporate, XX, essentially program and programs general, book, challenge administrative and powerful allowing members systems was one platform.

running systems with to are go there complex loyalty possible. integration always peak. XX% this discovered While were make challenges and In loyalty volume and Telephone some integrations, increased as as many at online days errors. loyalty following up our IT the to statements checked our their members lines cutover, teams unanticipated driven smoothly the

and to our times wait identified to wait normal. be To Today loyalty call to were issues. back X% sometimes were quickly high. help the are over volume loyalty with X% is and seasonal these to times team lines immediately Our trained problems sure, roughly running telephone too customers agents our norms

some we solved problems, we most the for addressing significant are While issues have still customers.

of from members about this patience. One those who aspect our powerful were passionate learning discovered appreciate loyalty For we just how we are integration, affected our the your loyalty members program.

loyalty integration. the from results positive the seeing already are We

expanded Europe, two years, Asia, Tribute still. loyalty introduced manage and over on American simple direct our data and will for the XXX that taking have a this offerings from hotels our homes and manner Express, stood we pilot decline. redemptions allow JPMorgan our owners digital services a and structure growing food implementing Ritz-Carlton luxury for Alibaba mobile us in proportion bookings Beginning Chase members. cards Post-program and beverage now with to Our XXXX, focus first services joint cost new expect reveals total at of last program of Portfolio hotels is services new reservations we bookings see in fee are integration loyalty cruise entered for from include into programs over began a and higher structure, and accelerated loyalty the yacht. integration channels. million is costs Notwithstanding will new predictable. for in three-quarters that in introduced We membership a members, Under to venture credit of not programs with these a we

Our bed System been type, rooms to high on guests intermediary select for balcony, which hotels. view, allowing and as so hotel more characteristics corner with new from has year, floor, ERS to a commissions XX% call choice over marketing. reduced Enhanced out low variety greater to and Reservation room of we allows descriptions ERS we such business rolled effective and XXX on customer this or room Earlier group greater more photography based X%.

to shift. Our months may followed largest temporarily after have benefit competitors us customer have albeit from them which permitted some

hotels hotels. significant intermediated, cost. reasonable choose business rooms outstanding group not commissions growing Group While space, customers our of for is group large have and and these high-quality a our because and meeting been service, meeting cost all

we on quarter RevPAR last largest third hotels are X%. our steady. index rose is the the our as XX months in in focused RevPAR. revenue North profitability as America Over And group RevPAR well at group In management,

reports, is is RevPAR for to success. but available blunt easy instrument measuring STR understand readily weekly in a measure a As

on occupancy worldwide are peak of nights during direct any Some in a the in channels OTA This OTA our now was to quarter favorable quarter nights when distribution America, open had with costs too business a deciding believe room the in for value management We third and profits. distribution but a night. just our continued on Global robust most impact the negative America North few RevPAR deliver. North in these in basis increase consider likely in expensive trends growth, roughly In they of declined a modest year-over-year in has third channels particular flat systems on increase an international rose X% On the North revenue decline which and tenths and bookings. in America. business RevPAR share hotel a impact this resulted markets.

in expect X% budget for will quarter X% the based and year X% full early on increase to global work XXXX. We fourth our RevPAR roughly the

cancellations. meetings X.X%. X% over third America increased RevPAR with and increased quarter fewer Group North RevPAR For attendance good at

anticipated transient hurricanes, than decline was the the industry we on U.S. to and transient group business year's than comparison looked demand in While last October in September a books. September considerable stronger demand anticipated. negative better with we more significant

RevPAR holiday We seasonally are American are a more view for so quarter. forecasting of nevertheless taking the slightly North slow periods, enter fourth we we X% conservative the growth as

For the shortages costs growth U.S. expected – XXXX me, of slower economic largely is the in pace higher despite skilled benefited excuse XXXX, continued favorable point lodging year XXXX slightly of to slightly in from estimates for U.S. to GDP supply tax climate. interest to which construction than growth rates year. the due next and higher growth moderate sub-contractors, earlier a cut

North XXXX XXXX meeting consistent both comp are XXXX our note consider America constrained hotels for we space with and revenues books that we As higher modestly in outlook, in the Group capacity. on

Our organization doing is job. sales a great

in are accounts negotiating XXXX corporate while North rates right And comparable a XXXX low corporate for America are corporate complete, clients with expect special rise largest few a We rates special now. to at our rate. negotiations only single-digit we

North RevPAR which lodging increase to of expect reflects continued Given in X% in all demand. X% America steady-as-she-goes we this, will our view XXXX,

our at in This are six portfolio Let is North strikes American of me of of X,XXX take to the hotels XX a moment out address hotels. a that occurring cities.

making have and for been good months negotiating are faith many progress. We in we

national have reached issues, already agreement on settlements. we reached have We of local and number a tentative

this have don't we more a back on Detroit. hope contract quarter. after back our to We our our We work earnings impact work Just of in in soon. welcomed the expect welcome and the weekend, material to associates fourth associates strikes to Oakland settlements to

people are in who have these hotels, occupancy. people. the we associates extraordinary We dedication our traveled other And hotels the have to guests. including and determination from have XX of thousands associates hotels be working at up who of cases to to by steadfast to to have to help. who of stepped Marriott with prouder Due across impacted their commitment humbled operate in grace grateful our the been continued by their the I are couldn't today of at strikes cities efforts work our many full

X%, in Kong, while mid-Autumn Golden South Hong constrained regions. Macau international dollar the Turning of constant as RevPAR timing the Greater quarter China the in Mangkhut holidays rose Typhoon Asia X% third Festival In well to struck RevPAR China. that Pacific the region, our as by and Week and the system-wide increased

We our quarter fourth mid-single-digit increase region RevPAR in will at the rate. a growth expect

benefit hotels quarter. in last eruption the in fourth a volcanic Bank year's World should to and Indonesia Our event comparisons easy from

quarter For well at Russia. X% XXXX Cup RevPAR the rate to XXXX, the we RevPAR in our World Europe, region. Turkey driven and travel expect a economic greater somewhat RevPAR in modest Russia more rose mid-single-digit dollar third entire grow France, as In strong growth Pacific Asia in constant will system-wide U.S. reflecting as by results assumptions. The doubled

at grow and mid-single-digit We Rome. in with RevPAR Spain a in demand easier will to rate Munich, continue stronger expect fourth in comps Vienna and quarter Europe

political in Cup system-wide tough comparison, RevPAR Dubai. the X% will of rose grow constant rate the and in Africa ahead mid-single-digit expect year Middle strength Africa in timing Europe parts Expo XXXX. considerable was be at and flat in For region reflecting third the World region East Egypt. quarter of a In holidays, XXXX the next RevPAR supply new over continued a we to alone in will but dollar in of the due RevPAR tensions

of at year's RevPAR supply fourth quarter due last tough new the in comparison low expect will largely in rate single-digit decline UAE The to a Riyadh. Ritz-Carlton the a and results the to We

