Earnings call transcript Q1 2023

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

Operator

Good day, everyone, and welcome to today's First Quarter 2023 Earnings Call. [Operator Instructions] Please note, this call may be recorded.

It is now my pleasure to turn the program over to Senior Vice President of Investor Relations, Jackie Burka.

Jackie Burka

Thank you. Good morning, and welcome to Marriott's first quarter 2023 earnings call.

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

everyone to statements remind our of results numerous implied as and are Please note facts subject many not under federal described comments our forward-looking future uncertainties SEC could constant from or hotels. for that are daily materially to considered stated, currency cause that statements expressed are in average comparable filings, in system-wide differ securities by those otherwise historical will comments and our I today also and laws. reflect RevPAR results rate which comments. our occupancy These unless risks

our unfold. in only effective as and Statements we release in press today actual comments issued be are earlier will updated events not today the

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

I will turn Tony. now over call to the And

Tony Capuano

all Thank joining Jackie, you for thank and us this you, morning.

We reflecting first quarter in momentum business the excellent world. continued around announced our results,

is across have While demand of recovery policies, has post-pandemic a that depending the on COVID varied it deep appreciation timing travel. clear people regions, for

global through people our Marriott connect Bonvoy award-winning of largest in XXX we portfolio and brands proud countries power with to the lodging As properties travel. diverse loyalty company, amazing and territories, of a the are program,

ago on XX demonstrating occupancy Global XXXX, the up XX%, percentage our of Asia and across Pacific XX% XX%, rate. First rest the higher grew continued quarter than ADR in global Worldwide regions. strong RevPAR driven focus year points by recovery driving versus quarter. significant rose our growth reached

uncertainty persists, demand weighed macroeconomic date. travel it While to on not has

to rise segments quarter. continued in demand customer all the across fact, In

still term trends are bookings solid. relatively could three quickly. change is at our window so booking around Though short Forward transient weeks,

robust. ADR still and are demand leisure incredibly Global

demand rising leisure quarter for full in the group with levels, ADR In Following Canada, already was nights a well year-over-year. XX% of quarter. the segment last significant the also strong transient X% U.S. demand XXXX first year room with improvement pre-pandemic quarter, the Group XX% end above to increased revenue was at up a at year. XXXX year the end the from group pacing pace of and very for

to through quarter room fourth For and year-over-year. nights with this primarily X% U.S. XX% increases. modest additional up demand second solid group in a business ADR up Canada corporate the the leading quarter. to rose were saw year, revenues of rate recovery up rate meaningfully pacing pacing X%, transient special due

First revenues And quarter began. XXXX Canada first to [for] time levels rise the continued globally. and surpassed transient since cross-border business pandemic has the travel for U.S.

points abroad XXX still a However, when for room XX% of total guests accounted basis few traveling it is nearly XXXX below nights.

Additional come upside given still is from well airlift pre-pandemic Asia is primarily from international and levels. below expected China Pacific to to

and grow enhancing which these strengthening on customers. membership million members March the end reached Bonvoy our platform at XXX focused engagement our to are continuing by We base, of loyalty Marriott with valuable

countries with Our nine offerings cards co-branded performed this credit again in quarter. well

first which digital Global channels To grew for mobile year-over-year and XX%. customers, leveraging basis, a increased quarter. our XX%, digital global app XX%. we year-over-year Card XX% a channels nights with digital XX% our climbed owners. Those are card acquisitions users On our sorted revenues engage room while platforms increasingly highly digital spend had rose are record profitable

of this gross rooms expect still year rooms We X.X%. and growth development. to around X% of net growth Turning X.X% to

Caribbean transaction pleased to do few to the discuss welcoming in growth We environment, Express financing mid-single-digit years. roughly eye in just our the remarks, her next as the City portfolio. to high-growth are to in returning anticipate other we into City Express Leeny rooms the world. locations keeping an is XX,XXX as yesterday, a CALA moderately American the a close region, were around incredible brand jumpstart and in While as we on launchpad opportunity our net see in close rooms will the entry expand meaningful well the into CALA, priced or Latin mid-scales. We

XX% Our continues, XXX,XXX industry-leading openings. XX% in at quarter at under in including and opportunities. rooms rooms of rooms XX% of pipeline multiunit interest and in markets approximately quarter those the represented conversions Strong stood XXX,XXX Conversions end, with international construction. nearly of signings about

detail. the turn more now to financial over call to Leeny results in I'll discuss our

