MAR - Earnings call transcript Q4 2024 | Marriott International, Inc.

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Operator

Good day, everyone, and welcome to the Marriott International Q4 2024 Earnings Call. [Operator Instructions] Please note today's call will be recorded. [Operator Instructions]

It is now my pleasure to turn today's conference over to Jackie McConagha, Senior Vice President of Investor Relations.

Jackie McConagha

Thank you. welcome and Earnings Quarter everyone, Call. morning, to Fourth Marriott's XXXX Good

with Tony Financial today and the of Pilar me On call Senior new are Vice Development; Officer; Director Oberg, Fernandez, our Executive Relations. Chief Leeny Capuano, our and Chief . Officer Investor President, and Executive President our

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

property comparable comments result updated and we for our otherwise events today constant currency the and system-wide hotels the be level in release actual revenue and will to Unless RevPAR comparable rate our stated, year-over-year or reflect comments unfold. not press as changes occupancy, are today all refer average Statements changes effective only earlier period. and issued daily

earnings the our Tony. today Relations release on And Investor reconciliations will non-GAAP financial of find to measures our referred our can You website. I now remarks call all over to turn in and

Anthony Capuano

than Thanks, brands. in Marriott demand more Jackie, franchisees and robust good morning, results reflecting XX XXXX, and our everyone. for continued had excellent for owners customers,

over global point. RevPAR increasing high and X%. full the X increased over note rooms RevPAR quarter year, growth For rose fourth rose X%. worldwide we and achieved ended percentage X%, X.X% on with the of occupancy We ADR year a net

had across of regions produced our better customer we previously with expected, strength our all All segments. RevPAR growth of than

election. a rebounding saw not RevPAR a had quarter X by U.S. Japan, Thailand led demand. ADR. occupancy. especially anticipated demand the was driven EMEA its quickly by November's across the selection leisure in with region X% the higher Canada strong X%, with by The RevPAR RevPAR APAP as with X%, over growth India in a rose the and we increased International severe over RevPAR fourth for primarily in drop rose in around growth X% in China. by after aided quarterly quarter, driven U.S. occupancy Greater The gain RevPAR rising led point demand, year best in cross-border and percentage and region from the by ADR broad-based as XX.X%, growth and rise strong strong

declined vacation than expanded citywide was the region, expectations demand China Greater the across better-than-anticipated in while better recent to multiple again and and was X Hong continue Taiwan, visa-free impacted transit demand prior holidays RevPAR policy in the as X% Tier parts RevPAR as across RevPAR benefited largest leisure and positive growth the of Hainan wealthier other Kong, cities, region. travelers from decline. region by again saw By Macau domestic weak events. Hainan Island

see However, quarter with Hainan to the sequential did nice down RevPAR in down QX. XX% in XX% improvement compared

strength RevPAR segments. growth segment, nights gains largest luxury Fourth customer strongest of year fastest growing of by nights in driven both globally was and U.S. from and ADR Canada, and select service. quarter X% to in leisure the RevPAR with room all X% across XX% tiers which quarter of portion customer the by global trends had the room to Turning the at was leisure, and its comprises our

Business fourth quarter. transient nights in XX% the of room contributed global

rose room in quarter. up ADR Canada. RevPAR and gains business XX% drove U.S. X% RevPAR, which of X% and nights comprised transient X% the in Solid up in Group globally the

the in election expected, group in due this and U.S. November's lowest was fewer As decline year a Greater in growth quarter to RevPAR group's of group the China. events around

leisure basis. rising and Group customer year global X% and growth on all full an a business segments solid X%, XXXX, transient RevPAR at experienced respectively. impressive Looking increased

will off for we start up end momentum both and as rate. At have her Leeny XX% increases for our of we the in during XXXX are As nights and on business solid pacing revenues we XXXX. X% were the in XXXX remarks, with average XXXX, room pleased discuss daily global group

Shifting to were development, XXXX, and Sander. rooms our the of contributing around X/X XXXX and a year. openings. growth of in by driver agreement again our over rooms signings addition X.X%, half grew was helped rooms of approximately another X,XXX terrific XX,XXX MGM our from of large from Net about with Conversions

deals record Our over over in industry-leading rooms the last goes across countries pipeline. over with our year, lodging X,XXX signed we X.X million ended rooms global of a portfolio XXX year territories. With now and XXX,XXX

room U.S. rooms the growth and led the flying in during all one X/X Marriott's around additions flags. industry we of Canada, In our opened of the with market, year largest

deals an While and financing U.S. new shown challenging of like associated Marriott. as strong our leading share starts for build XXXX new had the the we for experienced in banks have remains brands particularly with construction, also in player preference construction

During and across to the product and from both offerings. we meaningfully year, expanded breadth mid-scale of customer and portfolio traditional our the tiers, luxury across also lodging depth alternative