EMEA at rose industry region benefit following lower X% RevPAR hotels well year's demand, the our strong CALA they year-over-year. up will with Latin as flat be continue in hurricanes. supply expect transient and we XXXX as last Caribbean Caribbean as In from in XX% RevPAR For quarter to American the our RevPAR

upcoming favorable increase GXX benefiting Aires in the We rate expect to summit Buenos fourth at in earthquakes and Mexico. mid-single-digit will comps last RevPAR from year's quarter a CALA in

a digit rate. XXXX RevPAR increase the in expect will For low-single we region at

lenders Our brands by be continue alike. preferred are and to and developers strong

U.S. construction of As quarter under According of of pipeline XXX,XXX have continue rooms will construction. hotels including in and than our development construction of U.S. hotels under the one the development X% largest should total brands. one pipeline be expect end to three XXX,XXX roughly to rooms And the flags. rooms we In by under above more our our we alone and Marriott STR brand. pipeline of under valuable totaled one under this in than the hotels nearly in data, a Deletions the on three X% XX% world XXXX portfolio. our will With pipeline competitors in STR one under of quarter rooms upper-upscale tiers gross. grow the combined. in our under open industry next including will high-value Based rooms upscale in worldwide more luxury in International third will XXXX construction the our fly nearly existing five of

roughly owner deletions continue Starwood be XXXX. level workouts high of to in and the account expect efforts improvement we growth XXXX. brand product unusually X% for net total legacy to rooms In in of Our

room clearly our the gross of deletions on given downturn uncertainty some the to X.X%. time. about stock will economy's year see of an the expect Regardless economic given roughly strong to should horizon, there not unit should should do the while U.S. we X.X%. XXXX, be unit direction total For to continue but construction cycles performance, growth room growth X% Net moderate We is growth market this recent long economy. similar for volatility

X% In fact additions looking gross in XXXX. at and our downturn back XXXX in last room the totaled X%

two in was just years to XXXX, unit but back bottomed Our X% at growth later. X%

them. committed franchising model managing owning are rather or business to our hotels We asset-light by than

benefit is and generate higher growth investment customers, to economies on or Significant unit of to our our is return our return invest owners excess cash faster. scale Our and shareholders. flow considerable we

model and here's business For our more quarter Leeny. third the about

Kathleen Kelly Oberg

Arne. Thanks

guidance. XX% solid. Our financial $X.XX quarter performance third prior midpoint $X.XX, per the diluted year our the quarter of and totaled share was earnings over over Adjusted

of fees. Credit amortization came and million the Our came from tax timing, discrete general $X.XX of about expenses interest expense. branding the growth, hotel year-over-year XX% from $XX net items a $XXX assets impact of strong in a including unit higher termination revenues the on of and card due gains the line outperformance synergies the totaled the balance million, $X.XX better-than-expected increase sale of came continued largely the from incentive came sales totaled depreciation, on from Credit $XXX and the with fee and branding periods. from venture, largely asset sale card fees RevPAR and fees $X.XX outperformance, administrative gross related fees totaled million, in and reflecting tax favorable Gross fees, fee gains revenue performance million branding yielded favorable joint year-ago the true-up associated including alone prior $X.XX with to in fees quarter. a earned $X.XX of branding $X and leased fees. line to better-than-expected from owned largely

fees of continued with $XX property driven in million third in expenses Incentive the increased revenue and quarter owned/leased savings in For strength in by quarter prior to prior net the year. by our million profit compared Asia Termination margins dispositions Owned, in third quarter the Pacific accelerating $XX the house and quarter year-over-year. leased increases. XX in Europe. totaled million other increased reduced the flat fees year. $XX X% on company-operated worldwide the totaled wage synergy despite points $X results hotels, million Property basis

a $X recognized Fiji the in owned plan For General nearly profits our million X% the quarter years, tax X% in in The hotels a supplemental $XXX while $X company-funded the totaling in on income and were totaled $XX million venture. of and $XX the $X with XXXX Gains million contribution million, than made sale associated other prior both the third year ago in we that quarter. benefit. higher the savings sale retirement year. the quarter a adjustment million, leased the increased and in including included totaled gain two incentive interest a favorable opened earlier year hotels expenses quarter administrative million, joint of of or

Marriott gain We earnings as also ventures million JW our $XX of in City. and Mexico hotel reported joint line the equity on a the one sold

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

million and fee million the the our fourth foreign on expect million, growth impact is guidance. we revenue to $XXX Fourth prior quarter for expect assumptions, midpoint foreign have will ahead unit accounts exchange Looking lower of fourth given of fee don't the $XX than to worldwide increase $XXX over gross prior we for material exchange revenue quarter Unfavorable a our fees. a our quarter million to about gross Year-over-year, $XX X% about RevPAR decline. that X% total year.

Our modestly residential timing with about fees branding lower million RevPAR the of estimate balance. the accounts $XX covering for

results should leased total as from the owned, hotel fourth $XX in impact expenses termination million net Compared revenue quarter. other stronger reflect direct expect negative last sold will million well We $XX of as year, results and to hotels. and fees, higher roughly a

$XXX for in prior retirement associate the G&A the million The to related to compared fourth quarter, $X roughly have timing. guidance total should million including assumes is largely guidance our sales to $XXX supplemental programs. further company-funded contribution completed. and fourth to beyond Our savings that plan those no asset quarter increase support been our million

to to We $X.XX expect our forecast, total earnings million assumptions adjusted and X% borrowings, income. and rates in reflects These the will the quarter. lower Compared yield per net expense adjusted in EBITDA fourth interest interest higher share higher $XX $X.XX this interest to fixed-rate quarter. fourth for diluted X% prior growth

and increase $X.XX XXXX, to adjusted For to expect XX% EBITDA full adjusted total share the we per will should earnings year $X.XX, XX%.

spending XXXX. revenue, finished includes XXXX, of run other fees million with million provide $XX $XXX largely our in want through of to since Compared But $X.X nearly the capital acquisition capital has A and repayments, of annually. termination view our X rooms sales. guidance million $XX shares expenses, we asset our exceeding from cash your and leased for not to our year full for to owned, already that lower as forecast net direct and $XX process. is Starwood. Year-to-date, last lower billion asset the more associated termination $X.X fees normal budget full-year XXXX we've and our rate million repurchased roughly of investment million for consider through to yet billion, due for nearly We recycled cash prepared to XXXX January deleted for recycled flow more yesterday higher XXXX, models sales note of aren't improved for of XXXX. you we've taxes, than approximately We XX guidance as loan

billion XXXX. repurchases to in result, a dividends return expect through share shareholders to now roughly $X.X and As we

of of percentage because from fees, base most asset-light of hotel earned model and flow as cash attractive typically is Our line. coming low-risk with top hotel's the its business profile our franchise a

true owner, property's Of to return course, management demand exposure significant are include priority incentive agreements limited down which Marriott a has fee a risk. to downturn that a incentive was particularly this sensitive trends. This fees the drive meaningfully. can for to in

XX% nearly Our no represent two-thirds fees, in and incentive which total come hold our priority, better than of less owner markets, therefore of up have a frequently economy. weak international fees from and those

proportion we fee less Over relatively has XX Marriott years, the revenue increased risky and business. both international last as of have our franchise become

many one XXXX, our to fee segment our risk business. franchise earn that spun have our and our we business so. a has do while meaningfully with You quarter our income. profile alone expect In continue Today of we XXXX. off to timeshare Overall in improved fixed timeshare we business for our may years, our recall operating asset-light largely for timeshare from been only roughly also strategy growth accounted

comments more few to a before has who Arne, to over back we it turn Q&A. I'll go Now,

Arne M. Sorenson

Leeny. Thanks,

to extraordinarily who worked around effectively for me journey. integration it the thank opening the up on let have Marriott questions, one so pause our associates moment for more Before world,

have of thousands platforms can can we work say we pursue. technology We And work now their we to precedes based are about by it measure, every the and together. two opportunities company around-the-clock pull associates long-term had we on the and one these working very that bullish are

to to York the excited are save We for New it XX, Please plan the our in Day talk you, Monday, York, scheduled the Analyst more New date. about and March at future investors, our about Marquis. at

turn to questions. let's your Now,

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

Operator

Thank you. UBS. of Robin question Farley is And from your first

Robin M. Farley

Great. Thank you.

