Marriott International Q4 2025 Marriott International Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Marriott International Inc Earnings Call
Operator: Hello, and welcome to today's Marriott International Q4 2025 Earnings Call. At this time, all participants are in a listen-only mode. Later, you'll have the opportunity to ask questions during the question and answer session.
Operator: To register to ask a question at any time, please press star one on your telephone keypad. Please note that this call is being recorded, and we're standing by should you need any assistance. It is now my pleasure to turn the meeting over to Jackie McConaghan, Senior Vice President of Investor Relations. Please go ahead, ma'am.
Operator: To register to ask a question at any time, please press star one on your telephone keypad. Please note that this call is being recorded, and we're standing by should you need any assistance. It is now my pleasure to turn the meeting over to Jackie McConaghan, Senior Vice President of Investor Relations. Please go ahead, ma'am.
Speaker #1: ma'am.
Speaker #2: Good
Jackie McConagha: Good morning, everyone, and welcome to Marriott's Q4 2025 earnings call. On the call with me today are Tony Capuano, our President and Chief Executive Officer, Leeny Oberg, our Chief Financial Officer and Executive Vice President, Development, and Pilar Fernandez, Senior Director of Investor Relations. 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... 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. Unless otherwise stated, our RevPAR, occupancy, ADR, and property-level revenues for comments reflect system-wide constant currency results for comparable hotels, and all changes refer to year-over-year changes for the comparable period.
Jackie Burka McConagha: Good morning, everyone, and welcome to Marriott's Q4 2025 earnings call. On the call with me today are Tony Capuano, our President and Chief Executive Officer, Leeny Oberg, our Chief Financial Officer and Executive Vice President, Development, and Pilar Fernandez, Senior Director of Investor Relations. 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... 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. Unless otherwise stated, our RevPAR, occupancy, ADR, and property-level revenues for comments reflect system-wide constant currency results for comparable hotels, and all changes refer to year-over-year changes for the comparable period.
Speaker #2: Marriott's fourth quarter 2025 earnings call. On the call of me To register to ask a question at today, are Tony Capuano, our President
Speaker #2: Marriott's fourth quarter 2025 earnings call. On the call of me To register to ask a question at today, are Tony Capuano, our President and Chief Executive Officer;
Speaker #2: Officer and Executive Vice President Development; and Pilar Fernandez, Senior Director of Investor Relations. Before we begin, I would like to remind recorded, and we are standing by should you need any everyone that many of our comments today are not historical facts and are considered securities laws.
Speaker #2: are subject to numerous risks and uncertainties, as described in our SEC filing. Which could cause future results to differ materially from those forward-looking statements under federal comments.
Speaker #2: expressed in or implied by our These statements stated, our RevPAR, Unless otherwise Occupancy ADR, and Property Level Revenues comments reflect system-wide constant currency results for comparable hotels, and all the comparable period.
Jackie McConagha: Statements in our comments and the press release we issued earlier today are effective only today and will not be updated as 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. As you all know, this is Leeny's last earnings call. There is no doubt that everyone listening has benefited greatly from her leadership, wisdom, and insight. Leeny, thank you for everything. You will be greatly missed by us all. Now we'll turn the call over to Tony.
Jackie Burka McConagha: Statements in our comments and the press release we issued earlier today are effective only today and will not be updated as 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. As you all know, this is Leeny's last earnings call. There is no doubt that everyone listening has benefited greatly from her leadership, wisdom, and insight. Leeny, thank you for everything. You will be greatly missed by us all. Now we'll turn the call over to Tony.
Speaker #2: we issued earlier today are effective only today, and will not be Statements in our comments and the press release unfold. You can find our earnings release and reconciliations of all non-GAAP updated as actually events financial measures referred to in our remarks today on our Investor Relations website.
Speaker #2: As you all know, this is Leni's last earnings call. There is no doubt that everyone listening has benefited greatly from her leadership, wisdom, and insight.
Speaker #2: Leni, thank you for everything you will be greatly missed by us all. And now, I will turn the call over to Tony.
