Q2 2024 Marriott International Inc Earnings Call

July 31, 2024

Later, you will have the opportunity to ask questions. During the question and answer session. You may registered to ask a question at any time by pressing the star and one on your telephone keypad, you may withdraw yourself from the queue by pressing star and see them.

Tony Capuano: And then on top of that you've got your other international markets just continuing to normalize. So when I look at the first half of APEC and EMEA and Cala, I would expect that their back half is a little bit lower. And so in that regard, as you move towards Q4, you continue to see additional normalization, although still quite strong red part in those markets. And you put all that together, and that's where you get the bit lower outlook for the red part in Q4 than Q3. And maybe just add a little more context to that, Sean.

Jackie Mcconaughey: Please note. This call is being recorded I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to senior Vice President Investor Relations Jackie Mcconaughey.

Jackie Mcconaughey: Thank you.

[music].

Speaker Change: Good morning, and welcome to Marriott second quarter 2024 earnings call on the call with me today are Tony Capuano, Our President and Chief Executive Officer, Neil <unk>, Our Chief Financial Officer, and Executive Vice President development, and Betsy Dom our vice President of Investor Relations.

Hum.

Tony Capuano: Obviously, we knew there was an election this year and baked what we've seen as historical softness. But when you look back over prior election cycles, we tended to see a little bit of group softness the week of election, given sort of the unique attributes of this election cycle, we're seeing that bleed into the week after the election as well. So it's from a group perspective about out of November is feeling the impact on the groups on the group side.

Speaker Change: Before we begin I would like to remind everyone that many of our comments today are not historical facts and are considered forward looking statements under federal Securities laws.

Speaker Change: Please standby your program is about to begin if you need assistance during your conference today. Please press Star zero.

Speaker Change: Statements are subject to numerous risks and uncertainties as described in our SEC filings, which could cause future results to differ materially from those expressed in or implied by our comments.

Speaker Change: Okay.

Good day, everyone and welcome to today's Marriott International Q2, 'twenty 'twenty four earnings at this time all participants are in a listen only mode. Later, you will have the opportunity to ask questions. During the question and answer session. You May Register to ask a question at any time by pressing the star and one on your <unk>.

Speaker Change: Unless otherwise stated our revpar occupancy average daily rate property level revenues comments reflect system wide constant currency results for comparable hotels, and all changes refer to year over year changes for the comparable period.

Sean Kelley: Great. Thanks. And just as my follow-up, just to kind of hit on China specifically, obviously, you know, I think you gave us a little bit of the, you know, the heads up that this was softening last quarter. The real question, I expect we'll get some, is, you know, just bleeding it all into the development side, right? You know, the signings and the development, I think side was a highlight for the quarter broadly. But what do you think on the ground there and, you know, is that softness at all, you know, starting to, you know, impact developer conversations or signing conversations in greater China?

Speaker Change: Statements in our comments in the press release, we issued earlier today are effective only today and will not be updated actual events unfold you can find our earnings release and reconciliations of all non-GAAP financial measures referred to in our remarks today on our Investor Relations website, and now I will turn the floor over to Tony.

Speaker Change: The phone keypad, you may withdraw yourself from the queue by pressing star and Jim. Please note. This call is being recorded.

I'll be standing by if you should need any assistance. It is now my pleasure to turn the conference over to senior Vice President Investor Relations Jackie Mccarney Guy.

Speaker Change: Thank you.

Good morning, and welcome to Marriott second quarter 2024 earnings call on the call with me today are Tony half, while our president and Chief Executive Officer, Mindy over to our Chief Financial Officer, and Executive Vice President development, and Betsy Dong, our vice President of Investor Relations.

Tony: Thanks, Jackie and good morning, everyone. We.

Tony: We delivered another strong quarter as travel demand will remain robust in most markets around the world.

Tony Capuano: It's a great question, and it's sort of an interesting riddle. As you heard in my prepare remarks, we had record signings in the first half of the year in China. I think it's really about the long-term prospects in China. Our owner community, certainly the SOE's there, continue to believe in the long-term dynamics of travel and continue to both sign and start constructing them. So we really have seen no slowdown at all on that front. In fact, you know, it's interesting. And we signed 63 select service deals in the first half of the year in China; almost half of those are expected to open within 12 months.

Tony: Our net rooms grew by 6% year over year second.

Tony: Second quarter Global Revpar rose nearly 5%.

Tony: Average daily rates increased drove 3% and occupancy reached 73%.

Before we begin I would like to remind everyone that many of our comments today are not historical facts and are considered forward looking statements under federal Securities laws.

Tony: 150 basis points compared to last year's second quarter.

Tony: Revpar rose nearly 4% in the U S and Canada benefitting from the shift of the Easter holiday.

Statements are subject to numerous risks and uncertainties are described in our SEC filings, which could cause future results to differ materially from those expressed and implied by our comments.

Tony: All chain scales in the us and Canada from select service to luxury posted positive second quarter year over year Revpar.

Speaker Change: Unless otherwise stated our revpar occupancy average daily rate property level revenues comments reflect system wide constant currency results for comparable hotels.

Tony: Revpar increased over 7% internationally led by a remarkable 13% revpar gain in Asia Pacific, Excluding China or APAC.

Speaker Change: All changes refer to year over a year of changes for the comparable period.

Tony Capuano: So, you know, as we look at the pace, we ask the same question as you. Are we stacking paper, are we signing deals that are materialized as openings, and the pace of construction is really incurred. The only thing I'll add is that I think with our continued strength and red part index in greater China, especially as you see demand softening over the past six months or so, we have seen increased order appetite for being with the really strong brands that we have and across the full range of brands. So we're really pleased to see, kind of from the limited service segment all the way up through luxury, the really strong demand for the brands, including conversions in China.

In our comments in the press release, we issued earlier today are effective only today and will not be updated actual events unfold you can find our earnings release and reconciliations of all non-GAAP financial measures referred to in our remarks today on our Investor Relations website, and now I will turn the call over to John.

Tony: APAC benefited from strong macro trends and increased cross border travel, especially for mainland China growth in APAC was broad based but particularly robust in Japan, where revpar rose 21%.

Tony: Revpar grew nearly 10% in the EMEA region with continued strong regional and cross border demand at about 9% in the calibration.

Thanks, Jackie and good morning, everyone. We.

John: We delivered another strong quarter as travel demand will remain robust in most markets around the world.

Tony: To date in 2024.

Speaker Change: <unk> Express portfolio has meaningfully outperformed the overall Mexican market as well as our own internal revpar expectation and Bon voyage penetration into hotels continues to improve steadily.

John: Our net rooms grew by 6% year over year circa.

Speaker Change: Second quarter Global Revpar rose nearly 5%.

Speaker Change: Average daily rate increased around 3% and occupancy reached 73%.

Speaker Change: Revpar in greater China declined roughly 4% in the quarter as macroeconomic pressures led to softer domestic demand.

Speaker Change: 150 basis points compared to last year's second quarter.

Revpar rose nearly 4% in the U S and Canada.

Tony Capuano: I think really demonstrating that it's frankly in the weaker times that sometimes the brands can improve the most powerful.

Speaker Change: Benefiting from the shift of Easter holiday.

Speaker Change: The region was also impacted by an increase in the outbound travel.

All chain scales in the U S and Canada from select service to luxury posted positive second quarter year over year Revpar.

Speaker Change: Positive revpar growth in tier one cities, Hong Kong, Macau, and Taiwan was more than offset by declines in all other markets with finance seeing a meaningful revpar decline.

Operator: Thank you so much. Thank you.

Revpar increased over 7% and internationally led by a remarkable 13% revpar gain in Asia Pacific, Excluding China or APAC.

Smedes Rose: And our next question comes from Smedes Rose with City. Hi, thank you. I wanted to ask you a little bit more. You mentioned some weakness in Hawaii and just was wondering, are you seeing it across all regions, or is it maybe more isolated in Maui with what's been going on there, or kind of. And is it sort of pleaser or is it sort of group consensus meetings? What sort of driving relative weakness in our region? Yeah, sure. Smedes, and yes, I think I think Maui is definitely still seeing the slowest recovery. You still have the reality that the dollar is very strong and why it's been always been a very popular place for Japanese travelers.

Speaker Change: Despite the adverse market conditions, we outperformed our peers in the gained Revpar index across the region in the second quarter.

APAC benefited from strong macro trends and increased cross border travel, especially from mainland China growth in APAC was broad based but particularly robust in Japan, where revpar rose 21%.

Speaker Change: Our global Revpar index, which is at a substantial premium also rose again.

Speaker Change: As we look ahead to the full year, we are narrowing our global Revpar range to $3 to 4% growth largely due to anticipated continued weakness in greater China as we will discuss in more detail.

Revpar grew nearly 7% in the EMEA region with continued strong regional and cross border demand at about 9% in the calibration.

Speaker Change: On a global basis in the second quarter, we saw revpar growth across all three of our customer segments grew leisure transient business transient with each segment experiencing increases in both room nights and average daily rate.

To date in 2024.

City Express portfolio has meaningfully outperformed the overall Mexican market as well as our own internal revpar expectation and bond point penetration into hotels continues to improve steadily.

Tony Capuano: And so we overall and why we still not seen the level of Japanese travelers back in the state. But obviously, the tragedy in Lahaina has clearly had a huge impact on the island. And while we were there with Tony, with the senior team a couple of weeks ago, there's been fabulous progress, and it is really coming along well. But clearly, still that island in particular is having a slower recovery than the other parts of Hawaii. But why overall is still feeling the impact of the strong dollar?

Speaker Change: Group, which comprised 24% of worldwide room nights in the quarter remained our strongest customer segment.

Speaker Change: Revpar in greater China declined roughly 4% in the quarter as macroeconomic pressures led to softer domestic demand.

Speaker Change: Compared to the year ago quarter group, Revpar rose, 10% globally full.

The region was also impacted by an increase in the outbound travel.

Speaker Change: Full year 2024 worldwide group revenues were still pacing up 9% year over year at the end of the second quarter with a 5% increase in room nights and a 4% rise in ADR.

Positive revpar growth in tier one cities, Hong Kong, Macau, and Taiwan was more than offset by declines in all other markets with financing a meaningful revpar decline.

Business transient, which contributed 33% of global room nights in the quarter saw 4% increase in Revpar.

Despite the adverse market conditions, we outperformed our peers in the gained Revpar index across the region in the second quarter.

Speaker Change: Leisure transient which accounted for 43% of worldwide room nights in the quarter posted a 2% rise in revpar.

Our global Revpar index, which is at a substantial premium also rose together.

Tony Capuano: Okay, and then I just wanted to ask you. You mentioned that I and that needs for squat and what America I think you just remind us what what percentage of your systems in North America is currently paying. Sure, absolutely. So interestingly, it's the same percentage as a year ago in the second quarter: 26% of the hotels in the US are paying incentives in the second quarter. And just as a reference point in China and Greater China, we went from 86% to 80%. So you see that there are really large delta given the structure of the management agreements.

As we look ahead to the full year, we are narrowing our global Revpar range to 3% to 4% growth largely due to anticipated continued weakness in greater China as we will discuss in more detail.

Speaker Change: Within the business transient segment demand from small to medium sized corporates, which now account for nearly 55% of business transient room nights has grown significantly over the last few years.

Speaker Change: Earlier this month, we announced business accessed by Marriott envoy, a new comprehensive online booking travel program that we launched to ease and expand the booking experience and travel management process for these customers.

On a global basis in the second quarter, we saw revpar growth across all three of our customer.

Speaker Change: <unk> grew leisure transient business transient with each segment experiencing increases in both room nights and average daily rate.

Speaker Change: While it is still early days this new offering is already seeing great interest and were extremely pleased with the initial account sign ups and users to the platform both of which have outpaced expectations.

Group, which comprised 24% of worldwide room nights in the quarter remained our strongest customer segment compared to the year ago quarter Group Revpar rose 10% call. It.

Tony Capuano: Overall, were managed contracts from area we went from 62% paying incentive fees last year in the second quarter to 61% this year. So you can see that in the US it's fairly steady and more minimization certain pockets geographically that weren't quite as strong.

Speaker Change: We continue to enhance our powerful Marriott <unk> loyalty program, which had over 210 million members at the end of June.

Speaker Change: Full year 2024 worldwide group revenues were still pacing up 90% year over year at the end of the second quarter with a 5% increase in room nights and a 4% rise in ADR.

Speaker Change: We continue to see real success, driving enrollments and engagement internationally in part due to our bottom <unk> partnerships with <unk> in Japan, Alibaba in China, and Raffi and Cowen.

Speaker Change: Business transient, which contributed 33% of global room nights in the quarter saw 4% increase in Revpar.

Speaker Change: Member penetration of global room nights Rose again, reaching new record highs in the second quarter at 71% in the U S and Canada and 65% globally, our new collaboration with Starbucks is the latest examples how we're connecting our members with people places and passions that they truly love.