Arne M. Sorenson

Good morning, Robin.

Robin M. Farley

to we deal with wondered bit about wanted ask And if Host little they release some about bit I done recall a your that And that where seems having don't I would I could you – last guess, week, Hotels their of that. talk spend why about should or a for think capital be little the reduction like that morning. of guaranteeing It you? profits talked renovations. about just during disruption in for you Good sort you're you'll how doing Thanks. a in somehow Or be I that? revenue, fee unusual. before.

Arne M. Sorenson

a Thanks, question. great It's Yeah. Robin.

that what many Host many, transparency together. the seen Let just between as about The between years. a is sense it saying in relationship we the and working can of I've two by accomplish collaboration strong start today well as together and extraordinarily me high Marriott strong companies companies with are

to it participate well will put San Marriott XX is if Obviously, described call And went an which increasing into hotels a program. exciting owner over International that over returns into Because new owner's commit is right those hotels, fee quite way those the much an is system, was and the it Marquis, We'll be which Host Marquis, for both. believe capital in Orlando capital these the I hotels the was I and fees, priority, capital, light that them what get many few. higher formulas and adjustments amount World together including was that these key to think fee see on name and to we in we think preparing by more and our Host to New us Host we that There money Host but returns an of management one for perform Marriott interest hotels as Francisco very a anticipate into will that, be our us of is including million for a partial base of incenting hotels. in At provided in are that substantial saw years, numerous for time, of $XX the think the better will incentive financially a produces to them, aspects hotels, the manager have in in could roughly I get a York incremental in in there was that words, deals, very when gets done. we typical formulas and fee respects, gives focused it the models Center, just prominent them. an incentive renovation to incentive we owner, if incentive for other capital of most that – priority which that, for for above just our incremental that. as the as FF&E dollars typically drive deal will maybe perform, formula same example actually more them the recent of their as reserve and Host four

just So, we're will these be and transformed. see about to wait can't hotels really it excited the way

Robin M. Farley

maybe my That's Thank great. as And just you. follow-up.

typically RevPAR guidance you've your the time and at like been for your XXX XXX that looking years only many in over XXXX, the given point basis first points it range. a years Just basis has looks range

just wondering tighter anything, increased sort why Or maybe range? there? was uncertainty thought the next what Thanks. I'm So year, if about – the given of, the

Arne M. Sorenson

not it – budgeting obviously through which and – we're have old so want Maybe should start full new we the by this go the can is done to here probably we we restating carefully learn The obvious that we not just is process prove dogs completed. tricks.

thought And than And a like coming that using got you in a to as three is range neither either be time. We at we was more that below to math, we looks above we a to we give bit or have looked what as have. you think that. fair and something two-point range things tools did XXXX. this carefully as at in accurate the that one see we've two preliminary give we to be be the could relevant of point wanted to the we those that seem But point

And two obviously bit is up three with so to a range broader came the guidance. what we in U.S. with

Robin M. Farley

you Thank Great. Okay. much. very

Arne M. Sorenson

bet. You

Operator

Thank you.

next Your question David Jefferies. of from is Katz

David Katz

good everyone. Hi, morning

Arne M. Sorenson

Hi, David.

David Katz

to asserting and were it become be that well? comfortable et less harder board, turn on a it can but go the positive open remarks. back deeper If Can projects economy we that direction Why a the continue. I in would were and Arne, that? I'm the around sort prepared pick I growth the implication think, economy, will, bit the little cetera, should the getting just more in you unit of mentioned wouldn't uncertainty challenging if that but as not some perspective if that from you are that your with

Arne M. Sorenson

they think for openings question proceed new will materially the I not that is probably the case Well, pipeline matter into they and we opening. with good well underway. above proceed cycles development intake we've that construction projects economic is out. would and the David, not until while I the but of a like the towards certain openings those the And deals I that And be will environment, economic years XXXX for economic seen get what near-term completion – few biggest impact will as in necessarily it's but but environment, are weaker think think, the and that biggest XXXX, what XXXX – impacted being a are by is that prior just under probably a Overwhelmingly about actually, not today. reason reason it no

David Katz

feel if impressive to can and that you've that to looking members there's of SPG a on on respect on about, support it. Got and you any or still I that integration been of sort to this, on is relationship. at What those And if gone just heels I what commented board? the with comfortable but enhancing that? in through those are and And ask focus you people, measurements there data particular are apologize members retaining talked the

Arne M. Sorenson

questions. members like which ultimately Yeah, access will watching to good And to And we quite hawk. will we allows something look in have the a signs us those spending this obviously at be decreased and the SPG to granular the spending that continue see is that patterns the look increased loyalty data patterns wake of or of whether we programs. at have merger of any

on in prepared a XX somebody's was August we reminder, us but couple we it months not are put know a We of As it recent. and a increase already we quite substantial it's into we in are bookings now, still so this seeing got I the remarks, mute, know digital think. that –

the about Sorry that. I don't know where laughing is coming from.

digital in are volume. the increase substantial seeing We

set. combined more We look hotels at the are seeing eyeballs more in and

so thing with one customers gives earn is reality to obvious will points, and considerable out more be us what to preliminary more what choice and by is of turn more that is customers going that places see loyalty the offering be from to our we that. to program. quarters, obvious comfort our that data And our logically our site both it and stay will redeem logically increase important at. next But number have will we're We'll as grow share customers the single well portfolio particularly of wallet data most tuned of looking of for the over all the as

David Katz

my taking for questions. Thanks

laughing And you. sorry background my is on at was noise one it the No side. about

Arne M. Sorenson

David. Thanks, Okay.

Operator

Thank you.

of Beckel is question David from next Your Bernstein.

Apple Li

you questions. behalf Dave. on Apple taking Thank is This my Hello. of for

Arne M. Sorenson

Good morning.

Apple Li

Thank think us become a proving needs you. Can morning. And give that do please official project? sharing Good out? an And you update on will your trial? what feasibility you home

Arne M. Sorenson

Yeah.