Leeny Oberg

Thank Tony. you,

around U.S. and demand reached international results and XX% Asia the over posting in first a versus first regions year-over-year; quarter. rose grew XX% strong rose RevPAR 'XX all percentage Our growth travel XX ago restrictions markets percentage robust XX%, impressive improvement particularly remarkable points, point hotel year XX%. were prior XX% with quarter an X while International year ADR tiers rising up XX%, Pacific all Canada Occupancy the lifted. the all with quarter. world quarter ADR performance. improvement Demand RevPAR reflected solid with was the reached after in versus occupancy

in to of quarter driven and end domestic XX% at of RevPAR China travelers in quarter levels more than as was Greater in China Mainland XXXX was the was airlift This recovered. the was given overwhelmingly less that pre-pandemic all March. capacity XX% still notable than more the recovered the by demand international is fully

the As levels being quarter from guests were flights only international you room and of expected International in to second will to China although airlift slowly around from quarter. of are pre-pandemic. one recall, is be China adding, around XXXX Greater in nights XX%

rise fee quarter to management the the IMF compared doubled China, quarter earning for region year incentive nearly gross first nearly Greater meaningful prior above in fees $XXX than revenues to in XX%, the fees, a more with except with incentive Total also They quarter. by XXXX IMF. of XX% topped or XXXX every $X.X million. XXXX billion, totaled first

quarter, rising again remains cost at million, hotel level. a U.S. and once the $XXX credit to totaling grew up XX%. XX% meaningfully card Containing two year. XXXX due margin primarily focus points corporate the fees also the seasonally versus and and EBITDA both Canada, Our rose XXXX $X.X non-RevPAR-related being above the first percentage margins totaled billion, slowest year-over-year, first franchise at despite of quarter record remain managed the the quarter In our quarterly fees levels. co-branded Adjusted the they new a hotels

Now let's details our the earnings our outlook, in press full talk which about XXXX of are release.

full results robust year quarter trends our booking short-term first better-than-expected and the customer strong. Macroeconomic all remain is and trends, guidance. not raising segments uncertainty we're With our demand impacting global across

especially Pacific. is to Asia strong quarter particularly second international year-over-year from expected benefit The markets, growth in in

half in remainder financial the for high travel performance half range softening of second company's XXXX across a of economy second all and continued The roughly end resilience less economic with is steady the in in compared the customer to segments the year. quarters, worldwide markets. the visibility forecasting XXXX. relatively the meaningful flat conditions of there range demand The two the with RevPAR the the global of year reflects the low global reflects throughout of However, end of of last

growth year to the could and leading X% year, global could rising XX%, benefit with and number X% expected full XX%. grow and fees XX% non-RevPAR-related fees and from resulting Non-RevPAR Total XX% credit the RevPAR from grow the average Canada For component XX% of in the U.S. card in growth could to a for between RevPAR XX% higher to X%. international to RevPAR increasing to rise spend to cardholders. X% full fee is in

XXXX and still of and still below increase could annual to XX%, rise an expect above G&A expenses increase to EPS $XXX X% X%, adjusted million We adjusted year XX% of levels. XX% XX% but XXXX. EBITDA to could $XXX million, Full between

the net by operating million, to cash powerful end activities March. and business great a returned $X.X the deal to first our Our quarter, shareholders was asset-light around provided of model generate we over cash. of through billion continues In $XXX

has combination cash philosophy in We're rating, a value not through a changed. accretive and of modest while capital that Our dividend excess investment-grade share growth capital to investing committed shareholders shareholder our to to is returning repurchases. allocation

million year, reimbursed overwhelmingly This be spending the time. over includes as $XXX customer-facing full technology, the well $X just as to XXXX our the portfolio still For billion. is million in we Express completed $XXX of brand higher-than-typical of investment City expect expected acquisition through which to investment

$X.X With our forecast, now to between we return billion expect EBITDA $X.X and to the billion adjusted increase in XXXX. in shareholders

many have about On you the we questions in sure are Europe, of banking environment in the U.S. particular. development front, the and in

rising interest rates, challenging financing Given has rapidly in for regions time. these some been the environment

clarity as banks some Another has more additional for perhaps capital wait now regulations. element requirements around and been of added uncertainty

move lending, challenges continue construction However, with for financing have especially while that forward. projects, committed deals there to new are

X%. response be over term. quarter the is below do tightening the of regulatory we and expect increasing. X.X% number just deals average hotel the situation short closely in Additionally, pipeline our the not of to financing was around in monitoring the historical leading Fallout the but We're

As time, results. been to we of loans commercial term. as late hotels financing the among Hotel sectors proven have the estate to have long continue over excellent be better-performing real quite seen lending resilient has hotel of post operating over

turn Tony, who back before I'll a call has we the now over few to Q&A. to go more comments

Tony Capuano

Thanks, Leeny.

a are around start. the off that questions, to year for do strong such is who I a pause to world outstanding reason a work want open of we are key moment thank Before remarkable. and our for just such up associates team They continue our and to

you all know that Wednesday, Analyst plan our in Day South XXXX on to Miami let I'm first Beach at we also to since XX. W the excited hold early September

seeing dive will with on registration for fall. a We And sharing this June. South our look in in event that and forward Florida to business deeper we you open you

your Lenny to answer and are I now happy So questions.

Operator

will JPMorgan. [Operator from with first take Greff our we Instructions] Joe question And

is line Your open.

