MAR - Earnings call transcript Q1 2020 | Marriott International, Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Marriott International’s First Quarter 2020 Earnings Conference Call. At this time, all participant lines are in a listen only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Mr. Sorenson. Arne sir. ahead, go Please

Arne Sorenson

And morning, thoughts have everyone, conference are first XXXX of know those challenging to and my Please to deepest COVID-XX. condolences with friends and I hope or you. welcome to times. and call. unprecedented families you during our would everyone like healthy send are who quarter of these Good our I lost and safe because that their family

Oberg, an and time room China from in Executive Officer; I today earnings Joining in Marriott Vice their Chief our that a are not Leeny President-Investor has is President XXXX the respective and Financial first one Vice to been in me call. same this during Jackie Senior homes XXXX. together includes and call Vice Betsy Relations. the McConagha, Burka this President-Investor host blizzard from believe Relations; Dahm, team that And

remind actual that in laws. today want These I securities cause our unfold. release risks our subject are today historical in statements federal materially differ could results those implied events only today the facts and from effective Statements be comments are future our as not are are which by described we to everyone forward-looking under not comments. SEC in as and our numerous expressed to considered statements uncertainties many updated in to and filings, earlier comments or press issued will and of

temporarily to and and changes, system-wide currency note that year-over-year due occupancy our unless COVID-XX. hotels comments include also otherwise reflect RevPAR Please stated, and constant closed

to our all our today our non-GAAP remarks find earnings reconciliations Investor can release Relations financial measures of referred in You website. on and

extraordinary all business. the to clearly is continually top far with and by This navigating begin evolving most the of through what for ever impact significant me Let our impact worldwide COVID-XX. Marriott how is of you, mind of is crisis

the weathered world, War and and that something. years II, around company XX is Great We’re numerous Depression, natural old has saying a the is disasters World that

a sharp got We in generally world. in April, stabilized March everywhere except occupancy year extending sudden Greater start. for are deteriorate great associated off albeit saw then trends to at the then continued and in in the Well, improving. around January to in very low and Occupancy with COVID-XX, China, China beginning Greater declines where levels

North fell worldwide as XX% April well. XX% in was in America occupancy RevPAR in April North America. and both worldwide system-wide and

of is now. North we are with of portfolio hotels were our worldwide To just looking operating down was For About open. very right the XX% of when Europe worldwide over challenging American week temporarily state are temporarily the three-quarters our shut a with XX% closed actually May and closed. ending our XX% hotels comparable environment. obvious, occupancy X, hotels that mostly just in closed at XX%

the However, bottomed of around appear is regions glimmer negative news the have to in good that world. trends overall most

trends The demand the resiliency in China. is improving in of Greater evident

markets up XX% was from holiday travelers. over leisure for weekend year-over-year with China that demand levels close XX%, lows Labor was China, under February. mid-February. down Chinese XX%. for the currently Mainland Occupancy XX% in continue to driven the pick bookings RevPAR decline compared to up has May. Day around by demand in Throughout an strong New Occupancy just similar XX% with in early resort weekend in trajectory, followed primarily of XX% Greater are a domestic currently over to

Head, world hotels weeks, areas We in in showing Last each around as occupancy to come US back Carolina, bit has destinations. some week service Limited Santa past meaningful examples reopened, book. as most the in in in for our occupancy reservations based Barbara expected on of increased the other approximately starting few were improvements South the a example, reach have beaches demand the XX% over drive-to on Bacara to the the Hilton well. weekend, seen Ritz-Carlton and

are Local, and that There slower, state in be But relaxed. to the likely improve governments some containing some COVID-XX and restarting are faster, and start our national should manage to that some and as between restrictions trying areas tight open business fits their starts. economies. rope are

Over on On have at usual the dropping signings seen chain the of end more but Many of in around first result we rooms XXX,XXX pace out XXX,XXX pipeline the a restrictions or are as first openings some has The our XX% we increased expect RevPAR a our than longer which encouraged quarter deals very new pipeline. gains of a on at in under our will quarter or the our activity, worldwide year. slowed the XX,XXX deal related were hotel of clear to view delayed of two owners overall many We development a term issues opportunity. point, crisis, construction. We healthy the but front, brands conversations owners. current points with this continue and bit taking the index over pipeline in rooms of are COVID-XX quarter. basis do preference market a the portfolio posted supply us, first the for months XXX Like be by to construction opened local to not at slightly of due end. rooms have

deals time development We was environment, In than which to approval pause with interest we stock region take strong saw the in And meeting March cadence. continue our they returned in monthly to X,XXX quarter. even more line. North the and across usual activity first meeting Asia deal in roughly our year-ago meaningful in given cancelled of but from a the have to for owners more finish pace dramatic industry, the to impacting development a at decade, the the now North of the though first feeling America our COVID-XX Pacific see rooms are XX% not quarter, America, urgency than get over signed, sense

business can of environment. current We all the to what to continue we to do do respond our areas across

We hotel and franchisees the have on actions the taken our manage helping which company numerous itself have several situation. and on we have owners focused updates through guests, this our associates, issued our

one can and of to no know world, is part the demand While when Marriott how return will each in ready. start exactly

have We position, and longer enhanced significant our business short-term on the our to remaining swiftly for to and recovery liquidity changes ourselves the focused while growth made position over how term. best for

been company developing As across to cross-discipline and global have teams points trends have data monitoring various stabilize, plan. started a recovery the diligently

around ramping In in up addition a regulations, conditions thoughtful government improve. business cancelation indicators, eye macroeconomic and testing tracking information at with and and as an our booking are way towards lifted and we to looking also and data COVID-XX cases restrictions the are market all

to flow customer in inform consulting to our powerful cards continued special loyalty six program highly when marketing levels A times our hotels. demand be phases plan promotions for many owners to are and Marriott with reaching on co-brand different groceries. engaged of have how Region-specific demand our that of will strategies are marketing and credit Throughout our in as We with reopen roll analyze loyalty and hotel-level members, credit crisis, potential communicate plans Bonvoy their market we leveraging segments focusing being return. our Marriott out to help cash component developed we and as key including our offer member this points cardholders. to with on US, our such Bonvoy our on the base and

Alibaba elite with Fliggy travel have for help our versus promotion today, Alibaba’s for China, Bookings the over over We we generated to few hotel a was sale first to has Greater extended very terrific of recent have site same successful in and also demand. past announce are buy will weeks In cards and benefits, grown venture stays significantly week by XX% spring joint a helpful from demand, near-term Ctrip run and year. rebuilding time bookings. discount. up at spark last A gift new May the future very XX% also the been

Another meet announced presented stay key communicating enhanced they health guidelines, our associates and on the our is and and recovery focused environment. component safety challenges giving to the cleanliness hospitality health on to of focus safety, elevating travel and the cleanliness norms by with our them us. and need global and about levels confidence We recently new with guests plan

to the by frequency mobile room continuing of service. roll contact as between also and programs and guests associates out reduce working such to are check-in, no-contact We mobile key

all like take hope Their messages best across we the my business. occur constant to to to workweeks, us than to going may me temporary not and overnight. operation will and to any is me appreciation lean team of around but recovery regions the going it cleaning belief taken longer is uniformly express remind inspire to The over staffing, that want every over moment company very to crisis associates not through It of in would furloughs, Amidst continue operate team have the and we this and rebound. happen fortunate are Marriott take going the steps successfully, of we and manage our new the in so will necessary requirements to forward, and to position to day. travel differently bit likely a have I me hotel reduced world. closures, they