Anthony Capuano: Thanks, Jackie, and good morning, everyone. I'll have some comments about Leeny and her incredible career with Marriott at the end of the call. But for now, let's move on to our prepared remarks. Our team produced excellent results in 2025 as Marriott continued to experience solid momentum in our business around the world. With rooms growth as one of the top company priorities, I'm proud that Marriott's industry-leading global portfolio stood at nearly 1.78 million rooms across more than 9,800 properties in 145 countries and territories at the end of December. Conversions remained a key driver of growth, contributing around 1/3 of our signings and openings during the year. With an incredibly strong Q4 for signings, our team inked nearly 1,200 deals, representing 163,000 rooms, excluding M&A, during the year.
Tony Capuano: Thanks, Jackie, and good morning, everyone. I'll have some comments about Leeny and her incredible career with Marriott at the end of the call. But for now, let's move on to our prepared remarks. Our team produced excellent results in 2025 as Marriott continued to experience solid momentum in our business around the world. With rooms growth as one of the top company priorities, I'm proud that Marriott's industry-leading global portfolio stood at nearly 1.78 million rooms across more than 9,800 properties in 145 countries and territories at the end of December. Conversions remained a key driver of growth, contributing around 1/3 of our signings and openings during the year. With an incredibly strong Q4 for signings, our team inked nearly 1,200 deals, representing 163,000 rooms, excluding M&A, during the year.
Speaker #3: everyone. I'll have some comments about Leni and call, but for now, let's move on to Thanks, Jackie, and good morning, our prepared remarks. Our team produced excellent results in 2025, her incredible career with Marriott at the end of the as Marriott continued to experience solid momentum in our business around the the top company priorities, I'm proud that Marriott's industry-leading world.
Speaker #3: nearly $1.78 With rooms growth as one of million rooms across more than 9,800 properties in territories at the end of 145 countries and December.
Speaker #3: Conversions remained a key driver of growth, contributing around a third of our signings and openings during the year. With an incredibly strong fourth quarter for signings, our team inked 163,000 rooms excluding M&A during the year.
Anthony Capuano: At the end of December, our pipeline had grown to a record 610,000 rooms, up 2% from the prior quarter and up 6% from the prior year. Nearly 265,000 of the pipeline rooms were under construction, including rooms that are pending conversion, up 15% year-over-year. In 2025, 75% of our conversion rooms joined the system and began contributing to fee growth within 12 months of signing. For full year 2026, net rooms growth is expected to accelerate up to 4.5% to 5%. Our intent to recommend scores rose in every region around the world, and we continued to gain market share, with RevPAR index increasing globally year-over-year.
Tony Capuano: At the end of December, our pipeline had grown to a record 610,000 rooms, up 2% from the prior quarter and up 6% from the prior year. Nearly 265,000 of the pipeline rooms were under construction, including rooms that are pending conversion, up 15% year-over-year. In 2025, 75% of our conversion rooms joined the system and began contributing to fee growth within 12 months of signing. For full year 2026, net rooms growth is expected to accelerate up to 4.5% to 5%. Our intent to recommend scores rose in every region around the world, and we continued to gain market share, with RevPAR index increasing globally year-over-year.
Speaker #3: pipeline had grown to a record representing up 2% from the prior quarter and up 6% from 265,000 of the the prior year. Nearly pipeline rooms were under nearly 1,200 deals At the end of December, our conversion, up 15% year-over-year.
Speaker #3: In 2025, 75% of our conversion rooms joined the system within 12 months of signing. For full-year and began contributing to fee growth 2026, net rooms growth is expected to accelerate up recommend scores rose in every region 5%.
Speaker #3: around the world, and we continue to gain market share with RevPAR index increasing globally Our intent to year-over-year. Full-year global RevPAR rose 2%, with RevPAR in the U.S.