Smedes Rose: Great, I thank you; I appreciate it.

Joe Graff: Thank you, and our next question comes from Joe Graff with JP Morgan.

Leisure transient which accounted for 43% of worldwide room nights in the quarter posted a 2% rise in revpar.

Joe Graff: Good morning, everybody. Good morning, Joe. Good morning.

Speaker Change: Within the business transient segment demand from small to medium sized corporate which now account for nearly 55% of business transient room nights has grown significantly over the last few years.

Kathleen Oberg: Your gross fee guidance for the full year is lowered by about 50 to 100 million versus what you gave in May. I was hoping you can break that out between the net impact from Shaun China, the election impact in the US, and FX. Yeah, so let's do this. I am asked, are definitely two thirds of that. And I would say if you're looking at that, a solid half, if not a bit more, is from greater China. Now that you've got to get into how much is the rev power versus how much is FX, and there is a bit of both.

Speaker Change: We also remain laser focused on providing our guests with excellent experiences in our hotels and are pleased with our intent to recommend scores, which have continued to steadily rise.

Speaker Change: Earlier this month, we announced business accessed by Marriott thoughtfully.

Speaker Change: New comprehensive online booking travel program that we launched to ease and expand the booking experience and travel management process for these customers.

Speaker Change: Our leading global portfolio continues to grow meaningfully faster than overall industry supply and we added approximately 15500 net rooms to end the quarter with nearly $1 six 6 million rooms.

Speaker Change: Global signing activity has remained strong.

Speaker Change: Record signings in APAC and greater China for the first half of the year helped to grow our pipeline to over 559000 rooms around the world.

Speaker Change: We continue to enhance our powerful Marriott <unk> loyalty program, which had over 210 million members at the end of June we continue to see real success, driving enrollments and engagement internationally in part due to our bottom point partnerships with rack in tablet and Japan Alibaba in China.

Kathleen Oberg: Then you're also looking in IMF and some in the US, which let's call it broadly speaking, roughly 10 from various markets, not performing as well as we expected a quarter ago. Then you've got also FX overall is affecting both some base fees and IMF. So, to separate it out, you get into a bit into kind of which element you are describing, but I would say that China is the biggest impact on the change in IMF, which is two thirds of the overall 75 million in reduction. And then you've got a bit in the US and a bit from FX, obviously the lower rev power globally has a little bit of impact, and then ever so truly, ever so slightly, as related to non-written parties.

Speaker Change: Conversions, including Multiunit opportunities remain a significant driver of growth as owners continue to value the depth and breadth of our brand portfolio and our powerful revenue engines in the second quarter conversions represented 37% of openings and 32% of signings. This <unk>.

Speaker Change: And raffi and Kal.

Speaker Change: Number of penetration of global room nights Rose again, reaching new record highs in the second quarter at 71% in the U S and Canada and 65% globally.

Speaker Change: <unk> activity has been broad based with hotels converting into 'twenty three different Marriott brands over the last 12 months.

Speaker Change: Our new collaboration with Starbucks is the latest examples how we're connecting our members with people places and passion that they truly loved.

Speaker Change: While still below 2019 levels. We're also pleased with the continued upward trend in monthly construction starts in the second quarter construction starts in the U S and Canada rose, 40% year over year.

Speaker Change: In June we signed three marquee luxury conversion deals in the U S. There were now in the resort at Pelican Hill in Newport Beach, California, and the luxury collection hotel in Manhattan, Midtown have already joined our system.

Joe Graff: Great.

Tony Capuano: I think Tony, your prepared remarks to talk about construction starts in the US and Canada of 40% over a year. And we're hearing that from others as well.

Speaker Change: The iconic Turtle Bay resort in Hawaii is joining the Ritz Carlton brand today.

Speaker Change: Global signing activity has remained strong.

Speaker Change: We are thrilled to welcome these incredible properties as we further extend our global leading position in the high value luxury segment.

Tony Capuano: Can you talk about construction starts outside the US, how that has been trending? Yeah, of course. So, as I said, the here in the US up about 40%, which is really encouraging. In greater China, I might refer to the comment I met earlier. Again, in China, as you know, oftentimes projects that come to us are well under construction. So we tend to look more at what percent into those deals might open within 12 months of signing, and to see nearly half in greater China's are really encouraging. In APEC, Asia Pacific, excluding China, there are still some challenges getting projects financed, and there's a continued wait for easing in the interest rate environment.

Speaker Change: Record signings in APAC in greater China for the first half of the year helps grow our pipeline to over 559000 rooms around the world.

Speaker Change: Our momentum in the Midscale space.

Speaker Change: Developers are showing significant interest in our new brands in the tier city expressed by Marriott four points expressed by Sheraton studio Rez and our latest transient conversion friendly brand in the U S.

Speaker Change: Conversions, including multi unit opportunities remain a significant driver of growth as owners continue to value the depth and breadth of our brand portfolio and our powerful revenue engines in the second quarter conversions represented 37% of openings and 32% of signings. This <unk>.

Speaker Change: In talent, we continue to sign deals for city Express and are engaged in numerous discussions across the region.

Speaker Change: Our first four express opened in Turkey, and over a dozen hotels from our recent multi unit conversion deal in APAC are expected to join our system later this year.

Speaker Change: <unk> activity has been broad based with hotels converting into 'twenty three different Marriott brands over the last 12 months.

Speaker Change: We're also in talks for studio <unk> hotels, and over 300 markets and we continue to execute on and pursue numerous types of opportunities from large development deals to one off projects.

Tony Capuano: And in EVA, you've got a similar circumstance. Financing is continuing to be a bit of an impediment. But despite everything I just described between all of the regions that we talked about, construction starts on a global basis are that same number, about 40%. And the other thing I would tell you is the combination of some improvement in construction start activity and continue really strong performance on the conversion side. We've now had 27 straight quarters with about 200,000 wings or more under construction. So even with really strong openings, we continue to see those stars fuel the under-construction pipeline.

Speaker Change: In June we signed three marquee luxury conversion deals in the U S. So we're now in the resort at Pelican Hill in Newport Beach, California, and the luxury collection hotel in Manhattan, Midtown have already joined our system.

leaning: Before I turn the call over to leaning to discuss our financial results I want to say, thank you to all of our associates around the world for the hard work they do each and every day to advance our business and help connect people through the power of travel leaving.

Speaker Change: The iconic Turtle Bay resort in Hawaii, joining the rich Carlton brand today.

Tony: Thank you Tony.

Tony: Second quarter gross fee revenues rose, 7% year over year to $1 three important billion. The increase reflects stronger global revpar rooms growth in empires, non revpar related franchise state.

Speaker Change: We are thrilled to welcome these incredible properties as we further extend our global leading position in the high value luxury segment.

Speaker Change: Our momentum in the mid scale space.

Tony: Co branded credit card fees rose, 10% and residential branding fees were significantly higher than in the same quarter last year as we continue to benefit from our top position in branded residences globally.

Speaker Change: In parallel we continue to sign deals for city Express and are engaged in numerous discussions across the region.

Speaker Change: Thank you management fees or IMS totaled 190 $195 million in the second quarter.

Tony Capuano: Great, thank you very much. Well, thank you.

Speaker Change: Our first four points express opened in Turkey, and over a dozen hotels from our recent multi unit conversion deal in APAC are expected to join our system later this year.

Speaker Change: Growth in these fees with led by mid teens percentage increases in APAC and EMEA, partially offset by an $8 billion decline in greater China.

David Katz: And our next question comes from David Katz with Jefferies.

Speaker Change: We're also in talks for studio rents hotels, and over 300 markets and we continue to execute on and pursue numerous types of opportunities for large development deals to one off projects.

David Katz: Hi, good morning everyone. Thanks for taking my questions. What I wanted to do was just get a little further insight on, you know, that the Nugguidance broadly speaking, which is the same. And the makeup of that Nugg where, you know, we're focused on, let's say the MGM deal, which is a sort of different kind of fee structure than what you have. And should we be looking at that Nugg and that pipeline, you know, through a more updated lens, where, you know, there are going to be more of those kinds of deals in there. And, you know, just thinking about how we model fees in response to that Nugg over time, if my question's clear or not.

Speaker Change: <unk> in the U S and Canada were flat year over year in part impacted by continued softness in Hawaii second.

Speaker Change: Second quarter, adjusted EBITDA grew 9% to $1 32 billion and adjusted EPS increased 11% to $2 50.

Speaker Change: Before I turn the call over to we need to discuss our financial results I wanted to say, thank you to all of our associates around the world for the hard work they do each and every day to advance our business and help connect people through the power of travel leaving.

Speaker Change: Now, let's talk about our outlook for 2024.

Speaker Change: Global Revpar is expected to grow 3% to 4% in the third quarter and for the full year Revpar growth is expected to remain higher than the vast majority of our international markets than in the U S and Canada.

Tony: Thank you Tony.

Speaker Change: Second quarter gross fee revenues rose, 7% year over year to $1 three important billion. The increase reflects stronger global revpar rooms growth and inspire non revpar related franchise fees co.

Speaker Change: The primary change in our full year outlook is greater China's updated expectation of negative revpar growth for the rest of the year.

Speaker Change: Co branded credit card fees rose 10%.

Tony Capuano: Yeah, it is. And I think the short answer is I don't think it should cause you to think materially differently about our dog, about the value of our dog, about our fee structures. MGM was an extraordinarily exciting and unique opportunity to bring two powerhouse sets of brands together. And that caused us to be creative on the deal structure. But the vast majority, almost the entirety of the pipeline, fit squarely in our traditional approach to managed and franchise deals. And the only thing I would add, David, is that we are really pleased with the number of multi-unit deals that we're signing.

Speaker Change: Potential branding fees were significantly higher than in the same quarter last year as we continue to benefit from our top position in branded residences globally.

Speaker Change: We expect a continuation of current weak demand and pricing trends in the region with a third quarter anticipated to see the most meaningful revpar decline as outbound travel accelerates during summer holidays.

Speaker Change: Thank you management fees or IMS totaled 190 $195 million in the second quarter.

Speaker Change: Nobody could given greater China's lower overall average revpar compared to the rest of our system. It typically makes up around 7% of revpar related fees, although it accounts for 10% of open rooms, while we also expect marginally lower full year revpar in the U S.

Speaker Change: Growth in these fees was led by mid teens percentage increases in APAC and EMEA, partially offset by an $8 billion decline in greater China.

Speaker Change: I announced in the U S and Canada were flat year over year in part impacted by continued softness in Hawaii.

Speaker Change: In Canada than we had previously anticipated in part due to less group business. The first two weeks of November given the intense focus on the U S presidential election.

Speaker Change: Second quarter, adjusted EBITDAR was 9% to 132 billion and adjusted EPS increased 11% to $2.50.

Tony Capuano: But overwhelmingly, they're multi-unit franchise or managed deals that are typical, but they just represent an owner wanting to sign a number of properties up with Marriott, rather than a 1-0 to Z. So, in that regard, it is great for our growth, and we're really pleased with the continuation of those relationships, but they don't represent a fundamental change in the nature of the agreements.

Speaker Change: Overall revpar trends in the U S and Canada in the back half of the year are expected to remain relatively steady with the first six months of the year.

Speaker Change: Now, let's talk about our outlook for 2024.

Speaker Change: Our customer segment worldwide Revpar growth is still anticipated to be driven by another year of strong growth in group revenues continued improvement in business transient revenues and slower, but still growing leisure revenues in the third quarter gross fee growth is expected to be in the 6% to 8% range.

Speaker Change: The primary change in our full year outlook is greater China's updated expectation of negative revpar growth for the rest of the year we.

David Katz: That's really, really helpful.

Tony Capuano: And while we're on the subject, as my follow-up, could we just touch on the MDM deal and talk about how it's going? Any data points or anything like that would be helpful? Thanks. Yeah, the short answer is it's really going great. I talked to Bill not long ago, I think, from both companies' perspectives. We are elated at the volume of both transient and group leads that are coming through our systems, the number of folks that are considering linking their MGM Rewards and varied bond boy accounts, the number of groups that are unique groups that are now available to the MGM portfolio.

Speaker Change: We expect a continuation of current weak demand and pricing trends in the region with a third quarter anticipated to see the most meaningful revpar declines as outbound travel accelerates during summer holidays.

Our owned leased and other revenues net of expenses are anticipated to be roughly $75 million.

Speaker Change: For the full year gross fees could rise, 6% to 7% to five 1% to five 2 billion.

Speaker Change: Nobody could given greater China's lower overall average revpar compared to the rest of our system and typically makes up around 7% of revpar related fees, although it accounts for 10% of open rooms, while we also expect marginally lower full year revpar in the U S.

Speaker Change: Compared to last quarter's expectations roughly two thirds of the reductions is from IMS largely from greater China and select markets in the U S and Canada, like Hawaii, and Washington DC.

Speaker Change: There is also additional negative currency impact from a still strong dollar as well as slightly lower than previously expected non non revpar related franchise fees, and then timing of hotel openings.