Joe Greff

the to made -- you IMF management What's quarter the or above outside Can China it you growth? was levels, this mean about franchise below. relative that What's IMF you was comment growth just And China that China to was us XXXX guys. the about these IMF and good expectations how fee to year or morning, driven of overall. and us performance a the for in obviously XQ. incentive and it was balance of Good fees that think other talk I

Leeny Oberg

Sure. Thanks.

driven just talked by IMF's the So of in you great QX that essentially huge set stage that -- part about fact let that bit, was their kind is the doubled QX. of RevPAR over recovery. Pacific we Asia a little certainly, me a that And and

$XX to call if So Asia from $XX million that increase speaking, of IMF, came million Pacific. $XXX again, in broadly it, you about million

a with So the RevPAR rest definitely relative increase disproportionate they world, provider. to the a big were in of

Joe, not fees include incentive in an know, As priority. owner's generally, our Pacific you Asia do

terms as So way of not to the they return. quite tend they lumpy be in that

way best incentive peak that to put as remainder continue that levels this for globally actually see end fees expect And incentive our high we we guess expect, you had show the to to the see of to hit the would of that the surpass is in characteristic. we it guidance, could So if fees XXXX. I year, you

And only million, X.X make over point of thing then the I'll rooms XXX,XXX rooms. obviously, out is our of that, full-service other up about are rooms, which out XX% them managed that

both IMF. So I continued as strength the demand, see transient bodes and in think business and leisure for group that you returning well

Tony Capuano

has only fully Joe's might RevPAR question Mainland XXXX the recovery levels. thing the only specific was China of quarter, demand. the of benefits see since end Leeny, recovered. was about that XX% then, And At vast domestic majority did the we airlift his quarter, of to Joe, to for add that in international China, I China the remember, in recovered the But was

I about XX%. recovered April, it was by think

so a year. international of return expect the China demand And stronger of balance do and through stronger the we in

Joe Greff

my for Or development helpful. the on increased anticipate That's you prepared developers financing Are And then you. guys potential remarks Thank challenges. front requests financial you increased for support? follow-up requests? Leeny, you from question thank Great. getting with do --

Leeny Oberg

and the requests be consider senior area to get is support, we're do happy U.S. the to of always we the them. needs the I the the stack, at think I day, particularly that think, No, financial loan. Joe, end in largest filled, of capital for

where place we that so get is requests. perspective, from typically that a And not

I they're service or debt would is obviously request a for edges, profit whether properties. operating the more that managed for around say so And bit there's guarantees, guarantees and

of slowdown a more But get financings the putting capital some changed over speaking, I into is temporary to of line. would we're the deals has That really level say the that, meaningfully. that bank's in finish about this willingness these not broadly

Joe Greff

very Thank you much.

Operator

Stephen Grambling from We will take next our question Morgan Stanley. with

is open. line Your

Stephen Grambling

on Hi, morning. the good base that touch about last Wanted you digital technology or to quarter. talked investment

about and could consumer Just investment? revenue our longer-term employee experience we from want you little that bit about the experience to as know more think how think implications and/or a that impact margin

Tony Capuano

Sure.

our investment and only impact our as think of systems our So our always guests we about it also lens franchisees. about infrastructure, think the and but we on associates, of re-platforming technology through the in ongoing major our not the owners

an the understanding of think and our that particularly future future workforce instructions be from that with be similarly that iPhone are design that, is our a has technology intuitive. I no will will box up the and opening grown perspective, technology associate workforce intuitive an there

it think compete we we it create engage both talent, So will advantageous as capacity more with for also be but to will our them for guests. deeply

questions guests about concerns those we so at our we that of information they and centers, quickly level customer have. whatever to needs guests, or both agents that guests making property seamlessly our For the that the envision our or have can engagement address breadth and our available

When are think enhancing. I breadth click. of also And to we And you from the new should you be meaningful beverage, m.com customers, we revenue be will spa, and rooms. technologies efficiencies the inherent a new when the available have then our both go there a think to food full I represents to systems services think perspective, at generation book operating products perspective, today, have sell And very margin owner's that our upside. single that from from revenue ability out, a roll golf that

Leeny Oberg

again that, spending, it that, mean, is I investment the just And with we're will this add I'll talked thrilled the this see year's years. talked what take will a we only expect and reminder for potential really we that a multiyear Stephen, with that about we that quarter it is that this today, -- that we ago, impact and thing but this about process is a several

Stephen Grambling

focused follow-up question really a That's helpful. on and about Joe's the And pipeline. on development perhaps quick

particular, about translating particular that international that the in growth growth pipeline? how to of part strong pipeline, visibility net in unit the the in in markets the Given China, change does we think as from

Leeny Oberg

Well, I'll make a couple comments. of

the done our openings. to for really put put of First strong and needs to both the seen great shorter exactly that visibility obviously in to strength to they we continue open, on to signings continued actually is to and And tend flag be tend our They you've numbers be out be what into all, be clearer on conversions them. pipeline. to able

helps as really years with the started, noticed tribute extent, and is The the soft those internationally around with And thesis both have for over are net going visibility you open spreading think brands, other that collection that as trend Autograph frankly, that we've rooms Delta, you past increasing Luxury our about Autograph more frankly, really comfort us and couple that And conversions. obviously have. think to rooms better see you now of we expanded and about to the some gives really support really world. that the in growth U.S. the then