XXX Marriott Studio industry. engines end strong Flex, tier. the in We affiliation Points costs, of believe had brand and we of we X.X City the pipeline mid-scale their were all and have owner ] just year, entering our compelling properties, after mid-scale over design, the Res and of years Four continue [ power Express their the our which At simple interest brands, open to given lowest the the revenue in by bundled

including we several Shanghai with collection, Prague and the Ws Bund in an continue announced last Luminare lodging with to space, the in itineraries in in also of notable incredible our the sale X the Sao postcard anchored with on which hospitality yacht expected maiden innovative September, nontraditional Alaska Mediterranean this Yacht trail and super its Paulo. by the Ellman, In Mediterranean, luxury We luxury December, to summer. the super Ritz-Carlton yacht be in and plan to expand deals Regis in launch portfolio brands. hotels, will founding outdoor set had the second and St. Asia, our our cabins outdoor-focused third Canada. the collection voyage is opening

program Our new ensuring the over last historic in Bonvoy growing for fourth purpose that million to focus the members leading experiences at and quarter nights We added penetration members in room remains million industry's at XX% year, XX member offering to achieved fantastic to our nearly the year-end. Marriott XXX of Bonvoy every trip XX% on platform. globally. U.S. size is travel travel key loyalty

co-brand like we Uber our tie-ups and and share and more capturing engagement are cards with partners and products travel As add our global of and we collaborations with deepening member grow Starbucks, of base adjacent portfolio and our that customers' XX wallet. like members our credit

strong in credit our Driven nearly increase co-brand by fees global spend, rose card XX% last card a year.

direct lower this digital enhancing downloads Our little Bonvoy cost through In owners. multiyear a to at out excited our digital nearly of the the across we in have rose app a that all we customer digital channels drivers rolling begin our XXXX, XX% expect and key to clocking particular, about experience later channels remain mobile Marriott year. underway We're year-over-year. transformation

teams in a Leeny? place the turn making excellence to their our work for dedication more innovation [indiscernible]. over around hard and our Leeny Before where and the to results thank Marriott call detail, financial world discuss and I want I to for

Kathleen Oberg

branding Thank fees solid residential grew in near Greater in performance. decline due fee [ billion, a decreased RevPAR, gross timing ] year-over-year as quarter fees declines in given you, X% lower strength U.S. fees. and start management are fee in China was prior Canada. by XX% driven increase room offset $X.X Maui reviewing IMF the financial to U.S. of primarily our to of and in and and doubling by fees by Fourth the in APAC Tony. year. primarily was Canada total I'll higher recognition card additions, revenues the the credit in The Incentive

declined helped G&A $X.XX rose $XXX at and grew profit to expenses. points XXX quarter year-over-year XX adjusted to our and improvements. administrative the year by million, continued for basis hotel XX% worldwide EBITDA debt the X% At margins the in Fourth billion. hotels productivity primarily managed litigation bad basis points lower due to quarter level,

our rise customer regions. increasing every intent our pleased with our XXXX of to scores are that We in to that indicated surveys continued also one satisfaction recommend guest

pleased full the and year, and with the asset-light investment, For were we of billion gross buybacks. that fees of power business our dividends both strong cash-generating We returned $X.X increased a to adjusted our combination X%. EBITDA disciplined shareholders through over and model

of quickly, the number. the in nearly were pipeline pipeline about talk growth. in of our average XX added With rooms now they expectations, conversions, net expect in XX% Conversions, industry-leading our to of and opened X% strong quarter net course, rooms Conversions conversions our to X%. any system XXXX I'll that enter with we in were starting momentum months growth pipeline can system end been have so not on and for quickly. XXXX

discussed X-year growth the X% annual 'XX, rate a X.X% 'XX of grow net year-end period XXXX year-end Over our continue to Meeting. at compound we to Investor at from rooms to to expect we

For of full growth year 'XX, we RevPAR X% to X%. expect global

RevPAR in to China, be though and flat regions, Canada. year-over-year. the normalize Greater than higher exception currently to anticipate the With continuing in China again to international RevPAR in be growth We Greater is of U.S. roughly expected

RevPAR rising start X% we're discussed, great Tony globally. As off to January a with

full in XXXX RevPAR leased million The XXXX billion of sensitivity and to owned percentage in of change be $X versus $XX year million around fees RevPAR-related point X could $XX profits.