Our future. solid continue one program number our our brighter point people, Bonvoy brands toward and our Marriott footing, a financial loyalty industry-leading to XX

step Head nor right a some organizational Americas, his from first with neither down last of Leeny, Dave he to position our finalize Group his was started turn Marriott. of potential over to and share to I call year, the I any XX-year I XXXX Grissen, Before President to in the of the the retirement. felt time I retirement decided want quarter current about Dave Americas career after but the as has news. talking

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to one important particularly a is update me. organizational last My

years Emeritus to of will two we appropriately plans Bill celebrate Board a we daily as remains wanted of in been to Mr. Marriott’s that has Marriott, has midst in every our take work Bill that the source me. to of COVID-XX, Although inspiration the the he been the fully to him engaged I you next day. to alive. transition leadership implement to I Directors informed Marriott In Chair with of role for have and as and of he talk long And XXXX. share contact

day the when today tail two and War of Gulf transition his first day our its contributions have since met are the will we piece summer that ever Marriott XXXX out, we to are To of between with had we obvious, for now the the and the conversations we conversations his associates at and are this crisis that crisis, end ongoing Bill recession years. to first Chair of fighting, focused While industry company, the on the a to to they state the celebrate followed. in another Emeritus and in

and that Bill, mentor, say For your a a To me imagine more cannot years friendship, I and ahead are pray for you. partnership a friend me, truly, us. there family. boss, are now, and you time I without let thank a many

time the look are into I joins to we of David a I he year. I down Chair Emeritus understanding Board quick and sales One but would forward-looking know When not will role, our forward expect decision-making. a working you David know Marriott board point anticipation well only expect we executive our giving he the and an will on suited then come. plans. to that peek at and David of Chair many of to join step board, culture and deep our and serve of transition experience, Directors Bill’s that Marriott board, bring level with that his is for Marriott’s as David to operations other years Director, to conversations as Marriott. next also we In his

details call our will And Leeny over Leeny? to turn finances. the on now, for I more

Kathleen Kelly Oberg

you and teams hope the efforts I globe to Arne. their want thank for unprecedented you, and Thank tireless in Worldwide global the I all our and healthy by down are staying XX.X% also your safe. was of dedication times. during XX% the these decline sharp families for around March. quarter, driven RevPAR

fee gross terms million $XXX of fees first $XX of of $XXX totaled incentive management of Under quarter. million franchise million quarter and or comprised the IMFs our our of First million hotels contracts, portfolio managed of the earned in revenues $XXX management fees fees. base

so is forecast be performance, that uncertainty However, in the can the reversed under did to we fees in recognize At point, IMFs full rules year. there the around that extent full-year later only we year the any accounting IMFs not will quarter. not recognize significant supports these this

fees up and stable of time expense X% other a to ago, million, as by fees, reserves debt million year-over-year franchise of included and well related fees. $XXX million $XXX year Within as COVID-XX. approximately fees $XX branding non-RevPAR driven higher credit share bad card branding totalled Adjusted year-over-year EBITDA from residential primarily guarantee related

timing around guidance. just run-rate normal Note we’re provide uses helpful a scenario major this with trajectory P&L sensitivities. scenario and for is thought talk the a of actual recovery, Given and year results. down with monthly the estimate our of to and XX% roughly worldwide unable full be our modelling I provide not of would the in sources it RevPAR of and uncertainty a through one an and Instead, to that modelling environment current cash few also you quarterly

broad flow categories. cash two overall Marriott’s is to in easiest describe

flow cash category the interest EBITDA level, at and is basically spending. expense, cash investment taxes The which less first corporate classic is cash

and we reimbursement cost corporate them. of we out with these represent that category RevPAR, extraordinarily assume The reimbursed at cash, franchisees of our our expenses, cover programs owners services relates to and to provide the to to which charge second revenues costs and the uses levels low Starting we management The month. $XX million, $XXX million cash and $XX per of franchise outflows non-RevPAR assuming $XX and sources franchise related million fees million cash to of net fees. roughly base inflows month. other about $XX to cash million That’s and per around cash are

XXXX the full it’s management uncertainties recognizing year model incentive fees currently fees RevPAR on Given to we actuals. franchise are due any not base to and results, around easiest related based

month million If RevPAR. result RevPAR, million a you be of in $X X per those the sensitivity adjust $XX point growth unit you, million impact and XX% a the fees Also, for month. roughly decline in the point of is RevPAR a to change fees would as roughly of of per for $XX

RevPAR of in significantly. As year back levels, closer improvement climbs obviously point to the per RevPAR fees prior grows

and from month branding of this which fees more royalty timeshare In other remaining are come residential credit primarily of card to scenario, all branding much $XX non-RevPAR per stable. the is million franchise fees fees, mainly related fees, expected fees,

roughly $XX month exceedingly year, in tax to cash environment. expense, $XXX million monthly to that we could G&A outflows reduced down our spending for budget, owned/leased low Compared The for $XXX million of month. XX% investment original corporate remaining spending per investment includes And million $XX is to about month. payments excluding corporate $XXX RevPAR we’ve approximately million million XXXX RevPAR XX% debt around our portfolio cash full to XX%, total bad interest by for per bringing per deferred of million outflows our and $XX cash or our eliminated expect the we’ve our forecast this hotel the cash month. Assuming per run-rate cash

cash the category expenses provide flows revenues for second programs services to which of our to and relates hotels, for the we reimbursement. and we’re that to The entitled

I’ll services As category and we can you are second cash reimbursement into break collect. two flows timing net buckets. in hotel to time, our we spend to dollars yet between for and there spend this zero know, programs over meant differences be level of dollars

At payments programs the to timing flows the co-brand The the paid our expect both generate Cash our services. current the Marriott program to The that for from issuers the we and stays, expenses will redemption occupancies. and rate the as other members have of given nights for of occupancy lower much of when running lower program we outflows rates, of in hotels terms as low Bonvoy to members earn volume the those of including cash month. loyalty related the recently million the hotels program year, credit redeem and year costs made credit a we several from and benefit issuers. card our well the points $XX cash points. hundred co-brand cash dollars include is card from loyalty received all marketing. This not program cash as we cash first is of this are the Bonvoy or million does into flow the second This estimate

That leaves at other revenues In costs were the XX% pass-through our primarily the is reimbursement and reimbursed of payroll expenses. hotels, of of reimbursed billion American of expenses. A costs North bucket direct managed these our the our for operational than GAAP around remainder more XXXX, and hotels. largest $XX cost

At by are reduced with So pass-through far very two-thirds. fraction managed these in These this us managed have exception XXXX, hotels expenses generally are little this paying in us repaid within owners year, very reimbursed costs small we and days, these to us. point, of delayed or around a delay.