London, the work to maybe distinct And pilot would imprecise looked A, on with about which So a was with. we've and from been units units four, to available would associated linkage And who program. far. ago. essentially room; to We a we a we date. five on in precise I plan say a the be London months our having start a curates program very the Though I be pleased obviously partner felt have bit would loyalty in so units that started brands loyalty the were, quality with kind of big for Those of our good B, hotel our and site. traditional that enough

was assessing happened really The And that about pilot first wave we good London. what saw results. of in really

For in way think to it like leisure were And not to was of our our example, hotel total good members. us. the folks bookings looked synergy too. with that looked the loyalty business surprising I market, it which accretive booked It like the was by business XX% with mostly

So many that it sharing too look includes would expanded rooms any event, portfolios. with would went have looking book at In to we and Paris, would Lisbon we which hotel with people ultimately both enough X many that were Phase well and that our they home saw come at but now those, because essentially Rome. book units

and in four So, very seen markets in we're by encouraged are we far. what so Europe, we've

where see goes. we'll tuned, it stay So,

Apple Li

Thank you.

Arne M. Sorenson

bet. You

Operator

Your of Shojaian next question comes from Jared Wolfe Research.

Jared Shojaian

morning, good Thanks question. for my Hey, everyone. taking

Arne M. Sorenson

You bet.

Jared Shojaian

that more And you guidance feeling involuntary feeling room Are you more I the may So was you quarter, confident going last into guys stabilized. exits, but gives what which guidance think that the one-off? are guess your of uptick have sort from more that your that that largely was XXXX? implies of net a exits confident in I confidence

Arne M. Sorenson

Yeah.

lot saw Leeny was quarter deletions. there of what talk let Q&A a a me about we comment but of let ago. just make XXXX terms I'll a about and So in this Obviously, about XXXX,

maybe projects of an markets X,XXX in owner a was those rooms. was under in quality was about with would of those brought And a that Fairfields then numbers our everybody, of we And terms not of whether in all by decided to compared was what and be product competitive. impact roughly half in that entirely And a which QX there quality point franchise worked in or number the did aspect individual involuntary, And a perspective was we they'd before. think those wanted them. system have of There the I up XXXX big that we capital Fairfield to happens the was we to have X,XXX that, in for satisfied of what units quarter Dubai, that talked an projects, and exit don't Gen course, which have every a leave who but think, but with portfolio significant Las hotels the many us. not hotel when actually there's rooms answer quarter. rooms, a I'll as but discussions is of and leaving those little no-brainer not we needed justify It's on replace X,XXX numbers, X,XXX franchisee probably few can a those much ways say more Inns, about of that negotiation bit Generation a number you out. I at ability to have Vegas to a but quibble bit big X,XXX conversations. if ones owner our the is that think quite And a familiar QX are or part our The a operate we an are. we the want the they it was came have leave, to challenge, were they or owner with another that I system. think, look There to And to is you to with X,XXX when way with of something we in to that. system to deleted portfolio you contract the story – remain over couple another just because about really a they of that. of from that a And we and kind really right rooms, like hotel X X,

that on in they we are making and progress going mix return That to It – that of some those about year, early levels. resolved. XXXX around the normal optimistic long had that. that I things product have about but about loved fullness say; can from with more include a to repositioning sort hear getting would is and I'm be a we're about owners repositioning to of you probably loved for was example, discussions for to too been we're have we looked we've unresolved brand, into about think been we're some think would oversimplification. able and now an this, as talk bit doing have us of left a Leeny Sheraton to to towards and the great bit it quality, I But the would significantly of which Sheraton, only do extent getting

Kathleen Kelly Oberg

discussions legacy we and both improvements, to to that the in Just end as today. hotels product through scrub as we follow-on each that as we're cetera. we continent Marriott ongoing legacy having that or the do X.X% are about to on X% we've good time contract portfolio as Arne's comments, either about we their well And of a feel continue Starwood to coming all do et look do the described every

you X.X% a would deletions a Marriott of be normal of talked some a again merger. Starwood ago remember in legacy talked we we for since quarter well XXXX described of we And the number been rate for portfolio X% issues about around for while the have what host extent to the If more for legacy may that about to the before that over X% portfolio. kind some hanging as reasons of

as While be closer to level Starwood stereotypical now in to XXXX, continuing termination. we the portfolio the legacy forward a X.X% normal look the for to moving the worked legacy much and X% down through at look Marriott more and see them number we we've as the

to X.X%. So, overall looking X% at

Jared Shojaian

more want comments calendar underestimated September. back the transient Great. you think there to that? December, taking just in like October seems approach I'm impacts? you and go weaker November hearing That's think conservative was you the than seems right. if just better, I guess was it to that it even may And Thank And it the do about Do you I helpful. though, Or a you be you. but environment to to like more and holiday

is guidance year? towards into months cautiousness this you. latter of X% extent year to the also your what for next to Thank extrapolated RevPAR that X% So

Arne M. Sorenson

was These let's in these number. you towards think. Travel Travel a luxury example, market. in obviously September. of QX impact exactly segments us The to QX the hotels it for in in does RevPAR up you X.X% other performance the I It's surprising, disappointment in surprise, end the impact it again question a you early so guidance down up or than And look By were impacting interestingly a Upper-upscale for When see, was because got start are QX. skew our not And ranges Those our I'll the way well at leisure right luxury September bit flat. second, the is purely had about an Smith numbers, better a barely the bit than early U.S. Travel, and expectations And performance performing space. RevPAR reasonably with large you Smith RevPAR RevPAR, some in holiday more with fully X.X%. for all describe X%. performance little it segments, relatively numbers more with are other are Smith month. Not better end when the only numbers. resort often for has at And XXXX.

in system-wide was down number September roughly. Our X%

month. So, it disappointing a was

The when Houston we that's course, thought two occur performance comparisons the in the probably that us in all Florida in okay, you there, September. most it see points that, most everything and can holidays what than out worse figure relevant hurricane you heading still our that the let September. gave are tough obvious hang out are explanations of internally Jewish was and And what say, And and into think markets cause. the happen. explanations mid-week let's better than to we Now

over holidays little probably they into that's travel. bit were you So a but points, significant more we two both shifting on sobering. September, had impact when But because by mid-week had business miss they a the transient

can data And which is that tease a to pickup seen so bit done there slower everything of transient figure sweat out was us. happened. a numbers bit we've to test we what were to we and cautionary in can months. September's And It we and than had see little if prior

number fairly obviously, think September, be sort part, months months, towards done tells into business, of trend a this of still suppose test we concern this, good impact we tease in have to the concern. the went The back conservative not it be our pieces we as us about we part, get I into data sure be by reassuring. year in steady-as-she-goes into whole we but yet that overwhelming normal hurricane numbers though of expect more pickup is November prior will dependent stronger, see and for of October and was part and best it some in our and QX. for for is the with sort you and short-term they so bookings weaker to as a does able we've that very line. that head point the less be year, we enough more assumptions of There XXXX for depth And we transient, September, we should for that to by December, in the of look We of which QX, We headline more October transient into return of Again, we want because and of the RevPAR a large not to – had all sort into the on when of thoughtful because holiday than again news because traveling it not group experience year. in some don't XXXX. had way here to kind we that the are had expectations concern, head have would that about are QX enough but in been us probably XXXX, the group on books short from RevPAR quieter

it's Marriott but the important We I falling, think answer, that was long-winded more was notwithstanding story and an one a say not September. it story. that's think September I it's a the weak would sky do So, than is an question industry

we of September, look very we own, tuned. held so which when our for month index stay our at fact, the was In and RevPAR gratifying

but more a happened, particularly simply Let's bit September We're it. because watch we're fearful. cautious not

Jared Shojaian

very That's Thank you. helpful.