Speaker Change: In Canada than we had previously anticipated in part due to less group business. The first two weeks of November given the intense focus on the U S presidential election.

Tony Capuano: So I think, on all fronts, we are thrilled.

Speaker Change: Owned leased and other revenues net of expenses could now total $345 to $350 million. We now expect full year G&A expense could rise just 1% to 2% year over year.

Speaker Change: Overall revpar trends in the U S and Canada in the back half of the year are expected to remain relatively steady with the first six months of the year.

Operator: Excellent. Thank you. Appreciate it. Welcome. Thank you.

Branch Montour: And our next question comes from Branch Montour with Mark. Please. Good morning, everybody. Thanks for taking my question. Good morning, Leni.

Speaker Change: Full year adjusted EBITDA is now expected to rise between six and 8% to roughly $4 95 to 5 billion. Our 2024 effective tax rate is expected to be just above 25%.

Tony Capuano: So I want to talk about Group Pace for 25. Have you guys seen that Pace remain consistent? Has it strengthened or softened quarter over quarter? And if you've seen any booking hesitation from large groups for 25 in relation to the election and the uncertainty around the election? Yeah, so good question. And since I mentioned in my prepared remarks, the forward bookings for the balance of 24 are consistent with last quarter, with about 90% improvement. In 2025, as we look ahead, right now, 2025 is pacing at 9%, which is a little erosion from last quarter. But most of the changes due to pace in room nights.

Speaker Change: 2024, adjusted EPS is now expected to be between $9 23.

Speaker Change: Our owned leased and other revenues net of expenses are anticipated to be roughly 75 million.

Speaker Change: And $9 40.

Speaker Change: As Tony mentioned, we're very pleased with the robust signings and openings activity across our global portfolio, demonstrating owners and franchisees continued confidence in our brands performance. We're focused on driving strong growth and still expect full year net rooms growth of five five to six person.

Speaker Change: For the full year gross fees could rise, 6% to 7% to five 1% to $5 2 billion.

Speaker Change: Compared to last quarter's expectations, roughly two thirds of the reductions from IMS largely from greater China and select markets in the U S and Canada, like Hawaii, and Washington D C.

Speaker Change: <unk>.

Speaker Change: Full year investment spending is still expected to total one to $1 2 billion as you'll recall this spending includes higher than historical investment and technology associated with the multiyear transformation of our property management reservations and loyalty systems the vast.

Tony Capuano: Some of that is around the length of time that folks are booking now. But we continue to be a standout. That's great. So many thanks for that.

Speaker Change: Owned leased and other revenues net of expenses could now total $345 million to $350 million. We now expect full year G&A expense could rise just 1% to 2% year over year.

Speaker Change: Majority of which is expected to be reimbursed over time, we look forward to the many benefits expected to accrue from elevating our three major tech platforms.

Tony Capuano: And then just a second question on owned and leased.

Speaker Change: Full year adjusted EBITDA is now expected to rise between six and 8% to roughly $4 95 to 5 billion. Our 2024 effective tax rate is expected to be just above 25%.

Speaker Change: Our investment spending outlook also incorporates roughly 200 million for our owned lease portfolio, including renovation spending for the W. Union square in Manhattan, and the elegant portfolio and Barbados.

Kathleen Oberg: It looks like the two queues came in nicely ahead of plan, and you raised the full year.

Kathleen Oberg: Maybe just highlight which region stood out there and then the second half outlook for owned and how that squares with your broader sort of shifting in thoughts for that portfolio. Thanks. Sure. As you know, our own leased portfolio is a bit disparate around the world. And so it can depend on certain markets, obviously in Europe, and its business has been good. And so those results are strong. But it also contains termination fees in that category. And I think the reality is the outlook for termination fees is a bit higher than it was a quarter ago.

Speaker Change: When all relative renovations are complete we will ultimately look to recycle these assets and sign long term management contracts for these properties.

Speaker Change: 2024, adjusted EPS is now expected to be between $9.23 and $9.40.

Speaker Change: Our capital allocation philosophy remains the same.

Speaker Change: We're committed to our investment grade rating investing in growth that is accretive to shareholder value and then returning excess capital to shareholders through share repurchase and a modest dividend, which has risen meaningfully over time.

Speaker Change: We continue to generate strong levels of cash, including from our loyalty program and our leverage ratio remains at the low end of our target range of three to three five times debt to EBITDAR.

Speaker Change: Yes.

Speaker Change: What were your investment spending is still expected to total one to $1 2 billion as you'll recall this spending includes higher than historical investment and technology associated with our multi year transformation of our property management reservations and loyalty systems the vast majority.

Kathleen Oberg: It says you noted a very modest change in the overall guidance. So we're pleased with how well the hotels are doing in that portfolio. We've got a little bit of renovation impact that goes on. But otherwise overall really consistent view of the results in that segment, with a little bit more termination fees.

Speaker Change: Currently expect approximately $4 3 billion of capital returns to shareholders for the full year.

Speaker Change: This factors in that $500 million of required cash in the fourth quarter for the purchase of the Sheraton Grand Chicago.

Speaker Change: You already have which is expected to be reimbursed over time.

Speaker Change: We look forward to the many benefits expected to accrue from elevating our three major tech platforms.

Speaker Change: In closing, we have a lot of momentum in our business and strong growth prospects across our over 30 brands around the world. Thanks to our terrific team as we look ahead, we're incredibly optimistic about marriott's future.

Kathleen Oberg: Great. Thanks everyone.

Operator: Thank you.

Dan Politzer: And we will take our next question from Dan Pulitzer with Wells Fargo. Hey, good morning everyone. Things are taking my question. In terms of the unique growth, you know, certainly pacing well, and you've given a lot of color in terms of both China as well as ex-China. But as we think about kind of the exit pace for this year and the setup for next year. So what degree of confidence in achieving that five to five and a half percent? And Kager that you laid out of your Analyst Day last year. So, first of all, I won't surprise you.

Speaker Change: He and I are now happy to take your questions operator.

Speaker Change: When all relevant renovations are complete will ultimately look to recycle these assets and sign long term management contracts for these properties.

Speaker Change: Thank you.

Speaker Change: At this time, if you would like to ask a question. Please press the star and one on your telephone keypad you may remove yourself from the queue at any time by pressing star and two and we will pause for a moment to allow questions to queue.

Speaker Change: Our capital allocation philosophy remains the same.

Yeah.

Speaker Change: And we will take our first question from Stephen Grambling with Morgan Stanley.

Tony Capuano: We're not ready to talk about specifics for next year. But we certainly continue to believe that the five to five and a half percent guidance that we gave in September of '23 is appropriate. Whether we've got a specific budget that looks at a number that is higher or not, we will get there as we move through the process. The thing I'd like to point out is conversions and also the adaptive reuse numbers that Tony talked about relative to Greater China. Given that we are looking at a roughly 30% of our room openings coming from conversions and then the adaptive reuse numbers that we've talked about, I think we do continue to see a great.

Stephen Grambling: Hey, Thanks for taking the question I guess on the.

Stephen Grambling: The guidance in the second half it looks like you've kind of lowered overall revpar by about 50 basis points. The reduction EBITDA about 2% I realize there's a lot of that looks like its incentive management fee related but it is that the appropriate kind of operating leverage to consider.

Speaker Change: Going forward and what levers do you have to pull if you were to see either the backdrop deteriorate further and try to take additional action.

Speaker Change: Sure. Thanks, Steven so.

Speaker Change: Couple of things in that question. One is are the reality that when we typically talk about one point of revpar being $50 million to $60 million in fees that's assuming.

Speaker Change: That's equally across all markets around the world and it doesn't have any FX impact and so I think you are clearly seeing with the drop that we've talked today.

Tony Capuano: Rides of near-term openings over the next 18 months around the world. Tony pointed out the three luxury conversions that opened this year in the US, and those were in the year for the year conversions for the company. So those deals were signed this year and opened this year. So, from that perspective, we do continue to feel really good about the demands for the brands. And then we talked a little bit about the uptick in construction starts, and I think you put that together, and that goes well for the company's continued network growth.

Speaker Change: That the impact of the change in our outlook for greater China has a disproportionate impact.

Speaker Change: When I think about greater China is mix between base fees and IMS, It's obviously quite different than it is in the U S where you have an owner's priority return so for one point of Revpar in greater China that is typically something more like 3 billion in fees, which is going to be more heavily weight.

Speaker Change: Blank with Morgan Stanley.

Speaker Change: Hey, Thanks for taking the question I guess on the guidance in the second half it looks like you kind of lowered overall revpar by about 50 basis points. The reduction EBITDA about 2% I realize there's a lot of that looks like its incentive management fee related but it is that the appropriate kind of operating leverage to consider.

Speaker Change: Towards the imf's than it would be in the U S where it would have a dramatically a smaller impact. So I think we really have to look at the geography, rather than necessarily just thinking about it as being a half point overall because it is overwhelmingly.

Tony Capuano: Alright, thank you.

Tony Capuano: And then just I think we need to mention that leisure is still growing, albeit slowly. Can you maybe unpack that a bit and talk a little bit about the underlying trends there, either by chain scale or booking window or any changes you've seen in that customer base? Yeah, sure. You know, you're right. We saw Leisure grow 2%, and while that's clearly nothing like group that was at 10%, and still is still encouraging given they came out of COVID rapid fire and when huge increases in rep are so very pleased, global leisure nights were up 2%, ADR was up 1%.

Speaker Change: Going forward and what levers do you have to pull if you were to see either the backdrop deteriorate further and try to take additional action.

Speaker Change: Sure. Thanks, Steven so.

Speaker Change: Weighted to greater China, with just a slight truly a tad bit lower expectation in the U S and Canada.

Speaker Change: Couple of things in that question why he is.

Speaker Change: The reality that when we typically talk about one point of Revpar being 50% to $60 million in fees, that's assuming that's equally across all markets around the world and it doesn't have any FX impact and so I think you are clearly seeing with the drop that we talked today.

Speaker Change: Got it that's helpful. Maybe one kind of unrelated it could be related follow up is just that there was this always on these questions around fees per room, and and how the nug plus revpar translates to overall fees. There's a lot of puts and takes in the quarter, but has anything changed in your thought process or as we look at the longer term.

Tony Capuano: And even the US and Canada leisure a road par was up 1%. And when you look at the various segments of global luxury resorts, were up 4.1% in terms of road par, and US luxury resorts were almost 1%. So, while I think there is, at the margin, I hear more caution from the US customer. We do see that there continues to be very strong demand on the leisure front. The other thing I point out is that we clearly are seeing a stronger performance in the upper chain scale than compared to the lower chain scale. And you're seeing that throughout the industry as well.

Speaker Change: That the impact of the change in our outlook for greater China has a disproportionate impact when I think about greater China is mix between base fees and IMS. It's obviously quite different than it is in the U S where you have an owner's priority return so for one point of Revpar.

Speaker Change: Rhythm as we think about that fees.

Speaker Change: Being related to net unit growth plus revpar.

Speaker Change: Yeah, No we think you're absolutely right. We believe the algorithm absolutely holds up over time you do have as you described the impact of certain elements changing unevenly.

Speaker Change: Greater China that is typically something more like 3 billion in pes, which is going to be more heavily weighted towards I am apps and it would be in the U S where it would have a dramatically.

Speaker Change: So in this particular situation. It is one market, having a a a potentially large a change in expected revpar for the rest of the year, but what we've talked before about our expectation of fees per key is actually a rising over time, especially as we can thank you.

Speaker Change: Smaller impact so I think we really have to look at the geography, rather than necessarily just thinking about it as being a half point overall, because it is overwhelmingly related to greater China with just a slight truly a tad bit lower.

Tony Capuano: So when you look at premium and luxury, that overall is stronger than it is in the lower chain scale. And down just to provide a little more context, I mean, Leny referenced the strength we've seen in leisure. Remind yourself, leisure was the fastest customer segment to recover. And over the last 5 years, red part in the leisure segments of 40%, and so to continue to see quarter over quarter improvement in leisure red part on the shoulders of that sort of recovery for us is quite encouraged. And the last thing I'll say is we do expect for the full year, while it will not be, that it'll be relatively the slower growing segment compared to grew in BTA.

Speaker Change: Think about also having a rapidly growing non revpar fees. So we're very pleased with those continuing trends and do not believe that the fundamental algorithm is any different.

Speaker Change: In the U S and Canada.

Speaker Change: Got it that's helpful. Maybe one kind of unrelated it could be related follow up is just that there was there's always these questions around fees per room, and and how the nug plus revpar translates to overall fees. There's a lot of puts and takes in the quarter, but has anything changed in your thought process or as we look at the longer term algo.

Speaker Change: Great. Thank you I'll jump back in the queue.

Speaker Change: Thank you and we will take our next question from Shaun Kelley with Bank of America.

Shaun Kelley: Hi, good morning, everyone.