Anthony Capuano: Full year global RevPAR rose 2%, with RevPAR in the US and Canada rising 0.7% and international RevPAR increasing over 5%. Leisure and luxury led the way, with leisure RevPAR up 3%, while group RevPAR rose 2% and business transient RevPAR was flat for the full year. Full year luxury RevPAR increased over 6%, while select service RevPAR declined 30 basis points. Our portfolio is well positioned to benefit from continued expected strength at the upper end, as higher-end consumers remain resilient and continue to prioritize spending on experience and travel over goods. 10% of our open rooms globally and 10% of our pipeline rooms are in the luxury segment. Turning to the fourth quarter, we were pleased that worldwide RevPAR ended up at the high end of our guidance range.
Tony Capuano: Full year global RevPAR rose 2%, with RevPAR in the US and Canada rising 0.7% and international RevPAR increasing over 5%. Leisure and luxury led the way, with leisure RevPAR up 3%, while group RevPAR rose 2% and business transient RevPAR was flat for the full year. Full year luxury RevPAR increased over 6%, while select service RevPAR declined 30 basis points. Our portfolio is well positioned to benefit from continued expected strength at the upper end, as higher-end consumers remain resilient and continue to prioritize spending on experience and travel over goods. 10% of our open rooms globally and 10% of our pipeline rooms are in the luxury segment. Turning to the fourth quarter, we were pleased that worldwide RevPAR ended up at the high end of our guidance range.
Speaker #3: 0.7%, and international RevPAR increasing over 5%. Leisure and Canada, rising luxury led the way, with leisure RevPAR up 3%, while group RevPAR rose 2%, and business transient RevPAR for the year.
Speaker #3: Full-year luxury was flat for the full RevPAR increased over 6%, while select service RevPAR declined 30 basis points. Our portfolio is continued expected strength at the upper end, as higher-end consumers remain resilient and on experience and travel over continue to prioritize spending well-positioned to benefit from goods.
Speaker #3: 10% of our open rooms globally and 10% of our pipeline rooms are in the luxury segment. Turning to the fourth RevPAR ended up at the high end of our guidance range.
Speaker #3: RevPAR increased 1.9% thanks to a strong end of the year, with December RevPAR coming in well ahead of quarter; we were pleased that worldwide expectations. December global RevPAR rose 2.8%, showing growth since February, led by strong leisure demand, particularly for our luxury and resort hotels.
Anthony Capuano: RevPAR increased 1.9%, thanks to a strong end of the year, with December RevPAR coming in well ahead of our prior expectations. December global RevPAR rose 2.8%, showing the strongest monthly year-over-year growth since February, led by strong leisure demand, particularly for our luxury and resort hotels. By region, Q4 RevPAR was again strongest in APAC, which continues to benefit from double-digit rooms growth, as well as solid macroeconomic growth in many countries. Q4 RevPAR in APAC increased nearly 9%, with growth broad-based across the region and double-digit RevPAR gains in key markets, including India, Japan, and Australia. Q4 RevPAR in EMEA rose 7%, with strong growth across most of the region, led by 17% growth in the UAE.
Tony Capuano: RevPAR increased 1.9%, thanks to a strong end of the year, with December RevPAR coming in well ahead of our prior expectations. December global RevPAR rose 2.8%, showing the strongest monthly year-over-year growth since February, led by strong leisure demand, particularly for our luxury and resort hotels. By region, Q4 RevPAR was again strongest in APAC, which continues to benefit from double-digit rooms growth, as well as solid macroeconomic growth in many countries. Q4 RevPAR in APAC increased nearly 9%, with growth broad-based across the region and double-digit RevPAR gains in key markets, including India, Japan, and Australia. Q4 RevPAR in EMEA rose 7%, with strong growth across most of the region, led by 17% growth in the UAE.
Speaker #3: By region, fourth quarter RevPAR was again strongest in APEC, which continues to benefit from double-digit rooms growth, of our prior as well as solid macroeconomic the strongest monthly year-over-year growth in many countries.
Speaker #3: Fourth quarter RevPAR in APEC increased nearly 9%, with growth
Speaker #1: , based Broad across the region , and double digit in key markets , including Japan . Fourth quarter India , Australia EMEA and growth across most region of the gains Australia .
