Earnings call transcript Q4 2022

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Operator

Good day, everyone and welcome to today’s Q4 2022 Earnings. [Operator Instructions] It is now my pleasure to turn the conference over to Ms. Jackie Burka.

Jackie Burka

Thank you. Good morning, everyone and welcome to Marriott’s fourth quarter 2022 earnings call.

Operations; me Officer; Tony Financial Relations. Leeny Executive President, with and our Officer call our Vice Executive Dahm, Chief Oberg, Business the today of Capuano, are President and Vice On President Betsy Investor and our Chief

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

that, to RevPAR and Please and RevPAR rate results defined unless average year daily XXXX constant full our due reflect XXXX, criteria in open the reflect hotels ADR for for the between comparable and properties otherwise closed that and COVID-XX. stated, meet did and operating comments all temporarily occupancy system-wide currency XXXX were XXXX. as occupancy comparisons comparable if hotels also include not comparable they even other of or not they XX, XXXX for December as are note

to Additionally, the unless comparisons each otherwise stated, are pre-pandemic comparing XXXX in for all same time year. period

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

now, I the And to turn over will call Tony.

Tony Capuano

quarter, XXXX. high abundantly that Each levels up We year December X% XXXX all recovery real note, with sequential June, XXXX, fourth to fourth occupancy the year for and surpassing in After RevPAR and to China, With ended Marriott. points pre-pandemic in ADR global morning, saw people Asia-Pacific, a in RevPAR than XX%. in occupancy Greater good fully now fourth year China, in X% versus everyone. and the down achieving clear or finished and is was quarter. love improvement have up X APAC a It with the just the more Jackie percentage strong quarter regions, ADR very except up excluding quarter compared recovered. Thanks, we travel. global on

In nights Globally, X% has versus quarter, leisure driving transient XX%. robust. continued leisure the ADR, And we remained fourth which demand increased room XXXX. leisure rose

with quarter rate in Our and pacing the improvement for Canada, already group gains increased experienced and quarter Group is year-over-year, revenue revenues meaningful XXXX. quarter. group same night business U.S. each most in the XXXX fourth room XX% above In XXXX. XX% up the

rate group Given generation in-the-year, strong increased to lead and for-the-year bookings, quotes, strengthen year this further. expect especially for revenues we

the of in in half one-third room around to from quarter the transient XXXX. nights at compared demand to third business remained around group XXXX, steady U.S. fourth year the just recovery. XX% were Canada and In booked

For corporate rates the growth in high XXXX, single-digits years. we X these pleased to are holding the rate last have steady negotiated after special

down blending shoulder occupancy mid leisure points the in XXXX, nights business the fourth still midweek occupancy trips. was low Canada the U.S. and to quarter, In trends single-digit of the while day-of-the-week to point Our single-digits. weekend and down on was continue and percentage versus

XX% other accounted than we demand upside growth percentage room and versus XXX XXXX. still has cards. in Bonvoy of the lodging like believe yet powerful nights of in traveling helped program hotels key for also length now quarter, XXXX. has trip With percentage home our quarter, X for by fourth further average especially the the members, transient than the more cross-border have XXXX, transient borders Guests X credit during the a quarter, demand overall outside than co-branded U.S. business been and points country that spur more is China’s risen our adjacent driver globally Additionally, a point million XXXX Marriott in there than Bonvoy offerings of prior also higher their lower products XX% for reopened. still travel Rising though our

now had Our following our Bonvoy X especially last digital launch card of products. investments year. our other cards, key card and areas, growing countries with and spend in acquisitions Marriott global engagement Saudi record in Product members app card innovation November our credit focus portfolio through and member remain in Arabia,

profitable highly revenues owners over the climbed great anticipate our digital XX% We room many rose up XX%. and from additional our couple have platforms, mobile which our gains app next of XX%, made digital in channels were contributions users In year-over-year, nights XXXX, are enhancements for digital years. and

financing new U.S. challenging, given for uncertainties higher a in especially and environment the sales potential and rates remains economic here projects interest downturn. The surrounding hotel

industry disruptions, and other supply construction headwinds improved. However, of availability like have costs chain labor

in operating had local activity. strong overall of Given another signing we and XXXX trends, sentiment developer improved strong year

nearly rooms XXX,XXX Our year. global signed for franchise agreements last and development team management

the of the Express around transaction, mid-scale XX,XXX In moderately in City add anticipated the should addition, upon rooms closing priced the portfolio space.

the as We segment around America expand other in Caribbean in are in opportunity to or locations Latin the world. CALA about excited region and this the as well

in announced We to segments. brand the upper-upscale plan that by new Bonvoy, we also serviced to recently Apartments X Marriott and X-bedroom a apartment launch luxury

of developers. great interests already from deal initial and received have We owners a