Shaun Kelley: Tony.

Shaun Kelley: I really just wanted to start with the Revpar guidance. So if we kind of take the pieces here. Obviously, we know where we came in in the first half of the year and you've given us some color on Q3 I believe in the prepared remarks, you said Q3 would be the weakest point for China, but when we kind of do the pieces I think Q4 implied guidance.

Speaker Change: Adam as we think about that fees being related to net unit growth plus revpar.

Speaker Change: Yeah, No we think you're absolutely right. We believe the algorithm absolutely holds up over time you do have as you described the impact of certain elements are changing unevenly. So in this particular situation. It is one market having a.

Tony Capuano: We still do expect it to be up for the full year as well. Understood.

Speaker Change: Is below Q3, so what's driving that sort of weaker Q4 as it group timing is it some other shift any you mentioned the election, but I think you also said U S is pretty stable, so kind of what's driving it.

Operator: Thank you so much. Thank you.

Bill Crow: And our next question comes from Bill Crow with Raymond James. Hey, good morning. If I could just start with the follow-up on that last question, are you seeing the sluggishness at the low end creeping into hiring? Cum levels at this point. No, not really. I think one thing is just interesting is that ancillary spend around the world, US and Canada, and frankly all of the other regions. Ancillary spend was a hair softer than we anticipated, and I think it does show that the consumer, in general, is perhaps being a bit more judicious about the fancy dinner or going on that extra trip when they're on a vacation, and that is really the only thing.

Speaker Change: And potentially large.

Speaker Change: Check my math, but if the math is right what's driving the weaker Q4 is there anything in that Q4 run rate anybody needs to be concerned about or warehouse.

Speaker Change: Change in expected Revpar for the rest of the year, but what we've talked before about our expectation of fees per key is actually.

Speaker Change: Yeah. Thank you Shawn and you're right, we can point out that kind of an interesting distinction there between Q3 and Q4.

Speaker Change: Rising over time, especially as we can think think about also having a rapidly growing non revpar fees. So we're very pleased with those continuing trends and do not believe that the fundamental algorithm is any different.

Speaker Change: With China, only being roughly 10% of our rooms that impact of the the lowest quarter in the back half of the European Q3 doesn't have that much of an impact on Q4, what's going on on Q4 is as we described that we are seeing.

Speaker Change: Great. Thank you I'll jump back into queue.

Speaker Change: Thank you and we will take our next question from Shaun Kelley with Bank of America.

Speaker Change: A bit lower group bookings, specifically in Q4 around the election, which is having an impact on the expectations for U S and Canada in Q4 versus Q3, though as we described when we look at the entire back half of the year, we do expect to see a really a similar.

Shaun Clisby Kelley: Hi, good morning, everyone Tonioli.

Shaun Clisby Kelley: Ill highlight just wanted to start with on the Revpar guidance. So if we kind of take the pieces here. Obviously, we know where we came in in the first half of the year in any given us color on Q3 I believe in the prepared remarks, you said Q3 would be the weakest point for China, but when we kind of do the pieces I think Q4 via the <unk>.

Tony Capuano: It's not trade-down in any meaningful way, and as we pointed out, the resort rev-par was sturdy, but that's really the only item that I can point to.

Carla: Our sort of Revpar growth number as you see in the first half of the year and then on top of that you've got your other international markets just continuing to normalize so when I look at the first half of APAC and EMEA and Carla I would expect that their back half is a little bit lower.

Tony Capuano: Yeah, I think Bill, the empirical data that supports Leanie's observation, when you looked in the corridor at occupancy improvement by quality tier, luxury was actually the tier that had the best improvement at almost two and a half points of occupancy year over year. And so, again, that high-end consumer continues to show real resilience and real appetite for travel. I think the one thing we're watching is what Leanie pointed out, and that's the ancillary spend. Yeah, okay, thanks.

Carla: And so in that regard as you move towards Q4 or do you continue to see additional normalization, although still quite strong revpar in those markets and you put all that together and that's where you get.

Sean: The bit below our outlook for Revpar in Q4 than Q3, and maybe just add a little more context to that Sean.

Tony Capuano: If I could just follow up with a quick one about the balance of travel between inbound and outbound international. This was supposed to be the summer where it kind of equaled out, and that's not happening. Can you just update us on how you see that recovery playing out, especially inbound in the United States? Yeah, so we interestingly inbound is about the same as it was prior to COVID. Your four to five percent of the nights in the US are from cross-border, and it's the same as you. Well, we're big cities like New York and Miami.

Sean: Obviously, we knew there was an election this year and baked.

What we've seen is historical softness, but when you look back over prior election cycles, we tended to see a little bit of a group softness.

Sean: Week of election.

Speaker Change: Given sort of.

Speaker Change: The unique attributes of this election cycle, we're seeing that bleed into the week after the election as well. So it's from a group perspective about output November is feeling the impact on the groups on the group side.

Speaker Change: Great. Thanks, and just as my follow up just to kind of hit on China specifically.

Tony Capuano: I continue to get outsides presents from cross-border travel, but they also continue to be from the markets like Canada and Mexico coming to the US. As we look at going to other markets, we are seeing that we've gone in hair higher than 19 levels. We're almost to 20 percent of our business around the world is cross-border. Now, part of that, the reality is we've got more international rooms than we had in 2019, but you continue to see with the strong US dollar. You continue to see great travel from U.S. travelers, for example, going to Japan, going to Europe, Middle Eastern travelers traveling to many other countries.

Speaker Change: Obviously, I think you gave us a little bit of the.

Speaker Change: The heads up that this was softening last quarter. The real question do I expect we will get some is just bleeding at all into the development side right. The signings and the development side was a highlight for the quarter broadly, but what are you seeing on the ground there and is that softness at all starting to impact developer conversations.

Speaker Change: Or signing conversation.

Speaker Change: Greater China.

Speaker Change: It's a great question and it's.

Speaker Change: A bit below our outlook for Revpar in Q4 than Q3, and maybe just add a little more context to that show on the.

Speaker Change: Sort of an interesting riddle as you heard in my prepared remarks, we had record signings in the first half of the year in China.

Speaker Change: Obviously, we knew there was an election this year and baked in what we have.

Speaker Change: I think it's.

Speaker Change: It's really about the long term prospects in China.

Speaker Change: <unk> seen as historical softness, but when you look back over prior election cycles, we tend to see a little bit of group softness the week of election.

Speaker Change: Our owner community certainly DSO. He's there continue to believe in the long term dynamics of travel and continue to both sign and start construction. So.

Ari Klein: So I think the global nature of travel is only increasing, which from our perspective is fabulous. Thank you.

Speaker Change: Given sort of.

Speaker Change: The unique attributes of this election cycle, we're seeing that bleed into the week after the election as well. So it's from a group perspective about Apple November is feeling the impact on the groups on the group side.

Speaker Change: So we really have seen no slowdown at all on that front in fact.

Ari Klein: And we will take our next question from Ari Klein with BMO Capital Markets. Thank you. Good morning.

Speaker Change: It's interesting we signed 63.

Speaker Change: <unk> service deals in the first half of the year in China almost half of those are expected to open within 12 months. So as we look at the pace. We asked the same question. As you are we stacking paper, we signing deals that are going to materialize as openings and the pace of construction is really encouraging.

Speaker Change: Great. Thanks, and just as my follow up just to kind of hit on China specifically.

Tony Capuano: Going back to China, historically, that region has been a size-low outsource of travel to man globally. And based on the commentary, it's largely holding. Why do you think that's the case? And is that something you anticipate change? Can you repeat it? You broke up some on the questions. Do you mind repeating it, please? Sorry about that. Yeah, so just China has been a sizable outsourcer of travel demand globally, and based on the commentary that he still appears to be holding. Why do you think that that's the case? And is that something you expect to change given the broader weakness of China?

Speaker Change: Obviously, I think you gave us a little bit of the.

Speaker Change: And the only thing I'll add is that I think with our.

Speaker Change: Continued strength in Revpar index in greater China, especially as you see demand.

Speaker Change: Or signing conversations.

Speaker Change: Greater China.

Softening over the past.

Speaker Change: It's a great question and it's.

Speaker Change: Six months or so.

We have seen increased owner appetite for being with us.

Speaker Change: Sort of an interesting riddle as you heard in my prepared remarks, we had record signings in the first half of the year in China.

Tony Capuano: So I'll give you a couple of facts and also a reminder that a year ago you were just starting to see Chinese travelers leaving the country. So one of the big differences in Q2 is that with meetings laid better airlift out of China to other parts of the world. Now, while the US airlift is still not back to where it was, overall, they're about 75% back to where they were in terms of airlift to other countries, and particularly to other countries in Asia Pacific. So no doubt our Asia Pacific hotel outside of greater China benefited from the higher income travelers in China wanting to go outside of China now that, frankly, it was a earlier opportunity to do so on the heels of the recovery from COVID.

Speaker Change: The really strong brands that we have and across the full range of brands. So we're really pleased to see kind of from the limited service segment, all the way up through luxury there's really strong demand for the brands, including conversions in China I think really.

Speaker Change: I think it's.

Speaker Change: It's really about the long term prospects in China.

Speaker Change: Our owner community certainly DSO. He's there continue to believe in the long term dynamics of travel and continue to both sign and start construction. So.

Speaker Change: Demonstrating that it's frankly been the weaker times then sometimes the brands can improve is the most powerful.

Speaker Change: So we really have seen no slowdown at all on that front in fact.

Speaker Change: It's interesting we signed 63.

Speaker Change: Thank you so much.

Speaker Change: <unk> service deals in the first half of the year in China almost half of those are expected to open within 12 months. So as we look at the pace. We asked the same question. As you are we stacking paper, we signing deals that are going to materialize as the openings and the pace of construction is really encouraging.

Speaker Change: Thank you and our next question comes from Smedes Rose with Citi.

Smedes Rose: Hi, Thank you.

Smedes Rose: I wanted to ask you a little bit more I mean, you mentioned some weakness in Hawaii and that just was wondering are you seeing it.

Smedes Rose: Across all regions or is it maybe more isolated in Maui with what's been going on there or kind of is it sort of leisure or is it sort of grew consensus meeting, what's sort of driving relative weakness in that region.

Speaker Change: And the only thing I'll add is that I think with our.

Speaker Change: Continued strength in Revpar index in greater China, especially as you see demand.

Tony Capuano: So we are seeing that I will say the travel to and from the US is definitely not back to the levels that it was, and we do continue to expect to see really strong outbound demand from greater China. But I will point you again to the overall macroeconomic picture there in greater China, which is frankly meant that overall levels of travel spend have not recovered as fast as perhaps might have been expected. The only thing I would add are the other catalysts we've seen is the Chinese government has been more aggressive in striking decent deals with preferred destinations, removing one word layer of friction for outbound Chinese travelers, especially at the high end.

Smedes Rose: Yeah sure Smedes.

Smedes Rose: Yes, I think.

Speaker Change: Softening over the past.

Smedes Rose: I think now he is definitely still.

Speaker Change: Six months or so.

Speaker Change: We have seen increased owner appetite for being with us.

Speaker Change: Still seeing the slowest recovery do you still have the reality that the dollar is very strong and Hawaii has been always been a very popular place for Jack Japanese travelers and so we overall in Hawaii, we've still not seen.

Speaker Change: They're really strong brands that we have and across the full range of brands. So we're really pleased to see kind of from the limited service segment, all the way up through luxury really strong demand for the brands, including conversions in China.

Speaker Change: The level of Japanese travelers are back in the state.

Speaker Change: But obviously the tragedy in Lahaina has has clearly had a huge impact on the island and while we were there with Tony with the senior team a couple of weeks ago, and Theres been Fabulous progress and it is a really.

Speaker Change: I think really demonstrating that it's frankly in the weaker times then sometimes the brands can improve with the most powerful.

Speaker Change: Thank you so much.

Speaker Change: Thank you and our next question comes from Smedes Rose with Citi.

Speaker Change: Coming along well, but clearly still that island in particular is having a slower recovery than the other parts of Hawaii, but why overall is still feeling the impact of the strong dollar.

Tony Capuano: And we're seeing that particularly in our results across APEC. Thanks for that.

Smedes Rose: Hi, Thank you.

Smedes Rose: I wanted to ask you a little bit more I mean, you mentioned some weakness in Hawaii and that just was wondering are you seeing it.

Tony Capuano: And then just on the 40% increase in US construction starts, is there any notable difference between the starts on select service hotels versus full service hotels. Now, overwhelming, you know, our pipeline, as you might imagine, is overwhelmingly limited service into any event. And most of the full service deals that we're doing are conversions. So this is quite similar to 2019 where they're overwhelmingly select service new builds.

Speaker Change: Okay, and then I just wanted to ask you you mentioned that I M F E.

Speaker Change: And what the America I think you just remind us what percentage of your.

Speaker Change: System in North America is currently paying.

Speaker Change: Yes, sure Smedes and yes, I think.