fee international be full hundred growth growth. a to around lower year, than of For gross to points card due card X% primarily rise couple credit billion 'XX, normalization $X.X XX% could X% nearly the fees could fee growth of to the to in $X.X Co-brand basis billion. the

could Residential branding timing unit the XX%, solely due fees to sales. decline of nearly

as and FX revenues, our $XX a larger our expected efficiency number expense usual around gross in be million expected the the to XX% to million. impact at owned million with are $XXX line fees roughly effectiveness XXXX $XXX total is year hotels. the to by anticipated in relatively $XX Owned, $XXX to enhance by the with leased million, net from leased to G&A million. other negatively timeshare initiative of across of $XXX and and $XXX to While to property impacted This million somewhat of company. XXXX's to enterprise-wide expected prior million. fees decline renovations line relatively is savings expected $XX million X% above to our expenses, result is results. to is at of decline

should impacted year X%. X% and X% As adjusted reduce by billion. rate rates total $X.X expected roughly noted, $X.XX rate reflecting to EBITDA billion under $XX.XX. December, $X.X roughly process in to by charge-out our to to effective changes. growth announced diluted savings be that tax an loyalty compared we this adjusted could cost In XX%, XX% franchisees. our between Full EPS we tax increase Full will around to previously international owners and also we EPS could of XXXX, certain yield would year

cash percent Our remain rate to in underlying core is anticipated range. the low XXs tax

benefiting quarter, X%, and New Canada. to well in from Orleans inauguration this For benefiting to could RevPAR Super January's the from X% global Easter as the U.S. Bowl shifting as first increase year March and April the

quarter First X% X.X%. could to fees gross increase

China, Solid quarter the fees and as in a strong Canada certain a growth expected in well as first in by undergoing renovations. partially ago and IMS year a management to partly given in U.S. due Greater decline offset are to be properties franchise decline their

million of net the is termination revenue the due other expenses undergoing of well and leased expected renovations as $XX as to portfolio primarily around to fees. decline of timing owned, elegant quarter year-over-year, First

that We X/X of each spending this expect billion to X investment are XXXX. major are There $X.X $X of of areas total. around spending expected in billion

higher loyalty The and is management, of year this in half systems, overwhelming expected property multiyear than another Over with first the is reimbursed time. of investment transformation portion the associated over investment technology. which bucket is our of of historical be to reservations

renovations spending renovations a on The about investment above levels as the the half on for in spending by with historical owned expected handful lease to expected of the second of as well completion elegant bucket our hotels. Barbados 'XX portfolio is driven be in is other of portfolio. This

in we to We The are portfolio. largely to after our for in the elegant is bucket new global to sell units expect remain complete, portfolio renovations system. as to contracts, expected contract continue expand subject last our our long-term investment

time. accretive philosophy to allocation committed investing Excess of We're Our capital shareholders capital over modest through and that's in and risen to our a share rating investment-grade value. combination not repurchase to returned cash growth has dividend, changed. has meaningfully shareholder which a is

of press returns are approximately of In I XXXX, your billion. another strong quarter $X and the we full Full to the are take and now the in release. Tony year assumptions happy for year expect details Operator? and capital guidance questions. first

Operator

with take We'll question of our Bank Instructions] [Operator Shaun Kelley America. first from

Shaun Kelley

just a a unique management. What I about and did of efficiency Tony, your focus update areas kind bit that? program, transformation out this Obviously, Leeny, was hoping you sort you on? of if a on could. could little initiative been learn us you select heard is have service Marriott. of to We've cost What

And sort the of the and what's internally? community been response ownership some of from

Anthony Capuano

Sure. the to little just model a our place. and Well, obviously been are structure the put question, just in impact really thanks -- for Shaun. It's org resultant early have

Their across is little I to have in with our will high the deal qualitative my think hopes parallel where each and franchisee be franchisee who enthusiasm in engage continents. and the I tell they I heard the of from how And enterprise, the more about this, owner So energy with with streamlined we a improve think the how continent to there going feel internally, most field. owner be and of particularly will I for community. have a will can the as ability already empowerment And community. decision-making you relationship teams that day. result the have They they every responses think the I are

Shaun Kelley

-- at the maybe, when quick months a couple different then ago? what's of the higher sort little ago a Leeny, just expand spending bit of as Could the a that to you start than especially a to And or decline? bit, of Or a little was of spending of or level And technology expectations capital point, you Analyst years a are XX so. when kind outlined that buckets see than to kind that your on back little Day maybe just we back what get while follow-up, do back? kind then recycling that, expect of should off some investment

Kathleen Oberg

you've X/X Barbados Shaun. Yes. around largely in Sure, because, I owned properties, that at properties. rate would renovations year is Yes. of bit the larger say pointed When pointed got That also that expect of investment $XXX outlined as overall on than higher a the the end as our year, in and be be I is of this which out, And then this a amount. And X, completed normal towards then those properties. handful that is those I I leased a that largely not million in are normal normal our and out, you in also should leased investing will basis. to run than ones should continue

post of doing that down tech million of and $XXX that's the the you to part 'XX post we it, to believe do So getting $XXX appropriate kind million we're that the is investing transformational levels.

start things do reimbursed expenditures. repayment you in 'XX of the And charges CapEx the bit the 'XX, and got typical back in EBITDA that level expect our system As higher. the these be you again about, think we is one this the for to owners, that in of calculation reflects probably exactly kind 'XX. question than is that in those will When both think we've to paid in of your depreciation how noticed about investments out rolling adjusted by reflecting owners going about I 'XX normal some of the tech talked a we higher later

see the years, the this next we into as I throughout it So think you'll several move implementing over system.

