MAR - Earnings call transcript Q3 2019 | Marriott International, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by and welcome to Marriott International's Third Quarter 2019 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode and the floor will be open for your question, following the presentation. [Operator Instructions] Thank you.

I will now turn the call over to Arne Sorenson, President and Chief Executive Officer. Please go ahead sir.

Arne Sorenson

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

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

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

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

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

So in started. results pleased the with third let's our We get were quarter.

Our with our global guidance. rose consistent system-wide X.X% RevPAR

basis U.S., Caribbean with increased quarter points index the RevPAR America. Latin and Pacific global Asia XXX Our in the and in strength the

nearly Bonvoy up roll. alone the transient U.S. In the Marriott with quarter is for index index in points XXX basis revenue Marriott room is RevPAR on basis Global Bonvoy points. a members XXX system-wide a U.S. in the nine nine last members XX% over of nights room U.S. XX% year-to-date booked In up the alone months. XXX increase the contributed room XX% year-over-year. months point of nights, basis members represented increased

at driving results XX%, Year-to-date over resorts leisure loyalty destinations point are redemptions the better and around world. up

program about feedback the media become has favorable. decidedly Social

or the new over loyalty one members an to preferred Respondent survey either SPG. margin. said, program Bonvoy recent they Bonvoy of by a Marriott Rewards In Marriott eight

contribution nearly reach members Marriott XX from increased months, our by venture. increase meaningful joint China million membership with members that XXX to Over of from the coming the Alibaba including last nine million XX% Bonvoy

X,XXX homes International, of paid our villas. Bonvoy home number nearly redemptions. for in In Earlier Europe year, Caribbean offer we and were the across America. the homes Marriott were Today of with and and premium XX% Marriott markets rentals Latin rental home Homes by growing U.S., and Villas home business we quarter launched XX% our of rentals this the with and a point XXX booked over by the third members

members, another popular all-inclusive new owns in hotels acquire we our announced Barbados, recently which to which and would announced move all-inclusive In new agreements Elegant with build, Hotels, hotel Last Bonvoy Republic. our into in the all-inclusive we seven located for After offer the offering. resorts entry five management jump-start operates signing Dominican business. Mexico our and month

expect approval by We shareholders this Elegant's XXXX, to year-end other acquisition and will completed satisfaction conditions. be of subject by

Our are guests booking increasingly online.

offered Mobile digital booked XX% and Our nights higher basis popularity channels for year-over-year. points channels lowest the in marriott.com cost Those accounted leveraged direct reservation. of room per and the the Marriott quarter our of third Bonvoy Marriott XXX over

economics for in and the of room and signed result we control over in booked with enhanced how our Expedia, we Also Incidentally us XXX owners this which expect sites. nearly products better agreements third-party new year, declined are points. nights basis through OTAs presented quarter, Booking.com earlier will by percentage our give the

had quarter. organization a sales Our great

periods business all group year-over-year. comparable in booked the increased quarter hotels in new America, North for future For X%

rose the new XX%. and New bookings XXXX increased revenue revenue in X% for bookings quarter made third XXXX for

products. evenings sales weekends at and have customers serve many for advantage our strong of our our to convenience and of offices We the demand during to opened group their take

About is the year for mid-single-digit for booked. already is the expected down pace fourth two-thirds the rate up a hotels group the of of to quarter booking XXXX for year-over-year. timing modestly comparable due our XXXX holidays, is pace While booking for at business

XX,XXX nearly opened competitor worldwide. In the we quarter, third more rooms any than

X% rooms, are XXX,XXX and record XXX,XXX a to value rooms rooms high increased our under the luxury the upper Nearly higher year-ago high than in of rooms in pipeline XX% including quarter, markets. pipeline upscale construction. development Our RevPAR

In to reflecting net, room by construction deletions. XXXX, offset room delays, will we X.XX% lower-than-expected count increasing increase expect X% our

similar XXXX, growth. rooms' For net we expect

North openings We and continue to particularly Permitting the the America, signings also in strong. well are but groundbreaking issues markets experience delays, XXXX, to as in XX Middle construction which delays in as East are top Europe. contributing impact for

already In under are XXXX levels. majority openings XXXX The approaching fact, record signings construction. room XXXX vast of are

our This RevPAR So, X%. growth. GDP economic a pace let's continuing with slower continuing, U.S. at booking time, is with pace supply Estimates the the in for books growth for XXXX up the on growth growth rate. of moderating industry. group same point in At lodging mid-single-digit U.S. talk a growth quite implies at strong, mentioned, RevPAR about revenue America about to as I XXXX North

a special right negotiations will We few low special rate. only we a are XXXX are And negotiating while XXXX at corporate rates corporate rates single-digit now. expect rise complete,

of our from loyalty meaningful business global diems, in X.X% upcoming by guide. to distribution unknowns we X% for RevPAR in U.S. economy, market America But transient estimating seeing government reflecting both are our customers, government's to Today, given will brands demand X% the announced around the growth increase the XXXX and weighted our rise good leisure North RevPAR year. midpoint set the program. are our Recently per we and for fiscal are preference

year. South we countries make rate, are Asia forecast. India that and growth single-digit in region, Double-digit strong the quite Kong room modeling Malaysia in in Recent Beijing, supply in our Japan. reflecting XXXX market For and RevPAR to events RevPAR in constrain growth at China low difficult Maldives Markets, may Indonesia, Hong those growth Pacific next a growth

quarter, Hong Index a declined as albeit in with outperformed industry. improvement Kong RevPAR XX% meaningful the RevPAR Our in third we the

fourth at will roughly quarter. our We expect the RevPAR Hong hotels decline XX% in Kong

For we mid-single-digit city. for full performance in year speculative. assuming a any the RevPAR estimate Hong decline XXXX, somewhat Obviously, the RevPAR are Kong is

modeling of only we half a the ease in second are we hope XXXX, making while So, comparisons will assumption.

Africa. rate, up slightly in grow single-digit supply in Germany Caribbean low Latin rate Europe newly Panama in should should more at America year, demand low For and the the the new political in East from region, in Costa XXXX to uncertainty we same economic flat with Middle region Rica. reflecting Africa increase at and single-digit constrained RevPAR and and some growth a hotels At supply RevPAR the modest improving In continued next time, and growth and East be U.K. by will in RevPAR a benefit will the next Middle the comp luxury year, in expect markets.

model and As managing focused you is brands. finest the on franchising our lodging business know,

Investors perform of because economic we this. allowed business cycles. this more stability, model well than Our throughout favor past our results have to demonstrated how this but much us are

contributes world, the the We have deepest and brand loyalty program. broadest to property valuable distribution most our offering hotel in which

cyclical for America, points implementation in of has our contributed America. of premiums penetration is the than our increasing margin economies North and XXX XXX rising basis from RevPAR great hotels example for lift of managed time. have at best year our brand strong profit in peak profit Starwood. slowing benefit some scale North house particularly wages loyalty Worldwide our Today, the we acquisition and all we higher practices in from for Yet XXXX. basis faced margins XXXX house been at since Owners the America, and of have In RevPAR growth there since upside. believe Hotels last further points scale, industry Marriott greater is North and savings