Speaker Change: Sure absolutely so interestingly at the same percentage as a year ago in the second quarter, 26% and some hotels in the U S are paying incentive fees in the second quarter and just as a reference point in China, and greater China, We went from 86% to 80%.

Speaker Change: I think Maui is definitely still.

Speaker Change: Still seeing the slowest recovery you still have the reality that the dollar is very strong and Hawaii has been always been a very popular place for Jack Japanese travelers and so we overall in Hawaii, we've still not seen.

Robin Farley: Thank you.

Speaker Change: So you're seeing that that are really large delta given the structure of the management agreements overall for managed contracts.

Tony Capuano: And our next question comes from Robin Farley with UBS. Great. Thank you. I'm just going back to the topic of union growth. You talked about the increased construction starts, but if you look at sort of overall under construction as a percent of pipeline, it's still I want to say it's that 37% still quite a bit lower than historic. So I'm just wondering; you mentioned it's not really China, not the issue there. Is it? Is it a lot of projects that are sitting that haven't gotten the financing, or is it actually churn and, you know, like projects falling out, new projects coming in.

Speaker Change: The level of Japanese travelers are back in the state.

Speaker Change: For Marriott, we went from 62% paying incentive fees last year in the second quarter to 61%. This year. So you can see that in the U S is fairly steady and more limitations certain pockets.

Speaker Change: Coming along well, but clearly still that island in particular is having a slower recovery than the other parts of the Hawaii, but why overall is still feeling the impact of the strong dollar.

Speaker Change: Geographically that werent quite as strong.

Speaker Change: Great. Thank you appreciate it.

Speaker Change: Thank you and our next question comes from Joe Greff with J P. Morgan.

Tony Capuano: So that percent of under construction isn't necessarily taking up any color around that. Thanks. Yes, definitely not sure. I mean, we continue to see kind of historic low levels of drop out from the pipeline. I think here in the US, while we're encouraged by that, that it got a 40%, you still, and it's a bit ironic because when you talk to the lenders, often the hospitality component of their commercial real estate portfolios are the best subset of that portfolio. But the availability of construction debt is still relatively constricted to where we were in a pre-pandemic situation.

Speaker Change: Okay, and then I just wanted to ask you you mentioned that IMF Youtube.

Speaker Change: Good morning, everybody.

Joe Greff: Good morning, good morning, Jos fees.

Speaker Change: In North America, I think can you just remind us what percentage of your.

Speaker Change: Your gross fee guidance for the full year is lowered by about $50 million to $100 million versus.

Speaker Change: System in North America is currently paying.

Joe Greff: What you gave in May I was hoping you can break that out between you know the net impact from China the election impact in the U S and FX.

Speaker Change: Sure absolutely so interestingly at the same percentage as a year ago in the second quarter, 26%.

Speaker Change: <unk> in the U S are paying incentive fees in the second quarter and just as a reference point in China and greater China. We went from 86% to 80%. So you see that that are really large delta given the structure of the management agreements overall for <unk>.

Speaker Change: Yeah. So.

Speaker Change: To this I am apps are definitely two thirds of that and I would say if youre looking at that a solid half.

Speaker Change: If not a bit more is from greater China.

Tony Capuano: And as a result, we're not back to where we were in pre-pandemic terms as shovels in the ground. Trans are going the right direction, but we're just not all the way back yet.

Speaker Change: That that you've got to get into how much is the revpar versus how much is FX and there is a bit of both and then Youre also looking in IMS and some in the U S, which let's call. It broadly speaking roughly you can from various markets not performing as well as we expected of course.

Speaker Change: Managed contracts are.

Speaker Change: For Marriott, we went from 62% paying incentive fees last year in the second quarter to 61%. This year. So you can see that in the U S. It's fairly steady and more limited to certain pockets are.

Tony Capuano: Okay, thank you. And this is a follow-up looking at 2025, and I know you haven't guided specifically, but you had that sort of two-year guidance that, you know, kind of implies for 2025, that conversions will kind of accelerate, I think, as a percent of new units next year. And I think conversions are already a greater contributor to your net unicrowf and historic, just looking at that 30% of the shredder. Maybe you can refresh us, maybe that's, I'm not remembering that right? But if you're already at sort of that higher, the historic percent, they help us think about what dynamics you're expecting that will sort of drive incremental conversions of a percent of total for 2025.

Speaker Change: <unk> ago.

Speaker Change: Then you've got also a FX overall is affecting both some base fees and I am apps.

Speaker Change: So.

Speaker Change: To separate it out you get into a bit into <unk>.

Speaker Change: Kind of which element are you, describing but I would say that China is the biggest impact on the change and I am apps, which is two thirds of the overall 75 million.

Speaker Change: And then you've got a bit from the U S and a bit from <unk>.

Speaker Change: Effects, obviously, the lower Revpar globally.

Tony Capuano: And because of, there's conversion acceleration overall in your unit growth expectation, and it's not just acceleration, and percent of total acceleration in absolute units as well. Thanks. Yeah, so again, as Leanie pointed out earlier, we're not quite ready to put a stake in the ground on specific guidance for 2025, but we continue to see conversion volume at 30 plus percent of both signings and openings. It feels like our momentum in conversions is accelerating, and it's really encouraging to see the way the owner and franchise community is gravitating towards the strength of our revenue engines. Thank you.

Speaker Change: A little bit of impact and then ever so truly ever so slightly as related to nonrecurring fees.

Speaker Change: Great I think Tony in your prepared remarks, you talked about construction starts in the U S and Canada up 40% year over year.

Speaker Change: And we're hearing that from others as well can you talk about construction start start outside the U S. How that has been trending.

Speaker Change: Yeah of course, so as I said the.

Speaker Change: Here in the U S up about 40%, which is really encouraging.

Speaker Change: In greater China, I might refer to the comment I made earlier again in China as you know often times projects that come to us are well under construction. So we tend to look more at <unk>.

Speaker Change: What percentage of those deals might open within 12 months of signing and to see the early house in greater China is a really encouraging.

Patrick Schultz: And our next question comes from Patrick Schultz with two securities. Great.

Patrick Schultz: Good morning, everyone. First question, how would you describe your visibility as far as booking in China as opposed to the US? Even more granular, what would you say the typical booking window looks like for China versus over here? Thank you. Yeah, so I think our visibility is pretty good, but the booking window is historically short right now. And so that's making and challenging for us to look much beyond the end of this year. Right now, you are seeing very, very short-term booking window kind of one to three days versus what we see around most the rest of the world is closer to 20 days.

Speaker Change: In APAC.

Speaker Change: Pacific Excluding China, if there is still some challenges getting projects announced.

Speaker Change: And there is a continued wait for a little easing in the interest rate environment.

Speaker Change: <unk> reductions and then you've got a bit from the U S and a bit from him affects obviously the lower revpar globally.

Speaker Change: And in EMEA, you've got a similar circumstance financing is continuing to be a bit of an impediment.

Speaker Change: It's a little bit of impact and then ever so truly ever so slightly as related to nonrecurring fees.

Speaker Change: But despite everything I just described.

Speaker Change: Between all of the regions that we talked about construction starts on a global basis are up that same number about 40% and the other thing I would tell you is the combination of some improvement in construction start activity and continued really strong.

Speaker Change: Great I think Tony in your prepared remarks, you talked about construction starts in the U S and Canada up 40% younger over year.

Speaker Change: And we're hearing that from others as well can you talk about construction starts starts outside the U S. How that has been trending.

Speaker Change: Yeah of course, so as I said the.

Tony Capuano: Okay, thank you.

Speaker Change: Performance on the conversion side.

Tony Capuano: And then a different topic here.

Speaker Change: Here in the U S up about 40%, which is really encouraging.

Tony Capuano: I'm wondering if you could give us an update on your recent trends or spending key money to make the development happen. Thank you. Of course, it's a trend that we analyze quite a bit ourselves. And so I'm going to give you a couple statistics. We're only halfway through 24. So I'm going to compare 2019 to 2023 full year. It's interesting. The percentage of deals in full year 2023. They're required key money is actually a bit lower than what we saw in 2019. And similarly, the amount of key money offered in deals that had key money in 2023 was almost 10% lower than what we saw in 2019.

Speaker Change: We've now had 27 straight quarters with about 200000 rooms or more under construction. So even with really strong openings. We continue to see those starts fuel the under construction pipeline.

Speaker Change: What percentage of those deals might open within 12 months of signing and to see the early half in greater China is a really encouraging in.

Speaker Change: Great. Thank you very much.

Speaker Change: Well.

Speaker Change: Thank you and our next question comes from David Katz with Jefferies.

Speaker Change: APAC Asia Pacific Excluding China.

David Katz: Hi, good morning, everyone. Thanks for taking my questions.

Speaker Change: There is still some challenges getting projects financed.

Speaker Change: And there is a continued wait for a little easing in the.

Speaker Change: What I wanted to do was just get a little further insight on.

Speaker Change: Interest rate environment.

Speaker Change: So no guidance broadly speaking, which is the same.

Speaker Change: And in EMEA, you've got a similar circumstance financing is is continuing to be a bit of an impediment.

Speaker Change: And the makeup of that.

Speaker Change: Where we're focused on let's say the MGM deal which was a.

Speaker Change: But despite everything I just described.

Tony Capuano: Now, to be sure, there's a couple other trends below the surface of those encouraging statistics. To be sure, the environment is becoming more and more competitive, and we continue to apply the same lens we've always applied, which is in deals that are strategic and have significant fioside. That's when we consider leveraging the company's balance sheet. And number two, back in 2019, I don't know the precise statistic, but the bulk of the key money we deploy would have been in the upper upscale and luxury. And I think now you are seeing selective way, the opportunity or the need to deploy key money or other capital tools, lowering the quality of your friends.

Speaker Change: Between all of the regions that we talked about construction starts on a global basis are up that same number about 40%.

Speaker Change: Put a different kind of fee structure than what you have.

Speaker Change: Should we be looking at that NOG in the pipeline through a more updated lens, where there are going to be more of those kinds of deals in there.

Speaker Change: And the other thing I would tell you is the combination of some improvement in construction start activity and continued really strong performance on the conversion side.

Speaker Change: Just thinking about how we model fees in response to that node.

Speaker Change: Overtime.

Speaker Change: Yes, my questions clearer now.

Speaker Change: Yes, it is and I think the short answer is I don't think it should cause you to think materially differently about our dog about the value of our dog about our fee structures.

Speaker Change: <unk> was an extraordinarily exciting and unique opportunity to bring two powerhouse sets of brands together and that caused us to be creative on the deal structure, but the vast majority almost the entirety of the pipeline fits squarely in our traditional approach to managed and franchise deals.

Speaker Change: Great. Thank you very much.

Speaker Change: Well.

Speaker Change: Thank you and our next question comes from David Katz with Jefferies.

Tony Capuano: Thank you. Thank you for the color. Sure. Thank you.

David Brian Katz: Hi, good morning, everyone. Thanks for taking my questions.

Michael Bellisario: And we will take our final question from Michael Bellisario with Baird. Thanks. Good morning, everyone.

David Brian Katz: What I wanted to do was just get a little further insight on.

Speaker Change: And then the only thing I would add David is that we are really pleased with a number of multi unit deals that we're signing but it's overwhelmingly they are multi unit franchise or manage deals that are typical of it. They just represent an owner wanting to sign.

Speaker Change: The nug guidance broadly speaking, which is the same.

Michael Bellisario: Just first question, just to follow up on the ancillary spend, is the lower non-rev park fee outlook? Is that being driven by lower card spending? And then are you also seeing that softer ancillary spend within the group segment, or is that common just specific to leisure transient? Yeah, no. So good questions. I would say the lower ancillary spend is across the board. So a little bit, only a little bit, but a little bit everywhere, both leisure as well as group. And then on the non-rev park spend overall, we are still seeing credit card spend go up very nicely.

Speaker Change: And the makeup of that.

Speaker Change: Where we're focused on let's say the MGM deal which was a.

Speaker Change: But a different kind of fee structure than what you have.

Speaker Change: Sign a number of properties up with Marriott.

Speaker Change: Should we be looking at that NOG in the pipeline through a more updated lens, where there are going to be more of those kinds of deals in there.

Speaker Change: Rather than a one <unk> twosies. So in that regard it's great for our growth and we're really pleased with the continuation of those relationships, but they don't represent.

Speaker Change: Just thinking about how we model fees in response to that.

Speaker Change: And fundamental change in the nature of the agreements.

Ken: That's really really helpful. Ken while we're on the subject as my follow up could could we just touch on the MGM deal.

David Brian Katz: Overtime.

Speaker Change: Yes. My question is clearer now.

Speaker Change: Yes, it is and I think the short answer is I don't think it should cause you to think materially differently about our dog about the value of our dog about our fee structures.

Speaker Change: Talk about how it's going any data points or anything like that would be helpful. Thanks.