Speaker #1: Fourth quarter revenue rose and and with growth across 7% , by strong region led rose in the 17% growth UAE in over 2% as leisure resilient , especially EMEA during the season , was offset by the impact of comparisons to citywide events some . 2024 .
Speaker #1: Fourth quarter revenue rose and and with growth across 7% , by strong region led rose in the 17% growth UAE in over 2% as leisure resilient , especially EMEA during the season , was offset by the impact of comparisons to citywide events some .
Anthony Capuano: RevPAR in CALA rose over 2% as resilient leisure demand, especially during the festive season, was partially offset by the impact of comparisons to some citywide events in 2024. City Express hotels across the region are benefiting from being integrated into our ecosystem and are performing very well, contributing to strong signings for this brand in CALA during the year. While the operating environment in Greater China remains challenged by weak macro conditions and soft consumer sentiment, robust leisure trends and continued inbound travel recovery helped RevPAR return to growth in the fourth quarter. RevPAR rose over 3%, driven by ADR. ADR growth was driven by stronger rates in Hong Kong, Taiwan, Hainan, and Tier One markets, offsetting continued softness in tertiary markets within the Chinese mainland. In the US and Canada, fourth quarter RevPAR was around flat.
Tony Capuano: RevPAR in CALA rose over 2% as resilient leisure demand, especially during the festive season, was partially offset by the impact of comparisons to some citywide events in 2024. City Express hotels across the region are benefiting from being integrated into our ecosystem and are performing very well, contributing to strong signings for this brand in CALA during the year. While the operating environment in Greater China remains challenged by weak macro conditions and soft consumer sentiment, robust leisure trends and continued inbound travel recovery helped RevPAR return to growth in the fourth quarter. RevPAR rose over 3%, driven by ADR. ADR growth was driven by stronger rates in Hong Kong, Taiwan, Hainan, and Tier One markets, offsetting continued softness in tertiary markets within the Chinese mainland. In the US and Canada, fourth quarter RevPAR was around flat.
Speaker #1: City rose across the demand partially Rev PA Express festive driven by macro from being recovery offsetting tertiary in Hong China growth was ecosystem rose .
Speaker #1: City RevPAR rose across the region, partially driven by festive demand and the macro recovery, offsetting weaker growth in tertiary ecosystems in Hong Kong and China. Revenue year over year in the region was up.
Speaker #1: City rose across the demand partially Rev PA Express festive driven by macro from being recovery offsetting tertiary in Hong China growth was ecosystem rose . revenue offset year region are Kala , largely quarter , 43 day US decline in helped tier one markets , government was integrated continued down Government offset by .
Speaker #1: City rose across the demand partially Rev PA Express festive driven by macro from being recovery offsetting tertiary in Hong China growth was ecosystem rose . revenue offset year region are Kala , largely quarter , 43 day US decline in helped tier one markets , government was integrated continued down Government offset by meaningful government in the travel Leisure Taiwan operating flat though it soft the into our moderated to down around fourth quarter .
Speaker #1: inbound 30% extended our We lead in due to opening of very around Regis Aruba , the Como lodging Addition , a Lake Rica .
Speaker #1: Continued at 15% during Q4, and was expanded in breadth and depth. Leisure portfolio was strong across customer tiers, from luxury to midscale, and luxury transient growth remained solid. Customer sentiment was positive across markets, as well as in alternative product offerings.
Anthony Capuano: Luxury again saw solid growth, which was offset by declines in the select service tier. Leisure transient RevPAR rose 2% in the quarter, while group RevPAR increased 1%. These gains were offset by a 3% decline in business transient RevPAR, largely due to a meaningful decline in government RevPAR in the quarter. Government RevPAR was down over 30% during the 43-day US government shutdown, though it has since moderated to down around 15%. During the year, we meaningfully expanded the breadth and depth of our portfolio across customer tiers, from luxury to midscale, and across traditional as well as alternative lodging product offerings. We extended our lead in luxury with the opening of several notable hotels, including the St. Regis Aruba, The Lake Como EDITION, and Nekajui, a Ritz-Carlton Reserve in Costa Rica.