Strong for pipeline. for contribute preference market results increasing owners owner and economic to share brands, our our growing

leverage opportunities XX% distribution share our a our nearly a value. announced such of loyalty open We've rooms, worldwide brands have recently. of drive for X% share under have rooms we we program, While opportunities two look our construction. and to enhance We just investment worldwide shareholder and

complete Elegant brand. purchase of and enhance of W Hotel presence; our establish will value reinvention Union firmly Square of acquisition all-inclusive and the Hotels Hotel the once the should W Our our

York XX have of successful our of three for owner franchise other the and we New Our St. over brands to the strategy. our since strong hotels assets years commitment management of and past our acquisition demand we've the billion and total, Regis monetized over the In X.X demonstrates Starwood. sold sale

hotels. and more owner To to but fees, be total of is roughly North incentive vary fees than downside subject X% that incentive with franchise RevPAR return are an the fees American These from limited. basin sure priority admittedly our are fees

our value the long-term these prized to and among Further guests. hotels our shareholders most valuable from to are as meaningful properties these is

can you I'm tell, about appreciate prospects value. today and As feeling Marriott's compelling very the good company's

I've I'm a your more completed chemo, many words On appreciative six the immunotherapy support. months. of and last radiation over note, personal kind also for

earnings call in throughout expect to in with in still XXXX. surgery. I'm February I'll runs. seeing look New miss be and our step morning and in of been but to Next you the I'm is my person on you next I've many to sorry, upcoming holiday party working have York, forward in getting

IR to Sadly for in you. of for XX first a has this only Before and over my handling and moment Laura last quarterly better her Laura, other recognize then calls. side pause already veteran these the to to sat Laura a let have professional she was Leeny, XXXX. call thank this by earnings Paugh. earnings October we She my was better quarterly call. gotten in is years, me next each

interest our the securities so If all Marriott you other the and – you're industry, all industry. hospitality of in may at I us from be from and If simply us of bold best. the analyze the in thank we stock

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

Leeny Oberg

Thank Arne. you,

totaled financial Our earnings Adjusted was share performance $X.XX. diluted solid. per third quarter

shy higher-than-expected line a Hong tax hotel to While RevPAR $X.XX were came growth in weaker-than-expected about from $X.XX over from performance midpoint. the rate and came individual were Kong. close $X.XX guidance, Roughly quite and slightly items bit P&L we of

year-over-year. constant Global third the rose RevPAR X.X% system-wide in quarter dollar

RevPAR demand. X.X%. and on For North growth RevPAR and strong expectations alone our Houston citywide Hawaii transient America D.C., exceeded increased in

hotel the Dorian. constrained to higher and RevPAR increased quarter. and both XX Orlando York On South in in was markets largest lower Florida hand, death the RevPAR concern New RevPAR Hurricane hotels in for X.X% about the cope supply growth other by City with comparable continues our demand.

modest was meetings Group hotel corporate at slightly up business America and year-over-year demand demand Transient group group in and North For reflecting stronger strong. comparable cancellations RevPAR were leisure rose attendance steady travelers. RevPAR X%. from remained

increased third quarter constrained markets Kong in by In constant system-wide in tertiary RevPAR the X% on China. impact in dollar events Asia war trade and the nearly region Hong Pacific

increased X%. were China region Pacific Asia the particularly Guangzhou. nearly in RevPAR Larger Kong, and strong in markets Beijing, Hong Shanghai Excluding

room mainland our Chinese large Korea to is increased with region demand Japan, Malaysia. growing to in Leisure numbers the quarter in X% sold South the for by in and and China hotels Thailand, outbound travelers nights traveling

increased travelers constant the Europe quarter year. last dollar. excluding continues loyalty in the third to of In system-wide strong Spain. strong dollar RevPAR XX% prior impact benefit in Greece X% redemption to Room quarter to compared the year, demand the in Russia Cup X% the nights sold Europe particularly rose U.S. the with in and Italy, World from

demand. U.S. Egypt another offset quarter London third X% Saudi X% Eastern, East Dubai. on and region RevPAR Arabia, posted Africa results with weak in and strong In the system-wide constant and strong Middle Qatar dollar the RevPAR strong performance in with up by in quarter rose Middle

In America performance in rose RevPAR Brazil. our with region and X% quarter strong in Caribbean Latin the

the growth result in quarters. better showed strong benefited unit consistent with $XXX third the year, hotels Caribbean Our from leisure revenues over recent than the reflecting and guidance higher Mexico and our Gross increased million totaled X% RevPAR. in fee in quarter and prior demand

from declined of residential Residential timing uneven projects million, branding $XX reflecting year-to-year. the fees

under development. We continue to projects deep have residential a of pipeline

quarter, than and margin total met the largely expectations fees more to Pacific Asia RevPAR due declined region. in While the in expected weakness fees a our we incentive bit

the Hong such discussed million the quarter to could hotels the prior our fourth from Total third third performance decline Hong $X $X Arne by market. we in year compared the and during estimate quarter Kong million declined for quarter. Kong fees RevPAR fees

hotels contribute million year full totaled lower of prior due in fees. quarter, million and decline expect fees. will $XX in expenses to total a the roughly other Currently XXXX, we for million the dozen in net from $XX $XX revenue termination our Owned leased Kong year largely third Hong the

and City in million the the the the Phoenix. also totaled lower $XX of prior Sheraton year. $XX million renovation in in at compared Termination fees results to impact Results York reflected quarter New Grand

$XX by fees lower adjusted and in million Our reflecting EBITDA third flat $XX offset fees branding and lower lower fees, $XX million the million quarter residential RevPAR rooms incentive year-over-year growth. termination was

prior provision year a rate tax business. a to quarter dispositions. third tax geographic to was higher-than-expected mainly adjusted the prior from slightly mix was Our XXXX different higher, due third tax of quarter benefits our bit due Compared year, to adjusted

about Let's talk fourth the quarter.

to other calendar X% quarter, comparisons by from also we benefit year-over-year. Shifting holidays year's For in increase should strikes. constrain will expect fourth we quarter growth anomalies favorable RevPAR North the to America, fourth and last X% should but RevPAR

RevPAR economy to many secondary weaken expect China's quarter, Pacific could Asia fourth markets. which in will China's region, the the economists For in pressure further continue

overall With down ongoing RevPAR be fourth modestly. weakness in Asia quarter in Hong Kong could flat the Pacific to

Excluding we at rate. increase RevPAR will Pacific region single-digit Kong, Asia Hong growth expect in a the low

fourth quarter Moscow. results in mid and in expect will a We to continue with at to strong single-digit rate RevPAR grow Europe Venice, London low