Arne M. Sorenson

You bet.

Operator

you. Thank

of question Nomura is Instinet. from next Curtis Our Harry

Harry C. Curtis

Hi. to questioning. wanted I line just on of follow-up that

Arne M. Sorenson

Good morning Harry.

Harry C. Curtis

Good in if of the comps? December, that wondering you're find part do morning. conservatism. reason tough for you against Year-over-year that November, be might up I'm some

Arne M. Sorenson

Florida. because course, hurricanes of in of the comps, Houston tough have we Well, and

the comps about by us Our year-over-year. point hurt expectation is that hurricane a

based have comes to the number on for we comps out a U.S. rate for run so off close. And to first which than that. as pickup kind not, of kind a us seen. be transient guidance does of whether quarter, in short-term see Again conservative points, loves turns needed putting the three two about the be that on quarters far that's we'll And for quarter than have year. the would include for to that a table of X%-ish weren't our it hurricane as expectation while a or had more system-wide, place alone a we've And not of is number if the none of assumption conservative it more about

Harry C. Curtis

to very Okay is corporate that they're similarly fourth your departments at risk conversations next respect good. and with that anything customers, with sales And your the seeing softening? is demand there quarter year that would then in of indicate

Arne M. Sorenson

No.

Harry C. Curtis

Okay. That's good to hear.

Arne M. Sorenson

enough? that Is Great.

Harry C. Curtis

above corporate get if last high, property not close push to your are my historic answer. bit And to if the a why I'll of roughly XXXX just pretty good and similar a still is occupancy at not rate no is a in are managers expected think thoughts, more? levels I stop there. Yeah, your line XX% profits question grow or

Arne M. Sorenson

Yeah, that I'm entirely with you on too, Harry.

occupancy in relative are is have something, about we the in lack where talked prior in think, quarters. I rate given we obviously

who growth of system question the the said historic of are have compete in by rate hotels highly to is give optimistic And instructions franchised occupancy competitive manage, setting at it their that that obviously, industry. a some strongly. forward not if probably hotels it do particularly occupancy. question pricing. thousands that expected see peaks growth about are going still but will our in economy We Having we just continuing expect own made growth we decisions is are essentially occupancy are in than a trading a we the perform see more and to the would we that, We we and

that. And by both – so some way of really hotels but we would to and ignore competitors, can't you are do priced we've the independents got our love

drive And we so can rates. we to the are best doing

in making to see we're progress progress think, hope we I some in that, ahead. the months more but

Harry C. Curtis

Okay. Good it. with Thank luck you.

Arne M. Sorenson

Thank you.

Operator

you. Thank

of Greff Joe from is JPMorgan. question next Our

Joseph R. Greff

morning, guys. Hi. Good

Arne M. Sorenson

Hey, Joe.

Kathleen Kelly Oberg

Good Joe. morning,

Joseph R. Greff

American your North we North lost results index? RevPAR that and of which I wrong you at America if I know data, same-store. could bit American isn't maybe indicating and question, the same-store full-service look North results? STR if tend reporting am you sort when U.S. you the to of little a Arne, difference discuss interpreting the you're Maybe XQ answering as limited-service between in

Arne M. Sorenson

release. press obviously can mean, that our you I Yeah. in see

You've luxury our at little the got system-wide at at numbers way X% And limited-service about minus about looking in RevPAR, obviously bit then a less. segments. X.X%. strength at upper-upscale the a of And X.X% the relative that is

a think of customers I function that part those of the hotels. also is kind predominant in essentially of most that are

reasonably quarter. the that traveler, And are as next. and The group going see often toward probably stack that little the more plays sense week are to that can you on to hotels the So and particularly going the I of mentioned hotels the strongest, look And in the during luxury on on before hotels dependent traveler. a are group. skew therefore have bit business also business be through and the to during are business the dependent that bit a going And strength individual resort but relative well. leisure limited-service And next that leisure-dependent. at is traveler be upper-upscale individual transient a –

Washington. don't the Washington, different forget we to strong industry. areas are of in XX-year Now we've compared concentration Smith of got Because geographic Travel, history very our vis-à-vis in

in in If look big who is the that mid-term of for was reasons. are Washington by you'll not city, business. lot mix and the RevPAR numbers that much the Washington election months day. mid-term Smith got see out at of there's market weakest a Travel there In politicians the drives that Obviously, you before election happening a out today you hustings

we've even advance a comparison. it enough We got business. impact though and think year-over-year QX emergency called it never a here And and select-service with also Washington up. warning included distribution tough the I an on Houston, hurricane during had in But a was that that's called showed hurricane C., was D. had warning that strong

So did share and we we the question we your held the in lose held in the is, long-winded September to our own own. I way Our quarter? of share which quarter September, in our actually getting mentioned quarter

So Marriott by this in how This and the is geography is about the quarter? about both not fundamentally lagging the segment fundamentally by in market. September performed and market

Joseph R. Greff

other in the specifics that if you about U.S. this growth if at look flat? when for XQ, you next two gave answer. of September. months RevPAR than better I it. X% in your gave October U.S. was – don't know we thank I saying than you the you're any don't Got And basically the assume But guidance it know – quarter does

Arne M. Sorenson

strongest would the knew group the normal And present September more and in quarter, I that's of rebound worked to will travel a on say of extent, this normal bit our a business based happened things from – about be some because more month October will the time it's time, September it's October. the benefit expectations. a to that some we of it

stronger yet be So final October we again and numbers Obviously, than really for will have we think October. December. don't November

them preliminary for to out you it's don't final some hang views, numbers not – enough morning. this have but We have we

Joseph R. Greff

Thank Great. much. very you

Operator

Thank you.

Your Powell next from question is Anthony of Barclays.

Anthony F. Powell

everyone. morning good Hi,

Arne M. Sorenson

morning. Good

Kathleen Kelly Oberg

morning. Good

Anthony F. Powell

some standpoint to trend seems marketing management anything can there to the during holidays Is – from year. do help demand Slower this or transient revenue holiday demand periods? to make be better these during systemic Marriott

Arne M. Sorenson

is Well, a happen all we weekends. force could funny X, July that. I do Obviously, lobby But we year of whether can't or had right we've not and we a remember we the... talked what on if – kind that on internally government holidays is to the about have Wednesday which

Kathleen Kelly Oberg

Jewish holidays.