Tony Capuano

little the Stephen, that, on build quarter. last -- just bit might this we I about And talked a

individual to portfolio just are conversions, world but looking for as conversions. Of aggressively the continue teams around asset pursue course, the we

You announce the to conversion in X-hotel last year as might that that Vinpearl. we were an we to middle referred portfolio of in Vietnam remember delighted

calendar we Just will which X, in are last X,XXX was additional did open conversions Vinpearl which hotels, rooms, that month, of three XXXX. seven Round about

to expect a continue conversion area So should our strategy focus teams. for you to portfolio something I reasonably multi-unit think is that be

Stephen Grambling

Thanks context. much. so That's helpful

Operator

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

David Katz

I trajectory and provided And fees arguably, we the a you've we on term. hoping to my how of the of arc for morning. color modeling a over to little the think bit relative about ton have more get non-RevPAR obviously taking good a more experience on long just that Hi, or core thanks question. fees was color

Leeny Oberg

Sure.

as me for year. I fees think what which you in lodging X% relates XXXX, expectation for given heard operations seeing is talk the different we're the obviously about X% to to from bit a RevPAR the it

non-RevPAR number you they spend. chunk. fees overwhelmingly, of are the tie as fees. level the And and co-brand think of to card cardholders the to are going largest average credit the So I know, Those are both

seen moderate. surprise will card you But seeing is nicely. that say also of won't it COVID as average that that are start on growing think cardholders number I spend the amount to I the credit we you've year-over-year people of very increases

speaking, the say them. it it from coming two actual would I is So increased of spend, that combination is of growth the more great cardholders but than of relatively on it the base is a

fees, ours, that just resi a thing beautifully resi as time horizon, over on our of other branding product a our of great for fees, are kind The growing but they've is three on five demand been there's to bit of they vary you fees. they And when will the that, to quarter-to-quarter expect lumpier actual it residences meaningfully onetime quite can that grow open. to continue nature over I it the but should that in those time, given terms think see of year

David Katz

just And have helpful. my just hierarchy I Can as you RevPAR that I have? into Very more, Understood. might markets what of help see to kind sort not ask in And U. one. way how other if the place notably we touch a of us give can us stated sense, the when that City bit and of that Express admitting of S.? what and a more on follow-up, you sort grow within

Tony Capuano

Yes, of course.

way and the our both in the our wants opening When the we've of a about our needs breadth a this remarks, responded saying portfolio franchisees. long and of have excite and So guests questions midscale segment company transaction, the which we on not the where segment, of attributes love owners the that as for by the way of enter I satisfies previously. is the we which, it about mentioned have we great is in the list us to past often competed for talked to in that portfolio, breadth it

a perspective positioning from mid-scale a accelerate demands positioned architecture. those Caribbean Fairfield RevPAR region. where is rate of the Mid-scale of American the think brands hear as and constituents. And an like to and obviously that is perspective, in current tier - across both there our We Latin we City opportunity are from a immediate is below growth Express

developed that acquired. with brands have organically either done we we've As many or

streamlined, S., that few longer and indeed basic here state the markets in we're our Express the looking other and services at announcing those hear modern, product And platform, has point, just a are amenities that in world. the new price a around extended expect potential simple, growth you about City fact of been from for mid-scale We exploring very U. coming to applicability its the weeks away more build, weeks. in the for stays should and in

David Katz

it. much. Thank you so Appreciate

Tony Capuano

Of course.

Operator

We Robin from will UBS. next question our take with Farley

line open. Your is

Robin Farley

thanks. Great,

Just clearly percent transient you as are nights revenue introductory back be I could about us, level? XXXX in being rate talked seems circling above you of if transient business kind XXXX change to driver. business delta What your the the levels. wonder to tell because remarks, the

Leeny Oberg

down at the renegotiation the transient room versus particularly special the has most are recent X% about Obviously, with nights terrific, business rate been So XXXX. corporate rate.

Robin Farley

when this Great, of trailing I of raising would so seven the the sort for - market, two data, on STR weeks you're think clearly a having of you. RevPAR year-over-year about I seven for luxury at ends strong thank we showing and But we weeks strength down the Both trailing other seeing it's broader RevPAR, point, to trailing see kind that of you're question segments? those know follow-up six you've I be economy guess my And look the at demand. the talked two

upscale if into of than wonder start Thanks. opine I upper those move parts you that moment much or sort other something focused how just kind on view will economy in to happening upscale, more market? that's like realize you of you're whether for segments could those think a you I And what's the but of the and upscale

Tony Capuano

Sure.

that's on about up revealed global very in results the we're quarter. with rate ADR I and obviously, think XX% So the in focused

modest dig Canada, U.S. that slightly sense out shift. into and point data, is look largely QX our as we you mix rates decline were But If at luxury around the year-over-year. as you that is down

down your prior in saw compared X% the it's the destinations, was downtown in that's growth up the So luxury With even to the core demand in question for in for dragging and but resort of quarter. that think several we globally ADR on? second leisure start the as lower bit. at see was ADR urban a bulk we the said, business, extraordinarily quarter pickup great rate then, destinations And strong that first rates quarters, to luxury luxury in destinations. I That's was as