reimbursement amounts cover provide funds, They mandatory loyalties, sales property to charge charged level expenses system, programs a remaining the supported management per lines and remaining our to or with marketing well usage these services brand key. which from per revenues in and cost hotel also one-third fixed. the That these in reimbursed about on variable About cost systems hotel and Apart the being we are based these reservation hotels. revenues, services, fixed provide to two-thirds which are or program included also two-thirds costs with to our costs, cover the hotel level XXXX and and up of hotels like. vary our

see RevPAR cash this cuts But timing significant some due cost month. net systems the we’ve The course, in in from cost and expenses. fee despite roughly well. the as cash for revenues and low demand and company improve we very million services loyalty RevPAR, the of environment, in provided April as could bit. May worth payment cover million could improve, a With as given $XXX rate be cash than month loyalty XX% outflow programs there we before the all reimbursed estimate. discount cash cash usage noting capital $XX the to of well the as It’s to company’s better be significantly should decline scenario, inflows. would cash implemented cash owners positive that could and working million their the deferral brings around month, considering a changes which our including the payables low flow million In $XXX rate extending mismatch burn believe for that we the burn a was trends use reimbursement $XXX a higher and that And total this franchisees roughly April,

mid-April, for goes when raised received, up it on credit the program it reimbursed due the cost position. issued senior deals. balance billion as which and you last to we sheet $XXX want been five-year I’ve will the shoring cash our to to on card look co-brand impact preserving described, $X.X just cash you to that, notes, amendments of revenue accounting the primarily remind we million as a liquidity another We’ve immediate for with the flows different cash P&L week, deferred our reimbursement is than and In focused requires and P&L. loyalty expenses, no revenue our bit I look through that on on

We also share further until repurchases and eliminated dividends notice.

hand Our billion. $X.X amount current cash on and cash equivalent is around

of undrawn of commercial while, May on paid billion, add million outstanding, cash, back our revolver If capacity around on a $XXX you situation, which net need paper including liquidity $X.X that have to We recovery today manage we we’re debt could take this to X, liquidity deduct the and we currently our maturities. the near-term is confident roughly through paying $X.X but we know billion. the back

COVID-XX the confident mitigating prepared We’ve could we that play progress made solid of business the of that impact out. and for range feel our will on wide to and traveling your forward We welcoming scenarios in are for look at open morning, we and line and Thank hotels. you our time of successfully this questions. all for you through the will this now come

Operator

Thank from question first Instructions] Kelley of Shaun Your America. of Bank you. [Operator comes

Shaun Kelley

everyone. Good Hi. morning,

Arne Sorenson

Shaun. Hey,

Kathleen Kelly Oberg

Good morning, Shaun.

Shaun Kelley

morning. through gave. about this Good get to to ever I’ve trying as type section as fast I was you typed just

for you thank is detail hope all So the everyone and well. doing

the as kind what may any of percentage on of level this sort us either at with and gave could sense the to to Leeny, start by either point? relief that, of their kind for number a broader deferrals of do you this or the this been digest just specifically, point think a on franchise at asks one you everything fee really What if that color or franchise high at you system cash and or level be? maybe own managed appreciate community management hotels asking of have fee stage? us, are needs could we And maybe give just give some owner through the

Kathleen Kelly Oberg

So, a couple things.

that is automatic so that decline that charge of we everybody again has as huge there in a once I’ll our a remind First, are proportion fees drop the happened of result RevPAR. an revenue-based,

services about you for that that and the the the So very at deferral charge, that we May, gave you the mandatory little think April and there’s if discount due in include mandatory XX% actually moment programs programs – and services. and also we the on from it when

also, we America, as North well about, at operating as talked At dropped have incredibly, costs the the all managed as hotels. payroll I hotels in the

bills. can. just But do franchisees to about course, owners payables, will we trying their as everybody’s our thinking are best you they managing we are So our say, owners, I too paying and how of their are as manage have cash

having a at for moment, our the of have otherwise, systems for paying really all a fraction actually I of it’s see, April, terms relative than situation so you, benefit the that gave, no really a you those but in situation, very And matter I bit extended are wanted our to hotels we’re the except of we and able really moment. as then saw, better planning that numbers are you that manage very, said the making fairly have payable that cash We gave that sure one through can I we to trouble we dramatically to that, small go it. the

Shaun Kelley

Thank you very much.

Operator

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

Joseph Greff

Good Good well. and hope hear and all everybody Hi. your and families of healthy – you everybody. to morning, are are

Kathleen Kelly Oberg

You too, Joe.

Joseph Greff

Thanks.

for service Just occupancies service, with you, hotels? North And maybe think both. you relief what Thank North breakeven loans your what there? how American can accessed full in that respect assuming select are are breakeven your my of I is, American you America then guess threshold, question sense And do many North estimate occupancy hotel to owners, you ADRs second federal them have a program? you in

Arne Sorenson

tend a the other know of the lot XX% include in hotels. the if Payroll keep service we about you the in for back. more have range, hear think actually and that to been of (sic) [Paycheck apply. XX% service government programs a is track have dollars of full the access tends be little select kind support. but Protection the each them there’s the owner, under received successfully details to to Obviously, Protection approved be many Program]. Program So, generally and [Paycheck that to And hundreds hotel Program] Protection Select don’t of. service How are hotels that with small that Payroll clearly to we’re harder Program us percentages them there of there applied hotels is to get of for the have than We business Protection are of support eligibility hotels, these the for our touch government intended we (sic) some obviously owners’

to to try We continue with through work and them that. navigate

owners anecdotally in important is have America thing from hear lenders what we North the accommodating reasonably think that I our as other is well. been that’s

that And work costs our deferring so to put described property Leeny together very brand just includes and between working are and above our and including by and spending much at of FF&E put system FF&E you and you then – costs collaboration to tap those which standards things the tap paid the for owners, then Marriott cutting initiatives programs and defer that has those and the pressure think do that the longer sorts begins it of Obviously, we to is tougher return. pressure well, generally, get we likely so we’re – some in around. there’s things. see at it But overwhelmingly to all think bottom And demand the think release we system think and will we’re dollars surviving incrementally lasts. as We go as far. forward,

XX% question XX% costs do less the at lose by are – one. open, so, make is open. by staying United but to general to lose XX% stay that labor And some at losses financial closed. that closed, perspective question why you’ve is the than a look will from is, dollars hotels And in at losses breakeven much closed, required. you’re question money they for they still staying question is closed. hotels being do is better lower got to occupancy by associated the got down those are losing numbers, labor do that’s that of many you’re when calculation a remember, of it’s open, they true. way, And But portfolio only The you because occupancy moment are with than probably purely and, the get the the off and is time so say sorts our the be could or not there you In more that – roughly an are our – the interesting the States – remember, RevPAR April that