Arne M. Sorenson

...Jewish particularly middle maybe business week. to up Xth maybe but the holidays July both any temptation travel do surprise around in midweek. sides, that no with And weekends to when of you entire week on it's not the end it's time right that a take during

Jewish not holidays, taking on the business probably with people think travel much I it's vacations. impact the so XX-day

you're you end markets, I and that any lot lower won't where that particular but city, of there the can are to won't on end we best up doing some what you're find in a leisure to suburban but you obviously it with too. replace do going on leisure in – to the do But markets some around with travel up going And promotion, that surprise are you're you impact pick business to opportunities. real has not disappeared. We going occupancy has rate some can leisure

Anthony F. Powell

rates year, as you And volatility as in Got on leverage, interest around RevPAR it. Thanks. look does change some increase your or buybacks it is to the and go? steady and you the to growth approach buyback next

Kathleen Kelly Oberg

Steady goes. as she

steady-as-she-goes. model the Just that say rating more as that at on about as the not we we've roughly forecast recycling. business a our but definitely about the Sheraton call talked and purchase for any in the would $XXX the last leverage owning got we that net million range. away going of there I in otherwise Phoenix, – our for we've conversations models numbers. Grand it into target would we business is as sustainable, our year asset XXXX rating take the But that would looked put And to million agencies you we've thing We you as consideration you remember And call combined with the recycled. operating talked that timeshare from as with with well the with $XXX how net both assets cash-rich had this combination of over and into the Starwood moved more against a broadening with one the know is got stronger year, discussions agencies can

it's X.XX, of to X X X.X. to instead So now

make our that combination to with it of to and in before, which the value-added that relative a the range little dividends So but that is process would share I through in we first projects, But a And that be business maybe growth shareholders it comfortably do again a may then sure of dance ago that remainder, higher expect we to year great we still from repurchase. discussed. it invest sort return and will all with is with same within bit standpoint that the range. of the that

Anthony F. Powell

Great. Thank you.

Operator

you. Thank

Your is from next Scholes SunTrust. of question Patrick

Patrick Scholes

morning. good Hi,

Arne M. Sorenson

Patrick. Hey,

Patrick Scholes

to in your Good morning. trade China demand? Are you pipeline Chinese seeing changes And – also your Chinese wars? from any

Arne M. Sorenson

posted is intake development for on in with what China have our we're Not of is and expectations about of Obviously posted I the a carefully – a too modestly last good prior have X.X done. talked we over quarters. yet But answer. yet lower is XXXX. been in maybe been year. the our than steady Asia point, stronger number on as optimism watching get this team are in the we than want GDP that because Obviously, in has we still performance months. question in in talking expect lower But into from new growth experience deals well would for haven't watch don't RevPAR, the to have expectation likely obviously I the most don't good – about existing we next see equal you lower really it's And so saw openings granular the points the point terms Hong numbers were budgets strong impact China. in to performance had what and that to centrally. think Obviously or bore very hotel on that all next absolute being both we're hurricane on China. hotels. year-over-year of terms, as other some one seeing some But pipeline, RevPAR a down mid-single-digit year. But And We'll numbers impact Kong QX we really things demand.

Patrick Scholes

much. Thank very Okay. you

Arne M. Sorenson

You bet.

Operator

Thank you.

from Grambling Sachs. Your of question Stephen Goldman is next

Stephen Grambling

Hey, a earlier. thanks of for the question. one Anthony's questions follow-up Maybe taking to

Arne M. Sorenson

Good morning.

Stephen Grambling

free one-time much of you Good of free EBITDA? relative the kind and are generate be dictate how any that think cash items one-time run rate to other would this puts the what about morning. next cash guess And may takes? some there flow excluding flow for generation to year year will I

Kathleen Kelly Oberg

we – asset kind one before on Yeah, – I what one some continue system. Avendra less The the the And look dollars to which in the Sheraton. to keep as you had the to did just continue one. the of I know one, other most we And have our in which really our that is in that that's we benefit of taken recycling less is invest forward spend some we've obvious as position. would of on Stephen that to cash we a we mentioned with main think out the obviously, sale, Phoenix the gain hotel the committed is mind that expect we from one

any otherwise, $XXX talked apart uses is And rate use And expect XXXX. of we which that year cash higher received the Avendra so XXXX cash something of decent in year oddballs that, like the maybe a because But this which XX% be a million something will in cash obviously somewhat taxes similar for Avendra guidance other gave year. the we've bill roughly investing because that and of that next XXXX, year I that tax meaningfully end cash not would and will have expected before. use at expect to of for was in that gain, this would had had that that about we be think, forward cash taxes, essentially the of I we cash will I ballpark within flow. a that this again, done to higher carry so from run you the

are We doing of our in the process budget.

range a year standpoint a when for of of have the to but we will. from get So you, yet investment obviously beginning the we spending don't we

Stephen Grambling

I one guess, the And Thanks then, follow-up. for color. unrelated

some believe or you're still markets international seeing I less were OTA may of of effectiveness America, bookings think in make I but the bookings efforts overall elaborate flat. what effective? a of Can North mentioned the direct more remarks decline on your the just mentioned the strength and that in in you you booking you that in direct You

Arne M. Sorenson

the there and Yeah. and really Expedia the I out you and world lens sometimes big you OTAs from that additional we business see mean, it's similar think OTAs quite sometimes models two around those that American are world are a dependent. world parts reasons. and an that deep obviously question. which your and have of And look to are where regional of focus obvious but don't which the know got for I probably the leisure different, more I've That's There on regional strength is different. are any insights our they're OTAs strongest just booking,

OTAs, global or they it because market with leisure be to a going than Thailand is at Indonesia are look like for so example OTAs or And deliver in Bali. markets elsewhere. tend to which These are which incremental business Asian-based whether more is more

also really I our think a the brand in familiarity and some in Obviously, been with to the hotel the difference States deepest we've extent distribution. of United in there's probably programs. business longest the the with high distribution penetration of names loyalty our

away different these platforms where terms yielding market more world than has our in is think things of are dramatically nights the rest bit Those be those shorter, relatively occupancy don't I tools come will of they of place-to-place. and from on the probably the but a platforms be bit to share presence powerful a been here they're with that lower. little expensive our us mind, to use give in All midweek – probably from would which high

Stephen Grambling

Thanks. Best yearend. the in of luck

Arne M. Sorenson

much. Thank very you

Operator

Thank you.

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

Shaun C. Kelley

Hey, on the up from good a morning. moment just ago. OTA Arne, just following comment

tenths the on RevPAR saw you Could were I comments impacted mix also have changes those out some could you distribution a think in called actually growth. you on in few prepared cost that little again front maybe year? – Was little the – a the you that the RevPAR. remarks elaborate maybe bit? the maybe initiative exactly what just And that I is and you for quarter may on said bit think on a elaborate impact? for that having be what

Arne M. Sorenson

that can the has that expensive take. revenue really a business is management we system caused as is we is contribution making new the States our business we're business reduce business the modest afford us are that hadn't amount some be using us. And may revenue to do mid-week Yeah, decisions of fill initiatives management obviously, two with from because of tool. of enough, OTAs bottom United giving second couple to that what revenue use that latter lower-cost business. about context even yeah, to think we management business a And are be I the that replacing tenths for to One a which intermediaries, little give we're could we basically anything our in the which the say, if piece have that in we less net the We bit it growing hotel called if our you used be meaningfully And, you a we factor would business. that a platform yielding come top of if taking certainly to up us to we really with we're in impact of our And issue. essentially to can might mean, out it allows line, is from said, taken us reduction though in prepared might line have we group RevPAR of was commission up remarks. because cost

clearly that And RevPAR if And In it's what were very with explanation our not quarter again, maybe merger call. remarks. the we've I'm we I in the yielding the numbers that that we're – so doing clear intermediaries, notwithstanding post we paragraph pursuing that's index, don't good communicate. in continue the are a us to quarter. of sort notwithstanding the done actually we what gratified these of meant of is the sure the a of around macro company. lots across OTAs. to we loyalty Still noise numbers change programs our held and own of quarter with in in deliberately to the timeframe offering we're we the group the notwithstanding very tenths not right for it, as And couple even index the in that with we're

Shaun C. Kelley

how integration, growth done gross beyond. of side, have capital work in Thanks think smaller some M&A everybody kind there. that touch to of tuck-in actually unit that as but has still I'm you've and then, away the kind how initiatives do curious kind as from you in for take you out follow-up, here is And to on unit something the Is and the you growth that. This maybe and of about of all much my done on for the not allocation? got Great. that's and XXXX that screen you you past, anything just brand about think and look radar as to

Arne M. Sorenson

available to Obviously, just But we have respects. believe do getting that continue would will whether we started. happen industry, believe and love in our we no, we Yeah, hard is and full to look whatever anything many we're at predict an in hands side. the it's as we M&A

Shaun C. Kelley

Thank you very much.