Cayman. America Africa a events Middle should Rio at in strong low in reflecting the pressure East decline low RevPAR at in a increase benefiting season rate fourth Santiago in RevPAR strong should holiday rate a Caribbean single-digit the supply Aruba Janeiro Grand quarter while and continued citywide and Latin UAE, the and single-digit de in from and in

least lower modest million exchange. gross at to guidance fee of at and million unit due million, XXXX, $XX we midpoint, growth. fourth prior roughly to $XXX This events over the RevPAR For X% and to our $XXX last year's impact the total growth, Kong RevPAR fee due than quarter revenue largely the is X% unfavorable will foreign up to in quarter believe the Hong more

will total expect quarter. in We fees fourth be flattish the incentive

incentive will and strikes will RevPAR constrained the by unit environment, year's IMF international quarter be growth. to be comparisons fees by helped While fourth last also

card $XXX to fees could $XXX million believe to year the continue XXXX. credit full million total We for

million in Square. the $XX direct revenue million results in New XXXX also prior quarter the quarter fourth Owned termination to total and W leased leased compared $XX and Union to reflecting the other year's of $X Regis fees. reflect quarter expenses million $XX lower purchase Fourth fourth could net of million sale the owned of York the St. the

our total to the million over $XXX prior with the quarter guidance. should prior and G&A million consistent year fourth to fourth in X% X% $XXX quarter

should $XXX expectations, the million, year's to adjusted prior EBITDA X% million these fourth quarter With in $XXX a quarter. to over total increase the X%

in in rate quarter will tax XX%, higher be items due adjusted our prior year an year. the the to expect We over increase the discrete fourth prior favorable

fourth modestly effective Our $X.XX for quarter bit our quarter. the also yield earnings the These tax share last year-ago is the rate quarter per diluted $X.XX higher a guidance. flat assumptions up for from fourth to than to

increase For $X.XX to the diluted over we total will XXXX, $X.XXX prior to EBITDA year. And year a expect the per billion will earnings adjusted full billion, share total $X.XXX X% $X.XX.

sales earnings guidance diluted per the XXXX. Our of assets share full includes $X.XX of compared year on totaling in $X.XX impact per in gains to share XXXX per share

sale guidance Our the New XXXX does Regis of significant. St. York, earnings expect gain not we the a which be reflect on will

As or and include costs asset merger-related XXXX reimbursed always, does or guidance expenses sales. not additional revenues our

- purchase Elegant estimated total for and including for spending billion million $X.X roughly York $XXX and $XXX million XXXX investment maintenance could Total billion New $X spending an of million. the Hotels' W for to equity $XXX Union the debt Square of

be reimbursed investment million $XXX spending should million for total time. of $XXX recycle expect this to We over

subject repurchased and through $X.XX the cash a agreement. New week Year-to-date, we shares This for And assumes asset York dividends $X XX.X management completed. repurchases XXXX. million Regis billion million already long-term We those share no for in expect last $XXX beyond we've sales to will XXXX to in return sold shareholders St. approach billion.

to X.X XX, to standard Our our great balance within EBITDAR. shape. debt ratio adjusted our At X.X of was remains targeted debt adjusted September credit in sheet times

the without wit, questions, to I make me I hard for her her try to to life but at years. pen to to want innumerable all to for we'll and her for of So proud. contributions incredible before steady us mentorship we thank imagine hard Marriott her take her your guidance, her It's Laura Marriott. thank want also her Personally, over

take as limit up. So that you can follow as one yourself you speak we question to with many we -- possible, one Operator? ask that and

Operator

you. question Thank the Curtis first Instructions] of Harry, is comes of Instinet. line Our open. Harry your [Operator line from

Laura Paugh

open, You're Harry.

Harry Curtis

that? me? you is How hear Can

Arne Sorenson

you. got we Now

Laura Paugh

Harry. Hey,

Harry Curtis

here. and problem been All Thank the over years. Yes. great much. All a right. very Technology Laura, right. you partner you've resource

Laura Paugh

Harry. working in Great you. you, Thank with

Harry Curtis

I appreciate that.

a couple of So just quick questions.

process, guys about holding were improve investment take any travel environment the your that and you you -- rates or political it or Arne, sense not back that is getting First, by whether negotiated if in And what to customers? the are corporate talking would sentiment? of budgets

Arne Sorenson

of suppose, -- more conversations a with American there I not community. members just we're that we senior I negotiations I'm Yes. is don't is it apprehension, in and in bit as the pick business little the up. special having so much rate the certain directly

bit way little think I is makes sound about general. maybe that it framed a it, politics, apprehension a too the bit but little almost you

is probably we're generally. course, more we've it nearing dynamic whether news trade politics or on of about think got focused I a deal. trade And, every the day than not

I deal, if if will be think, obviously, it's a even meaningful that relatively deal. trade a get we small to

a said year-over-year basis. I low performance we'd of But performance still industry see may at It quite to economy absolute that meaningful. absolute having you obviously of our on industry, see the growth think not or our whether is in robust. you're more But that, see you like a bit think, kind be see looking is the economy while high apprehension broadly, you unemployment reflecting is U.S. higher, I the fairly occupancy,

we expecting I of said And you cautious But this accounts. feels corporate more special would as same those XXXX sense XXXX, from declining. the but it characterize coming opposed a and can into from expect in revenue think it something year-over-year move to terms steady of a we in so sort of to like bit in what increases

Harry Curtis

or there correlation to growth the fees. Is expect of in And credit you number similar in -- in you've Very be XXXX there fees in shown gears, card card -- a increase any, to Bonvoy in the we there a shifting members relates my question, second as terrific to if card beyond. growth would degree correlation between to fees, growth members. your and the good. and credit is And some credit to connection,

Arne Sorenson

Well, to was credit with with us compared we're credit XXXX, looked partners. limited things the obviously, we way that to deals quite card in And, in gonzo at we moving had of new and when our both renegotiated other of you contributions the a robustly. card And had because market we're offers made that time before. year that course,

comparison, by different. better but Growth have lodging rates not a total tad been maybe growth fees, XXXX, in in dramatically than

discussions where budget looking we we're course, XXXX. what have, have internal got underway We at of might for

little that about a to but It's ranges, gets we early the opportunity talk too think that there cards is particular these for as any much more powerful. in of program credit sort more

Our very Bonvoy total of penetration light. members is

of is probably XXXX for But a grow in penetration think that. to number that in Our contribution years significant. I more obviously the opportunities travelers and heavy we'll look of beyond

Harry Curtis

very Very everyone. good. much, Thanks

Arne Sorenson

You bet.

Operator

Katz David Your comes Jefferies. the of next from question of line

David Katz

Hi. Good everyone. morning

Arne Sorenson

morning. Good

David Katz

Laura all me you I to for any just want time. for and synfuel, of to other the being explaining timeshare best being And in caller-backer thank patient detail.

Laura Paugh

you, Dave. Thank

David Katz

to being trying to fees of today my that to it per of margins I we but we go sort for a in more. and what halfway that versus a have sort kind on love and got me the that would bit the would XXX think up generation fee just comment of remarks comment turn. what wanted in looked a about context a found that about back and and cycle I some best. you your opening gone different elaborate that versus Arne it I incentive basis. became compare today, All are compare where business and made interesting a at were little to just we're how XXXX. XXXX. incentive is put analysis -- Obviously, in you back the room basis through points Help comparing on the I

Arne Sorenson

Yes.