Kathleen Oberg: We're still looking at credit card fees being up 10% in 2024. It is the average spent that has moderated a little bit in terms of a typical card holder in the US, but again, only a very, very small amount. And just as a reminder, the ancillary spend is related to credit card spend because obviously people use their credit cards to buy these things. But our ancillary revenues are going to come through the Rev Park. They are online because those are earned at hotels. The non-rev park fees are entirely a function of what's going on, obviously, in residential and time share and in the credit cards.

Speaker Change: The short answer is it's really going great I talked to bill not long ago, I think from both companies' perspectives.

Speaker Change: MGM was an extraordinarily exciting and unique opportunity to bring two powerhouse sets of brands together and that caused us to be creative on the deal structure, but the vast majority almost the entirety of the pipeline fits squarely in our traditional approach to managed and franchise deals.

Speaker Change: We are elated at the volume of both transient and group leads that are coming through our systems.

Speaker Change: A number of folks that are considering linking their mcf rewards Marriott bond boy accounts the.

Speaker Change: And the only thing I would add David is that we are really pleased to win a number of multi unit deals that we're signing but it's been overwhelmingly they are multi unit franchise or manage deals that are typically when things just represent an owner wanting to sign a number of <unk>.

Speaker Change: The number of groups.

Speaker Change: Our unique groups that are now available to the MGM portfolio. So I think on all fronts, we are thrilled.

Speaker Change: Excellent. Thank you I appreciate it thank.

Kathleen Oberg: And that's where, to your point, seeing average spent moderate a bit. But again, overall credit card spend will go up very nicely because we're really pleased with the adding of new card holders to our portfolio. Got it. Understood.

Speaker Change: <unk> upped with Marriott.

Thank you.

Speaker Change: Rather than a one theory choosy so in that regard it's great for our growth and we're really pleased with the continuation of those relationships, but they don't represent.

Brandon <unk>: Thank you and our next question comes from Brandon <unk> with Barclays.

Brandon <unk>: Good morning, everybody. Thanks for taking my question.

Speaker Change: A fundamental change in the nature of the agreements.

Speaker Change: Good morning.

Speaker Change: So I wanted to talk about group a group pace for 'twenty five.

Speaker Change: That's really really helpful. Because while we're on the subject as my follow up could could we just touch on the MGM deal.

Tony Capuano: And I'm just one follow-up just on your lower end chain scales.

Speaker Change: Have you guys seen that pace remain consistent as it strengthened or softened quarter over quarter and have you seen any.

Tony Capuano: You've known a lot of discussions and signings, but where are you at with shovels in the ground, say for studio res? And then, are you still focused on the multi unit development deals? And then when do you switch to single asset deals? Thank you. Yeah, so as we spoke about before, we are really pleased with the large number of multi-unit conversion deals that we've had under discussion and, in some cases, closed around the world. So that is great. And then we've talked about specifically in the mid scale as having over 300 hotels under discussion with multi-unit developers.

Speaker Change: Talk about how it's going any data points or anything like that would be helpful. Thanks, Yes.

Looking hesitation from large groups for 25.

Speaker Change: The short answer is it's really going great I talked to bill not long ago, I think from both companies' perspectives.

Speaker Change: In relation to the election and the uncertainty around the election.

Speaker Change: Yes. So good question so as I mentioned in my prepared remarks.

Speaker Change: We are.

Speaker Change: The forward bookings for the balance of 'twenty four are consistent with last quarter with about 90%.

Speaker Change: Related to the volume.

Speaker Change: Both transient and group.

Speaker Change: Leads that are coming through our systems.

Speaker Change: Improvement in 2025 as we look.

Speaker Change: The number of folks that are considering linking their MGM rewards and Marriott bond boy accounts.

Speaker Change: And right now 2025 is pacing at 9%, which is a little erosion from last quarter.

Speaker Change: The number of groups.

Speaker Change: That our unique groups that are now available to the MGM portfolio. So I think on all fronts, we are thrilled.

Speaker Change: Most of the changes to the pace in room nights.

Tony Capuano: And we are seeing more of them actually put the shovels in the ground.

Speaker Change: Some of that is around.

Speaker Change: Or the.

Operator: Operator. Thank you.

Speaker Change: The length of time that folks are booking now but.

Speaker Change: Excellent. Thank you I appreciate it.

Tony Capuano: We have used up our allotted time for questions.

Speaker Change: Thank you.

Speaker Change: But group continues to be a standout.

Tony Capuano: I will now turn the call over to Tony for closing remarks. Great. Well, that's always. Thank you again for your interest in Maria. I hope you enjoy the balance of the summer. Hope you're out on the road, and we'll look forward to speaking to you next quarter. Thanks.

Brandon <unk>: Thank you and our next question comes from Brandon <unk> with Barclays.

Speaker Change: That's great and Tony Thanks for that.

Speaker Change: And then just a second question on owned and leased it looks like the <unk> came in nicely ahead of plan.

Brandon: Good morning, everybody. Thanks for taking my question.

Speaker Change: Good morning, ladies.

Speaker Change: And you raised the full year.

Speaker Change: I wanted to talk about group and group pace for 'twenty five.

Maybe just highlight which regions stood out there and then the second half outlook for owned and how that squares with your with your broader sort of shifting and thoughts for that portfolio. Thanks sure as you know.

Operator: This does conclude today's Maria International Q2 2024 earnings. Thank you for your participation. You may disconnect at any time.

Speaker Change: Have you guys seen that pace remained consistent as it strengthened or softened quarter over quarter and have you seen any.

Speaker Change: Booking hesitation from large groups for 25.

Speaker Change: In relation to the election and the uncertainty around the election.

Speaker Change: Our owned and leased portfolio has been dispersed around the world and so it can depend on certain markets obviously in Europe.

Speaker Change: Yes, so good questions as I mentioned in my prepared remarks.

Speaker Change: The forward bookings for the balance of 24 are consistent with last quarter with about 9%.

Bill: It's bill.

Speaker Change: Business has been good and so those results are strong.

Speaker Change: It also contains termination fees in that category and I think the reality is the outlook for termination fees is a bit higher than it was a quarter ago is as you noted a very modest.

Speaker Change: And in 2025 as we look.

Speaker Change: And right now 2025 is pacing at 9%, which is a little more erosion from last quarter.

Speaker Change: Change in the overall guidance. So we're pleased with how well the the hotels are doing in that portfolio, we've got a little bit of renovation impact.

Speaker Change: Most of the changes to the pace in our room nights.

Speaker Change: Some of that is around.

Speaker Change: <unk>.

Speaker Change: The length of time that folks are booking now but.

Speaker Change: That goes on but otherwise overall, a really consistent.

Speaker Change: But group continues to be a standout.

Speaker Change: A few of the results in that segment with a little bit more termination fees.

Speaker Change: That's great and Tony Thanks for that.

Speaker Change: And then just a second question on owned and leased it looks like the <unk> came in nicely ahead of plan and you raised the full year.

Speaker Change: Great. Thanks, everyone.

Dan <unk>: Thank you and we will take our next question from Dan <unk> with Wells Fargo.

Speaker Change: Maybe just highlight which regions stood out there and then the second half outlook for owned and how that squares with your with your broader sort of shifting and thoughts for that portfolio. Thanks sure as you know.

Dan <unk>: Hey, good morning, everyone. Thanks for taking my question.

Speaker Change: In terms of the unit growth.

Speaker Change: Certainly pacing well and you've given a lot of color in terms of both China as well as ex China, but as we think about kind of the exit pace for this year and the setup for next year to what degree do you have confidence in achieving that five to five 5% CAGR that you laid out at your analyst day last year.

Speaker Change #100: Our owned and leased portfolio has it been dispersed around the world and so it can depend on us certain markets obviously in Europe.

Speaker Change: Business has been good and Sandoz results are strong.

Speaker Change: So first of all advanced surprise, you, we're not ready to talk about specifics for next year, but we certainly are.

Speaker Change: Continue to believe that the five to five 5% guidance that we gave in September of 'twenty three is appropriate.

Speaker Change: Whether it's we've got a specific budget that looks at a number that.

Speaker Change #102: Change in the overall guidance. So we're pleased with how well the hotels are doing in that portfolio, we've got a little bit of renovation impact.

That is higher or not we will get there as we move through the process. The thing I'd like to point out is conversion.

Speaker Change: That goes on but otherwise overall are really consistent.

Speaker Change: Also the adaptive reuse numbers that Tony talked about relative to greater China.

Speaker Change: The results in that segment with a little bit more termination fees.

Speaker Change: Given that we are looking at roughly 30% of our room openings coming from conversions and then the adaptive reuse numbers that we've talked about I think we do continue to see a great.

Speaker Change: Great. Thanks, everyone.

Daniel Brian Politzer: Thank you and we will take our next question from Dan <unk> with Wells Fargo.

Daniel Brian Politzer: Hey, good morning, everyone and thanks for taking my question.

Speaker Change: Verizon near term openings over the next 18 months around the world.

Speaker Change: In terms of the unit growth.

Speaker Change #105: Certainly pacing well and you've given a lot of color in terms of both China as well as ex China, but as we think about kind of the exit pace for this year and the setup for next year to what degree do you have confidence in achieving that five to five 5% CAGR that you laid out at your analyst day last year.

Speaker Change: Tony pointed out three luxury conversions.

Tony: That opened this year in the U S and those were in the year for the year conversions for the company. So those deals were signed to this year and opened this year.

Tony: So from that perspective, we feel continue to feel really good about the demand for the brands.

Speaker Change: So first of all it won't surprise you, we're not ready to talk about specifics for next year, but we certainly.

Tony: And then we talked a little bit about the uptick in construction starts and I think you put that together and that bodes well for the company's continued net rooms growth.

Speaker Change #103: Continue to believe that the five to five 5% guidance that we gave in September of 'twenty three is appropriate.

Speaker Change #100: Got it. Thank you and then just I think you mentioned that leisure is still growing, albeit slowly can you, maybe unpack that a bit and talk a little bit about the underlying trends there either by chain scale or booking window or any.

Speaker Change: Whether it's we've got a specific budget that looks at a number that.

Speaker Change: That is higher or not we will get there as we move through the process. The thing I'd like to point out is conversion and also the adaptive reuse numbers that Tony talked about relative to greater China.

Speaker Change: Any changes you've seen in it in that customer base.

Speaker Change: Yes sure.

Speaker Change: Youre right, we saw leisure grow 2%.

Speaker Change: And while that's clearly nothing like crude that was at 10% and still are.

Tony: Given that we are looking at a roughly 30% of our room openings coming from conversions and then the adaptive reuse numbers that we've talked about I think we do continue to see a great.

Speaker Change: It's still encouraging given they came out of Covid.

Speaker Change: Rapid fire and with huge increases in Revpar. So very pleased global leisure nights were up 2% ADR was up 1% and even the U S and Canada leisure, our Revpar was up 1% and when you look at the various segments.

Speaker Change: Right.

Tony: Near term openings over the next 18 months around the world are Tony.

Tony: Tony pointed out in three luxury conversions.

Tony: That opened this year in the U S and those were in the year for the year conversions for the company. So those deals were signed this year and opened this year.

Speaker Change: Global luxury resorts were up 41%.

Speaker Change: In terms of Revpar and U S luxury resorts were up almost 1%. So while I think there is at the margin I hear more caution from the U S customer.

Speaker Change: So from that perspective, we do continue to feel really good about the demand for the brands.

Speaker Change: And then we talked a little bit about the.

Speaker Change: Uptick in construction starts and I think you put that together and that bodes well for the company's continued net rooms growth.

Speaker Change: But we do see that there continues to be very strong demand on the leisure front.

Speaker Change: Got it. Thank you and then just I think you mentioned that leisure is still growing, albeit slowly can you, maybe unpack that a bit and talk a little bit about the underlying trends there either by chain scale or booking window or you know any.

Speaker Change: The other thing I'd point out is that we clearly are seeing a stronger performance in the upper chain scales and compare it to the lower chain scale and you're seeing that throughout the industry as well.

Speaker Change #101: Any changes you've seen in it in that customer base.

Speaker Change: So when you look at premium and luxury that overall is stronger.

Speaker Change: Yeah sure you know.

Speaker Change #109: Youre right, we saw leisure grown 2%.

Speaker Change: And it isn't the lower chain scales and down just to provide a little more context, I mean lenient.

Speaker Change: And while that's clearly nothing like crude that was at 10% and still are.

Speaker Change: Referenced.

Speaker Change: That's the strength we've seen in leisure.

Speaker Change #108: It's still encouraging given they came out of Covid.

Speaker Change: Remind yourself leisure was the fastest customer segment to recover and over the last five years revpar of the leisure segments up 40% and so to continue to see quarter over quarter improvement in leisure revpar on the shoulders of that sort of recovery for us is quite encouraging.

Speaker Change #108: Rapid fire and when huge increases in Revpar. So very pleased global leisure nights were up 2% ADR was up 1% and even the U S and Canada leisure our Revpar was up 1% when you look at the various segments.