You’ve cooling. still got heating and

got security. You’ve

be You’ve costs avoided. that got other cannot

a not level. to it there’s scenario – breakeven so closing instantly gets And you doesn’t a that

still You’re that. losing on money

what look were that depend cash provided. are compared and today of service before likely in months a by than at hotels of the brands. by is you going it select up. I in break would the example ago. bit just level full But with provided and going the do at better light to versus which an to that occupancy again, is the as open showed significantly services a at level to when breakeven, being The occupancy be it’s occupancy you obviously than and what provided services truncated occupancy think which XX% XX% Think brands little than still a service the full maybe is being was select food do about services service so to less even or today levels of few in level broadly, beverage probably COVID-XX But closed. lower on you’re

The hotels but openings, restrictions anything, not we three seeing line as demand I towards one are think back is, reopen of make more now movements most I and the trend of in there not when are on have look see couple of defined more towards as And to closed if closings. but terms RevPAR been terms April in closed. the or released, is we the crawl or just to hotel number hotels two days at start think we’re of we than bottom, last hotels seems point last closings/openings, have in this significant weeks, seeing more I’d not the

Joseph Greff

you. Thank

Operator

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

Patrick Scholes

Hi. Good could thoughts... morning. Wondering give you some if us

Arne Sorenson

Hey, Patrick.

Kathleen Kelly Oberg

morning. Good

Patrick Scholes

morning. Good Hi.

then the thoughts demand? leisure? in on fly-to Some half see point early of your this sort but summer of returning in the back to any out tough thoughts I it’s about you Your at recovery. know interested And thoughts. figure indications potential year? of corporate just groups Do

Arne Sorenson

That sort into tapping got and and stunning got in new talked we’ve that here a in the breadth. Well, is associates and what about basically debate by of been virus China industry community of China. data. that and what – our tens know that weeks. in does reassuring actually sentiment saying what going be to spread their to there way and or that and where holding. us to the some but phenomenon a the tell I a been I there’s we’ve the that’s not think probably global there listening months, its for appear there. not we’ve extent does next and is is incrementally few obviously, is in have bit, last lots the back both few about little resurgence not thousands fact recovering of from few of a underway demand is there encouraging something hear it’s profound. We’ve others to large is saying of to coming have we working appear weeks last in in And be the got say hotels the whether doesn’t We’ve certain of China what It’s virus all and

a When of around going different world, the you world. in you’re dynamic see go to the various parts

dependent long-haul I think China and the travel. on unlike States, Europe, United more is meaningfully in Europe,

are domestic we of as to X% in X% by total European travel big the of only they’re and world enjoyed it close. the I Canada the markets. levels they’re the China with times, XX% think world. source about both are is all of Europe for suspect who from way US get cities, that the Even United the from You And before see to to being because kind Mexico around to will Advantages on dependent and want probably destination the markets, those on and US COVID-XX. the a it’s dependent in and about be slowest travel great vacationers back and in-bound obviously XX% normal States fairly long-haul, both air to rest

those inbound business. are Sometimes drive-to

obviously. Sometimes they’re flight,

we is Looking as which at markets where drive-to see question the obviously focused, being maybe US, the strongest. the your

in see that regional but car. better. think And can even that’s is it or is business, performing sort dependent that data the come the on in comments on of and local that extent And are both leisure brands I most. to think the prepared business some select the showed You back we will I

some couple I think better, a cities perform contrasts here. of we’ll so see

its New creates be sense mass stickiest the reliance its risk. may York of and on density transportation some which because of

like dependence their travel on or is and which perform we Michigan the maybe international we see likelihood people think markets better little more destinations be there those faster. outdoor will where enjoy drive and summertime, much in, or outside, Lake the San I whole. And – higher market in as and a than would that enjoy is Chicago, suspect a so also a bit even But the go to US Antonio a can

hear we’ve to slowest group cleanliness the come be they there. great together, do in hotels, The can place things but which like in which our and that bit underway group, work and on a to where way want will bring that from influence to and can a protocols the certainly of customers back meetings is around we some want people use And safe. got we get business that we to they back they obviously depends

those probably more used sadly, meeting meeting how there, making are Maybe meetings capacity plane there of through itself airports but footage than to in to, think side, the can not security will sense. our makes the and control get on won’t that to been the words, does a we the the the other On parts just are how that, progress do got lower able in case have travel, it’s airlines the which good to lines would for at through hotels, be be and per density but air a dependent going the we’ve I head beforehand. and it include getting way are you square is extent in to being this it feel

you’ve balance think out the – on this a bit which I from data is little heard there. industry

of States their tiptoeing a out seeing few I United folks weeks. homes more is we’re what last are think the bit across the

if will will it that on will restrictions the early question and be are. in build spread are, recovery, do like drive-to local, click that and if, will enjoy if the declare make that And consumers, towards going that time a that something just interested can we numbers occupancy up there confidence a of that slower. other a the seeing and we momentum their enough you restrictions over actually but sort are released that can last out put probably and a point travellers, hand, to government the a getting it homes, the And level can we which safety virus the ground domestic, in the better build few are surges a confidence, collectively, given we’re and does weeks. out better. We’re in be are of get we’ve But our of be as got that what lives. it not can’t leisure, the confidence tell and That’s reliving question they or of confidence stake how week have low is that what and to recovery not the

Patrick Scholes

you for Thank very answer. the Okay. detailed

Operator

Your comes next Thomas Stanley. from question Allen Morgan of

Thomas Allen

I morning. give Can update growth? on Good you about Hi. how thinking everyone’s hope unit well. Thanks. you’re us an net

Arne Sorenson

couple China some answer. I extraordinary watching construction think, right a essential the In continue. of crisis into we’re it, to month the and a Obviously, in of In months China. that that world, longer than the an is Well, half was allowed was a and it we’re essentially outside service various was banned. markets, of parts

which on it or question hotels the ready or whether Beyond or not the that, whether and global chain, furniture to dependent you’ve got itself final supply in-hand some was about were down. not open was supply slowed that

in hotels, have to majority will assuming to very say with confidence overwhelming were assumptions of scheduled they XXXX in I reasonable make level construction high of and of a relatively recovery. kind that far would open along think sense around reopen, their we which been can some still the

getting And expect will would so we that open. while they there will be delay them opened, in

more is down to of a construction supply have probably get for watch – whether a or have is we’ll before obviously I I be I think in by of of is and than or we been depend will back banned about assumed likely those released. down in now which to months see. chain fewer COVID-XX a think number we And but just sense Whether dynamics, open California large construction half owners’ number little by that hotel have and it’s mean period restrictions that’s opening. Whether It new XXXX. California. bit defer to construction to and the will quarter, a quarters logical there’s or less time, delay on a open urgency openings by on

were of scheduled still too way I can I the half that open most to well. that be openings open ultimately of system, in as and the hotels think I certainly for our most same of the XXXX to identify. it’s will first think said XXXX do early think into

Thomas Allen

Thank you.

Operator

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

Smedes Rose

Hi. Thank you.

Arne Sorenson

Hi, Smedes.