couple So I a a the said couple of things. of in remarks. I'll repeat things prepared

hotels because by obviously to tried things. up what performance margin comment principally margin is about is RevPAR we're So we've coming America. we've the about is Starwood what until a and hotel-level One by driven which really calculated two is is about we been -- of performance driven And able implement have performance North managed here transaction. calculate then to assets implement margin and talking

that points in XXX And America. difference is North basis about

part or end basis operating about up think points up delivered of peak points the because XXX at profit In that. XXX So, margin basis two with full been we we from in level of gross points because, of hotel has nominal that the XXXX. GOP GOP

the for compounded Now United that's benefits an in just supply has York a of that property the in lot experienced substantial but last which growth. States. cost not and and decade variables covers across some average know We wages with It in number. both example different with New growth also in taxes markets

house markets. have we have more there pressure on some peak compared seen We profit to other margins in than

gets cycles global it, through in on to the derived domestic typically when incentive would nothing, risky first it international world, Now more fill we've that of is to significantly rest formula And say IMFs management American continued that share seen would all of are. in what States U.S. international than be fees And shift priority IMF Because this is less incentive certainly the gives than of a fees the an from fee average owner's course. story of fees. oversimplification profits you to much United get owner's the you bucket terms get-go. from it Why? the where is a until the a meaningful becomes an we us have while derived And stable priority. the IMF

Leeny Oberg

from we just you couple North only So coming more to the switch of -- incentive kind be America one-third incentive the which to the two-thirds now will that from absolutely is are case in that XXXX be North of David add fees helpful what America. things total that to expect one-third to used fees which find a of to may

U.S. to XX% from of to XX% XX%. while interesting surprisingly QX that actually the things look the international declined at when you percentage hotels in fees earning of XX%, increased the not they One from is incentive

to lower priorities the predominance our in theme overall fee outside of hotels owner's while about more a that percentage of points of on an Arne's all managed earn albeit we North again U.S. much one profits America of profit. dollar So the it's incentive this

David Katz

Super you much. helpful. Thank very

Operator

next comes Robin Farley of the line from UBS. question Your of

Robin Farley

question Great. Two follow-up. one one questions or

looking years. wondering this a couple you to quarter that more in just just willing just forcing is of of the timing that sort make removals in properties removals. some And issue at the it a or First there's if in looks Or rate are system reinvestments? was in the like a change either system are lowest if lenient with not

color I then So do just a wanted get well. I as to And there. some have follow-up Thanks.

Leeny Oberg

Robin. undergoing we've portfolio. hotels the Starwood the of this for hotels hit got moved this of portfolio been in as required being as those agreements at many undergo or year system We've and talked system. that continue either been to through is kind to are are Thanks a them uXs to on to example these relative being are from investment X% many have more in of we've our much last which but in conversations the lower of Great. lenient of nail Okay. giving head It not to with the staying X.X%, we're you a No, hotels tremendous are to for related that we've deletion legacy to function continuing we to And the of for of see there's you than X% the these closer Hotel for owners, year year Sheridan we rate investment X%. the approached renovation renovation. as disproportionately was looking expecting guidance year the and that certainly terms year

to stable we say XXXX more up to lower, than really that this early be it to it's early are of it Obviously, rate think range. it at year going the look X.X%. think course, would that turns thinking lower I and this budget anything out towards in as fairly be if is great we too a end X% process we do historic will but for

Robin Farley

incentive Great. then about little follow-up Okay. fees. you management talked bit a already as And a just

sounds the you've expenses year given thinking next – and if only in in X% we Kong management property it XXXX go this guidance. incentive like fee then expenses the about to should this expectation And house saw being this thinking not the fee than like margins this Hong quarter next up America with seem fee same as RevPAR really we American that Just North year. that America you year would North year? it about year's rate? given year's year growth the Does margins issues to level RevPAR at Is pressure highlighted just in where this maybe be growth be lower expected the it decline for just continue North on growth next

Arne Sorenson

I reason positive teams and but and pulls believe I for of of growth to be RevPAR the around think think to which businesses be of fee now, think world range through you think we've their each experienced that run working not that way process it'd to the fact are with that completed sort would we conclude a sense, germane there's budget about this mindful And we're to will we every let's But morning is heavily be it which course mean, lodging settles. to the matter the too in be early just a right I hotels where XXXX. should that. But are to together XXXX. yet. of broadly we shared individual the into comparable it what of and we we've got

Leeny Oberg

fees that to growth impacted. fees RevPAR And As get all will into similar fundamental termination in model and of and in had looks quite consideration branding unit be as need this to you we of look that couple items would you year. at residential But to that changes alone. of part shifts and something oddball FX the know, things certainly a like those we taken year next on

Robin Farley

very Great. Okay. Thank much. you

Arne Sorenson

You bet.

Operator

of Rose line Your Citi. comes next of Smedes from question the

Smedes Rose

Hi. Thank you.

Arne Sorenson

Good morning.

Smedes Rose

little expect I will the would underway the thoughts just brand seen performance be about these of struggling any mean, to ask if what bit by least you RevPAR at the Sheraton you brands? specifically. the Westin something I at a versus percentage brands kind just gap doing look Marriott that they're and move terms wanted there to And is differently you measured you've year-to-date Or of that at anything performance in that's help acquired close changes maybe you since forward? as the or

Arne Sorenson

it RevPAR good share question that a numbers – press given the brand it's the does in and release. It's we logical a Yeah. by question

that And this work legacy-Marriott that both in is things a saw I that most think But well and growth obviously portfolios talked think legacy at think portfolios. one we you of well. for [Audio the Gap]. is working QX we in it's were And pretty both Starwood we that gratified experiment by look it we going about we powerful way. sign if to index

Westin this I think Westin numbers quite what extent in to more small are is. Sheraton impacted is Sheraton and by than some regard. law of different the probably

more that the numbers. geography alone on portfolio So smaller the RevPAR the can an often based got you've reported the have impact some to variability

a is brand. bigger obviously Sheraton

still You have differences there some relevant. geographic that are

– piece point about repositioning Leeny's by really That our it Sheraton got term out advantage. to in much the – is might relatively actually got activity Sheraton encouraged. lower I be well, the said, the thing in? think The comments is the on the which amount on think how again, given if the a that any a good system. underway from RevPAR does have quarter. of quite is in put We're an margins we've pain, is you I brand a long But does but of deletions clearly posted implied renovation very other we've and short-term impact going way

needs means the for those generally that brought brand an brought I need brand up we're in to we're think support of our be – the seeing community what is for standards we're forward. brands those acknowledgment positive going that taking and hotels to setting ownership where capital be from and a kind to the

Smedes Rose

of as it of Okay. Thanks. just I continuing valuation to imagine pretty there's all-inclusive I quickly? big You're – expand clearly synergies as follow perspective From I'd wanted And and – in Not pretty it's lot But be I then I destination European. want your can up the there. it not come part big of a up a just it's is concentration looks, say, of to a that sort was sort tourists other mean, just ask of kind what's compelling biggest a your Or Barbados. to to the a presence. Is you here? folks for of goal sort I platform ultimately? now this and mean, kind of for is And set this? for as what to we endgame guess U.S.