Speaker Change #108: Global luxury resorts were up 41%.

Speaker Change: And then I will say, we do expect for the full year.

Speaker Change: In terms of Revpar and U S luxury resorts were up almost 1%. So while I think there is at the margin I hear more caution from the U S customer.

Speaker Change: While it will not be it'll be relatively the slower growing segment compared to group in beauty, we still do we expect it to be up for the full year as well.

Speaker Change #101: Understood. Thank you so much.

Speaker Change #101: Thank you and our next question comes from Bill Crow with Raymond James.

Speaker Change: We do see that there continues to be very strong demand on the leisure front.

Bill Crow: Hey, good morning.

Speaker Change: The other thing I'd point out is that we clearly are seeing a stronger performance in the upper chain scales and compare it to the lower chain scale and youre seeing that throughout the industry as well.

Bill Crow: If I could just start with a follow up on that last question.

Bill Crow: Are you seeing the sluggishness at the low end creeping into <unk>.

Speaker Change #103: Higher income levels at this point.

Speaker Change: So when you look at premium and luxury that overall was stronger.

Speaker Change #104: No not really I think one thing is just interesting as that ancillary spend around the world.

Speaker Change: Then it is at the lower chain scales and dam just to provide a little more context, I mean, you referenced.

Speaker Change: That's the strength we've seen in leisure.

Speaker Change #105: U S and Canada, and frankly, all of the other regions ancillary spend with aged care softer than we anticipated and I think it does show that the consumer in general as perhaps being a bit more judicious.

Speaker Change: Remind yourself leisure was the fastest customer segment to recover and over the last five years Revpar in the leisure segment is up 40% and so to continue to see quarter over quarter improvement in leisure revpar on the shoulders of that sort of recovery for us is quite encouraging.

Speaker Change #106: About the fancy dinner or going on that extra.

Speaker Change #106: Trip when they are when they're on a vacation and that that is really the only thing it's not trade down in any meaningful way.

Speaker Change: And then I will say is we do expect for the full year.

Speaker Change: While it will not be it'll be relatively the slower growing segment compared to group in beauty, we still do we expect it to be up for the full year as well.

Speaker Change #106: And as we pointed out the resort Revpar.

Speaker Change #106: With sturdy.

Speaker Change #106: But that's really the only item that I can point to I think build.

Speaker Change #110: Understood. Thank you so much.

Speaker Change #107: The empirical data that supports lean these observation when you looked in the quarter at occupancy improvement by quality tier luxury was actually the tier that had the best improvement at almost two five points of occupancy.

Speaker Change #110: Thank you and our next question comes from Bill Crow with Raymond James.

William Andrew Crow: Hey, good morning.

William Andrew Crow: If I could just start with a follow up on that last question.

William Andrew Crow: Are you seeing the sluggishness at the low end creeping into.

Speaker Change #107: Year over year, and so again.

Speaker Change #107: That high end consumer continues to show real resilience and real appetite for travel I think the one thing we're watching is what we pointed out and that's the ancillary spend.

William Andrew Crow: Higher income levels at this point.

Speaker Change #104: No not really I think one thing is just interesting is that our ancillary spend around the world.

Speaker Change #108: Okay. Thanks, if I could just follow up with a quick one.

Speaker Change #109: About the balance of travel between inbound and outbound international this was supposed to be the suburb where kind of equaled out and that's not happening.

Speaker Change #106: U S and Canada, and frankly, all of the other regions ancillary spend with aged care softer than we anticipated and I think it does show that the consumer in general as perhaps being a bit more judicious.

Speaker Change #110: Could you just update us your thoughts on how you see that recovery plays out, especially inbound into the United States.

Speaker Change #111: Yeah. So interestingly inbound is about the same as it was prior to Covid your 4% to 5% of the two.

Speaker Change #106: About the fancy dinner or going on that extra trip when they are when they're on a vacation and that that is really the only thing it's not trade down in any meaningful way.

Speaker Change #112: <unk> in the U S are from cross border and it's the same as usual we're in big cities like New York and Miami are continuing to get outsized.

Speaker Change #106: And as we pointed out the resort Revpar.

Speaker Change #106: Our sturdy.

Residents from cross border travel, but they also continue to be from the markets like Canada and Mexico.

Speaker Change #106: But that's really the only item that I can point to I think build.

Speaker Change #149: The empirical data that supports lean these observation when you looked in the quarter at occupancy improvement by quality tier luxury was actually the tier that had the best improvement at almost two and a half points of occupancy.

Speaker Change #112: Coming to the U S.

Speaker Change #112: As we look at going to other markets. We are seeing that we've got a hair higher than 19 levels were almost 20% of our business around the world. This cross border now part of that the reality is we've got more international rooms than we had in 2019, but you continue.

Speaker Change #106: Year over year, and so again that that high end consumer continues to show real resilience and real appetite for travel I think the one thing we're watching is what we need pointed out and that's the ancillary spend.

Speaker Change #112: C with the strong U S. Dollar you continue to see great travel from U S. Travelers for example go into Japan.

Speaker Change #117: Okay. Thanks, if I could just follow up with a quick one.

Speaker Change #126: About the balance of travel between inbound and outbound international this was supposed to be the suburb where kind of equals out and that's not happening.

Speaker Change #112: Going to Europe middle Eastern travelers are traveling to many other countries. So I think the global nature of travel is only increasing which from our perspective is fabulous.

Speaker Change #116: Could you just update us your thoughts on how you see that recovery plays out, especially in the United States.

Speaker Change #111: Yeah. So interestingly inbound is about the same as it was prior to Covid your 4% to 5% of the.

Speaker Change #113: Great. Thank you.

Speaker Change #113: Thank you and we will take our next question from Ari Klein with BMO capital markets.

Speaker Change #125: Nights in the U S are from cross border and it's the same as usual we're at Big cities like New York and Miami I can.

Ari Klein: Thank you good morning going.

Ari Klein: Going back to China, historically that that region has been a sizable outsource of travel demand globally and based on the commentary that that'd be filtered appears to be largely holding why do you think that the case and is that something you anticipate changing.

Speaker Change #111: To get outsized.

Speaker Change #114: Presence from cross border travel, but they also continue to be from the markets like Canada and Mexico.

Speaker Change #114: Coming to the U S.

Speaker Change #115: Could you repeat it you broke up some on the question do you mind repeating it please.

Speaker Change #114: As we look at going to other markets. We are seeing that we've got a hair higher than 19 levels were almost 20% of our business around the world. This cross border now part of that the reality is we've got more international rooms than we had in 2019, but you continue.

Speaker Change #116: Sorry about that yeah, So just to China, China has been a sizable outsourcer.

Speaker Change #116: Demand globally and based on the commentary that he's still appears to be holding why do you think that that's the case and is that something you expect to change given the broader weakness in China.

Speaker Change #114: To see with the strong U S. Dollar you continue to see great travel from U S. Travelers for example go into Japan.

Speaker Change #117: So I'll give you a couple of facts.

Speaker Change #118: And also a reminder, that a year ago, you were just starting to see Chinese travelers are leaving the country. So one of the big differences in Q2 is there with meaningfully better air lift out of China to other parts of the world and while the.

Speaker Change #114: I'm going to Europe middle Eastern travelers are traveling to many other countries. So I think the global nature of travel is only increasing which from our perspective, it's fabulous.

Speaker Change #115: Great. Thank you.

Speaker Change #118: Airlift is still not back to where it was overall there are about 75% back to where they were in terms of air lift two to other countries and particularly to other countries.

Speaker Change #111: Yeah.

Speaker Change #113: Thank you and we will take our next question from Ari Klein with BMO capital markets.

Aryeh Klein: Thank you good morning.

Speaker Change #118: Going back to China's historically that that region has been a sizable outsourcing travel demand globally and based on the commentary that that'd be cool silicone appears to be largely holding.

Speaker Change #118: In Asia Pacific So no doubt, our Asia Pacific hotels outside of greater China benefited from the higher income.

Speaker Change #133: Why do you think that the case and is that something you anticipate changing.

Speaker Change #118: Travelers in China wanting to go outside of China, now that that frankly, it was a bring your opportunity to do so on the heels of the recovery from Covid. So we are seeing that I will say that.

Speaker Change #119: Could you repeat that you broke up some on the question do you mind repeating it please.

Speaker Change #119: Sorry about that yeah. So just to China, China has been a sizable outsourcer travel demand globally and based on the commentary that he's still appears to be holding.

Speaker Change #118: Travel to and from the U S is definitely not back to the levels that it was and we do continue to expect to see really strong.

Speaker Change #123: Do you think that that's the case and is that something you expect to change given the broader weakness in China.

Speaker Change #118: Outbound demand from greater China, but I will point, you again to the overall macroeconomic picture there in greater China, which is frankly not that overall levels of travel spend.

Speaker Change #130: So I'll give you a couple of facts.

Speaker Change #121: And also a reminder, that a year ago, you were just starting to see Chinese travelers are leaving the country. So one of the big differences in Q2 is there with meaningfully better.

Hum.

It has not recovered as fast as perhaps might have been expected.

Speaker Change #122: Air lift out of China to other parts of the world and while the U S. Air lift is still not back to where it was overall, they're about 75% back to where they were in terms of air lift two to other countries and particularly to other countries.

Speaker Change #119: The thing I would add R&D. The other catalyst we've seen as the Chinese government has been more aggressive in striking decent deals with preferred destinations removing one more layer of friction for outbound Chinese travelers, especially at the high end and we're seeing that particularly in our result.

Speaker Change #122: In Asia Pacific So no doubt, our Asia Pacific hotels outside of greater China benefited from the higher income on travelers in China wanting to go outside of China now that that frankly it was a.

Speaker Change #119: It's across APAC.

Speaker Change #120: Thanks for that and then just on the 40% increase in U S. Construction starts is there any notable difference between the starts on select service hotels versus a full service hotels.

Speaker Change #119: Or your opportunity to do so on the heels of the recovery from Covid. So we are seeing that I will say that there's.

Speaker Change #120: No.

Speaker Change #121: Overwhelmingly our pipeline as you might imagine is overwhelmingly limited service in any event.

Speaker Change #119: Travel to and from the U S is definitely not back to the levels that it was and we do continue to expect to see really strong.

Speaker Change #121: And most of the full service deals that we're doing are.

Speaker Change #121: Conversions. So this is quite similar to 2019, where they are overwhelmingly select service new builds.

Speaker Change #119: Outbound demand from greater China, but I will point, you again to the overall macroeconomic picture there in greater China, which is frankly not that overall levels of travel spend.

Speaker Change #121: Thank you.

Speaker Change #121: Thank you and our next question comes from Robin Farley with UBS.

Speaker Change #119: And have not recovered as fast as perhaps might have been expected.

Robin Farley: Great. Thank you just going back to them to the topic of unit growth.

Speaker Change #134: Only thing I would add the other catalyst we've seen as the Chinese government has been more aggressive in striking decent deals with preferred destinations removing one more layer of friction for outbound Chinese travelers, especially at the high end and we're seeing that particularly in our results.

Robin Farley: You talked about the increase in construction starts, but if you look at overall under construction as a percent of pipeline. It's still I wouldn't say, it's about 37% so quite a bit lower than that historic. So I'm. Just wondering you mentioned, it's not really China not the issue. There is it is.

Speaker Change #123: It's a lot of projects that are sitting that haven't gotten the financing or is it actually churn and you know like projects falling out new projects coming in so that percent of under construction isn't necessarily picking up just any color on that thanks.

Speaker Change #120: It's across APAC.

Speaker Change #124: Thanks for that and then just on the 40% increase in U S. Construction starts starts is there any notable difference between the starts on select service hotels versus a full service hotels.

Speaker Change #124: Definitely not churn I mean, we continue to see kind of a historic low level. So drop out from the pipeline I think here in the U S. While we're encouraged by that that pickup of 40% you still and it's a bit ironic because when you talk to the lenders often the hospitality component of their.

Speaker Change #120: No.

Speaker Change #129: Overwhelmingly our pipeline as you might imagine is overwhelmingly limited service in any event.

Speaker Change #120: And most of the full service deals that we're doing are.

Speaker Change #120: Conversions. So this is quite similar to 2019, where they are overwhelmingly select service do belts.

Speaker Change #125: <unk> real estate portfolios are the best subset of that portfolio.

Speaker Change #125: But the availability of construction debt is still relatively constricted to where we werent a pre pandemic sit.

Speaker Change #135: Thank you.

Speaker Change #120: Thank you and our next question comes from Robin Farley with UBS.

Speaker Change #126: Situations and as a result, we are.

Robin Margaret Farley: Great. Thank you just going back to them to the topic of unit growth.

Speaker Change #126: Not back to where we were pre pandemic terms of shovels in the ground trends are going the right direction.