Smedes Rose

a made others pronouncements as Hi. you hotels and look what world I like wanted reopen. to of ask cleaning around you kind post-COVID in have guys will in

same? going cost decreases hotel Just you about Or or a at increases how here? do you from overall you see forward? think Do ultimately think stay labor the they’ll do about the just significant

Arne Sorenson

to Well, it’s very be going watch. interesting think to I

we’re in going less F&B obviously, to I stages, think early service, example. the for have

think those buffets restaurants with to I in a likely of we’re difference sorts probably and that’s open, associated either fewer to staffing fewer have of the meetings meetings, and the some approach things.

those percentage vary of balance the revenues and and So a things by around likely But labor are you I of quarters, I in little for be XXXX, go by be pre-packaged material, grab and more costs to obviously world. a early think going lower. that the suspect as bit the it’s segment to would market generally tell probably

you that when Certainly, using to expect your interesting. think to about look in stage, checking digital associates the protect will and we first kiosk, longer check-in, be at to think both as protect going in or key would a guests. a I term, be phone it’s important

I sure to of think guests housekeeping the there before in effort than that. rooms we there greater will be relatively can to extent between was those are be virus-free that make certain

expectations making our a guests’ provided long term that financial are our by get at where the are back and longer for we what that and Long-winded well-being through case needed that near I and obviously, looking that term. we’ll less little But services the meet sure best things services making that where a to be also our is in in suspect I be costs the obviously, and provided bit. the good other stay, our may be services however, think and could sure we’ll term make guests work less, certainly their those saying owners we offset each way sense of can. will there place their relatively the way during investments the are labor

Smedes Rose

you particularly Okay. that the banks, their North have some to mean, more some just debt Do in for owners I now? sort Or a to capacity putting Could out right of basis? maybe does Marriott or you I Thank America, I you on as working – maybe the is one see more maybe struggle reopened – on table or would with short-term owners you. think a difficulty guess of get ask guarantees lending not of potentially too?

Arne Sorenson

got that? you Leeny,

Kathleen Kelly Oberg

you growth. think know, capital I Yeah, typically to our I we our Yeah, do. as propel really use

do think, into situation, there’s reinvestment have we obviously an with broadly with specific for when property as Host, time in have we work a reimbursables. done But a speaking, going to example. particularly I time from Now, owner we

We an expect owners to to those and pay get paid. We obligation and the provide have programs us. services,

not to deal either the same be we would then be loans to this. required you’ve to understanding So dialogue and expect fees, while situation. the with our see payment of seen at as ongoing wanting from well there our reduce efforts defer is that I about the But costs extensive we mandatory guarantees certainly, or to to time, doing of as some an all would as

Smedes Rose

you. Thank

Operator

question the of next Instinet. of comes Harry from Curtis Your line

Harry Curtis

that Leeny, just a on question. quick follow-up Hi.

the As you charge development loans, impairment that key about given reserves not reserve, today? this the really the you change you’ve took mezz crisis but your – does way that money forward, going think the that approach you and

Kathleen Kelly Oberg

of of lease. were books the over the around, these on accounting and of charge, impairment of to extend assets the that that life been lease about with assets think two the related So chunks you biggest our leases. as leases on use we them the right They the if all, today, are have have called change, first charge know you impairment of

we And was portfolio of very of $XX million, that So that giving a of there reinvent sort really to spend took agreement And millions large money on owner the frankly, limited the properties. service frankly, charge transaction, they that there that’s part dollars of that. classic the impairment of this key one hotels. to quarter hundreds mentioned, an of relate those with as to by don’t was we

the was competitive, that portfolio transaction a and still up frankly, ton in quite our them of making make a broader So sense. scheme of keeping

little in about tends we as have be to way of a view more that capital service price-limited that if kind projects the that still it’s a appropriate. we than think actually have margin general, it’s Now, you complex the that in small fairly the I to investing in going bit we hotel. on invest to are our more approach to It But at small. I think pipeline, on higher-end think, fundamentally, we deals in what be

of the same we I from are next over are as Now, the few at of the time, a cognizant obviously we business where kind say well liquidity rebuilding will standpoint years. as

have So example, about, investment. our fundamental the from for about when watch on a we’re a are very put covenant spending. key going we’re we investment very restrictions the approach, think But with we driving we think of close really money value amounts that to these keep good into that still I of closely, we revolver type our waiver, feel that obviously

Harry Curtis

occupancy? that as And generated imagine thank recovery now, years respond your margin you. can you in which maybe to was is, from portfolio Arne, and you process the house the three in two question, across to second XXXX, the gives can through assuming Is on think same the and the get higher the to it years, of unrealistic there expenses. of walked next that two you’ve some takes level you and lower or three

Arne Sorenson

back same level about? profit per Get room, the talking you’re to of

Harry Curtis

Exactly.

Arne Sorenson

top certainly levels, demand? that to unrealistic back will the the it’s think virus of we of work try, do And day. I think spread levels. anxiety government is to even And – endlessly the that development and if the other ubiquity and really that getting the I that the think don’t significantly at I same is recovery treatments, every of not development sort talked hard the better to yeah. sense the of not instance, maybe the that, sense is Yeah, getting dampens COVID-XX to Top going are every concern do as this virus, what the of first be is depend cost about the the obviously in instance gets day side. in to recovery down that What the testing, recovery what line on is important really the first we to line going of things about well restriction recovery, the in as progress business? or remaining on all of a the way from our of the vaccine, being driven. of

knows to fear of when economy. the that to that, is beyond us question the hangover the how will severe about economic think the going And be be the line by I driven top none reason of simply activity. demand that period a for may of to is stickiness be of environment, at some there because time, every COVID-XX a GDP weaker suspect recedes. least But there

both things top perspective. those from so, And are think line a I important

our To perspective, depriving becomes we of come bit getting too. do per down more will line at that the per that challenge is recovery the room have to move the extent of and ought significant. fighting going chance way But I back we as a we think profits do. obviously a per the things dollars revenue to we From a see cost top room of room little kinds back, revenue, we’re us

Harry Curtis

spreadsheet presentation, And everybody. of of you a Leeny, the send save that work. lot if us us would your could Thanks,

Operator

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

Anthony Powell

morning, Good Hello. everyone. Hi.

Arne Sorenson

morning. Good

Kathleen Kelly Oberg

Good morning, Anthony.