Tony Capuano: Luxury again saw solid growth, which was offset by declines in the select service tier. Leisure transient RevPAR rose 2% in the quarter, while group RevPAR increased 1%. These gains were offset by a 3% decline in business transient RevPAR, largely due to a meaningful decline in government RevPAR in the quarter. Government RevPAR was down over 30% during the 43-day US government shutdown, though it has since moderated to down around 15%. During the year, we meaningfully expanded the breadth and depth of our portfolio across customer tiers, from luxury to midscale, and across traditional as well as alternative lodging product offerings. We extended our lead in luxury with the opening of several notable hotels, including the St. Regis Aruba, The Lake Como EDITION, and Nekajui, a Ritz-Carlton Reserve in Costa Rica.
Anthony Capuano: We also signed a record 114 luxury deals during the year. We continue to have growing owner interest in all of our midscale brands, given their compelling brand design, the power of our revenue engines, and their simple, bundled affiliation costs, which we believe are the lowest in the industry. Since entering the segment less than three years ago, we've experienced incredible growth. At the end of the year, we had over 450 open and pipeline Four Points Flex, StudioRes, and City Express by Marriott properties in 26 countries and territories around the world. We also had 100 open and pipeline Sonder by Marriott properties. During 2025, we were pleased to add several new brands to our portfolio.
Tony Capuano: We also signed a record 114 luxury deals during the year. We continue to have growing owner interest in all of our midscale brands, given their compelling brand design, the power of our revenue engines, and their simple, bundled affiliation costs, which we believe are the lowest in the industry. Since entering the segment less than three years ago, we've experienced incredible growth. At the end of the year, we had over 450 open and pipeline Four Points Flex, StudioRes, and City Express by Marriott properties in 26 countries and territories around the world. We also had 100 open and pipeline Sonder by Marriott properties. During 2025, we were pleased to add several new brands to our portfolio.
Speaker #1: We signed deals also year during the . We 114 luxury have growing in all of our Saint given their brand Midscale the power of our revenue engines and their Costa simple bundled owner interest costs , which believe are we the lowest in the luxury with the industry since entering brands , segment .
Speaker #1: the three years ago . We've design , Less than reserve in incredible growth at the end of the year , we had 450 open and compelling a record flex and studio City , raise properties .
Speaker #1: Express by In pipeline territories around Marriott had the pipeline properties Marriott during 2025 . We were series by several new We our portfolio .
Speaker #1: also Lifestyle brands add Citizenm , which was fully integrated onto our experienced November platforms in . Series by pleased to global Marriott , brand upscale for the outdoor segments , and the collection by Bonvoy and focus on being in more .
Anthony Capuano: Lifestyle brand citizenM, which was fully integrated onto our platforms in November, Series by Marriott, our new global collection brand for the midscale and upscale segments, and the Outdoor Collection by Marriott Bonvoy. Our focus on being in more places with the best brands and experiences helps fuel the growth of our powerful Marriott Bonvoy loyalty program. Last year alone, 43 million new members joined Bonvoy, propelling the membership base to 271 million members worldwide at year-end. We continue to augment the Bonvoy platform with popular collaborations like Uber and Starbucks, and with new bespoke Bonvoy moments and immersive experiences.
Tony Capuano: Lifestyle brand citizenM, which was fully integrated onto our platforms in November, Series by Marriott, our new global collection brand for the midscale and upscale segments, and the Outdoor Collection by Marriott Bonvoy. Our focus on being in more places with the best brands and experiences helps fuel the growth of our powerful Marriott Bonvoy loyalty program. Last year alone, 43 million new members joined Bonvoy, propelling the membership base to 271 million members worldwide at year-end. We continue to augment the Bonvoy platform with popular collaborations like Uber and Starbucks, and with new bespoke Bonvoy moments and immersive experiences.
Speaker #1: Midscale places with the best brands and Our fuel the our powerful Marriott growth of loyalty collection program . members joined our new Last year , propelling the base to alone worldwide membership Bonvoy .