Leeny Oberg

economy think meaningful largely any I as might which way. in On don't there we very imagine, much you play really

in down surprise terms variability end we tends than in see I that very up over I when highest I that generally But think economy, again, time on speaking it's Robin a less to you rates. in will just the not see there luxury, of think very, with luxury demand. point you and see be out pleased what both still we're

of where when some you people before, more size the opportunities the think, our frankly, go because were to they're now but going domestically, travel. be going abroad. It's example, system, scale to of actually of one may they and being can And not that of actually places want having they benefits for

Tony Capuano

up question, to extended 'XX XX% RevPAR industry that to up tracks of your referenced. for was just put XX% premium data RevPAR And XX%. is context and then a kind RevPAR brand stay was XX% quarter, This then more luxury select little think we up Robin. you was RevPAR the up with system And was compared wide this the to I as

Robin Farley

that for yes. year-over-year on Yes

very you. much. Thank Thanks Thanks. Okay.

Tony Capuano

thank Yes, you.

You're welcome.

Operator

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

open. Your line is

Shaun Kelley

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

we leverage little maybe sort and new Obviously, maybe you range target a there. or expectations of your could that target capital boosted kind you puts is? just of remind of kind this talk outlook medium-term about where bit. Leeny, you your outlook what us to up return if So Could relative

Leeny Oberg

Sure.

reinforce where that of time is we end be low rest some expect it's be to for have to investment the able been continue leverage think the we are, this question a grade targets. to I be continue the and to year great for at which to of

So for the expected in all, the of chunk in from increase capital biggest company. relative EBITDA the cash and is the the return increase of to chunk flow

adjusted you $XXX and going you million, see this if of math broadly midpoint million call between roughly about increase up $XXX midpoint million EBITDA pretty $XXX that So think get capital of it's speaking, of to can the straight return. it to that of

way we performance feel business in the we've certainly about really well got, So, as strong the the is operating, as near-term. from flow a cash visibility that the

even the that the provided, low good end But end at think, leverage of at we've range of of I lower with feel the the guidance that, return our we still being capital given. we kind about targets really

Shaun Kelley

Great. of on bit, that priorities launches you little M&A, number And took few about talk I gears could comment around I tuck-in us stay a up Maybe each? City but just switch obviously Tony, to little those Starwood extended years too. around front and for of of in the back early how a there? or in over to relative late sort kind and the on see for kind a brand opportunities two and of saw space teens a years Express know think bit and we you then which as XXXXs a potential white balance help into maybe my where balance the follow-up following mid-scale bit the little of M&A see

Tony Capuano

has fundamental so course, strategy not the shifted. then Of

of a of prior to were there with fairly foothold refer point what a was us Starwood, that to organic right of some bulk bolt-on in to out They are pace often geography helped consistent we we those as the You acquisitions the acquisitions. But always had dissatisfied a common where growth. gain D&A. cadence

And they that best be a - the perhaps growth regionally of globally. that. view AC platform would illustration often or acquisition have potentially we the either often they represented

of the needing Our to leading gives We enjoy scale. scale gain industry us not luxury to do M&A maybe scale.

City where the to gap a we're our continue is gap we the geography and our giving in entry will brand we architecture. guided look architecture that brand into if see in believe in we opportunities, filled the transaction leadership the transaction, in there a us and or our a CALA seek That our also footprint our to guests a But of dissatisfied at if footprint mid-scale. was solidified what travel and by Express strength gap with region

in around on see last But number in common discipline maybe around What of opportunities should as is one think to be discipline valuation, is, and the that I will comment the I every those that out, be platform. transactions then the market. final would last fair will D&A or of expect I the as And same our make there of the of bit you a floating reflect of evaluate. the decade more we expansion

I had Autograph system platforms. brand I'm we've the delighted added the that look and with like launches approach. generated were and really Ritz-Carlton and organically expanded thoughtful we've our which powerhouses like and blend organic Residence architecture to success, at with through I AC When and that a I that blend like M&A., of both Moxy Inn M&A through

Shaun Kelley

much. very Thanks

Tony Capuano

Of course.

Operator

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

open. now is line Your

Smedes Rose

as looks just and to a occupancy from about, you're of obviously of closed, asking bit it's I kind should wanted for sort thanks. little rate? of And but still stubbornly I'm how they're like mean we've thinking occupancy the in just in sort certainly, levels. you I others, still that Hi by pre-pandemic that offset seen below reports ask for hear. context about you it below,

or we year just updated kind occupancies pre-pandemic is priced on business that's some to and - think But can next have sort being this any into are you through of of do kind and go you I'm maybe of of piece there year? thoughts wondering people do return will out gone levels or as

Tony Capuano

Sure.