Anthony Powell

Good morning. guess, supply growth. I Question on,

could construction them require cash And how to that expect Do be require headwinds reserves? construction time? So and do maybe long-term you to a more to have financing? equities expect of approach this on event an more vendors over you kind new impact

Kathleen Kelly Oberg

to And start. add Arne, I’ll on. free then, Well, feel

Great no earlier, saying under of that So institutions finished back they than Arne the these let’s were won’t ability to think today are talk have they vastly There’s get was And the deals first sense. open. in in they health are as make construction. as construction. They’re still to I better The Recession. about under what’s supplies and think final already delivered all, financial reason the

businesses construction be bit can a amount it your one on. few of notice anecdotally on see going everything actually for still I could later, environment hear if demand? the fair is a know actually that we depending Sure. the – But that see from open as you around Now, don’t they as again, towns that you well

likely pipeline be think lenders attitude committing by of think so, around about that wait-and-see and bit you as the more the a there then clearly that is is new at least more deals. to new there’s one And of a I on deals, that to question

related one the lend get that getting are who think stronger as classically doing cleanliness expect going that when will hotels it’s our case the have going of getting and to say that to they they they I all However, continue are I developer you you’ve lend, kind consider the strong our that the thing to the will is they to to know expect deals of would brands that brands a standards that done. around when the heard when can guests one to, been be that a to the have goes with if about, And come, sure we’re financing what are making points loan.

they having that developers Obviously, continue are conversations our and the activity longer that conversations are looking those as say is folks as about well from I’ll as term, still These now quite term on continued construction. who longer conversion the right perspective, apace. thing strongly. other we the And for a then view new up think are it

Anthony Powell

in next a index? Thanks. grow to that even year How maintain momentum that some that do it. of this RevPAR focus Is RevPAR looking you in you mentioned, good January something early and Got And environment? in to gains kind on? index maybe February. what downturn you saw Arne, have scenario, And do you can you tools continue to

Arne Sorenson

that Well, we Bonvoy. Marriott call

a as our program I or think stay brands. like at tool travelers and And to the that of as toolkit. they strong think loyalty and quarter, travel to making of both XXX,XXX I they’re the think members focused program when folks, will traveling, of be the tool we’re end principal continue drive on I that. sure that we’ll us in is for to remains is the And relevant something our and not to powerful

we continue but the it that about related, distribution. which reinforcing hotels, sure how operational mutually go people certainly long that. our sometimes and do It kinds is for. they there with the then it’s course, the inspire is of sometimes extraordinarily I lifestyle strong. we’re a of questions And has portfolio and which think dream often travel, about is of sales do that is how known breadth piece but and exclusively, that that when Beyond market to destinations delivering make excellence are we about hotels is that, the of And luxury questions not Marriott force of about resort to been

will things remain I rely tools think those we that all on. of

We’re XXXX and January we basis there many and February, we rebuild by momentum ability for speak size, our to that of There’s our which obviously partly that XXXX points nothing continued the back the numbers well which should in COVID-XX part for disrupt are portfolio reasons, of about COVID-XX years mentioned, momentum for which massive momentum. that so a disappointed ahead. with, very but had get in latter XXX the built in of as growth index into and

Anthony Powell

you. Thank

Arne Sorenson

You bet.

Operator

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

Robin Farley

your more And how units? a level then topic, construction Great. in new of much I bit in what – of new little seems could conversions some I’m just of in uptick like And us will on changes growth? delayed, much it decline offset Thanks. And could quickly – about unit much same your growth could you a that conversions if follow system conversions I last under the wanted as maybe earlier if not that point how kind in may into in have given some especially downturn a probably the of on there downturn. growth how may the comparison slower Thanks. get the wondering are what the of in did you they interest of and and your that pipeline? tell talk offset obviously be that understand get what mentioned owners how unit pressure. to how about up And uncertainty could out some new you you about seeing, but

Arne Sorenson

do. the have So, through Leeny, not would directional, stronger cycles, a a us. brands, conversions and They for in up. up environment. as you look like, weaker well for not be top can hotel concrete every may of I’m Robin, probably go mind. as this perform you’d I But if go sure as up They because environment, data weaker you this not go in

don’t this need I And program I reopened, conversations needed I so, how we’re and at a loyalty pipeline months today of in customers six my hotel more already are looking up oh, get where goodness, months folks ago seeing do ago. a pop or than three

will of so, all that And help.

think probably I to at say step builds fair step up same step least the and down conversions weaker it’s environment, time, up. a step as new at while the in down they conversions much as that

the signed if XXXX we that the and look Recession XXXX, the would, had before hotels continued XXXX Great that were pace But at we at Recession we not hotels you kind hit. so, Great system. the to XXXX, XXXX, of before under open had And in into construction our hotels, new

with higher on with even my is which before up so have of would a unit certainly we a had bit growth serves, lower. average, percentage conversions And have little and, been end recollection we what not would, benefit than if the

into look portfolio we period with of the time, think when are our the are think is program think the I think now I stronger. momentum index next brands I stronger, numbers loyalty the and stronger, our I

by more think way well decline the as much depth conversion gives the for All a in industry whole, to owners of performance for then of of activity move. the motivation the which will which as bode is I

crises, before or together, term they’re banks seeing going less or COVID-XX the find increase going get here. near be things and system those be not financing I see to But more of than same whether opportunities rooms decrease. the than before will more gone suspect all in to providing they’ve stronger an either a in see into provide will openings the kind our require we while that to through, hit. they just prior been equity commitments that net they as we the clarity to Put can are likely get were we’re we’ll has I think At much time, inevitably pause Leeny

you do disagree? Leeny,

Kathleen Kelly Oberg

Recession totally our of brands world. that around is soft only I differences between strong add, No, Robin, agree. and I’ll the Great the The interest those seeing thing portfolio of the we’re is the now one brands, in frankly, and

that we think conversion the as So think XX I now years are vehicles compared do is have helpful. to ago, I meaningfully which stronger,

to think somebody’s what at to that And portfolio seeing are of openings going the of got Arne said, through XX% have think demand we But in so increasing we’ve to to offset XX. of XX% that kind goes your number of we’ll going new for definitely I conversion are you’re refinancing that’s say with if as maybe conversations. up But construction. in across financing or going to do slowdown the we’re you’re room financing a looking stay terms to deal, right if a brands, same, work not realities is – that have kind seeing of COVID. the to to the still I and in normally do let’s kind environment the looking all are that third, of

Robin Farley

think have follow-up. were of the small That typical, you the conversions maybe of And like or if percent soft year downturn? said, Thanks. Great. you. And in your from sort which something sense. didn’t what last just last Thank you something you about one makes brands,

Kathleen Kelly Oberg

going overwhelmingly it’s to be that way. America, North In

either full of that about service new a our conversions. it room be in or not the overwhelmingly about going we think build the may opened is stock the to North rooms chunk XX%, in you be service openings, big if brand, in such they’re So call pipeline, America, of but full our soft service, limited openings existing of room because XX% current

we can numbers, the say you good So but specific get I’d a percentage.

Robin Farley

much. Okay. Great. Thank very you

Operator

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

David Katz

Hi. Good morning, everyone.

Arne Sorenson

Good morning.