Conversions signings the attractive across breadth grew a conversions on brands and last thanks of XX% room rooms being part more convergent-friendly to with multi-property scales. roster chain of top leading year-over-year. representing in nearly of XX% these in portfolio the XX,XXX of than industry of X.X% a owners. net system total or our basis properties our X.X% our of and make continues, line added Momentum gross bottom and opportunities, very associated brands room year, to additions benefits The represented XXXX. including XXX in meaningful We

impact the our X.X%. from of was rooms net our growth exit Excluding Russia,

rooms to forecasting percentage our Express are City we point franchise around of X.X%, from around system. of XXXX, growth addition including anticipated rooms the For the gross X

net to Assuming grow deletions to X.X%, X% of rooms X.X%. X% could

to in of also here called wider to sustainable and is North now trafficking over ESG do taken million program positive underrepresented program highlights in to is $XX associates system In The our diverse of new our Marriott’s making a hospitality support announced XXXX. having pivot ownership the X,XXX wherever company’s Marriott we and least through few to by journey business. our Bridging we reach in our that to the goal million impact X culture a we December, and groups efforts. historically donated have ESG strategy, we integral recent June, have committed training, and like dedicated America hotel and an In of us our part our our Gap. help company share I’d which women-owned human hotels This at should industries.

to positions achieve gender terms workforce XXXX and company’s U.S. by parity and our aim inclusion, In of leadership the diversity people of have XXXX. XX% global by executive is in color of hold

reduction our science-based set with expected emissions come work continue details also to to year. We this targets, later more

I am proud of in we these achieved accomplishments that and have XXXX. all

To-date, booking and given there look economic X Lodging As Certainly, environment. seen to not our meaningful and we demand XXXX, macroeconomic is immune in global about signs XXXX, is full a demand to remains softening. weeks. trends pricing months growth. have around into uncertainty transient is strong. average relatively downturns window the quickly we ahead year change could business X.X booking But however, of it’s cyclical not

her will global year-over-year in this in back we Leeny will global if economy that even grow half year. remarks, the the discuss are of RevPAR As softens optimistic

this these the in over Before I navigating financial make hard couple record for Linnartz world the the has to new in regarding and I helping am President been like commitment members. that also CEO, role achieve associates month. at call end Stephanie turn the she two work a I’d I team of senior our will appointed years of thank in Under challenging statements want to last you their December and a Leeny, and the company results. sure saw around assume the that news to my Armour’s few of

Also, has later Group me Craig this and has the globe, to want our to of international has of general and for President, and hundreds developed the Stephanie month. and decision retire Smith, dedication his Marriott has from Craig that Craig spanned career helped after property a meaningfully company the around the hotel managers I both International, of Marriott. XX-year world our countless contributions and thank growth decades us informed above to business. their of leaders mentored with accelerate

details While about soon. bench. these new we deep I more miss appointments that am forward two will personally excellent executives, proud senior leadership incredibly have an sharing to look I I such management

Now, let over Leeny? call me turn to Leeny. the

Leeny Oberg

global XXXX an we With growth, XX% Gross fourth EBITDA climbed you, quarter. RevPAR momentum adjusted Thank fees Tony. outstanding sustained rose XX% over the in and quarter. reported

variant causing slow we EBITDA year, full and EPS, to adjusted despite Omicron adjusted the record For fees, the the start posted year. a

quarter quarter U.S. nicely China. quarter, XXXX Canada fourth in RevPAR third fourth in the from select versus RevPAR growth Compared market Greater the in except every accelerated In to the to primary aided tertiary sequentially tiers, levels, to quarter region, X%, pre-pandemic XXXX the from by from to third increased all region XX% RevPAR service. improved and types, the ADR. luxury from versus across all fourth brand and

in X% or driven increased both World XX%, for In by above the RevPAR in except the Europe and X% MEA, pre-pandemic rose Asia-Pacific, in East grew Qatar. rate and by the in in RevPAR the quarter, and fourth X% for Africa, CALA, levels XXXX comparison International Middle to RevPAR XX% occupancy. boosted improvements in China. Cup

and line Other region in increase January Greater from the Chinese XXXX in to as While during of are and border the APAC, in holiday but fourth about policy It China major requirements region period especially RevPAR XXXX. meaningful surge requests, passport the optimistic travelers. the demand in Year milestone work-through quarter, January. the travel, an abate. saw capacity for We RevPAR to nearly visa outbound with anticipated issues new by benefit could are results room with and Chinese the came over lockdowns were, XX% recovery we holiday, from a in impacted in New of take nights these airline lifting also quarantine the with time in where regions in a increase China huge again, open reached

growth wage In our margins and IMF credit quarter fees. room and quarter in impressively in of costs. Those at rose the the quarter, benefit hotel fees, billion, meaningful revenues franchise of while and fourth our $X.X Canada, year-over-year quarter reaching reflecting the operating card largely U.S. containing non-RevPAR-related gross total million, with IMF superior million. co-brand by surpassed XX% fee management of Incentive totaled XX%. RevPAR, the our XXXX quarter, our the ‘XX At rose $XXX with period or IMFs, remain fees closely the in and additions to same fees. focused service, $XXX fourth significant owners driven were franchisees up hotels higher for the inflation. Profit again customer managed we in working on nearly deliver U.S. to level, higher despite another