are talked your we right that for levels the I normal the model. think, longer-term still about, again, ones So

Operator

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

Charles Scholes

Or acquisitions? say, coming as should year this then do you feel follow-up additional question. more a have would for Europe, previous Great. a appetite of year? your is we this digestion you see tuck-in What acquisitions I And

Anthony Capuano

Sure.

a or history our thought through portfolio last allocation that decade as or in would just our effectively gap so, done question. to So at brand have same say geographic in intact. that. look in if capital over we Leeny footprint talked could obviously, our We've response thing when acquisition. more I the you tuck-in be remaining we about your identified either our filled We philosophy the

And In some we the will going vast, assume filled you should certainly will at and that our look in there's gaps, development sort consider evaluating to gaps continue economics. through of platforms. our the the terms both forward, of growth. majority vast footprint. a global we but brand be portfolio the the tuck-in of But acquisition, apply organic opportunity we'll growth those same think we of the an will instances, certainly range of And breadth organic expanding to those fill if rigor

Charles Scholes

then my very recent something or are Mexican articles tariffs, your news bookings Okay. political And and regarding related I've related to et tensions is these Canadian reading pulling seeing travelers cetera. some recently back and travel from X their this been customers plans, these from question. you that well follow-up as to reservations reservations regions? and canceling in Is that

Kathleen Oberg

would of it we're Yes. to anything say soon too Sure. be seeing Yes, that note.

as the driven small to look call are the to it, Canada part X% and they you very Canada by U.S. travelers. domestic is a of make and up largest of reminder, overall, when Just overall, really X% from a U.S. Mexico, the coming but The international our U.S. markets overwhelmingly nights travelers in X

part and in So see business we'll too certainly the early our overwhelmingly time, a U.S. but over to small very of say

Operator

from We'll Research. Melius take our Cunningham next question from Conor

Conor Cunningham

for assume -- to seems going means the going forward? to actually you -- about with there's down the XXXX. to talk And end. at what business I going be implemented. to the year tech a just it how it's benefit your you're that's that going then just just you be going that Can be whole migration. So to like Can been back --

that that talk helpful. could about just if little So bit a would you more, be

Anthony Capuano

Sure.

streamlined we talked bit this as this we elements we the to transformation a we Associates, transformation especially the Starting think there We've in a big tech serve. start We simplicity remarks, try later will from mentioned think the with training, about out best-in-class to attract workforce. talent, are the in impacts be this and So all out that and as to Marriott to prepared far-reaching constituents there of go the next-generation year. roll will a past. advantage

the at our For tremendous our that transformation level guests can guests, the think we in the better capacity person. so create will hotel engage associates

spa, agents their that planning side, to then broader excited most ability Certainly, golf, of categories for et we of guest It And But guest with help believe be opportunities shop will across of call for on platform, meaningful the can guests efficiency. food represents and on to expense our reservations all there there expect are wide the day our new and our a the the which with is our ease revenue we services about, think range and offer things that meaningfully cetera. advantages owners on help products community we or beverage, we a expense beyond older upside also our both side. revenue owners. and travel questions. every one really those enhanced the rooms,

Kathleen Oberg

the this This to to of only which be our that heard, quarters the systems is you going and roll is around I program. a our the something add -- involves transformation, number would just of out that add thing one given property take more management as world. given our reservations, to And thing is, loyalty size will scale is

you over couple the should . so. or next So this of years expect

Conor Cunningham

ADRs that and just nice about a But just of on can the XXXX just thinking general be on that the you a great. occupancy. quarter. you're then level in composition how about around curious saw And you be set would Okay. thought cadence it to versus for in talk Obviously, RevPAR, fourth

Kathleen Oberg

Yes.

you've be So for had the BT now When with with X% for as the the right of single continuing the I strong. probably and environment with 'XX, RevPAR X% I also that leader full the to think I this way was up the flat XXXX, low in this the big in of be macroeconomic up. kind with the that's about heard, the up about year, full that, leisure think digits for year in pace and would in group will [indiscernible] say, very in slightly it is, leisure, both we've winner, clubhouse sturdy year to likely the grow BT

overwhelmingly do towards be I of to say in driven, bit would a we say -- heavily when 'XX. I ADR expect going occupancy year, well. to ADR we it's be more But And it it little compare expect gains would I this more like as weighted to would

Operator

Richard We'll from take our question Clarke with next Bernstein.