Arne M. Sorenson

bet. You

Operator

you. Thank

Macquarie Beynon my Hi, Our (USA), question. next Chad Macquarie. from morning. is Inc. Beynon question Capital of thanks - taking Chad for Good

Arne M. Sorenson

morning. Good

Kathleen Kelly Oberg

Good morning. Capital Chad Beynon (USA), Inc. - Macquarie

believe was think and Starwood with a I Westin, came features. more like their your WN, one kind main standpoint which of I One then around lifestyle of ones. brands, acquisition it or motives from towards now of lifestyle smaller has wellness the moved of some the wellness demand And seems room biggest like

you do these right wellness like with So guests, Thanks. your particularly you properties the image? members lifestyle of think kind to new respect have for the and platinum

Arne M. Sorenson

it's mean, question. I good Well,

place. resort and important interesting lifestyle a and growth say, important our in portfolio. it's think really Obviously I we loyalty and all of, for would for features have are to us, us luxury areas

lifestyle. take enough the relevant in meaningfully most interested attractiveness can to program all lifestyle. luxury. in who of don't we interested we They're my things Starwood about one for only by if And travelers they do increased earned those of we a places. our things. They're the regular that it's whom in I of vacation, interested interested vacation. distribution, think folks of free when breadth are I've They're in of are say get the that But all think is to points those where want I free loyalty in And motivates resorts. think acquiring sorts go we business I So is

deal And think reason strong. is pursuing different working much different things the for to so means that – is I and people. Lifestyle very alive includes it very

wellness that Element itself. distributed our You've just two brands maybe piece got which I of have probably include a view are but those in is actually a focus. I suggested the meaningful Westin most not broadly it. thing behind, the one lifestyle brand think far

of is and at bar think what the many the I think quite I so very too that I restaurant there club look that are W And that in have of lifestyle brand to travelers. which strong to lifestyle with strong think aspects is in liveliness is are other say still something very in and do But space. you'd we fact and scene attractive – and maybe

resort great, more many we're and those while - distribution Chad we think satisfied in believe leading the our the the in strengths I it's believe is not (USA), in Capital one certainly luxury program. and I to respects Inc. loyalty We're So and space continue think and Macquarie seek portfolio lifestyle spaces. will of Beynon of

savings guys guess, match a could initiative? of be it's beginning fewer that of anything And then or better And anything I don't were companies but quantified program, the thanks. of unrelated, did you're that that seeing, as just in training there fees Okay, I'm early, retirement I like you're you of result wondering year. know think the going seeing attrition forward many that plans terms the at Scores. because if I announced lower Promoter Net either

Arne M. Sorenson

a extra pull there's high, I asking from their around world feel our for that all-time of people people a they associates the be things. of around We're lot because our about we is up at these very But an you part you One love of associate couple I regularly, the our every surveying year. I to year work asking that. are team. are and Thank our last and motivated question. do mean, of the We try to companies satisfaction lot two how work together. world think a understand to

I for proud to Marriott. be think working they're

about feel loud in they through that that and think good careers survey and I their comes clear.

thing match been And $X,XXX high we which is up. number an you that XX% we number. among retirement eligible is our we and about associates second supplemental they in that good is extraordinarily gets there's all plans and of look – always that The gone has the in tells associates It it more on at focused look did at participation States United XXX(k) our the participation.

I match. in XXX(k) the gone we substantial because think with supplemental up of it's part, what did

the around Chad so, And Inc. encouraging. we people world strike about got (USA), noise in is overwhelming relationship Capital the few our with notwithstanding markets, the we've bit our got Macquarie very actually a we've data think of Beynon - that

much. very you Thank Okay.

Operator

you. Thank

Your Bellisario next with Baird. from question is Michael

Michael J. Bellisario

Good Thanks. morning.

Arne M. Sorenson

morning. Good

Kathleen Kelly Oberg

Good morning.

Michael J. Bellisario

about integration to views corporate merger to the what planners, that it? booking side, impacting any more are group concerns the the having be then kind of Want the travel on and how not one more Just focus, you with front. the hearing their accounts seeing from respect merger? they're of on consumer their And Maybe but and decisions? may

Arne M. Sorenson

our so a community it's we travelers. transient it's their big mean, I and Yeah. it regular its monolithic big there out both and hardly dialogue But in voice. group customers with have corporate to relates as

We have regular with sessions group planners.

platforms and corporate Sometimes those folks in are often association or customers. intermediary at are those folks internally

boxes response I of been, execution we biggest the choice. enthusiastically but we're to of They group away the has the the I think appreciate industry. corporate offering. And which of in and similarly, breadth from like portfolio the we the that business are transient appreciate overwhelmingly portfolio. breadth customers we that think bringing their within that group just that our not the positive, offer the much positive. traveler They far from both that I hear choice of we're we're they and they choice love hearing association very think, breadth our And of

the robust. very generally generally see when of our relationship's total see the book some we that share and travel And so growing we corporate of of biggest clients, our share

Michael J. Bellisario

you. That's Thank helpful.

Operator

you. Thank

Your next is of Cowen question Company. Kopelman from Kevin &

Arne M. Sorenson

morning. Good

Kevin Kopelman

Good Thanks. a morning. Thanks Great. lot.

seeing mentioned – loyalty. a you So just question you're on

You seeing the you're an unification. direct you since percentage any How of trending give you on you the of a where direct online mentioned as are uptick sense us total Thanks. online that year? see on over post-unification? next booking Can

Arne M. Sorenson

Yeah.

continue will things ever. year saying that be shift We happening careful to see direct grow the have we about towards digital for continued a all certain. digital. words include next certain But in for of a the things should I organic number

And should so, us. help that's tailwind continue a to which

our direct business I which to direct coming of year-over-year number, in think is – but growth. which digital good our total channels, through XX% the digital hold is nearing me precise our is don't healthy

Kevin Kopelman

update us And OTAs you negotiations follow-up your in in it's And a that trending any Can contract fourth OTA? and you U.S. new a the transient-heavy at on your mix. the talk previous the a quarter? you lot. about can Thanks. on Thanks on more give quarter, large Okay. to OTAs comments on given just follow-up see how

Arne M. Sorenson

on – fourth any can't you've has can particular the we'll how wait fourth Laura and this. that, I the stumped you whether could see Maybe on later. Yeah. to you but quarter into I this in. have Paugh of comes any me give insight you work quarter. she maybe know should she And see and

negotiations are with We in Expedia.

think Our nothing Expedia I those Other things, expires say there's November XX. report. contract can than with to two we

Kevin Kopelman

Okay. Thanks much so Arne.