customer intent scores. Hiring have our continues tenth open in number Importantly, In satisfaction rise. XXXX consecutive below and U.S. scores line XXXX recommend that now the to in improved to December, positions are indicate with for is now our the guest and the in U.S. levels. of generally month challenges moderated surveys the

with Our XXXX, cash billion, the during asset-light in XXXX. business model totaling double $X.X activities by once amount again provided operating generated cash significant net

year modest reduced In Our cash again from of the to we in positive XXXX, factoring before the payments. impact companies. card loyalty loyalty with final modestly source received a the of reduced payments, before program, expect be of cash credit the the

opened outlook, XXXX full our both in about than year will in release. details all press More which are our RevPAR currently talk comparisons X comparable to let’s that full for X and that XXXX. hotels ‘XX be are the Note of or not the also Now, with were ‘XX is not trends. I to to anticipate lodging that underlying a ago easier open start the continued demand. in first making XXXX, comparisons the variant benefit will comparison which meaningfully Omicron quarter, will year the from year we really strong depressed meaningful. when quarter There in

and demand is across travel through Momentum being group by gains. are due strong and customer geographies quarter, segments rising excellent. Halfway bookings cross-border ADR revenues driven and to the

are negotiations. to global worldwide. rose and could the January in from up Canada special and XX%. Additionally, XX% with XX% quarter rate to anticipate markets XX%, RevPAR international benefiting successful and XX% We and corporate XX% increase business Canada, in higher that transient U.S. XX% XX% to revenues our volumes the RevPAR first U.S.

financial windows performance booking level macroeconomic in year of a XXXX. short-term company’s forecasting visibility uncertainty, there less is full Given the and significant for

As broad for and a result, year RevPAR full key we range other are providing metrics. a

low across RevPAR the throughout continued economy, travel reflects end high economic in to demand year. the roughly flat markets, of range a compared beginning The end quarter relatively reflects second steady softening half of a in and global with XXXX. of second the of worldwide XX% meaningful the the segments customer the resilience With picture the global of range

fee RevPAR-related number from full year spend fees fees million X% growth Canada gain versus $XX X% of with rise The the benefit to for year, sensitivity expected to could is credit international of full XXXX the X% RevPAR rise in fees. X% to leading So in the RevPAR to Total XX%, of cardholders. and to global year X% higher growth to RevPAR could to could in non-RevPAR-related $XX XX% the million X% RevPAR U.S. a change and around XX%, in of for between XXXX anticipated and resulting X%. to XX%. Non-RevPAR component be could the from a rise full increase and card average

G&A brands to and in in $XXX and adjusted and the spending we Square $XXX representations but for includes New Barbados. expected our the be XXXX renovation levels. could acquisition City Hotel investment Union the and million terrific Express expenses to W $XXX XXXX These adjusted W anticipate XX% of of below years of of XXXX. York own After an our and $X XX% million million spending, $XXX X% We X% could completed. X%, will increase X% portfolio X billion. brand expect elegant portfolio on $XXX hotels Full spending hotel of of year all-inclusive to million, investment reduced million when above of meaningfully to This EPS increase still XXXX between annual EBITDA rise around

recycle with investment hotels to expect selling capital long-term our by We in these them agreements.

technology, typical overwhelmingly investment Spending than expected in our which in XXXX customer-facing also higher be incorporates to time. reimbursed is over

investment billion returning share remains growth shareholder rating, capital allocation In through We're to to investing end the our we XXXX, value excess capital of to of to a at in $X.X same. then committed a returned combination low targets. is repurchases. grade modest our Our quarter, the the accretive philosophy the that shareholders cash At fourth investment-grade and and was dividend leverage end shareholders. of

shareholders $X.X be For billion between capital XXXX, to returns $X.X billion. and could

the to gratitude I Operator? I associates open line, for like we my of your would resilience incredible questions. Tony and Before are our too global now dedication. express to the around world team happy take their to and

Operator

with question our Morgan [Operator first Instructions] We will take from Stanley. Stephen Grambling

Stephen Grambling

Thanks Hey, good the for taking questions. morning.

Tony Capuano

Good morning.

Leeny Oberg

Good morning.

Stephen Grambling

you shareholders? And start on guess referencing allocation to that leverage I about moving capital the cash allocation capital off or rate to dictate the rate given ratio? outcome the terms you wanted that within I actually. may parts environment, thinking how of the actually how right returning were are in

Leeny Oberg

Sure.

are as we we So in I year And my overall, strong rating. credit committed Stephen, investment-grade to terrific comments, stated the ended shape. a in

to I overall perspective perspective return. our environment, of I metrics, us being about think picture than deal our gives we low cash we at see great plenty we rate. investing growth you need from an and about the Obviously, flexibility interest ratio in RevPAR us to it think the year tell is and credit activity good shape see whatever earnings it’s this that flexibility how our how a and plays ourselves specific a about can flow very think that does I it capital come. macroeconomic may more out. global But that we of from end range rate in from gave on the being think, But give interest really with

Stephen Grambling

discuss bit you're we’ve guess end. little if corporate on the We've and And how demand I And booking the that medium-sized seeing perhaps across I'm influence business, small follow-up. this our corporate been versus wondering what then Great. in seeing tie large you might a data strong a seeing? of been volatility could different maybe it some into IMF

Tony Capuano

Sure.

which ish the and business our So X% transient, represent business in medium-sized they actually I prepared small broadly mentioned as fourth the quarter-over-quarter Interestingly of quarter. companies, about in were remarks, XX% total at for for recovery XX%. up still about my transient is

steady have recovery to but levels. to get companies, So We’ve a a ways to that of they to pre-pandemic albeit back larger from slower seen be go continues bit got strong.