Speaker #1: We Bonvoy platform with popular experiences augment the Marriott 271 million members bespoke moments and with immersive collaborations like new points Guy Award for the best hotel loyalty program third year in a row Uber and , and we're thrilled that and year Bonvoy is now the hotel Marriott for the the World Cup .
Anthony Capuano: We recently won The Points Guy Award for the Best Hotel Loyalty Program for the third year in a row, and we're thrilled that Marriott Bonvoy is now the official hotel supporter of the 2026 FIFA World Cup, with our extensive portfolio of hotels across the 16 host cities and curated fan activations poised to provide incredible, memorable experiences throughout the 104-match tournament. We are actively investing in technology, data, and AI, both internally and with partners, to transform the guest and the associate experience. The multiyear transformation of Marriott's three major tech systems, property management, reservations, and loyalty, is well underway, and we're rolling out the new systems to a meaningful number of our hotels around the world in 2026. We see AI as an opportunity to potentially redefine the customer acquisition paradigm that has governed our industry for the past several decades.
Tony Capuano: We recently won The Points Guy Award for the Best Hotel Loyalty Program for the third year in a row, and we're thrilled that Marriott Bonvoy is now the official hotel supporter of the 2026 FIFA World Cup, with our extensive portfolio of hotels across the 16 host cities and curated fan activations poised to provide incredible, memorable experiences throughout the 104-match tournament. We are actively investing in technology, data, and AI, both internally and with partners, to transform the guest and the associate experience. The multiyear transformation of Marriott's three major tech systems, property management, reservations, and loyalty, is well underway, and we're rolling out the new systems to a meaningful number of our hotels around the world in 2026. We see AI as an opportunity to potentially redefine the customer acquisition paradigm that has governed our industry for the past several decades.
Speaker #1: With our 2026 FIFA extensive of hotels across the portfolio and fan activations provide cities incredible , curated memorable experiences of throughout the 104 match tournament are actively investing , we in technology , data AI and , both internally and partners to transform the guest and the with experience .
Speaker #1: associate The Marriott's three major tech systems transformation of , reservations and underway , we're rolling out the new systems to a and our loyalty is around the world .
Speaker #1: multi-year 2026 , AI we see opportunity to official potentially In acquisition redefine the customer industry . For the past several is governed our decades , believe our industry leading scale , the breadth and depth of our global portfolio , large as an we our base , and our strong relationships partners across the ecosystem position to capitalize engaged Gen opportunities represents with .
Anthony Capuano: We believe our industry-leading scale, the breadth and depth of our global portfolio, our large and engaged customer base, and our strong relationships with partners across the ecosystem position us well to capitalize on the significant opportunities Gen AI represents. While AI search and commerce models are still emerging, we're excited about AI's ability to further personalize and simplify the travel search and the booking process. And we're optimistic about the potential for AI to bring more consumers into the Marriott Bonvoy ecosystem and help strengthen our direct booking channels in a very efficient manner. In the first half of this year, we plan to start deploying natural language search on marriott.com and on the Bonvoy mobile app. We're also optimizing our content for generative AI technologies, so our properties are well positioned wherever and however consumers are searching.
Tony Capuano: We believe our industry-leading scale, the breadth and depth of our global portfolio, our large and engaged customer base, and our strong relationships with partners across the ecosystem position us well to capitalize on the significant opportunities Gen AI represents. While AI search and commerce models are still emerging, we're excited about AI's ability to further personalize and simplify the travel search and the booking process. And we're optimistic about the potential for AI to bring more consumers into the Marriott Bonvoy ecosystem and help strengthen our direct booking channels in a very efficient manner. In the first half of this year, we plan to start deploying natural language search on marriott.com and on the Bonvoy mobile app. We're also optimizing our content for generative AI technologies, so our properties are well positioned wherever and however consumers are searching.
Speaker #1: With AI emerging, we're excited about its ability to search and further simplify the travel search and booking process. We're also optimistic about AI's potential to personalize customer experiences and bring more efficiency into the process. For Marriott, AI can help strengthen our direct booking capabilities and make management of Bonvoy more efficient.