Arne Sorenson

almost it by all-inclusive I last a grown over leisure but I we've some leisure the course mean, that mean, hotels has that not of brand. purely obviously, certainly is decades develop. the and It Yeah. steadily are there business suppose heavily a definition the is getting I it leisure watched some very is play. couple – of group are

resort that portfolio, tremendous to all-inclusive a for the in lifestyle hotel like in morning, some We like many, which are talked strength is by got we've there. of Bonvoy and we've about thing want, they taking the would leisure recognizing respects able to portfolio travelers really many experiences with we've which and loyalty encouraged which trips. this connection when about which the things all-inclusive to our got program luxury can And by stay kind we we But really the travelers in an have. offer with that business giving there's be another space is to that their them they're offer see already

only the concentrated hotels bet It's rooms Well total. as making think a I market. with about seem. Elegant in is we're as handful it not of it's XXX might that

we're the in will of who attractive strongest American think market the travelers the continue in both Barbados for up market about been ability not region. markets has to market the but find I our that concerned as those to paradise hotels, UK, the source as of that increasingly open So any to other in which way many

to And continue we'll then think I move.

hotels. this to our that And don't a all-inclusive are loyalty of obvious good I hotel I but we has we should number management I of the but deliver we of customer is years all-inclusive that it able hotel competitors with theory our know to anybody that. in cost-effective some really Obviously that well-recognized that want -- deliver been to we'll in hotels, think think business, yet. already a for team isn't in make be think has still make do volumes can programs to sure able proven hotels. kinds and handful there differences that be learn use that early to sure these And able get the all both And for also us. we our I of to to it's be of

Smedes Rose

luck your next of All right. adventure. And Thanks. best on Laura

Laura Paugh

Thanks, Smedes.

Operator

Joseph JPMorgan. of question from Greff of the line Your comes next

Joseph Greff

Good Laura, add I want morning, just be you missed. to will and everybody

help you for over the So thank years. your all

Laura Paugh

Joe. Thanks,

Joseph Greff

call. XXXX? Arne, you things macro just new you how related in talk cooling a you of confidence maybe of in look light construction do out about how expenses construction openings operating costs much earlier talked have it much of in to in versus as and little finding you a then plateau terms the And is delay about these that owners labor or to the Can of of there's uncertainty? bit some delays

Arne Sorenson

by when every we is we've analyst high-quality pipeline that a good signing the shared obvious size and with too. done So based do disappointed we've just obviously in And based Joe. asked big unit ago and planning and XXXX. which ahead in the -- of and we've or also much The in year. in is this about growth the which probably that meeting deals multiyear to fairness quarter the on aggregate a on compared ago years were question, too XXXX been quarters net you We two we're very

in are well apprehension is we with year that the continues a have how surprised in projects the new the many pipeline. into the the about coming into not every And record market. upside while been sort XXXX And even of to respects

things be factual that us those beyond have we're were but see years levels not the of just we up all So and step underpinning to from thinking today. caused hopeful, some XXXX in growth to going unit to

early as we we've plan. year disappointing mention know at We're said release night. it don't expect that. And finalized we've we And year, or have still morning look is I be process folks. -- in last this in our our now you budget should obviously, XXXX to not next our given so rates this We the I to first roughly which comparable growth negative

signings as the last we on few through subtract moving. we add in that subtract new the we past this go said And The that think we we've and every is that quarter that not category a canceled are quarter. units really units we've pipeline. and number done based I killed been when have entire every portfolio they open

are the is driving abandoned. seeing news not which we're So deals being that this worst

upper-upscale Instead, mix delays. what all that our is of for in urban by permitting often greater takes in of construction and is a pipeline; greater piece sort pipeline that we're got seeing of about it is mix I above our the the And luxury and is longer. you've mean, which which where

You've got continued our world sure well terms. owners around continued debt are to trying offset bit by manage that at high the little pretty a of availability construction high markets which costs make in many they attractive financing

And then some about do lastly economy think the have apprehension you I generally.

with bit would do than forward convinced -- this But some bit that say, I'm a owners some more but do XXX% I varies it by And are I it so owners project. have will intend going thing little needed I move look think this to I a it with maybe deliberate speed to if to going away. capture and market-to-market, right it. really I there to do who was cap I'm

take but probably dynamic Europe Because trends we phenomenon, the States, the world. global it around next think seeing same to the is play but American an out we're and a are Middle is East United of in seeing these I sort phenomenon. also place It increasingly the

Joseph Greff

the buyback I Excellent. like return intact. commentary to-date. somewhat quarter in meaningfully moderated Thank my then is disclosures And know for left you. on the capital follow-up, press activity And Great. the looks your it based release that

If one, in correctly? maybe two you interpreting that help slowdown of this am what could sort activity. us drove buyback And understand; just I XQ-to-date

Leeny Oberg

Joe, happy to. Sure

can you general cash of constantly month of of As and operations. kind we're imagine timing that investment, well we for as timing of cash flow just the asset the assessing dispositions every between need investment, that the as the in from

on of Elegant And reality timing bit until commitment cash on got the it really not count Union on both our the we up. showed to bit in Square and is, by door actually and a the wanting

isn't really the quarter at there any of So all timing to to-date. relative message

the down lower towards more you actually of except a accelerated look bit ratio they a in for with QX, three because you we end if quite that the even quarters really as QX, at And X.X remember off year our are where first our X.X. to leverage started were was we

overall that to about, by about it's shareholders expectation capital the last talked for So return we've was we it the CapEx generally, same of as offset as that last had is the we talked And new disposition week. level time.

Joseph Greff

you. Thank Great.

Leeny Oberg

Thank you.

Operator

from the Powell Barclays. Your next of question Anthony of comes line

Anthony Powell

customer about index Hi, by good morning guys. better the The RevPAR was you quarter. in the Was by with sales acceleration engagement the more Bonvoy? talked meaningful of pretty or momentum gain driven that

Arne Sorenson

is driven the market very meaningfully think essentially extent. much is the program loyalty around was up went I probably That in both, Bonvoy in every its world. from where broadest the by It the a but penetration piece global phenomenon

a a dramatically by and of not stronger group the sales but time index is the that so which transient Our sales explaining same for is quarter. all business, than point the force not if you function of or the capable at of certainly obviously growth, of will categories

Anthony Powell

it. may fact redemptions you future? to comps Got the Was of the and off-peak and that that forward in redemptions loyalty mentioned some up were quarter. in upper like due some bookings of be peak customers And pulling the growth penetrate XX% ahead that the changes

Arne Sorenson

year. redemptions been this The high have Yes.

program there's customers the now Collection experiment examples. the obvious Great chunk and a think of portfolio. it And see legacy very a for that's ability the of had SPG to to some stability and Chica broader big is and Marriott Italy rewards the from with in example I interesting legacy simply of been principally. Starwood

legacy up that suddenly Southern huge Europe number want and these that's to experiment are of places hotels members. And say, opened with. glorious Marriott But Rewards they and we to try a

I think aspect also on-sale is there some probably moved that that.