Robin Margaret Farley: You talked about the increase in construction starts, but if you look at overall under construction as a percent of pipeline. It's still I wouldn't say, it's that 37% so quite a bit lower than that historic. So I'm. Just wondering you mentioned, it's not really China is not the issue. There is it is.

But we're just not all the way back yet.

Speaker Change #127: Okay. Thank you and just as a follow up.

Speaker Change #132: Looking at 2025, and I know you haven't guided specifically, but you had that sort of two year guidance.

Speaker Change #128: But you know kind of implies for 2025.

Speaker Change #151: A lot of projects that are sitting that haven't gotten the financing or is it actually churn and you know like projects falling out new projects coming in so that percent of under construction isn't necessarily ticking up just any color on that thanks.

Speaker Change #129: The conversions will kind of accelerated I think as a percent of.

Speaker Change #134: New units next year, and I think conversions are already a greater contributor.

Speaker Change #130: Your net unit growth than historic just looking at that 30% of the shred. It maybe you can refresh us maybe that's I'm not remembering that right.

Speaker Change #132: Definitely not churn I mean, we continue to see kind of a historic low levels of drop out from the pipeline I think here in the U S. While we're encouraged by that that pick up a 40% you still and it's a bit ironic because when you talk to the lenders often the hospitality component of their.

Speaker Change #130: If you're already at sort of that are higher than historic percentage.

Speaker Change #131: Help us think about what dynamics, you're expecting that will sort of drive incremental conversions as a percent of total.

Speaker Change #133: For 2025, and because of their conversion acceleration over all your unit growth expectation. It is not just acceleration in percent of total acceleration in absolute units as well.

Speaker Change #132: Real estate portfolios are the best subset of that portfolio.

Robin Margaret Farley: But the availability of construction debt.

Speaker Change #120: It's still relatively constricted to where we were in a pre pandemic.

Speaker Change #135: Yes, so again as <unk> pointed out earlier, we're not quite ready to put a stake in the ground on specific guidance for 25, but.

Speaker Change #120: Situation and as a result, we're not back to where we were pre pandemic terms of shovels in the ground.

Speaker Change #136: But we continue to see conversion volume at 30 plus percent of both signings and openings.

Speaker Change #120: Trends are going the right direction, but were just not all the way back yet.

Speaker Change #128: Okay. Thank you and just as a follow up.

Speaker Change #137: Feels like our momentum and conversions is accelerating and it's really encouraging to see the way the owner and franchise community is gravitating towards the strength of our revenue engines.

Speaker Change #152: Looking at 2025, and I know you haven't guided specifically, but you had that sort of two year guidance that you.

Speaker Change #146: You know kind of implies for 2025.

Speaker Change #141: The conversions will kind of accelerated I think as a percent of.

Speaker Change #138: Thank you.

Speaker Change #138: Well.

Speaker Change #148: New units next year and it is I think conversions are already a greater contributor to that.

Speaker Change #138: Thank you and our next question comes from Patrick Scholes with Jewish Securities.

Speaker Change #144: Your net unit growth than historic just looking at that 30%. The shred. It maybe you can refresh us maybe that's that's I'm not remembering that right.

Patrick Scholes: Great Good morning, everyone.

Patrick Scholes: My first question is how would you describe your visibility is.

Speaker Change #145: If you're already at sort of that are higher than historic person.

Speaker Change #140: As far as booking.

Speaker Change #142: In China as opposed to the U S.

Speaker Change #136: Can you help us think about what dynamics, you're expecting that will sort of drive incremental conversions as a percent of total for for 2025 and because of their conversion.

Speaker Change #141: More granularly, what would you say.

Speaker Change #143: Typical booking window looks like for China versus over here. Thank you.

Speaker Change #144: Yes, so I think our visibility is pretty good but the booking window is is historically short right now and so that's that's making it challenging for us to look.

Speaker Change #139: Acceleration over all your unit growth expectations, not just acceleration in percent of total rate acceleration in an absolute units as well.

Lee: Yeah. So again as Lee pointed out earlier, we're not quite ready to put a stake in the ground on specific guidance for 25, but.

Speaker Change #145: Much beyond the end of this year right now where you are seeing very very short term booking window kind of one to three days versus what we see around most of the rest of the world is closer to 20 days.

Lee: But we continue to see conversion volume at 30 plus percent of both signings and openings.

Speaker Change #146: Okay. Thank you and then a different topic here I'm wondering if you could give us an update on your recent trends or <unk>.

Lee: Feels like our momentum and conversions is accelerating and it's really encouraging to see the way the owner and franchise community is gravitating towards the strengths of our revenue engines.

Speaker Change #147: Pending key money to make development happen. Thank you.

Speaker Change #147: Of course.

Speaker Change #137: Thank you.

Speaker Change #148: It's a trend that we analyzed quite a bit ourselves and so I'm going to give you a couple of statistics, we're only halfway through 'twenty four so I'm going to compare 2019 to 2023.

Speaker Change #157: Youre welcome.

Speaker Change #160: Thank you and our next question comes from Patrick Schultz with Jewish Securities.

Patrick Schultz: Great Good morning, everyone.

Patrick Schultz: My first question is how would you describe your visibility is.

Speaker Change #148: Full year, it's interesting the percentage of deals in full year 2023, they require key money.

Speaker Change #138: As far as booking.

Speaker Change #158: In China as opposed to the U S.

Speaker Change #149: Is actually a bit lower than what we saw in 2019 and similarly, the amount of key money offered in deals that had key money in 2023 was almost 10% lower.

Speaker Change #150: More granularly, what would you say the typical booking window looks like for China versus over here. Thank you.

Speaker Change #143: Yes, so I think our visibility is pretty good but the booking window is is historically short right now and so that's that's making it challenging for us to look.

Speaker Change #149: Then what we saw in 2019 now to be sure. There's a couple of other trends below the surface of those encouraging statistics.

Speaker Change #153: Beyond the end of this year right now where you are seeing very very short term booking window kind of one to three days versus what we see around most of the rest of the world is closer to 20 days.

Speaker Change #149: To be sure the environment is becoming more and more competitive and we continue to apply the same lens. We've always applied which is in deals that are strategic and have significant fee upside. That's when we consider leveraging the company's balance sheet and number two.

Speaker Change #169: Okay. Thank you and then a different topic here I'm wondering if you could give us an update on your recent trends or <unk>.

Speaker Change #149: Back in 2019, I don't know the precise statistic, but the bulk of the key money, we deploy would've been in the upper upscale and luxury and I think now you are seeing a selective way the opportunity or the need to deploy key money or other capital tools.

Speaker Change #165: Pending key money to make development happen. Thank you.

Speaker Change #139: Of course.

Speaker Change #155: It's a trend that we analyzed quite a bit ourselves and so I'm going to give you a couple of statistics, we're only halfway through 'twenty four so I'm going to compare 2019 to 2023 full year. It's interesting the percentage of deals in full year of 2023, they require key money.

Speaker Change #149: Lower in the quality of tier framework.

Speaker Change #150: Okay. Thank you for the color.

Sure.

Speaker Change #151: Thank you and we will take our final question from Michael Bellisario with Baird.

Speaker Change #155: Is actually a bit lower than what we saw in 2019 and similarly, the amount of key money offered in deals that had key money in 2023 was almost 10% lower.

Michael Bellisario: Thanks, Good morning, everyone.

Michael Bellisario: Good morning, just first question just a follow up on the ancillary spend.

Michael Bellisario: Is the lower non revpar fee outlook is that being driven by lower card spending and then are you also seeing that softer ancillary spend.

Speaker Change #139: Then what we saw in 2019 now to be sure. There is a couple of other trends below the surface of those encouraging statistics.

Speaker Change #153: Within the group segment or was that comment just specific to leisure transient.

Speaker Change #139: To be sure the environment is becoming more and more competitive and we continue to apply the same lens, we've always applied which is in deals that are strategic and have.

Speaker Change #154: Yeah, no. So so good questions I would say that lower ancillary spend it is across the board so a little bit.

Speaker Change #154: Only a little bit, but a little bit everywhere, both leisure as well as group and then on the non Revpar spend overall, we are still seeing.

Speaker Change #139: Significant fee upside that's when we consider leveraging the company's balance sheet and number two are back in 2019, I don't know the precise statistic, but the bulk of the key money, we deploy it would've been in the upper upscale and luxury and I think now you are seeing us.

Speaker Change #154: Credit card spend go up very nicely, we're still looking at credit card fees being up 10% in 2024.

Speaker Change #154: It is the average spend that has moderated a little bit.

Speaker Change #139: Collectively the opportunity or the need to deploy key money or other capital tools are lower in the quality and cheer framework.

In terms of a typical card holder in the U S. But again only a very very small amount and just as a reminder of the ancillary spend is related to credit card spend because obviously people would use their credit cards to buy these things, but our ancillary.

Speaker Change #156: Okay. Thank you for the color.

Speaker Change #156: Sure.

Speaker Change #164: Thank you and we will take our final question from Michael Bellisario with Baird.

Michael Joseph Bellisario: Thanks, Good morning, everyone.

Speaker Change #155: Our revenues are going to come through the Revpar line because those are earned at hotels. The non revpar fees are entirely a function of what's going on obviously in residential and timeshare and in credit cards, and that's where to your point.

Michael Joseph Bellisario: Good morning, just first question just to follow up on the ancillary spend.

Michael Joseph Bellisario: Is the lower non revpar fee outlook is that being driven by lower card spending and then are you also seeing that softer ancillary spend.

Speaker Change #161: Within the group segment or was that comment just specific to leisure transient.

Speaker Change #155: We're seeing average spend.

Speaker Change #155: Moderate a bit but again overall credit card spend will go up very nicely because we're really pleased with the adding of new cardholders to our portfolio.

Speaker Change #147: Yeah, no. So so good questions.

Speaker Change #159: I'd say the lower ancillary spend it is across the board so a little bit.

Speaker Change #159: Only a little bit, but a little bit everywhere.

Speaker Change #159: Both leisure as well as group and then on the non Revpar spend overall, we're still seeing.

Speaker Change #156: Got it understood and then just one follow up just on your lower end chain scales.

Speaker Change #157: A lot of discussions and signings, but where are you at with shovels in the ground say for studio raise and then are you still focused on the multi unit development deals and then when do you switch to.

Speaker Change #159: Credit card spend go up very nicely, we're still looking at credit card fees being up.

Speaker Change #159: 10% in 2024.

Speaker Change #159: It is the average spend that has moderated a little bit.

Speaker Change #159: Single asset deals. Thank you.

Speaker Change #158: Yeah. So.

Speaker Change #159: In terms of a typical cardholder in the U S. But again only a very very small amount and just as a reminder, the ancillary spend is related to credit card spend because obviously people use their credit cards to buy these things, but our ancillary.

We spoke about before we are really pleased with the large number of multi unit conversion deals that we've had under discussion and in some cases closed around the world. So that is great and then we've talked about specifically in the mid scale and having oh.

Speaker Change #163: Our revenues are going to come through the Revpar line because those are earned at hotels. The non revpar fees are entirely a function of what's going on obviously in residential and timeshare and in credit cards, and that's where to your point.

Speaker Change #158: Over 300.

Speaker Change #158: Hotels under discussion with multi unit developers and we are seeing more of them actually put into the space the shovels in the ground.

Speaker Change #158: Operator.

Speaker Change #158: Thank you we have used up our allotted time for questions I will now turn the call over to Tony for closing remarks.

Speaker Change #147: We're seeing average spend a moderate a bit but again overall credit card spend will go up very nicely because we're really pleased with the adding of new cardholders to our portfolio.

Tony: Well as always thank you again for your interest in Marriott I Hope you enjoy the balance of the summer hope you're out on the road and we'll look forward to speaking to you next quarter. Thanks.

Speaker Change #162: Got it understood and I'm just one follow up just on your lower end chain scales.

Speaker Change #160: This does conclude today's Marriott International Q2, 2024 earnings. Thank you for your participation you may disconnect at any time.

Speaker Change #170: A lot of discussions in signings, but where are you at with shovels in the ground say for studio rise and then are you still focused on the multi unit development deals and then when do you switch to.

Speaker Change #168: Single asset deals. Thank you.

Speaker Change #166: Yeah. So.

Speaker Change #167: As we spoke about before we were really pleased with the large number of multi unit conversion deals that we've had under discussion and in some cases closed around the world. So that is great and then we've talked about specifically in the mid scale and having a.

Speaker Change #166: Over 300 hotels.

Speaker Change #147: Hotels under discussion with multi unit developers and we are seeing more of them actually put them in Spain, the shovels in the ground.

Speaker Change #147: Operator.

Speaker Change #147: Thank you we have used up our allotted time for questions I will now turn the call over to Tony for closing remarks, great.

Speaker Change #147: This does conclude today's Marriott International Q2, 2024 earnings. Thank you for your participation you may disconnect at any time.

Speaker Change #147: Okay.

Speaker Change #147: Yeah.

Speaker Change #147: Hum.

Speaker Change #147: Uh-huh.