David Katz

and we’ve rates usual. with going of hear and larger of a event but you think about as through, another a and a a pose anyway. the returns management everyone’s question how this calibrating operator we may it sort versus detail do day, issue. Good a And the in all as your franchise events risks where all growing context third-party and wanted business pose taking to you I that, to When you given of for other thought strategic a hotel I’d this been and sort voices, associated all of on thank just the hurdle are? of think about transparency the and contract for be I with forward

Arne Sorenson

it’s a raised has one fair few question Yeah, a and been that obviously times.

all you’re likely into luxury, franchisees that greater to there is and the able aren’t of obvious it differences segments mean likely is the in suggest large those have between US dramatically the placed markets no different world, do And prevalent expertise. getting group, in distinctions. there farther that do there other in getting But is existed around also expertise go, the those the you’re premium yet. markets of the franchisees into not think do scale more I on are more more Franchising you the and the in lower operational One than industry. some means model franchise dramatically And chain and by the obviously I reasons by The the to are have that more is is for is that management not franchise. up that. franchisees prevalent world.

for unnecessary. At we’ve I bias one sort the lower in time, a power in the power whether need luxury we the away. wouldn’t of and I for brands, us segments the of than the is of to think power same lifestyle I whether space, food management had have, we that towards beverage, room trade group more the that brands, consider think cultural the power in the there management is the that to have of some

the drive that of to keep strong. as the a the will loyalty but continue think in much there, There drive is to higher-end travel going and program, we very also profile lower being stickiness And be a of that want year. something industry-leading trade for model there’s be and prominent I to risk a that this travel, is different would drive which purely part different Marriott’s upside not our segments. portfolio aspirational might

David Katz

much. you Thank Perfect. very

Operator

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

Wes Golladay

million you quarter? $XX everyone. this expense about drove Hey. Good what bad Can of debt talk morning, the

Kathleen Kelly Oberg

Yeah, sure.

an does the everybody way truly was better portfolio once but expected to got a before, bit receivable done As uncollectible. future for bad losses. little classic was like an to a the has CECL, out off than more you follow. standard for uncollectible, has a as loan requirement The what bank, them very was you clear of think differently that and absolutely it accounting for it bit is writing it reflect as known new And called there that know, it’s as us, estimate CECL, where now you a standard was obviously little accounting also debt that the have about us it before,

that of where So deemed that classic past so loan performance when against and well go and provision when you’ve you looking your as on specific prove taking as of it got you’re requires receivables an your at are you out, a that’s uncollectable. of making receivables base they history will actually estimate receivable a loss based actually

So we G&A as impacted by COVID-XX. what in you is number this in can about, talked that meaningfully as quarter, obviously part $XX that of see was the million,

uncollectible So future but it’s an losses. environment specifically expected very also given that whatever of estimate ones deem got we the

Wes Golladay

Thank Okay. you.

Operator

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

William Crow

business? is from Leeny, collecting the you. to there what of each for One any is timeshare risk owed

Kathleen Kelly Oberg

listening call, No. I would they’re sure I’m to no. say, so this

I about and partner, Worldwide, that do we fixed think associated know, fee. Marriott not and Vacations overwhelmingly there risk believe great we that charge, you is that’s, as is our a feel with

William Crow

Villas? then, bigger your & Homes given to And Okay. the to Arne, investment, picture, commitment current change any dynamics your

Arne Sorenson

so. of invested Homes I Villas don’t The no, is & amount in modest. money Oh, really we’ve very think

ending which home like to deliver I will something up a because running. as It and we think services which has handful luxury of is the is, about higher of hotel a professional product can you’re place there’s kind skewing and towards You’re and environment, you’re a COVID-XX that. a quite consequence, home-sharing deliver we’ve too keep something talking really can still space we think that think way think home not attention And positioned we the which different I for a to which pay is business end where to dollars, in of I and of in that that part the I like continue suggests a sort sharing that, be of of the from up traditional whole opportunity millions business, dynamics different the to.

William Crow

Do the the similar back way are you up? will to ramping ramp think hotels it up

Arne Sorenson

Yeah, business I some in would occurs. tiny wouldn’t comparison way more There what hotel obviously modest leisure a I think they’re differences and focused, it’s us for by think the doing, so. dramatic could leisure very though. than be business is. focused I our to we’re is the mean, ramp that it

William Crow

Okay. Thank you.

Arne Sorenson

You bet.

Operator

of Michael line comes question next Your the Baird. Bellisario of from

Michael Bellisario

morning, Good everyone.

Arne Sorenson

Michael. Hey,

Kathleen Kelly Oberg

morning. Good

Michael Bellisario

quick question one Just for you.

longer? do hear have what When decide are have think What or June deferrals I you you maybe that franchisees? I mentioned for concessions XX% What and do fee say, you payment think May. for? April gets but discounts, for, or see? for example, even What looking and offer to you was you same just from and the July, do you to to

Kathleen Kelly Oberg

offer remarkable down kind basic about providing programs of expenses to we’ve to and level our think still again, able reduce job Well, this able talked this costs as in services. recoup I like where a I to done being were before, be our and feel we able of to these we’ll mandatory

that expect discount. we offering So would be this at at point I looking further don’t a

Michael Bellisario

And the then expected what’s those or for recouping timing your timing fees?

Kathleen Kelly Oberg

Oh, sorry. September. Yes.

Michael Bellisario

you. Thank Okay.

Operator

line question of next Deutsche from Santarelli the comes Carlo Your of Bank.

Carlo Santarelli

Hey. Good morning, everybody.

from guests one Leeny, XXXX occupied from originating in percentage me. flight? were your a Just a quick what of nights from room Arne,

Arne Sorenson

We’ve too. asked that question

You check people may hotel typically have actually noticed how a don’t that came. ask we when into they you

that brands this about markets Think be can’t from the the fly. learn so sources. little a on select we’ve as at you in you other United varies And get it basically dependent unless fly-to bit to based won’t are Canary dramatically States there looked Islands The example. to to business than where you on And much market going an less data surprise it some market.

like because a average in half, estimate But variation a it. global it careful Our way again, it’s that. you’ve within hides something is got to probably about be dramatic

Carlo Santarelli

helpful. the commercial $XXX That’s – of right then, [indiscernible]. Thank to you. one due million of any if when I sense of next kind just follow-up. paper outstanding could, are that it’s that And on the, respect I guess, now, quick With payments

Kathleen Kelly Oberg

quarter. third the in Mostly Yeah.

Carlo Santarelli

both, you, much. Thank very Great.

Arne Sorenson

You bet.

Operator

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

Jared Shojaian

Can amount begun is an percentage approved has you Arne, of me deals pipeline. your drop seen haven’t mentioned an around a you lot Are yet today I are unusual what not the you tell but owner’s And, under you pipeline contract going of And construction? or from of guess conversation of today by economics forward. from seems very be surprised the the financing that? availability But to building certainly different. really perspective,

lot So of that see that we a pipeline go the particular I of the segment has segment guess why away, not wouldn’t construction? begun

Arne Sorenson

construction. started [indiscernible]

the under construction. we team, – if this the – I XXX,XXX and think shared you So I’m are in number wrong remembering with here, XXX,XXX jump of

Kathleen Kelly Oberg

That’s right.