Leeny I'll free jump give it feel in. a try, So to and

recovery growth. robust to As see the we strong occupancy demand prepared continue we translating pointed out remarks, into in

between global basis, our a be on we and ADR occupancy of points at updated the guidance, of split improvement RevPAR expect fairly our we growth fact, When in that end to saw quarter. In XX evenly gains. high the think guidance, occupancy about we

So, gains the year. back economy that we that end last flat, continued in the a to half we range half the end guidance. in back there year. meaningful the high expect do of compared of in to of the The would, of low the global worldwide where reflect occupancy were have relatively RevPAR And at be softening would

Leeny Oberg

from to moving So it look interesting is the at progress and compared percentage we through I'll down we're in Canada look March kind when is the we're continue two January percentage at only to points, in When actually, that only and two time of you March compared only to comparison. we're thing, U.S. through as well. add make And I at of points do occupancy difference XXXX, this to 'XX, by March. Q globally,

of I a note. pretty there are We've rooms XX% different. things are one since the added portfolios XXXX. more to Number think is couple

completely maximizing to And that great sure we're management. been some at make also So be starts the revenue trying the comparison end day, to not estate learnings part on we're returns there's, And these assets. there, industry about apples-to-apples. the on think the of of I the think the real I

of group some there's then seen the with benefit you've as actually that actual And to reality group, example, booking closer over event. the is time been the for

will get think, eventually So there. back we I

still that you're really We behaved But not is the I business, really exactly all in fairly part XXXX, on group best full transient cylinders, they the good the fundamental are of but operating business shape. in and getting way think close. leisure segments seeing

Smedes Rose

point? kind - coming bit through percent then sorry, at if talk on thanks. that said demand just maybe of you demand about in Marriott the this I'm Okay OTAs could what came what you quarter ongoing little of is a through And members? And just

Leeny Oberg

Yes.

- that is your Marriott? On question the side penetration on

Smedes Rose

yes Yes, right.

Leeny Oberg

talking talking Marriott? or you channels about about are digital Are you

Smedes Rose

how occupancy, came like through that? Marriott right bonds for Well much

Leeny Oberg

Yes.

globally, So penetration for the first quarter, XX% XX%. U.S., the was and the member in was it

Smedes Rose

Okay. the the occupancy And meaningfully has through OTAs or? - changed

Leeny Oberg

No, at is that stayed XX%, to that's what similar has and that pre-COVID. was about quite

OTAs since points have if We've have share interesting direct digital all grown which together. channels or XXX you the Marriott's is actually points pre-COVID, at of either roughly think part about XXX remained the look grown since the that at channels look basis flat. I pre-COVID you but basis

Smedes Rose

Thank the you. I appreciate details.

Operator

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

is now open. line Your

Patrick Scholes

good morning Hi, everyone.

Tony Capuano

morning. Good

Patrick Scholes

Do last this. your see I does - would with first major just bundling that in unfair you displays lead your create pricing you're looks to to Thank folks you there's yourself you. putting hotel day other Good for an follow will resort morning fees later competitive news fees? these be hotel month. this like company your also you into or companies this disadvantage so doing some see you? displaying Tony, the And expect the begin It

Tony Capuano

Yes.

simply making It been showing of guests. way been I'd with clear So transparency. that, just the that discussions not is for The as already it. various jurisdictions enhancing having and somehow, we're we've those enhanced hidden our sure Patrick, crystal we've clarifying are, if the further is were about and answer the disclosures those that transparency

of terms disclosure lead country industry the that for guests. I the the the will rest our of to the leave pleased, will it AGs of But state in transparency we am around rest the the for industry. our of I

Patrick Scholes

I transparency Thank - do these. And full on thing I agree, to the that's you. you. I right to think Thank give also

Tony Capuano

course. Of

Operator

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

Your line now open. is

Richard Clarke

my there, Hi taking for thanks questions.

Just would it of the finance risk or is How XX% are are has the finance under first construction not of much that comment started? clarify construction is About there was under construction? not pipeline of that XX% projects that your how under is without associated construction. not much the you one, And affected. being your that? How

Leeny Oberg

Sure.

those between developers which roughly One right, firm senior thing basic be has That's their specific is as started pipeline for sources. So loan number construction, other XX%. expect always they remember our capital financed. parameters dependent not various a is, have on that There's that an yes, that over in tend and ongoing be those financing to the you've would got been which less to that you already to the consider be on international, financing. process XX% does is

strong And for of a that overwhelmingly those we seeing are at willing we basis, then at see And relative looking speaking And loans brands we banks financing it to and the from franchised there U.S., the still in properties. slowdown is in of some strong those pace for to limited but that is time, do the believe projects. same are, lenders remainder, for continuing the service are proven those, consider markets. that are

we projects So, fundamental in you to few that I those in hotels remind and quite that change I'd conversion build is see a a materializing don't how also actually there hotels. well. think as there's, that

I the as starts. has and can construction probably bit a slowdown you've that think, there a So had be a seen times in past lending of where slowdown

of loans, to limited relative particularly going business performance again hotel of expect in expect more do the hotel frankly, we loans, the and would we the get that performance with quickly. service But that

seeing aren't typical than of anything those fall from in deals pipeline fashion. our out We more a

Richard Clarke

follow-up. Okay, as And thanks for a that just color.