XXXX hotels of first They is on those middle the bit this and have based XXXX the were pricing, highest about into sale probably not the allowed of of but peak/off-peak work. could of category a former the been to some the bookings little made I of on the highest -- be think through some part minutia not that it's formula hotels. way about category the

aspect watch extraordinarily you see will a this programs loyalty of time forward. of hotel. reserve some And folks as to kind state and I steady pretty robust a But is who some redemption loyalty sophisticated for these suspect, stays that we I think good those a going redemption have thought activity of program

Anthony Powell

in similar years Got in overall? Or of this terms redemptions system the prior was significantly it. Did it the of to year? kind mix increased of

Arne Sorenson

and Well up upscale, are the but just in they're select luxury upper up all not but up, space. in also they're redemptions service

Leeny Oberg

which there's crossover And meaningful to see. is great

and So versa you've Starwood got former vice in hotels Marriott Rewards to legacy meaningful nights. going members

Anthony Powell

you. Thank

Operator

Your Stanley. next of Morgan question comes Allen Thomas line of from the

Thomas Allen

good Hey morning.

like you to practice Starwood? in the how larger medium-sized larger-scale very about Thank were returning near thinking are you you to expect doing couple front You a then, more or on And picture the of so historical think to Do year? a term? you. do small then every just you bigger transaction are your bolt-on single-asset transaction transaction transaction bolt-on when of M&A active on questions that. any And

Arne Sorenson

But, some growth we modest I I'm company precise. say have, here, general, then for going given accelerated will Leeny and forward. give going jump capacity more you size obviously, to something positioning investments mean in to the make in our that's the and something

we've example, really proved out. four deals to announced, And last so, the for in that the six weeks

They what want brand, W to particularly that many positioning space, the this what do want the all-inclusive us where which already we have and making that for do sure great we about we that sure the invest a really Starwood years; America are in morning important for for brand, juggernaut talked we've for in where North we strength that about make feel it a well to do we which market flagship been about. has like we in but York of that New a is

it? long-term. the add And But platform don't opportunities of Leeny, at value them we context what for are we that deal of in that at looked the than how of We, course, the context future. individual up. that. more strategy I does look it for in us to so, to those for in What's both the stepped know us grow strengthening should the of

Leeny Oberg

answer a your We the business is changing whatsoever, only the XX No, asset-light relative model. own actually basic Yeah. is is not We're business no. the the thing question, which to hotels model, to ago today, small quarter but one And we the for resold number hotels one. same said, total they owned as we only Elegant, and that Arne bought a on it's seven of as rooms.

opportunistic strategic are continues not bolt-on it whether view a or lens, a are very which done but be it’d model. moving to we it’d is So, the from be whether with that from They're be much same single-asset that asset-light at we also purchases. our all

Thomas Allen

just the color. one. a quick thanks And Helpful, then, for

that to remarks think that would was so, us on help volatility What fees in that you in be the from like hotels? in you. great. earn just XXXX million Kong. those XXXX? highlighted Hong expect And Thank have about potential from guarantees prepared do number $XX And in You you the

Leeny Oberg

be up -- base break fees they fees. we all, base bit and talked down first of is million, about, talked in QX. versus were $X we of $X is expected little that this million franchise My which fees between as So, to $XX the in What is about million kind being QX it's in probably XX-XX is them year. incentive guess a

million that down, $X-ish this that's year net So, the say year. to basis don't on I know, they're for a probably going

relatively JV, that We obviously JV, again, don't these QX, QX meaningful as only was be We at any which of Kong when that give looking kind we'll expect JV remotely impacts have to Hong would brings. all overall. do into have year the earnings. -- those see impacted you pause. what small a go guarantees and But in you're sort have then, be XX And from hotels next Sheraton of are amounts something we would we'll forward,

Thomas Allen

you. Thank

Operator

of Sachs. from comes Amanda question Goldman of Graham line next Your the

Steven Grambling

with all that that's and for Thank getting one Grambling, Maybe This for to Laura me. in. Thanks me. you, Steven humor. me is so was mess last maybe of insight thing your

Arne Sorenson

I promise didn’t she promise. She you that. do didn’t. But I

Steven Grambling

margins, benefits on question cetera? first card owners been sale much et David's in improvement of expansion renegotiations, to by driven the RevPAR how economic OTA on the credit solely negotiations versus First increased house has through

Arne Sorenson

-- points, all and question, the the XXX% latter, deal, take you XXX% answer that Well, basis versus the number the improvement the in than so okay? That's margin, basis since take we closed the then. steps we've RevPAR. XXXX, by that a calculate and deal able margin XXX it points driven effort that we've more And of it since of done impact to is that Starwood XXX would difference an Does absolute impact if the margins Steve. from your bit the cumulative to is been that the excluding suggest

Steven Grambling

combined does. be That's given investment should perfect. question that a second increase move a two of moving then thumb to on contract Thomas' rule more the Yeah, there think seems the for Is over past the about As CapEx capital level? And we intensity. software to years, we forward, costs? about like acquisition normalized

Arne Sorenson

this think some a unusual I good the bit -- a talked of mean quite we've spending the That's I we morning about question. deals. do capital

about. So, been let's because talked ignore first, it that's

Leeny Oberg

owned the roughly, still is million well hotels. security number of about it, to leased million $XXX for ongoing that maintenance call the Yes. on for talked that systems think for and $XXX appropriate as is about $XXX talked normal what The business basis CapEx our which at our we analyst of million growth an normal corporate we've organic as for annual we our meeting

if money example billion there's for And you again should be that for either are we for good that as today about time. would we about is this and to know $XXX the loans as you're as then billion, well recycled $X as of bps So, million talked guarantees. roughly as chunk a rest over much expect and $X.X of investing key as could equity in year talking be

Stephen Grambling

much. so Thanks Helpful.

Operator

question Patrick next SunTrust. Scholes Your from comes the line of of

Patrick Scholes

good Hi, morning.

Arne Sorenson

Good morning.

Patrick Scholes

over Laura, you thank these for promptly Certainly answering my and again. years. many obscure you questions thank taking

Laura Paugh

Patrick. It's fun been

Patrick Scholes

like? and group strong do for pace is on driven that for you next that strength How by political much year. the a conventions of you. Thank question Arne see you

Arne Sorenson

being a because don't year is I I But not much. year Washington in as think over for presidential out I'm actually for the Washington. politicians are large a know opposed the things on sure example, out election hanging other D.C., hustings for and by not equal certainty. certainly a great all time to

hotels we have presence a including And obviously in Washington. so group substantial

know don't individual which is that country, about cities guess I of about next of what less for bookings I their I you But is the have will business. what the we're look it good not but you'll sort are I conventions than political two talking and would year, And of corporate when two overwhelmingly association rest course, average. at the think environment. It's for in that. think be

Patrick Scholes

color on Okay. for that. Thank your you

Arne Sorenson

Okay.

Operator

of comes question next the Your line from Shaun Kelley of America. of Bank

Shaun Kelley

about talking incentive along management were everybody sure I And Hi, as wanted years good fees. think morning and congratulations I'm Laura XX I pass to well. we ago my

like feel an to ask incentive I appropriate time fees. So, about it's management

So, versus gave about wanted kind in you of dig breakdown the earlier a where I today the think international. bit. was to just Q&A in Arne, color I sort it little some between domestic of previously in in mix just

running of though kind thought hit was mid-single-digit what we're below able feels does of maybe harder environment type and get at like to look the in to that let's Analyst the targets we kind might growth feel sort at provided environment level IMF think that. Securities we Day a As of RevPAR and we X% be call where of we it the it harder and we're like it about to

board Is break little you below more? area missing what you trending a how the for down that you that thought Is that little could in break kind of than is thought bit it there's was? the specific Or of across us. just just more there a or model leverage that of kind So, just think down there a you either kind bit expectation? you