Leeny Oberg

I top Stephen, we our the in points X mentioning trend that a that just January, to relative accounts hesitate other yet, thing another worth I’ll but special add call improve to ‘XX. is it’s saw corporate

classic So ‘XX into in or only the see are or continuing but we a there. far. so are good areas of defense and progress accounting healthcare, month consulting we to

Tony Capuano

last and make, for special would rolled the the our years, we’ve corporate I just I call, last said the maybe Stephen, reiterating is, over in And couple earlier is that point rates. of what

we went high felt in we really year, like good pretty the we as so rates special we negotiating as corporate materialized saw in And that this digits. season a single And the negotiated into were place.

Stephen Grambling

Thank you. Makes sense.

Tony Capuano

you. Thank

Operator

with question And we next our will take Bank Kelley from Shaun of America.

Shaun Kelley

everyone. Hi, morning, good

Tony Capuano

Good morning.

Leeny Oberg

morning. Good

Shaun Kelley

– you good bit I when more the little to sort about side. a of demand Tony, wanted morning. talk

from know looks obviously, the But is like is coincidentally strong. time to So pretty it seeing visibility short the a industry you’re little time. we obviously, in everything

you seeing And could little way how bit? – you’re North what’s kind a talk little America. powering specifically, just year, year kind trends us even of help so bridge in us – to group just outlook? could January bit then help work as STR more what look the Your about China, well side And of our the So you kind we averages, unpack that? above on of then lead just underwriting full generation you’re through a the maybe about and

Tony Capuano

Yes.

with maybe group because terrific Shaun, a such course, story. start I’ll just that’s Of the

currently for where look revenue to I Number about we’re a just group When not the heard XX% quarter up we about we compelling. pre-pandemic. one XXXX, in and comparisons. were of that ahead about quarter really the numbers Canada, the that’s is in XX% were pacing would there given into group You where U.S. year-over-year. point the favorable And with are one, two interestingly, things we phenomenon,

quarters seeing We’re across XXXX. steady pacing in all pretty

Secondly, to shorter I specific you would window transient. remind booking that is not the

compressed well. little We’re group booking seeing a window more as in

think there of for is bookings still the year to we so as in materialize upside And the group the XXXX. year balance during meaningful launch we

Leeny Oberg

we And China, if as year on this comfort point to strong, particularly water got in into is – a Omicron that of jump significantly into as things. pronounced, well, January. I’ll we particularly your And moved One, and about is being right, January was remember, two degree you obviously, QX. there Shaun,

I see pleased QX of pace momentum really in the in China, – biggest business we’re was RevPAR ‘XX you So think demand seeing will could leisure just increase sense, could are the the give we we And for saw we as Year, about saw New then saw the we building the you throughout with year into is that continue that cylinders. first on firing the a And really and all of Greater all think over associated parts obviously, be overall when you demand but And with January increase. to Chinese over XX% ‘XX all see that tremendous China, in we quarter. rough there. the ‘XX

Shaun Kelley

Thank you very much.

Tony Capuano

Shaun. Thanks,

Operator

Greff our will from question next We with take JPMorgan. Joe

Joe Greff

everybody. morning, Good

Tony Capuano

Good morning.

Joe Greff

China little down going signings mean fourth you necessarily. explained I of been then pipeline presently? sequential sequentially. pipeline There last China look much on Tony, been you quarters first guess, bit on fourth the with doesn’t signings? of was given quarter in about going anything at was a how the it’s have by quarter there? development be How quarter, where what’s talk the X It a And years, the whether in in sequentially. and in in And the down disruption it much back when a, disruption, can of what’s pipeline the

Tony Capuano

openings of where first. they conversions never get Maybe tends, year-over-year of pipeline. the and The XX% They out deals conversions. were even the statistic question The down know, think as is opened look We’ve to more make in last pipeline. the a in On were take our were China at Sure. second I’ll I about the quite and year the and into bit Obviously, were increase a in pipeline where related the first signings X% China you pipeline in well come ebb the year talked more that your ‘XX. we from in ‘XX. it pipeline little question quarter-to-quarter. nearly is that XX% signings, telling where in were down I past than flow about And we fact third quickly. a some signed about from to

As of to we the certainly but expect the the and on borders our on development also health see partners. positive meaningful impact demand outlook open, patterns,

an And so in volume. deal we acceleration would expect

Leeny Oberg

teams opening And add and China permits I’ll Joe, the obvious tied trained that to China only and shutdown the in up the was thing for hotels challenges getting there that is in and impacted running. the

that from QX. to few we saw in be that open think so as saw had the shutdown we continue. QX respect, But them up, expected where a look I expected forward And things opened in them we from And they increasing. to to drift certainly as open clearly was again,

Joe Greff

Thank you.