non-U.S. You nine to many eventually so there eight now card can are And meaningfully natural is the countries, those in in credit what Can we or mentioned countries have countries you your countries opportunity? launch XXX a how it? cards credit limit far. some how is just

Leeny Oberg

many going certainly of as that. as to we be we're Well, can have can, sure you

comments. think two I I'd make

of of of certainly quite all, in and the received that related the terms use to is the we both share is U.S. the in seeing growth tremendous. with U.S., in the the, far, lion's rate of, say that would I we're by revolving First credit But cardholder spend really fees the are international numbers of the that

those we're cards well Both countries. numbers number in in - of as the terms the of of cardholders cards countries, adding of numbers as that

be growth at And to because hotel for terms for our that our with and staying cardholders. pleased hotel growth, really in South really business, I think members points who want been these example, well in we've for in and Japan, but the growth increases So, of for earning Bonvoy are the our in Korea, properties. all also bodes future

ecosystem it's So our of of great part business. a the

Richard Clarke

Okay, you. thank

Operator

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

Your open. line is

Dori Kesten

Thanks, morning. good

Tony Capuano

morning. Good

Dori Kesten

construction percentage open What the years? next slated rooms over of three are to XXX,XXX your under

Leeny Oberg

- Well, particular I way the percentage. think a don't we have best

We and of they doing, as has how careful talked well we are very they conversions. eye on coming don't we've in - construction of from gross As share room terms that those about the talked open. Tony which that openings, keep numbers the a when both under out a do know, as control you exactly again, feel with comfortable

Dori Kesten

an I typical a just a you result conversions, to of do you have Okay. as on know owner do sales guess come switch? versus And to choosing percentage - that

Tony Capuano

a think typical or there's brands an decade independent has transaction. I necessarily result last a created I in on versus an is, guess ourselves Yes, an probably hotel that or think over depending that ebbs of an where that evenly opportunity percentage. a opportunity relatively find to change an the economic a it's so, between don't split, But If I as simply to owner had flows flag and bit to we cycle.

Leeny Oberg

one add speaking, as is come reminder and other and roughly limited may your anywhere point be be hotel to just with hotel try a just three own I'll you construction to construction And math, up under a hotel full-service years that service can is two a that four. for from

Dori Kesten

thank you. Okay,

Operator

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

Your open. is line

Brandt Montour

Thank you. Good morning, everybody.

Tony Capuano

Good morning.

Brandt Montour

And drum the building little different there maybe just it sort that, you talked you growing its on talk the side talking in anyone or starts momentum sort what we're do momentum financing of that you the China? quickly U.S., but seeing to than could could the you Tony the on about? offset are to ground. in headwinds beats about think or Lenny I Just bit about in drum in construction a new potentially any that own U.S. know starts China back of the

Tony Capuano

Yes.

borders just So up. the I starting are to really opening, just economy think gear is the

So paused construction it's tell some have can restarted. that is soon new What construction bit for have you a of in-flight projects been the starts. I

executing memorandums approval and that are the accelerating, Our we're are volumes negotiating volume of understanding of accelerating.

should strong you. to starts a but that are So data premature construction encouraging, all probably any really have really for drive of bit the leading indicators

Leeny Oberg

thing of is other The our we help speaking, roughly that some does as is point Chinese you think I those I'll participation. the projects ongoing for as And pipeline deals out that again. sourcing those XX% state-owned capital about have get enterprise that about think helpful

Tony Capuano

project last add, the tiers owner, the is valuable under maybe weighted and luxury, we're would our of I And most because quality with the when so construction. the to point oftentimes well engage heavily we upscale

So may they U.S., our unlike come a greenfield to the of conversations where site, tower out with the a ground. with XX stories of us start

comparison. bit to it's an apples a So of orange

Brandt Montour

in squaring That's IMF with fact on maybe talked you that really implying on away about the following discussion, try square in full outlook for in of guys U.S. factors growth as those that up the touch half? there. of component you mentioned, the of for has your you the to Asia-Pac aren't ton please? And IMF the helpful. us, and you the which U.S. a back the and Leeny, skews mix group then, you Could in service, Can international. But sort kind

Leeny Oberg

Absolutely. sure. Yes,

hotels. growth So from XX the We premium did our luxury hotels, biggest that that our are U.S. I did XX, of came the business in was close hotels double, you -- growth from the overwhelmingly premium from QX return of chunk transient actually IMF, those growth if to by driven premium but out was and at you do to continue group hotels. IMF came to the look to in see pointing doubling QX, in year-over-year right which

his strength the and both in of with well U.S. to IMFs out, group rest the I continue you year pointed should Tony So that in the of the as that see strong Canada as for international. think comments growth

Brandt Montour

Perfect. Thanks much. so

Operator

Evercore will next from And Duane we question take with Pfennigwerth our ISI.

open. Your line is

Duane Pfennigwerth

thank Hi, morning. you. Good

follow-up that like China, geographies Just recovery. a if have talk has could you you summer bit wonder do with so just But to the forward? my the in and other within booming China this you at on or it's And view primarily about looking leisure geographies? And Thank primarily share then sake there's I comment for just fairly understand to BT respect Europe Is a that if we differences airlift recovery feel that been obviously little be recovery it could far, for good time, a stage? segmentation. other I of domestic versus any you. it group and will the for