Richard Clarke

going on that, I this a grow of It appreciate net gross the around quarter. to you bit the first gave X%. of to sounds But growth year the RevPAR basis, is fee full above plus getting you're for like some just but color growth unit non-RevPAR X.X%. fees you're only

the So we to should bridge what's there? think get about that down to X%

Kathleen Oberg

Sure.

pop comments, first probably next year. are the closings year. up. about as by buildings sales are for could example, we'd this which they to because a so headwind This to the year. us heard XX% do all the a fees say strong brand these almost so be million my of as the get residential and units impacting and is I'd in are is can elements you 'XX, couple that expect closed fees particularly the FX, there expect, repeated around then is that them not We much occur lower is fees, necessarily were As one of built are when and is that in reduction recognized. other Part for $XX that you the back every time

lumpy. to tend fees fairly those So be .

their growth QX greater do the that 'XX, quarter. is One is continues X a our front year, obviously a of on China the had of headwinds function only and I'll X% really have have because and then changing you in thing next challenging out RevPAR is And that to slightly they IMS RevPAR last point is QX things. particularly

decline. to the and year that 'XX. where U.S. that's fee And on in growth slightly IMFs some expect and then our have renovations put than 'XX, going their going that RevPAR. might rooms together, IMF perhaps the I full you got Canada, the lower their we've also would strong see and are to And impact for overall expected growth in given you you'll see So

Richard Clarke

that guided CMD, to Maybe fees I to years? growing 'XX Where guess out actually you then. as XXXX. your the credit I non-RevPAR at expect at grow and XX% XXXX across growth, just non-RevPAR think Maybe across on what interpret X come I 'XX... card do follow-up across you and it a that those do but all in, fees

Kathleen Oberg

think Yes. lots moving -- It's I in parts really are there of there.

I think roughly lower the dropping flat. card X points being half from then residential hundred timeshare the the year million drivers year. couple obviously, likely fees Those being this drivers. then which than $XX ones a fees big fees are biggest the and branding And basis are of this I mentioned, growth that to credit essentially

Operator

with Farley next Robin UBS. from We'll take question our

Robin Farley

are expecting for to circling year. construction? guide unit come your versus from you of growth new that back Roughly Just to the percent what conversions

Kathleen Oberg

I as seen and this this high able particularly as in the to Rob, were Sonder year, you've we year, So think MGM rooms. fold

was it over half. So

our you openings clearly coming in conversions XX% think this could XX% think that XX% could how I reflects year's I going forward, it about at from signs in 'XX. which think be to

Robin Farley

just And one final Okay. maybe question.

that we loan it's hotel in if from not capital up showing return about about is the back on key capital loans, equity for slivers should that's a how of that's spend you should contract sort think get money, for that -- think that? how a the of On we that those a mix of Or owner? some Are new spend probably some X/X investments units. the

Anthony Capuano

Sure.

got in lots volumes tools for toolbox deals So Robin, think that out, our financial outsized provide fees. will as we those point we've you of of

the the in really in U.S. key shifted the lot towards has being of tool Here landscape a money of preference competitive and Canada, ways.

chain which in at occasionally, money are key in look it scales, new a money, more across we meaning used we is seeing we're more a seeing lower bit tiers, trends development. required key bit a As of

deal, Given [Audio of compare gallon our money is kind which saw The compared think XXXX. you interesting back dramatically, where dollars volume grows money slightly absolute Gap] our growing per key deal rapidly less as per prepandemic. scale, to to we used but investment key XXXX is if of we system were grows I

Kathleen Oberg

would service key you And money. about I debt you Robin, in guarantees, when growth a to be think guarantees. going be about have We think We operating when it, obviously broad of profit smaller the investments think overwhelmingly about that's the amount. do, do But makeup, to brush relatively in time a biggest deal actually you've of of is on key [indiscernible] and into is that back. do But recycling that which a recyclable, time, year I from some get that to we'll money we loan going the . investment form seen this the as component of think money.

Operator

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

Stephen Grambling

people bit asking XXXX. And that September XXXX of outlook kind about back the number to what a out kind been of versus if you guess think and could and then for mean regarding I growth a and as perhaps compare do you trajectory puts potential? have what free we the surprised to Analyst think the And these been takes takes a Day in of the EBITDA of the upside? more There's flow What's challenge? about zoom all cash longer-term puts been of

Kathleen Oberg

I for Yes, thanks question. the -- think

and is I around in asked X.X% pretty we've classic to with And midpoint we RevPAR rooms being the 'XX that the question given around around RevPAR. as are view squarely growth. X% the of and that guidance often kind tell, growth I year, this this of think of can you fits that when equation, get know this you rooms in

think that we think can being we've as to see improve we and Tony grow continue a about year, about for past with work described opportunities to efficient that over us the of and been of doing that. to effective I as lot for on the as opportunity pace be the

think that basic in very, we up September has the equation held well. very I out laid of 'XX

of few and kind for with FX that overwhelmingly, world. the certain like going have And what's had you the think has on years think to come, parts about see of to things puts capital it's and RevPAR we well. return many growth really worked when takes You in EBITDA equation and the robust. I relative a But in the very

Anthony Capuano

importance And than there time a have the only multiyear maybe shift the the growth since a from in underscore on thinking time. that to Investor at we being we really And laid the was specific X.X% relevant little a Stephen, the that point to basis, zoomed to maybe Investor out I deliver that recall illustration. net on in instances of ability most in Day, Day. about over some timing in CAGR perspective on you'll been But our that X% at feel rather basis CAGR confident unit Investor the it the of we of thing Day our time first add, looking continue MGM a would