Tony Capuano

Joe. Thanks.

Operator

take we question UBS. next Farley from Robin And with will our

Robin Farley

Great. the there Thanks. on acceleration is question and is embedded outlook, growth some unit there. in My

And one mentioned that. Express obviously, acquisition. China, the of drivers You I guess of the City is

unit that? if to just acquisitions guidance, you wondering other clarify in any So growth that just have

Tony Capuano

not. do We

Robin Farley

out to in sort U.S. segments of why looking my your then big just on some brands the further the you’ve new okay. and regions. other segments, as is then you And Thank market there economy that Marriott. the chain question more then more talked And – And in of focus also use why Thanks. in about using been you. mid-scale a the of limited hasn’t and or not is units curious U.S. mentioned brand for segments, any other well? I’m Express have scale using that Great. if this There in because of – you and potentially those sort thoughts grow that other to are haven’t service on I’m Perfect. others in curious City was the grow it down and

Tony Capuano

course. Of

line very over So finish Express. we excited with City get the to are

acquire we significantly is mid-scale increases growing It Citi, our to we and entry which represents intent announced important exciting. outlined, our it the As into region. segment, in very when CALA the our portfolio

decisions expect of not roll made discussions that transaction, if – closing but We’ve in that about other and evaluations the Express world. that we towards the do aggressively CALA, brand will City you to we out assured grow if you look in of many or we speak. We as other evaluating around across quickly and grow City brand are move apply applicability markets at when platform as definitive going we are those in organically. places, region on we to and rest position those I strengthened of think can as leadership And as And us record over the I meaningful the growing strategy we’d where our Express. historical of our weren’t for gave to passage track a will time, think broadly. like either a opportunities acquisitions, initially look acquisitions same more then foothold we that

Robin Farley

follow-up, I Great. one Thank quick if And just could. you.

to termination Just fees? Or it is out? Thanks. in compared you big call anything on How fees that that that the item? part for there – a with line is you would anything Is pre-pandemic? call growth just there would termination going out of

Leeny Oberg

year. quite And absolutely as really Robin. vary. about apart from from We’ve hotel They varying where but related Sure. a deletions we do you talked Russia, vary. a saw particular number, anywhere kind to They million in are. typically we’re Nothing before, them or million $XX can to our in of particular from something be particular. transaction, one It’s $XX they

nothing number. is in particular So there that

Robin Farley

very Great. Thank you much.

Tony Capuano

Thanks.

Operator

next We take from question Richard will Clarke with Bernstein. our

Richard Clarke

for Hi. taking question. my Good morning. Thanks

Tony Capuano

morning. Good

Richard Clarke

recovered the about than whether paying more base first The talked fees the management on one seem that’s fees. incentive or have quicker a And incentive you’ve sort management fees in broad-based hotels a of of becoming that’s number in increase of XX% The is profitability. the whether lot to fees. about small past, incentive a

comment So what’s sort you supporting incentive fee? the of of just could the on outperformance wondering maybe

Leeny Oberg

Yes, sure, absolutely.

in our fees. while spectacular, rest as reality is grown than fees while a non-RevPAR has The lower fee fees we are the performance in still wonderful rooms So franchise RevPAR our was nicely, they really increased. the just grown, have – recovered growth they and as has were incentive meaningfully have quite basin had our as well of XXXX, QX

fee total bit been. an in at in So be a gone lower percentage – because MSB IMF obviously, include their our stream I there there are interesting of our the than ‘XX not classic I XX% recovering so the as a fee actually very franchise don’t us of back managed XX% think versus in little when to is incentive hotels XXXX. in But you than riskier full-service for U.S. at hotel’s break big a fees they the And earned they they earned And when fee do, I little and fees, would continue later XXXX. hotels than base hotel to ‘XX, couple we ‘XX difference the you an a reflect incentive incentive that look them it’s comparing service in fees as And historically relevant down. And compares XX% of between limited U.S., our you are is Pacific to levels result RevPAR where to ‘XX, bit of know, of of many a number. to managed portfolio And as incentive have as terms Asia to a not of compared XX% fees. in kind are earning in have of look expect statistics. a bit a that we ‘XX, that And

to we the I point proud what for excited about think the operating thrilled think work one IMF that of that especially with in hotels. ‘XX I So ahead wage of you’re performance increases. our team, our for the years the very And we’re and they raising; potential we’re given have done, see

Richard Clarke

great. That’s Okay.

net it right, growth. earlier, unit like in looks Just question XXXX, X.X% X.X% in ex-City someone’s did follow-up you XXXX. math the If the Express drops refer a down quick exit ex-Russia I to to they that did in to acceleration and

from? coming year, some you’ve that into moving China this slowdown if is correct? that And So where got hotels is