Leeny Oberg

Sure.

will So the that and I'll question. start then fill in is, yes, with second on first, Tony the also. second And question

a are we soften and Europe with booking dollar gave were where great little more we is when patterns the the to earlier the pleased seeing the very there. than still for relative we seen demand have in actually we hotels summer February, reality see we bit While guidance for that

On a things. China, Greater couple let talk me about of

earlier reminder cross-border, the three domestic. right now, First our Well, quarters typically business comments a roughly of domestic. that is of all, is over XX% just of it's

in So out I -- as as of and there's the the is be both travel airlift Greater more reality improve. going that there China think to demand

both help into parts China. travel that see to also that the other of expect would we more So world, but there's

In it to difference in that we corporate and being the China recovery did of the The of the way world. other similar segments it's than seeing one that on quickly in very special saw more parts in segment, the the it is terms in transient that U.S. recovering much business

offices overwhelmingly, people obviously in are U.S., the China, more much in example, mix. in their there's back hybrid Greater while of For a

another after with was actually each of other are all recover it than more in seeing rather line way we in the necessarily segments So U.S. the one the

Tony Capuano

those international to to for visitors a be greater only international XX had pave prior need 'XX, inbound that the because for visa lengthy. March now pivoted new visas available government those initially, this, I'm been issued renewed, and the quite for for processing entry And and Chinese queue into just said said of sure foreign you're Mainland have I China, the other use of would are note aware that they with bit for of would should which way small make,

Duane Pfennigwerth

Really interesting. you. Thank

Tony Capuano

Welcome.

Operator

take next question with Beynon Macquarie. will we And Chad our from

Your line is open.

Chad Beynon

for morning. Good question. my Thanks taking

presumably luxury. in helped I'd terms [coined blazer], in what your of Tony, team has upscale stay, upper assume, length which of First, the has

all? but people While in hybrid trips? as tough I it's out Thanks. you just these that analyze hard know if waned it's that, fully trying the seen always to get figure in benefit at pinpoint, back to any reduction to to have has office

Tony Capuano

be think and empirical compelling probably we and the data supplement recovery suggests trip And data of statistical on that to Thursdays, continue best blended the have I strong and Not Yes. mean the which that Sundays customers continues with week, are would and anecdotally we is is data both encouraging most make our I what the see strong. by recovery day when us we easier have purpose it I attendees and yet. to then meeting special their re-platform we're hear business technology we group book we to or to us talking a for group purposes. has to reservation both that with who travelers business corporate with single as talking leisure their that customers

is news no down. for our other I've said that, So And sense great in that as forums, trend business. shows that's of sign slowing our

Chad Beynon

in in Thank you. doing Day. Analyst and And the for at then lastly, global between into But probably of terms currently are the the prior and the something recessions or variables about out, and each soft Leeny, maybe slightly difference the pronounced there, is scenarios expect a decline Thank high- obviously, or guys landing or of the you'll this regarding guidance Obviously, landing get variable low-end, you analysis we in wondering thinking how laid you just lot a U.S.? but flattening outside could should guidance, affect you. worse soft maybe of America North you're a than in or kind market. more the of

Leeny Oberg

probably recovery. would the about of I consider Yes. the it timing

demand does lodging speaking, Generally have comments. high a with GDP broad of couple correlation a growth. So

might like than that economies regard. be different you where seeing and as that's typical emerging like what very an recession more growth, X% impact the X%, be a U.S. in growth GDP different you're can of of when you going see So think India, GDP be to so example, more where in the

tied think example, in U.S., And I I we're think recovery. COVID in Asia think about this Asia meaningfully from than to now recovery seeing all the that along for The farther of are its Pacific, I more guidance clearly when much pace the year, is that lifted it restrictions given for example. But we've slowdown, is a demand where if U.S., we I demand the less both will point. U.S., in they we that be from it, starting that which impacted for will the see than, and should it's pent-up think and obviously economic mean different coming a Pacific in of bit return see example, quite nicely, an

we not that there economic deep that sharp QX talked that super in to we and flat slowdown clearly, a roughly meaningful and compared meaningful a as QX to would get mean would I I'm call imagine economic does real V. and again, that us 'XX. sure QX would But about, slowdown. a QX So that RevPAR is it slowdown

Chad Beynon

Very helpful. it. much. Thank you very Appreciate

Operator

reached allotted time over have for to We I the questions. turn call remarks. closing our Capuano Tony back will for now

Tony Capuano

the a in International. Day. Thanks to in Marriott around you terrific the thoughtful thank questions. of beach Thank afternoon. world. fall Well, you. welcoming hope your to interest our should for to And be for all you again in in look all accommodate a we Great. the what summer great you Have We forward Miami for your Investor

Operator

does Thank program. participation. conclude today's This for you your

day. wonderful You disconnect any may at Have a time.

Marriott International (MAR) 2 May 232023 Q1 Earnings call transcript