Speaker #1: While AI emerging , excited about ability , search and to further II simplify the travel search and the booking process , us well optimistic personalize and and we're potential for AI customer bring we're more about the into the significant on the Marriott management help Bonvoy AI's strengthen our direct efficient booking to In the first half of this year , a to start consumers deploying language search on Marriott.com and on the Bonvoy .
Speaker #1: also We're optimizing our ecosystem and natural generative AI technologies . properties So our are well positioned wherever and however are . , we are actively consumers collaborating with numerous space .
Anthony Capuano: Furthermore, we are actively collaborating with numerous tech companies across the space. For example, we are one of the initial companies working with Google on their forthcoming Google AI mode travel product and with OpenAI on their Ad Pilot program. Before I end my prepared remarks, I want to thank our team around the world for their hard work and care that they bring to Marriott every day. And, Leeny, for the last time, I'll turn the call over to you to discuss our financial results in more detail.
Tony Capuano: Furthermore, we are actively collaborating with numerous tech companies across the space. For example, we are one of the initial companies working with Google on their forthcoming Google AI mode travel product and with OpenAI on their Ad Pilot program. Before I end my prepared remarks, I want to thank our team around the world for their hard work and care that they bring to Marriott every day. And, Leeny, for the last time, I'll turn the call over to you to discuss our financial results in more detail.
Speaker #1: the we searching For working with example , forthcoming Google companies travel AI and with ad pilot Furthermore program tech on their Before I mode end my prepared remarks , I their thank our team product , world hard and care that they Marriott every day and OpenAI our want to detail results in .
Speaker #1: the we searching For working with example , forthcoming Google companies travel AI and with ad pilot Furthermore program tech on their Before I mode end my prepared remarks , I their thank our team product , world hard and care that they Marriott every day and OpenAI our mobile app .
Leeny Oberg: Thank you, Tony. Good morning. I'll start by reviewing our strong financial performance. Fourth quarter total gross fee revenues grew 7% to $1.4 billion, ahead of expectations. Growth was primarily due to higher RevPAR, room additions, and an 8% increase in credit card fees, partially offset by a 20% decline in residential branding fees. Growth in credit card fees reflected higher spending on our co-brand credit cards, with particularly strong increases in international markets, including Japan and the UAE. Incentive management fees, or IMFs, rose 16% to $239 million, primarily due to strong results in the US and Canada, where IMFs rose over 30%, led by New York City and resorts in Florida. Fourth quarter adjusted EBITDA rose 9% to $1.4 billion.
Leeny Oberg: Thank you, Tony. Good morning. I'll start by reviewing our strong financial performance. Fourth quarter total gross fee revenues grew 7% to $1.4 billion, ahead of expectations. Growth was primarily due to higher RevPAR, room additions, and an 8% increase in credit card fees, partially offset by a 20% decline in residential branding fees. Growth in credit card fees reflected higher spending on our co-brand credit cards, with particularly strong increases in international markets, including Japan and the UAE. Incentive management fees, or IMFs, rose 16% to $239 million, primarily due to strong results in the US and Canada, where IMFs rose over 30%, led by New York City and resorts in Florida. Fourth quarter adjusted EBITDA rose 9% to $1.4 billion.
Speaker #2: Thank
Speaker #2: morning . I'll start by
Speaker #2: reviewing our Fourth quarter . Total gross fee performance . revenues 7% grew to 1.4 billion , ahead of
Speaker #2: financial for their Growth in spending on our Co-brand credit cards , with particularly strong increases in international markets ,
Speaker #2: financial for their Growth in spending on our Co-brand credit cards , with particularly strong increases in international
Speaker #2: due to higher repar room Tony . additions and an 8% increase in credit Good card for the partially fees , offset a by 20% decline in residential branding .
Speaker #2: due to higher repar room Tony . additions and an 8% increase in credit Good card for the partially fees , offset a by 20% decline in residential branding
Speaker #2: Japan and the card fees UAE . Incentive or IMF's , management fees rose financial credit 16% to 239 million , primarily strong around the due to results US and Canada , where IMF's rose bring to over 30% .