Leeny Oberg

want about how Well, Express. a about growing include again, the we growth, we When to around I component we our think important that’s strategically certainly rooms City think world. very we’re make of sure how

room part So rooms growth accelerating couple we’ve having the an the big ‘XX, when and again, starts that about, in then the heard signings clearly timing, in past forward over I particular, the about years very openings. construction component And enthused in a then of got what a we well. of as in you Tony that U.S. I that it. see think the U.S. we’re conversions reality for are with is think of about impact going otherwise, been when talking have the But

Richard Clarke

much. Understood. very Thanks

Operator

take our Smedes will with next question Citi. from We Rose

Smedes Rose

I capital I developers who you Hi, about the broke Are the the spending guess, a line bit money, out for a you. ask wanted allocate, key know thank you’ve are maybe there more of you in way different thinking than for little items. the options? XXXX. their considering differently you any I to done that or just couple about brand Or either anything conversions in past?

Leeny Oberg

ask I Smedes, thought question. No, you might this Yes.

helpful I definitely down. break would So be to it think it

for Square ‘XX $XXX projects $XXX million speaking, what So the $XXX similar the at about if is That of down $XXX you to it, spend Express, Barbados which as million, us I midpoint the out talked Union that’s and to million systems $XXX to tech will and than use, as you to you’re take in a got on that overwhelmingly W quite million well call million. roughly $XXX from higher the of, renovation kind Then about, you be then of higher down system you’ve million. gets City year’s another reimbursed this typical.

ballpark again, numbers of Marriott. ‘XX, our lines when deals in quite perhaps do being, of key I that well on the with historical money kinds many about many, the system. capital growth of as $XXX up $XXX the think signed million you in the not that you the million, investment actually we of any require think part know, for of And

Tony Capuano

form Marriott prior capital, drive may just obvious be in to the projects you might build on key some Days. which and determine leading portfolio upper we of shared of – weighted measure as we’ve of And that I tend an more and our much premium this money, reminding the valuations is And some well. by we tend deploy in premium to of that, Analyst The deals luxury Smedes, upscale fact, even they fees. heavily to and

Smedes Rose

more follow-up And Marriott economy, I Express of or you on general? dipped making really that segment guess just I strategically, of wider or we do of I so it a be competitor scale. With upper-mid capturing, important need to down being mean of largest, for haven’t in you guess, maybe traditionally, I I be is terms that move on sort in I call below, you question attentive range like in about to sort premium to that it’s City also something much? can termed, your guess customers? what’s I just mean Thanks. Robin’s U.S. that feel thinking guess a not

Tony Capuano

to entry the two at we impacted, comment constituents competitors. of equally product by portfolio. tell focus level, clearly our alternative mid-scale quality on and I Bonvoy our loudly the is Apartments you is right by terms lodging those What that’s now I appeal. both of guests constituents, franchisees. hear what and lies and where obviously, are that into right Marriott them is we of hear the won’t is strategy directly will An from appealing broadly Yes, from in our what owners And and great our like our expanding driven most is growth

Smedes Rose

Okay. Thank it. you. Appreciate

Tony Capuano

Sure.

Operator

from will Scholes next We our Securities. question Patrick Truist take with

Patrick Scholes

everyone. morning Good Hi.

Tony Capuano

morning. Good

Patrick Scholes

morning. Good

apologize missed on – I of as versus perform international or regarding quarter Pacific? more you your ranges markets can little just various question, for expect a this. RevPAR year, But quantification gave, the us full first Europe to those I guidance RevPAR you how such Asia would you give First and you. Thank the if international and

Leeny Oberg

Yes.

So, meaningfully quarter. in that, think broadly, as Greater first both above to international China, you outside the for particular, ballpark. around you would us Asia be of heard probably XX% in about world, about And I to XX% expect of talk the somewhere in that APAC, China Pacific, kind

that You very year quarter. being very they were ago be a of the particularly of clearly first With kind will in saw EMEA high that a given range. sort real in high also Europe where outlier,

performances, impacted having not Omicron Middle outsized greatest as way think easiest the example, see is to where was where these a the it think you about will is by because I impact Omicron. EMEA, So, East ago, the was for year

not So, their be as year-over-year increase will strong.

we I in that good variation. any growth rate that seeing environment, and occupancy for in current this we normal of QX, strength messages about is from think continued want of are opportunities the and apart hear kind think to QX one you seasonal when you moving still from into

Patrick Scholes

service, whether will issue. housekeeping a large the be you. question, am debate an Okay. operational of Thank thoughts back will eventually a just that is managers, of amenity? on what talked back. I belief I at to daily are that of bit coming a there a out I housekeeping coming Allison, And your the be and curious more follow-up of Thank on type you. are was some at they There

Tony Capuano

and guided City decisions, franchisees made of these our operating might expectations tier. those I little bit are earlier and owners we will have said economic in housekeeping repeat our by guests expectations we the When have protocols evolving course, myself both quality a we of is Express. sort the sets and What make of Of both about protocol of by I of weighing needs. comment the modified we realities

we the us count do give in for during a captures the if we franchisees. owners something optionality, that we you but housekeeping. tier, trash, give So, the not guests, if select making blended essentially in other our our day tidy. full hear and so can service, cleaning, or pandemic daily economics And a are etcetera. which have our the we we will of And upscale And portfolio, back our full What [ph], to path needs. luxury approach changing every portfolio, our the cleaning this us both pre-pandemic you consistently, daily MSB the we created tearing upper on we meet in check-in. have the In bed, tidy, and you from lot booking a

Patrick Scholes

the Okay. color. Thank you for

Tony Capuano

Sure.