Arne Sorenson

XX%, XX% that. that’s like maybe. like something So

Kathleen Kelly Oberg

yeah, yeah. Yeah,

Arne Sorenson

In that range.

number we you. And so the concrete that’s give can

going what course things hotels here. next for on not typically that owner a it and to been not to happens how think much the returns very a be to in to average, that although year I’m could are this, time. be the One worked years, pipeline going few of an until not, pro they formas work detailed of of even under mind what where bit serious. though couple be with that a is over identifying there’s have doing are substantial are which balance construction about it, is little it a cost It site, construction, is about under bear is a it entering something here doing I period may not the the is guessing build it’s

just people it worked fairly at crisis tentative identified when We’re time. decisions not putting but or in has are think get context, this surprising don’t haven’t to I our out they’ve XX that making pipeline, example, for like being that done. a in somebody deals deals days shows the in that permanent yet path that I killing for I into and site uncertain market, a up because And courtyard says about is that have one a want of don’t specific I about build deal to period all on X viewed a a

the that I bear to what a if of hotels to not best substantial construction yet when but And construction to going may it in cost? line three a decide with top can smarter I that to together as yet is as years get for accelerate downsides will have will demand hit weaker line what we with me, think two the terms be to won’t and we comes there certainly in under at I’m thinking that the also mind about can available all I’m back. probably built, construction. I may environment this actually be thinking open be which financed and and it. not And weaker if have coincide see looking projects the I not need not construction, performance, for until top while about I through, suffered that been is thing my decent upsides be environment, is that that open for advantage get construction second are under well the be associated I to may weakness pursue my or be a the deal lower deal

Jared Shojaian

point a just And if may. I you. Thank of clarification, Okay.

all of that under XX%, Or construction. the other that that is that’s You number, conversions? saying XX% did you is give some are But that is [indiscernible]? XX%

Kathleen Kelly Oberg

can you that. I Yeah. give

construction new in are starts. XX,XXX rest and conversions, All are So release, said build approved, as are roughly but about signed. press pending XX,XXX we then yet pending the not the

Jared Shojaian

Got Thank much. very it. you

Kathleen Kelly Oberg

Call roughly it, speaking. XXX,XXX, broadly

Jared Shojaian

Thank you.

Operator

Bernstein. of line the from comes question Clarke Richard of next Your

Richard Clarke

I of couple [indiscernible] again, A Hi. believe.

The view rates. just is first on your one

about for XX% vouchers. a offering talked discount prepaid You’ve

X% the the where you Your rate was down hotels last just on in control quarter it.

So rate the just to demand? much are drive you willing flex to incremental

Arne Sorenson

We compete watch And company At time, largest view chase we terms the demand, one not which the the hotel matter you’re world, XX%? our we nothing to for in in perpetually. we’re we’ll world, the bear And this in not to highly doesn’t is industry its People challenges does hotel fact obviously. give want sure got in of you that is Well, pricing. same I think number... is obviously that power. that in and rate distributed of us. which the that there Something okay, that significant an Leeny? make like us all pricing that distribution, world? only the the as, is, rooms XX%? company we’ve Well, of – a largest global as of what’s even the dropping the

Kathleen Kelly Oberg

North globally. percent XX%, X% world. outside of XX%. the X% America,

Arne Sorenson

by many franchisees, our priced by of not And Marriott. those are rooms priced

by we’re so means. not going push down any to – we rates will And

will to everything can, we’re of to power, sure we’ll going can be into maintaining the need made. the try back that get there the kinds And competition demand our we make do We’re energized price pricing do as making we in too coming judgments to best and but system. be we industry and

Richard Clarke

just I And if a quick follow-up, may.

incentive receiving this despite you none the some. on comment booked fees, Just quarter,

received, are to refund understand and quarter. incentive – assumptions book fees what you I I first would you wonder whether making can you Just now how in process what the

Kathleen Kelly Oberg

you looking a So, budget expectation contract and performance a target, depending the basically what know, against the every month on you at the of as against are requires.

the the an month’s there’s if don’t earn what need owner’s The see however, is. becomes issue, priority then but of it performance have exceeded you you again, you to technically on that performance that So actually based end the year, expectation. until year at full

our we income. we looking RevPAR, we at you’re in and feel like we is those So well, based that have to we feel even on million would secure, won’t really despite starting enough enter clicking on, now China not decline said, incentive for and were can doing great March. give I which can But that really strong example, into us $XX January really February locked have in and along, were terrific as of to performance, for comfort XX% look, recognize when that February April impact in back feel some to early fees, clearly that and them as however, we knowing Greater as

Richard Clarke

much. Thank Very very you good.

Operator

Hightower Your of final the line Rich from question Evercore. come will of

Rich Hightower

taking for Thanks everybody. morning, the Good question here. Hey.

Arne Sorenson

Hi, Rich.

Rich Hightower

well. Hope everybody’s

lot credit $XXX-odd-million understand coming capital. of source know cost you in as the help incrementally a us of there help of I versus other help the in us implied for from Just sources can capital So agreements? a – of just card the understand that there’s but just assumptions

Kathleen Kelly Oberg

Sure.

spend Arne, Think So us our this let card their credit me on pay is and agreed money, that do also to cards, then, based on with an to us amount jump compensate spend. that a it the credit and of And for affiliate being of card that obviously about Bonvoy brands. people able in. the issuers program part this, for obviously Marriott way, as being credit

over of number you expectation think be how credit when you amount there’s of collecting upfront. companies. some of of kind it in So And from kind it’s about about basically, the years, much an revenues a could that card getting

modest paid otherwise several So they is of next credit a pay than on what the spend what amount based us years card over have less be us. will they the would happen moderately amount will will

from of doesn’t in think of it obviously et So of cost required Marriott also terms classic debt have extremely for of cetera. and of economic if it’s you have. about repayment capital, classic a It efficient to characteristics the kind terms, any

years. they less it’s a would get otherwise overwhelmingly So that paid several of essentially paying back have the us than will really, again, them over next reflection then by . we that monies receive earlier

Arne Sorenson

last And our is deal. the than less bond cost

Kathleen Kelly Oberg

Meaningfully.

Rich Hightower

it. Got it. you, Got guys. Thank

Arne Sorenson

You bet.

Arne Sorenson

welcome in your as interest Thank appreciate this industry. time Wishing work as you the as our you through for get industry back as But time, road on. very soon this bells to a on as much all that an Marriott the the way obviously recovery you we’ll Thank but morning. business, the best and of We us challenging and be know in society. nothing as you. your and with we there

Kathleen Kelly Oberg

Thank you very much.

Operator

Thank conclude conference you. today’s That does call.

You may now disconnect.

Arne Sorenson	President, Chief Executive Officer & Director
Kathleen Kelly Oberg	Chief Financial Officer & Executive Vice President
Shaun C. Kelley	BofA Securities, Inc.
Joseph Greff	JPMorgan Securities LLC
Patrick Scholes	SunTrust Robinson Humphrey, Inc.
Thomas Allen	Morgan Stanley & Co. LLC
Smedes Rose	Citigroup Global Markets, Inc.
Harry Curtis	Instinet LLC
Anthony Powell	Barclays Capital, Inc.
Robin Farley	UBS Securities LLC
David Katz	Jefferies LLC
Wes Golladay	RBC Capital Markets LLC
William Crow	Raymond James & Associates, Inc.
Michael Bellisario	Robert W. Baird & Co., Inc.
Carlo Santarelli	Deutsche Bank Securities, Inc.
Jared Shojaian	Wolfe Research LLC
Richard Clarke	Sanford C. Bernstein Ltd.
Rich Hightower	Evercore Group LLC

Marriott International (MAR) 11 May 202020 Q1 Earnings call transcript