Arne Sorenson

management back that about what decade like be that something decide that. we right Laura fees a or should maybe XXXX incentive we'll in and we invite would now and talk can So,

fees us top fees on world. very hotels will The the before the by significant or towards around And the those well-established answering resort -- question, which comment -- managed XX And more hotels and industry think or deliver States are incentive skew they one not are got. the they all And is in towards upper-upscale higher definition room franchised skewed experience the that your than context-setting they it always United markets and disproportionately obviously, hotels skew of towards in from to per they've our the destinations. competitors luxury brands hotels. others

bit instance difference. and fees a more reasons, as they amount not volatility management So, obvious in line is incentive for in economically those because to are while every be extraordinary they an strategically additive come to They of fees would hotels are are bottom from the because earning just there the we us because soon they us topline. make additive

meeting of think Leeny be in Laura that, lines within range in scenario, if and actually performing go analyst securities may contributing right fees. talked talking the X% least some variability the I about. the fee and which and at you terms with that were of line I what morning broadly is There but to back we've we're and and Betsy we're at look total this of three in the

have what And know to contribution rate when is be its say just morning at it's to incentive the so that's that and an RevPAR more their that be we're to there's to growing you're obvious that you going to the from have meaningfully way year-over-year is clarity which environment an to gives to impact impact going than here that expenses in low faster this owner tremendously that Marriott you going with RevPAR to a you fees than hotel. the able nothing and

a to bit modest. I had here some impact or length this Kong talked because the than more another. suspect would one about there there going exacerbated disproportionate is things at QX. significant will little that impact be a QX Now, morning in worse are QX QX way performance in be which albeit the have we've in in Hong much

And around see markets. the then of you performance you'll different rest in go world and the different

from we've disproportionately York place anemic because New that the will And too they would York, cost where are be be declines a be RevPAR other weaker world. York contribution fee fees increases the growth than of talked in modest in incentive will New in even about markets in hotels or around RevPAR. the incentive New

Leeny Oberg

this fees, would is up full actually expect incentive up two fees point at only I'd And when will that go XXXX's we look go that The things. at add that year international we go a year-over-year. represents to lot but They expected up. thing that they won't will

the of fees all quality different an we've about owner's of earlier First priority the as much incentive talked less of characteristic.

in the growing U.S. inside general, is managed And than U.S. number faster our two, it's outside footprint the growing

incentive this unit look faster when again inside be those one or in you this difference models of to year, that we which that security the we than characteristics has expecting the at the over again, the is expect the analysts' forecast U.S., earlier put things are So U.S. fees. to out remember growth outside

Shaun Kelley

Great. Thanks, everyone.

Operator

of line the from Research. of Wolfe comes question next Your Jared Shojaian

Jared Shojaian

hear And Thanks and it's Congrats taking everyone's so I'm all Arne we've you. for to best everybody. hoped Laura Hi, fantastic. wishes my as just echo far. to It's been glad question. comments. good is you. from trending

Laura Paugh

Jared. Thanks

Jared Shojaian

In and the would strong. corporate XXXX, transient? and leisure as And parse rates the up impact leisure group really is X% your strong like to RevPAR X% I which single-digits, low transient commentary, you seems group can special your guidance, being take seem out business if from it just not

wrong So if on that. correct I'm me

Arne Sorenson

Yes.

group done that we've that bit next contributor X% we not it's from going to range think year. infer testing will our you're if -- you You're be next we may for said year. budgets us mean gave I to I for have X% think that little given a I what to the strongest yet

would transient. average way soon going think evolves of transient to X% X%, see the the actually business evolves. behind than that also I Obviously, we're way suggest see of -- And to leisure year we're you're weaker but that it to again the budget be our to far season the that is too completion that meaningfully but with implies of that the opposed something other some group local going booking the do economies. dynamics, drivers X% convention lower than based see X% markets higher that are markets as economies market which to may sort centers are than to that or that some and of the of upon have market pace individual those or some strength for going to

necessarily would among means I the for group while So others that think I the us. don't -- to be are be down. it strongest think will I segments going

Jared Shojaian

quite Thank other I in just a you. strong. And I follow-up seems around leisure industries, at be think still mean, on to travel I that. Okay. if travel look general

experiences. the theme You've got of

to of side. boomers the seems on to things You've some we're in got the be That contrast hotel retiring. the a seeing little

think not rental with call leisure bigger the pie any recent of a some seeing of that little and share a years? strong to you the home maybe I you starting it as guess what could I the here in of think like? group of Do hotel gain be bit we're as softness guess Do -- related to

Arne Sorenson

probably I'm way Yes. bit parts of has to probably first is I at the reason again the this expand we one well. -- world can that's about leisure We the and I question we don't -- weak. a situation talking but American some did and it little see as point been your answered other see I don't

the home and is who are will. great our us interested most rentals on they we when what are travel taking those their in for experience if those of out That they're they that that customer staying think I think more is Yes course, -- well. and not a vacations. most cost-sensitive, I the road relevant for you as particularly are is some leisure with doing see are

experience into more rate reasons they as get. that's to predictable course the more a space of get of that to for deliver ourselves decided one just we've and in this something And can possibly cheapest which is are than interested travelers great more who tied the

China coming which folks if leisure, And remains met leisure long strong. often respectable. look We some -- think I senior numbers But think travel quite with the not I still global ago. at of I are is so outbound China out you

of States number as Arrivals But arrivals that. stronger healthy. there are from a than much of the in United being China are would characterize really course leisure in generally Europe China are the quite and reasons customer I from for

Jared Shojaian

much. very Okay. Thank you

Operator

Your next line from question comes with Crow James. Raymond of Bill the

Bill Crow

is Good years topic. it do My for jumped strength that has the on years the incentive on as -- the first now XX other but mark-to-market ride. good Laura, know doctors. Marriott. signed they management really question economics or were change? to those XX ago to they words, expiring XX management bandwagon and as I fees wisdom or In for morning. Arne, that and your expire years that the on What mature, question What's delta? really what been we to the were thanks I've go But XX does ago fee? at back with an

Arne Sorenson

incentive in a of line question Bill. by good I example. a that's That's terribly performance I mark-to-market today, fee our mean, don't So driven not think we're is managed significant what experiencing hotels number global to okay? germane a the being of for

they're that question would I little a abstractly incentive vary suggest be the of about mentioned real going United to from Leeny brand bit viewed about in. it's of incentive more hotels decade not our now new fees we're system hotels all from States. this and of part contributions bit I world. formulas with think coming two-thirds many -- of by a the And into are Those So little uniform, than outside there a to similar that. course, are contracts which our are signing the ago, fee we coming them but signed

And a meaningful don't term. so risk there's mark-to-market think there I long

some to there that you States a I United did deals market the are ago. think time if in above some or long in Europe, we extent look

that assets try and sold. were owners will incentive we reduce those and controlled fees they Sometimes mature, I there. And as that suspect

fees they line as the to level but And always kind try program there of the reduce be fees do that negotiations paying, and about what, fees of, are not brands value worth. and incentive are just will loyalty fair, really and owners your your top net does the what deliver well. Now they're

were what they over fees start And but is course, than lower start a long-winded I starting saying, if for again, and would with way today. with similar of that those all of incentive probably some suspect point, a of achieving which formula contracts today a terminated they're

Bill Crow

you All return won't capital? I suspect right. about And return my or so to given you being comments $X XXXX trends that of year the for follow-up apologize. made quickly this reason in next But other some and if you year? similar capital talk I billion missed about Any to it could

Leeny Oberg

growth numbers think standpoint and think you're the when from you that fundamentals that of kind unit that Yeah, we've about talked model makes in a right, sense. I RevPAR the many about growth EBITDA respects and

of couple for a caveats Bill. But you

haven't planning detailed cash net loyalty working all, capital gotten taxes it's program of or into that. the we and about First we're whether that the and thinking all

comment ratio. So that the leverage take let's for we're at our remember X.X talking this kind I times the to of assume, of the we only of X.X did And the of to would end the more make advantage in early started And moment we classic year. the lower really that same. is part of year out

kind But general thesis is correct. your that that, of, So otherwise of year. won't would I advantage kick next the say have we

Bill Crow

right. you all. All Thank

Arne Sorenson

bet. You

Leeny Oberg

you. Thank

Operator

of Wes Your Markets. the Capital Golladay next of question from line comes RBC

Wes Golladay

Hi, everyone.