Operator

our Dori take Wells will We Kesten question Fargo. from next with

Dori Kesten

Leeny. Tony morning Good and Thanks.

Leeny Oberg

Good morning.

Dori Kesten

mentioned You costs year. this higher technology

that see heard over that through next just have We some the we looking have that are interesting years? you front pretty to. that on walk may several changes what the Can plans forward you are owners

Leeny Oberg

Tony and I perspective, investment you then am sure will give jump the will start in. and I

critical this would the they is for forever. company for not So, few call our next experience over This I really that on what the the thing. view systems our I as and digital I is being guess that interact and first, the we would one with say years really associates experience customers a importance of recognition that the or

important of able our transform as experience address we the also will our for the specific really think our And the are we that so care they regard, our well which as and as It stays mobile with us. take guests guests work transform the plan associates, tech execute is to systems are in that that we for most and experience about with about interact needs. very to are guests, how particularly, they excited critically for will our doing as they app their on really Bonvoy their

think several with have already our So, app on the our service seen already transform with the and of systems. we But and specific as experience noting that. our address worth we improved customers we probably incredible to platform providers that I of meaningfully, announcements expect our out, and and to to look wants third-party done things have also their from communications at really on build ability working several digital it has it’s you rolling our really and needs

Dori Kesten

Prefect. Thank you.

Operator

will with We Katz from question our next Jefferies. David take

David Katz

morning everyone. my Thanks for Good Hi. taking question.

something wanted lifted what the reported. – up, owned wondered and in looks a like could that just if I flattish bit. just there within help profit or that It So, ‘XX to it it some a look little unpack are I you us leased is just bit. And versus you the down or guidance into was there

Leeny Oberg

Absolutely. Sure.

of a important bit So, properties, you demand. renovation on the on would these say, a full No we impact – that David, really we to innovation And do think fees I of look was do couple it couple we as crushing lower all, un-leased past have be really in profits. a of things. a Barbados will things that leisure as going as year versus offsetting. very of at surprise, had would ‘XX. expect about two to over close first renovation We I have ‘XX. termination other are ‘XX projects an

had ‘XX, the If of subsidies. you remember, in QX, German in we particular,

in of ‘XX, obviously, QX ‘XX. So, in they hit have them of QX we, and will not

have a on involved year in that ‘XX. had hotels later ‘XX. of And we that in an a We also pack charge U.S. won’t in agreement obviously, leased the

quarters a other. be that between the will there offset things Those each around. two So, thing bit little moves largely

to both as well So, as termination look around the would issue I really renovation. fees

David Katz

Thank of like But because that follow-up, just Perfect. of and apologize about deletions a Okay. And I NUG. X.X think lot the – X I my you. There should just deletions as wanted forward, sounds as quickly, this to has going question. on normal to kind if I what number? a touch negative discussion a we is about it been course

Tony Capuano

of you in in her It’s of uncertainty X.X and more in we than providing it Leeny a to offered. range RevPAR have historically described reflective some remarks, I guidance to the us range on would is that forward a X ultimately wider suggest the good question. that resulted might

David Katz

Got it.

you very Appreciate it. Okay. much. Thank

Tony Capuano

You’re welcome.

Operator

We our take question next will Bill Crow Raymond from with James.

Bill Crow

as follow-up the Hey. Good question. NUG well on morning. might I

large acquisition in no back XXXX, XXXX in is kind that of Assuming range? we should repeats that X.X% assume

Tony Capuano

to be albeit some acceleration of ‘XX. that the we construction were are we seeing debt markets, in in able probably the Bill, Well, XXXX. ambitious. constriction were are a is encouraged excited starts, of to some tell incremental is, little ‘XX visibility we we give not I you though where back you will to into What notwithstanding

an to expect and momentum encouraged portfolio are both experienced We basis we conversions asset with on build and individual front continue on the signings what by XXXX that openings both in a and to basis.

Bill Crow

the U.S. be Okay. environment my in follow-up question operating the on And just would then expense

what If expenses this for you us little seeing you expectation could year? then of and the details expense bit maybe increase the kind of Thanks. front, just of labor on are give year-over-year all kind or total growth other a on

Leeny Oberg

Sure.

to you the of to business. on more really, be given have that we numbers, And think expectation the our about reflects just back-end in seen X% it, you X% year. as more have and you continuing As

added property. that wage really, have So, annualization more more property in as or other normal. really ‘XX a bit pressures moderated, higher at both whether seeing But and positions I a And level say, The quite is we it above ‘XX. as environment, that, travel little are expenses the we Bill. of than would well normalized

Bill Crow

Leeny. Thanks Great.