Kathleen Oberg

last The forward been should compared rate RevPAR that 'XX. we going thing what one talked as -- reflection the about seen parts when day we And tax we how that talked of as we about world gave effective updated heard then had certain frankly, September at has tax roughly think when excellent. probably And XX% is tell, And we is it me on from the obviously, changes a in you that a look some X-year view XX% we jurisdictional can what 'XX. of you one that is 'XX, to in a just with about period. the I'll in that over rate, tax describe mention rate was entire of

Operator

from question Katz We'll with take Jefferies. our next David

David Katz

terms shrink? the you A talk I you're money, correctly, the contracts in money. around to is of all of lot more a them about become the where of sort years of longer? the and key length sort walk right? market, rest to does do it the return that just heard seeing X ago? bigger If starting the key fit Does button say, of Can as get of us compared have, How together would to

Anthony Capuano

the long-term around stable for contracts. using I'm in think, where have a The consider outsized David, mean of drive is remains we a it's best the We the capital do going repeat to to believe fees. I Yes. I we myself [indiscernible] fundamental sheet tools bit. model those Marriott question. deals probably will believe dealmaking use consistent. balance We company's And good

a it's being where we're being established. seeing castle incentive fees deals attacked getting X we're do deviate on meaning making that And -- we've sorts of materially the we're and a the money where franchise fees not key to getting base circumstance not from forced shorter to is terms, contribution walls, or so all forced

David Katz

Right.

what the management feels feel like contracts but like just at day, it become structure in more of the are? a the of So you it's steadfast you're those end competitive, bit

Kathleen Oberg

I money. key So I'll 'XX. key And 'XX. a value for don't numbers the help that getting put about we think cash premium couple before compared net add a the money on to involve key the premium door not and talked deals David. good a out have we present to than different this, money to about just for of to be in in use deals materially that key on When in of going that money there we're It's contracts money amount where continues involve

the to tools Tony tool about and and way franchisees it's the of various ways. that variety is think in a these best So way it it's I use owners described, in which toolbox a the think -- is

ramp. it's Sometimes fee a

renovation, is Sometimes, the returns participate it's cetera. to overall, -- in about we're very thinking very, invested capital. think contracts see continue we how how with on it strong coming But we in et I

Anthony Capuano

in part and upscale first prevalent response that quality it of upper much lower into that make XX% leak pipeline. luxury. my our And tiers. And while more value highest the represents in the point of I we David, key the Occasionally, the seeing last on mentioned is of tiers, are it money, would I some

our holding XX% so being is should in want shareholders quality be us tools I reflected focus our the pipeline those think most nearly leading tiers those or of to opportunities. those those And largely in on for And in X tiers. over valuable

Operator

Montour We'll Barclays. Brandt question from take our next with

Brandt Montour

commentary commentary, Tony, it which of about year guide you was leisure I the like the fourth leaning. big to the want the up full sounded on in was yet, for surprise to in quarter. And the sort flat drill

there's tougher third kind quarter I the but because it the any of of is kind are wouldn't thought a what segment? seeing just conservatism 'XX, that not fourth you visibility And maybe have that first of comps in business? quarter sort Or than so that just were curious, of through ton on

Anthony Capuano

I little you Yes. are short still windows relatively everything kind of bit think I booking mean weeks. there's a The identified. sub X of

really so looked [ ] quarter there ability fourth I I numbers like RevPAR. leisure the predictions you've as the or might visibility been many as mean encouraging. much And as on understandably and we at the we've of had to in those we we predict so. since But there, mean, have 'XX, a maybe historically. seen leisure XX% of improvement run end don't have

the think in numbers still are you normalizing to continue Leeny through growth, is legs are and bit. expectation we'll guidance reflective leisure walked reflective some I that kind while of me, fourth an that of to so a it's the And see there quarter that

Kathleen Oberg

at just hotels, that leisure It BT saw. point. see both to our in luxury encouraging your that's at by obviously, QX our RevPAR RevPAR And and room this we that also X%. I'll resort add, was grew and helped to and

huge think being be just hotels, macroeconomic element always about little will to be would I predict, our a to watching at talked leisure as and point picture it I very all business we'll that closely. to overall Tony bit that a how developed the harder

Brandt Montour

Okay. other the And about coin. then, side Tony, key I have of a the question money

that and rates horizon issue. that? talked a high about a availability and the been unlock of lot panels that's I capital, are It's you've separate which but something anything sort in the is Do is a sort of the conferences of problem, things. of for high, and capital availability they've could you there's sort mean of think Just while. the at

I capital banks. should mean of factors markets? Are time? the post-COVID a that see the still within alleviate a of deregulation think or issues have from you -- regional optimistic you the of is are over of sort problem for What you loan sort it office hangover do that to sort do could some just the getting about that 'XX? for past is Or