OTA quick on the had a new question agreement. Just

RevPAR How will with line You with Or is have meaningful there any the you show better mentioned that will cost third in parties. up it? of more inventory and be control the savings this associated item?

Arne Sorenson

of significant it to done brand-new dialing from We with to use. will drove that had quarterly the it is we'll started think just conceivably zero tool The that be with essentially agreements continue Yeah. growth a something not -- as we've the a for as It But a in back aggressive we have thing we've lower about when ago. And costs the associated -- a we in RevPAR net-net in some as calls. year probably bit a few right themselves the OTAs doing then project the we that to business came turned the when will use number the continue we've been probably more of that to in that most hotels. something OTAs we profitability dials last at years. aggressively And but we're year-over-year. We've had we'll will business those down high now. the we it be for take in And using modest didn't occupancies. negative talked over been factoring impact

often is a where greater The of was and other could Expedia, be alignment kind we another, that place disclosed -- course we a thing, which much wholesale we space. is being actually the sold. found which that challenged both we third end our did out of, in if know with with them there Wholesale pricing to that a it's intermediary and where wholesale is channel inventory party an from makes and sometimes passed another channel, integrity you will don't can one expensive up because

their business And we into in cost Expedia put which integrity can with they wholesale an to manage market, And both well bear easier technological that of the perspective. through through to reduce should talking system bring thought from discipline channel. our that wholesale and we can comes prowess the that make the that in some

So, outcomes that aggressively. teams think days good about. it's Expedia excited that, we that. working we're some the be -- there but Obviously, and in early both we're are will Marriott of And from

Wes Golladay

RevPAR a low will a obviously, But Okay. growth And now accelerate then, just that conversions and a downturn. quick we're right in follow-up, would seeing be environment.

OTA meaningfully down commissions the driving also You're lower.

increased more direct having bookings. you're And

the years, downturn acceleration an accelerate? environment? see Or the over we to could wait next low-growth few still for So, in would to the we a for have conversions

Arne Sorenson

also It think quite I and we've you've all is, as Autograph is mentioned. that And even with some the just that about today brands speak. that, luxury used Tribute collection well. conversions are quite things performing we the of partly soft healthy,

We hard also only a benefits. some position on go where the financial are brands. have be necessarily top in that can product bottom-line we offer both of flexibility we we case, out wouldn't kind if and the and we the But had take, the

weaker a get to economic environment. when think we I

that have of incremental We have don't don't have good reason an which them. today some pipes will then. They'll that they will, hotels that also really see to the customers, you helpful be connected should if of

Wes Golladay

you. Thank

Arne Sorenson

bet. You

Operator

line comes of Kevin Cowen the Kopelman question of Company. from next Your and

Kevin Kopelman

And, of Thanks lot. Hello. on the luck first a Arne, procedure. best all, of upcoming

Arne Sorenson

Thank you.

Kevin Kopelman

And your all Laura help thanks and for congrats.

quickly. follow-up wanted signings really I So to on just

were talk in what could So, QX? approvals and you about signings

expected almost then, Are there year. And approaching is maybe November? year-end? this signings that already you to your clarify early in closer comment Or record about

would characterize how for signings, you And it kind outlook forward, going new as generally of the today? stands

Arne Sorenson

our And A breed. quarter developer year. by Yeah. of industry in -- love the developers the the they at do fourth special the a are comments, preliminary But to far. of things in are they best couple

to at so know the where And never until the going rung really is year, of end the bell end you up. you're

year. of other context about things a We are a And the again, QX, there look -- success. you if of through at, or But signings think marginally about about global that's level out pretty could we're that comment. are the of the context -- ahead stunning in last of you say, the I in geopolitics, or that's economy, uncertainties

they've the to this on. end States say funny table. there's And contract. working big December, year. can't thing, bell that on to the United sits got they the it And scramble We point they we're bell going time this the get is at as But work the every One select into they'll lot sign through. they that where team in ring the team service a up a

of the ringing But all if fun report share January me time year. office in And will. let the when big of sort the weeks They news. to we'll through last keep you obviously, generally into that settled where on in of the bell all of just, of one good is delivered into signings, those about, my we'll year. December working couple the bells dust last the we the get end And

Kevin Kopelman

Excellent, thanks, Arne.

Arne Sorenson

You bet.

Operator

line question of final come of will the Your BMO Ari Capital from Klein Markets.

Ari Klein

some Hi. been the Thank seen you. markets? in you things, Maybe just can you markets little bit following talk that in tougher up about conversions of on have a of you? the increase conversion Have side just those for

Arne Sorenson

RevPAR has talking You're which been about in markets softer?

Ari Klein

Yeah, yeah.

Arne Sorenson

look Yeah. don't you can growth of Yeah. at do sure justice I think is the cuff. world highest one to the not off the mean, I supply -- in if environments I'm I do include the Dubai. I UAE that

Dubai of so, would done had I And we've or done the a handful guess that, conversions. in zero of And essentially we conversions. back if you year couple look a years, last in

weakening. of may And little growth about that I before, theory which about businesses talking most in it's that were where prove pressure that the not this mostly is about a we a instance, in under bit think supply demand sense

every the suppose But quarter, RevPAR in for has in Dubai. been much negative years the Not necessarily I last for been of couple has Dubai. in us negative the industry for in -- but last

consequence, a that in can't a an better bit That And the case than there would stats you markets sort of if will. past. we're as has seeing be I activity ever like conversion give for of the example. a been you group

Ari Klein

thanks great, the for Okay, yeah color. appreciate I it.

Arne Sorenson

All Yeah. will bring Laura, right, us home? you

Laura Paugh

to So last no the of investor in The all about care customer. care than It's company relations. world it about isn't in culture world of of here in my also just job comment no the there's taking Marriott do And corporate you. better better in. taking the

commitment a and here get with accurate of There's and of you, candid it all trends. right business straightforward to for disclosures fulsome real assessments

people of team they a to terrific. takes make it that are happen Fortunately and

joined me listening met some have them You've road of conferences over years. many of this them and on call. are the to shows that And

so is look And my good thank us for keep making colleagues the of So to for my up long. all work. message you smart

call, the a going really And on terrific analysts miss X. the on I all going sell-side have you and to investors We're come I the to you. enjoyed working holiday of For December party time. I've with am to you. hope

Arne Sorenson

Thank you, Laura.

Laura Paugh

right. All

Leeny Oberg

you, Thank Laura.

Arne Sorenson

Thank you everybody.

Operator

Earnings Conference Marriott in Quarter Thank Call. Third International's participating XXXX you for

disconnect. now may You

Marriott International (MAR) 5 Nov 192019 Q3 Earnings call transcript