Operator

our take Montour will with question We Brandt next from Barclays.

Brandt Montour

so you morning Thanks everybody. Good Thank my for questions. much. taking Hey.

with starting Lenny, if maybe you, So, you could.

and fees RevPAR X%. if would card credit I that a wondering portion, growth? break and bit mentioned – fees relation the imply about at out residential what be to was little fee that in You to And non-RevPAR other? willing you least talk growing to grow X% could then would for

Leeny Oberg

Sure.

timing know, as So, move the do is are the in They of a sales. on people and depending fees actually building branding bumpy. close when complete their of vary residential opening can you really and

within the gone have $XX years. of $XX from anywhere million They vary. to tend they X million So, to space

have say, projects. heard As robust have of us we residential you a really pipeline

growth well partly have average do added are as of Those the economic a flattish of increased how, we And think we to fees, U.S. into both When be ‘XX, to cardholder, expect spend. from so timing. ‘XX. will I moderate tied the while that card an partly the the credit we higher are view. ‘XX spend residential of increase really as more in compared as as about to a for of and that reflection existing that’s other combination think generally fees would them the a just think countries I seeing and branding bunch cardholders, in to a compared I fact I number expect that’s

more that and wonderful example, increase more look cardholders. like terrific while the from more for inflation, might comes So,

Brandt Montour

strong, they had as talked talk dynamic like segment curious from That’s and on there seeing of in the a maybe stale, hugely And that had really for but any that’s just about. signings necessarily just if pipeline history? about And but a curious the little Obviously, different not signed, not phases, Tony is outlook you could the bit? a are little a you. just helpful. than follow-up Thank the in am sound been are I then if development pipeline earlier. there planning you discussion that’s that bit

Tony Capuano

period pipeline, No, fall-out so. canceled what with the projects, on the best would of and is metric with long empirical interestingly from experienced to your question be to I were which pandemic. over running maybe the that’s of have think pace mean we a prior kind and I time what don’t historically answer experiencing we

question, pointed were bottom construction would move to the as the meaningfully seeing of as an pandemic. much accelerated not number Leeny U.S., like. we from As starts, prior has not a in earlier where particularly moving out trough, we the on of back in to response to sign shovel But getting again, ground to we the from are quite the the albeit

Brandt Montour

Thanks everyone. Prefect.

Operator

Chad Macquarie. We will our question from with next take Beynon

Chad Beynon

for morning. my question. Good taking Thanks

year, does Tony, are group of year. of you kind the about kind wanted pace. the percentage the outlooks? about that’s about ask now as years? And on I how you look affect to to past to talked So, changed couple And over rooms we what out kind Thanks for think the the like that on movement normally the versus early? books this in books – First, how RevPAR ‘XX, be would of what of of

Tony Capuano

Sure.

just not even earlier, bright looking as real I and So, forward. for but mentioned spot the been group a has us backwards,

at what January look X% books revenue January were was where from what that prior, meaning ‘XX, on to on X, have that’s we gross the ‘XX X, for in you the on about XXXX. ‘XX on ahead If a books year comparing for we

so pacing that continuing a prospect those year where we were for of because ago. ahead of at And the described. the phenomenon And numbers the of the to in are are we enthused year year, we expand you

Chad Beynon

something surprise Congress talked then that talk reduction in more And about they Great. fees. get Okay. ‘XX, as about lot a we call what probably through has we a will

the transition they happen could the move about those fees of rate the if to thinking are would if about on So, just or above-the-line? I could how banned? guess kind back-end. resorts be Can your your a partners difficult Thanks. be there in would of talk some If in are included industry, hit these you potentially – what if period they these below-the-line would

Tony Capuano

fees would what manner the of during the as and Well, we rigorous those the It said, listened comments one proposition with or of the the President’s Union. was to are have we fees, fees strategy. “hidden combined a the actually the we that listen to approved, meaningful if fees you implementation resort of you process concern requirements us have disclose in great appeared, the destination And value give those for which before expect, right he interest approve his comfort State fees.” with to we

XXX thing hotels hotel portfolio, those other fees. our remind that X,XXX I across have would have sorts we think you got The of less than I

So, quite in for impactful on it’s those terms a individual less portfolio-wide impactful basis. materiality, owners, of but

Chad Beynon

That’s helpful. Thank you.

Operator

will or program We have reached I closing turn our for questions. any the allotted remarks. back now the for time over to additional presenters

Tony Capuano

Well, seeing We as empirical a travel. we thoughtful appreciate I see with road. you again. and the want thank engage your forward fun of calls Thank on continue you to questions to look to are These more evidence lot resilience the you. you to of

Leeny Oberg

Thank you.

Operator

teleconference. That participation. concludes you your today’s for Thank

disconnect. may now You

Marriott International (MAR) 14 Feb 232022 Q4 Earnings call transcript