Anthony Capuano

there certainly portfolios in best-performing estate when their real regulatory irony loans lenders, here. is we sector. to Yes, commercial a the are The element hospitality the often, is talk

more fundamentals they -- much it what if so imposed little them. of reluctance might to to about have lend on requirements there hospitality to be do . Basel projects has unknown regulatory new and And with III do with the construction, upon or other

about talked Lenny this think I earlier.

be starts I and are other the the would opening a this is pre-pandemic encouraging, But issue, had U.S. U.S. Europe same to but we an We although in levels really mentioned share build used. And a that's which I in my and it remarks. thing Canada, uptick starts felt the this of a using in to seeing in not construction there's of that construction that are new lending encouraging. for sure, back Largely, Canada are in the active out the new and well. leading suggest as they've there, build, criteria always lenders bit they

But well the that there. lending family. the They're to originations in I out terms think sense is looking the And the change, steady [indiscernible]. new barring significant and and improvement our looking some slow capturing our are with over-index track construction in really that regulatory at affiliation developer brand of speaks the to at they're ability record right the of

Operator

We'll ISI. take our Pfennigwerth next question Evercore with from Duane

Duane Pfennigwerth

revenue then any as either view a about transient can just you're year, thinking from recovered or your you both you geographic is a volume offer deeper perspective? how recovering on how And vertical us remind from Can you business regarding industry see insights basis. and a that the

Kathleen Oberg

Yes.

and start with I'll up he's can got. Tony anything follow So

First different COVID, had just think companies the you cetera. since of all, the that and medium-sized levels. when back has corporates about work a large faster small- load et more XXXX bit recovered have businesses to came -- little form business than largest transient in the

see their meaningfully although some back levels, large corporates I nights actually XXXX will sector more those economy, in like to say of other recovered. financing that You the the behind of are still they than

So the recovered. business overall, has

nights more One of overall I thing I you as the week our are Tuesday, global the seen are leisure being overall has Monday, not was higher still of occupancy thought growth interesting example, as other Wednesday pre-COVID. looked to had we have are nights system XXXX at seeing occupancy when actually for while the compared levels. whose the than You than of in nights the week, occupancy sector. BT recovered But higher

still not and by bit additional continue in of recovery to we year, to into but are back the see overall is. XXXX, the BT during to expect continue those we 'XX, So bid that level large corporates while they

Duane Pfennigwerth

Can specific? your for a maybe Are those of we global Are extension? co-brand country remind you speak And structure a And they just maybe you us would a when to level. it high then follow-up, renewal significant just nature? relationships. see an could for at or in opportunity the

Anthony Capuano

Yes.

as when might to it evidenced great we're is our those not We've and -- with really and to largely to XX by the about we Chase X relationships So renewal. make relationship. where banks. countries shape continue tend into local relationships shared, of relationships to other are JPMorgan American establish around the biggest talk a in enter growth Leeny ready got We're a might and of which set local evaluate the a sense We numbers that domestic partner Express, with on world.

Kathleen Oberg

agreements. multiyear They're

but on So there them, in . is always particular a not pressure discussions.

Operator

with our We'll from Rose question Smedes take Citi. next

Bennett Rose

wanted to wondering looking are buyers? an might could time about of investing you be that then sort your there talk was I in mentioned the maybe I a selling that just world. sector bit. Are you, challenges sell potential region you the you seeking I all-inclusive wondering was unique to line to in portfolio or just just investors that that. elegant ask little And portfolio actively or of to there if Barbados and if now

Kathleen Oberg

any I sure. have Yes, wouldn't expectations. particular

related place. given in executing. I what not be COVID. chain supply the challenges We're you that all plans following would and COVID to got think to some and surprising We've

of majority completed in to it the get 'XX, done going Some vast was in really 'XX. we're and

a it of the be renovation a for nice It that hotels. to makes themselves. normal you're the position that and sale where is the So where X/X then somebody sale or clean to execute kind for having would kind complete us not of pathway do X/X of a of in a the

you've is the sell at us and evaluating time time, Nothing particular we're seen talk that. marketing appropriate do, process about to about opportunities Smedes, it. for over constantly opportunities, in to buyer this the thinking as when market point Obviously,

Anthony Capuano

And concerns. any was particular the your only thing add, Smedes, part I question of would the

that watch we think we well bodes ready landscape more watch you competitive recycle dollars the I this seeing the are market, into transaction all-inclusive as as I the cap. space. more investment institutional think when going we're And to and

Kathleen Oberg

acquired we is traveler. the a It for since we for performance global of excellent it, have wonderful us addition Bonvoy -- have frankly, hotels. And our has been those

presence have had before. a in Barbados We not

really a quite to been done to It's portfolio. add the well. wonderful hotels it's of set So

Bennett Rose

included Great. did forward? just you one the your Chicago outlook, complete that I guess, And quarter? Sheraton the but small would one, the going and be then purchase in of owned And in is leased