Laura E. Paugh

generally over think share you've And overall the of last remained year-over-year up think that a Arne the X% seen the several on nights that room comment that the is OTAs, flat share that I QX on has talked gone Your worldwide. I share interesting about comment of in years. overall their about OTAs year

in all this doing work that is book revenue work So et direct. we're consumers management, our on to we're obviously, is the doing cetera hopeful loyalty, the that encouraging to encourage helping we're

Kevin Kopelman

Thanks so much.

Operator

Thank you.

next Your Cleveland from Research. of Ciepiel is question Vince

Vince Ciepiel

also on Hey. few midpoint North next I year's range had for best the a It number X% has of your the question now big like America. X%. and guess, a of kind years seems is picture been

seen to the pieces North curious, years? of just your fall few narratives there's actually the way. that And and terms the accelerate? next domestic take So along it would trend of would think acceleration do deceleration in to actually place in X% you've what America see X% year? end last core to been What to the in you to then, of the have upper get are What

Arne M. Sorenson

we we've and now which three of and pretty Yeah, I quarters the this at over three one XXXX talked quarters you look mean guidance, all eight in it's steady-as-she-goes. a quarters. books little quarter XXXX of use in When continue good of the those to been – question. books there's got terms That's phrase of variation about why we've

comps high at think in year. X.X%, adjust of those to and be last X.X%, sorts each quarters and out and three were first all look if of we fair, I Xs, quarters things, the hurricane the X.X% in of those we holidays

apples-to-apples in the first of in And crested just true think last quarters X% quarter I we the like QX. in year of this it over hair couple fourth now probably it's under looks implicit implicit a comparison, and of QX what's X% a year. and in

period see the so at XXXX our what more number And moment pretty over that's midpoint kind but the we've not GDP that see still growth helpful. the eight think We supply or And does, view much sort bit right, correlating That three-tenths get time. shifting shows better at. we in will a do we'll up in be more is less markets even weaken better, also like markets. over you in single eight-quarter within I maybe we supply next really last could will of than quarters be. a better I is see some mean, it of over growth seen suspect variation feels New of What four-tenths, of measure you're see could That bit the the some very other of the the quarters. the same, growth right it an what I York year. a supply look in. much we'll eight obviously, to little

numbers for for could New New York and be helpful. extent a some important that bit so could market that helpful be so And the industry maybe is to for an Marriott, little York and

we get the when we'll fully Marriott the into single loyalty story, really managing XXXX. that And be at the I one program can that of us. drive we about story we as the as look are think company industry to sort and that way opposed the optimistic stabilized

those So should well. be us to helpful as things

Kathleen Kelly Oberg

The down. that, only look forecast at for GDP versus there, slightly I'll out add XXXX, they as XXXX generally comment are you is

economy, these may not assuming numbers a be acceleration may So in we're which meaningful in not or the U.S. true.

Vince Ciepiel

quarter X%. you've then growth and turns first just cadence the Easter next into approximately I shift the... domestically, favorable a get think get as easier helpful. the range? about as out in that maybe little that going sometimes with I Got on Is year. the quarterly of next compares the XQ, for helps we other year into simple of going helping you're trend bit how thinking And to the towards it hurricane of past one year be investors that But the you it. thing, next line midpoint just commented and years know kind should think That's the Or

Arne M. Sorenson

that, until strong should first calendar and group mention good. Yeah, in sort But we looks much work good, better budget. be probably by the – We should we be XXXX QX that quite haven't too good and the wait the than next a it's part did But we is was thing. question. quarter done I The let's careful about I should quarter next the year next from saying the Easter there'll got comparison. detailed the But comparable much talk of example, and think quarters be we for QX too be like quarter before some work of a for I hurricane less good year. we'll think because relief individual – of you've have because average think because impact although Houston, business again looks so given quarters for get of year. done I still about looks

Vince Ciepiel

you. Thank

Operator

you. Thank

Raymond of Crow James. Bill from coming is question final Your

Bill A. Crow

my Sheraton. Other point first through quality you decade going? I Starwood get Thanks to for appreciate drive brand trying trying Arne than consistency, more kind that shows staying Hey success selling and the spent question than morning. late, is on to good to reviving assets it. that of a anything can

Arne M. Sorenson

guest think as as about as we far by massive four a The deal have about there's We shift globally We've points we're to fair done. is satisfaction full I about points, with far know. is memory three moved share. moved We're with it. not that. three think done share since the Guest associated it upside the maybe to data that first was figures for a positive. still points. And Well, fair few concerned time brand is as in

in whole, particularly and portfolio bit the that for know look interest renovation look And see developer think the we're about we we around which in as partner but And a we talked we weaker past. schedules progress. a I and the on the feel that see commitments can the the brand, really world we've strengthening. when hotels good we at making

which the had raise little I'd them because our prove good really point to prepared the Sheraton for bit where last is the a tenor of we're more last in our but week about our Annual remarks think taking a together we during MINA owners I brand. I And feel full-service conversation, harder here about it's little Meeting. U.S. alignment Washington we with mentioned

that And all – steady we're way those things of long So think be is a multiyear this we but I progress we're proving challenge progress. from are a completed, sure. being to making

Bill A. Crow

corporate past I finer companies come know you corporate special point year the companies? That's growth think you to up it helpful. pushbacks could has negotiated but you low follow-up I'm with. different on pushback negotiated smaller don't years? as any a special and get I rates single-digits. a that, the used sure The unrelated that the you're than given on And is economic this said as if put rates, Is it from has you every been dealing be important lot year is the from in of were

Arne M. Sorenson

good a know. you Leeny that's able tell think actually. maybe I might Yes, Laura or be reminder us to

is market. in here special is any corporate that. the important our like more total something of percentage any And corporate is other have XX% we various What I than be some other parts total where big may in There the as the about think cities believe or the special U.S. market, special in corporate world XX%, important. only business I U.S. a Laura? got of

Laura E. Paugh

America. North Here's

Arne M. Sorenson

XX% XX% and to in in limited-service. full-service closer

not And so it's massive. but it's relevant,

the gets because does it's negotiated. it attention it think I

transient little more on bit gives business it other in. a than coming us pricing predictability So that's

companies. I because they of percentage than when went that smaller this, special was. They And special way business corporate higher to think as with was Starwood we've was a kind you had corporate at more approached of look of of traveling non-discounted have We'd a the accounts. total business Marriott rack special public much the soon had We've compared in possible. as just as effect some reduced obviously as up pay rate Starwood corporate rate actually what those to accounts. or and show

got special book. doing we've expand always and that, for customers right corporate to not arrangements so special And who have certainly Having looking necessarily to expect customer the the we're great said that. corporate we're

Bill A. Crow

Thank Okay. you much. very

Arne M. Sorenson

You bet.

Arne M. Sorenson

for out this right. very then come suppose Thanks. All Thank but morning. first, there with us. you and out much your I stay all vote and Get attention there Get travel.

Operator

This Thank call. today's does conference conclude you.

You disconnect. now may

Marriott International (MAR) 6 Nov 182018 Q3 Earnings call transcript