Anthony Capuano

Yes, we did.

we generator in are an we the think will it our the So good proud on owners Sheraton will We assets evaluation and of owned be line. Chicago embark the of cash flow and value capital the performing is well. a needs. leased

Operator

We'll from take Capital Klein Ari our with Markets. BMO question next

Unknown Analyst

bit curious and takes given it's puts if growth, on capital. I you that such of from an a actually your strong a have be what aggressive accretive perspective, going different cost from the key are of there that view? say and was that to was of Maybe point money. back of front Maybe front on more to to to little just opportunity a some

Anthony Capuano

to of see over Maybe opportunities one growth generate our the deals valuable into Marriott and we perspective. anxious or go tool Again, myself, evaluation risk minute. a our cost. of for start, money have same circumstances to in we turn any here then available of investment, key-money tools the the buy in And Development and are incorporated it the I'll key other repeating We the from Yes. whether fees. value transaction. I'll at than to not individual that use is discipline of we it's obviously Head each typical extent creation higher that right the same at calculation. of is will the a

lens. not that it's We through about are but shy disciplined be that got tool, using . certainly to

Operator

question next our take Macquarie. from We'll Chad Beynon with

Chad Beynon

seeing in touch age and kind if this where outset, talked Can continued saw at or deal? nice the region about Bonvoy maybe MGM you from just the of you strength the the particular 'XX growth? on benefit Tony, members. a you're Or with a

Anthony Capuano

to news course, the good we're the add is program. embraced around the continue The members efforts to to of it everywhere. property The Yes, world, high-value teams Chad. teams world around our seeing continent really the have

into open those and I we've think made bring progress the rapid about great evolution mid-scale the [ opportunity in we Bonvoy younger starting my ] the their -- prepared the of less maybe that in our that their entry frequent are talked aperture in tier. creates to view remarks travel My is a just members, journey.

push really opportunities. globe you'll And grow like level continue the 'XX. So where seeing I partners have to property the to a we're for I think We'll think see opportunity some it's that's us. try we Starbucks to those MGM in the amazing the But of around continue to and on leveraging renewed a big focus platform. at

Chad Beynon

cities Tier curve. with respect New X China of maybe you anything lastly, in And then that China terms some in China Year, the going? catalyst you of that Chinese the in the just a about recovery to big or saw talk get maybe outside see of points, and provinces if to the be those near-term data maybe you're regions if recovery from lower starting tier to stimulus would Can

Anthony Capuano

all it's hope too soon think that, say. to I but really we Yes,

heard that of a timing byproduct while is Year. Leeny's because bit little New some Chinese remarks, the encouraged the got temper a of that we're to enthusiasm you of We've also by January quite in As performance.

to we'll continue watch. So

to is seeing [ are is very the fact positive encouraging. X signs. sequentially, were some fact sign. is The in We like Tier the small it cities close anywhere not The improving, ] good that that weakness we'd a where be encouraging albeit INAV

have property long interesting us the stimulus we be continue a deal quite trends. to indicative least, operating face on We've China. date, matter for I the level on coming short-term performance will weakness, really which on the programs government. patterns It's And in record of central material that's at we long to impact seen growth term, community's in about bullish or to even XXXX. that had the believe of of demand out some of of we None some sector. think China confidence volume term development Greater that But

Operator

Goldman Lizzie We'll take our next Dove question from Sachs. with

Elizabeth Dove

I'm the can just U.S. around wondering RevPAR international if higher your than you on comments being expand

anything you're that's but you you Jubilee be but Olympics, Middle flat, share in know there, Europe? You mentioned I East can have China or the Italy. would lapping whether

you color that? of can kind any around give just So

Kathleen Oberg

and I'll GDP. you've rooms all, Well, are growing you've as double-digit in areas very got where out those faster example, -- much growth India got tied the And on RevPAR obviously, first at our world, meaningfully of an around are to some rates. basics GDP, are point in markets

So there's obviously like that. benefits

seen talk be about when travelers for also cross-border been we encouraging very travel, strong going You've the to dollar has overseas.

RevPAR I hotels example, they And at I of think think a that trends than pre-COVID little like the had compared and to our U.S., could as we've the the higher in outstanding growth think particular, Europe when that stronger you demand. this for seen about emphasize year. the guests end of We percentage Japan, bit lower. really cross-border fact be to on continue

Operator

to turn program additional or now for And remarks. for any time does I'll Tony questions. that conclude our allotted the closing back

Anthony Capuano

for again you questions. thank your Well, and interest Great. your

in our around outset, you excited 'XX the to are fantastic energized XXX at and the mentioned we performance countries teams As by world. welcome in

talk you we'll to and soon. travels, safe So

Operator

conclude Thank disconnect. and This you for your may program. does participation, today's you now

Marriott International (MAR) 11 Feb 252024 Q4 Earnings call transcript