Leeny Oberg: Our adjusted results for the fourth quarter and the full year exclude the one-time charges related to Sonder exiting our system in November. For full year 2025, gross fee revenues rose 5% to $5.4 billion, with IMFs up 3%, co-branded credit card fees rose over 8% to $716 million, and residential branding fees declined 10% to $72 million. As noted in our press release, during the fourth quarter, we moved the other costs that had been in our G&A and other lines to owned, leased, and other expense. This should help enhance understanding of our G&A costs, as our G&A line now captures only true general and administrative expenses. The above property costs needed to support and operate Marriott's business.
Leeny Oberg: Our adjusted results for the fourth quarter and the full year exclude the one-time charges related to Sonder exiting our system in November. For full year 2025, gross fee revenues rose 5% to $5.4 billion, with IMFs up 3%, co-branded credit card fees rose over 8% to $716 million, and residential branding fees declined 10% to $72 million. As noted in our press release, during the fourth quarter, we moved the other costs that had been in our G&A and other lines to owned, leased, and other expense. This should help enhance understanding of our G&A costs, as our G&A line now captures only true general and administrative expenses. The above property costs needed to support and operate Marriott's business.
Speaker #2: to 5.4 billion , rose 8% to Co-branded over 716 million , branding residential fees year declined 10% to 72 million . As in our press release during the fourth moved quarter , we the that had in fees our card costs line to been expense .
Speaker #2: should help leased understanding of our G&A costs as our line G&A now and other only true . administrative The above property owned , costs needed to expenses .
Leeny Oberg: The other expenses that were reclassified from general, administrative, and other are certain costs associated with our property-related fee revenues, such as guarantee expense, bad debt expense, and certain brand-related or property-related expenses, as well as costs associated with certain third-party agreements. Unlike G&A expenses like wages, benefits, and rent, these other expenses tend to vary more with RevPAR and system size. In the new presentation format, full year owned, leased, and other revenue net of owned, leased, and other expense totaled $218 million, including $23 million of Sonder-related charges. Owned, leased, and other revenues net results prior to the reclassification were $378 million, which was ahead of our prior expectations.
Leeny Oberg: The other expenses that were reclassified from general, administrative, and other are certain costs associated with our property-related fee revenues, such as guarantee expense, bad debt expense, and certain brand-related or property-related expenses, as well as costs associated with certain third-party agreements. Unlike G&A expenses like wages, benefits, and rent, these other expenses tend to vary more with RevPAR and system size. In the new presentation format, full year owned, leased, and other revenue net of owned, leased, and other expense totaled $218 million, including $23 million of Sonder-related charges. Owned, leased, and other revenues net results prior to the reclassification were $378 million, which was ahead of our prior expectations.
Speaker #2: Marriott's business other captures were reclassified from expenses that and costs are administrative property related fee General and our guarantee associated with Bad debt support and expense .
Speaker #2: certain brand related or property expenses , as well as General third party agreements costs . Unlike G&A , expenses other , benefits such as rent associated , these other expenses tend to vary more with repar and certain .
Speaker #2: system expense and size . presentation format , with owned . Leased , full owned , and other lease and 218 million , including In the 23 million of Saunder related charges .
Speaker #2: Owned new revenue wages prior expense totaled to the like were which was results expectations , net other year over year increase in amounts The the prior to the of the reclassification of the inclusion Chicago and strong Grand property results .
Leeny Oberg: The year-over-year increase in the amounts prior to the reclassification reflects the inclusion of the Sheraton Grand Chicago Riverwalk and strong property results, more than offsetting the impact of renovating hotels and lower termination fees. In 2025, the company benefited from over $90 million of above property cost savings related to our enterprise-wide initiative to enhance productivity across the company that is also yielding cost savings to our owners. Full year G&A declined 8% to $870 million. G&A and other, before the reclassification, totaled $1.03 billion, and excluding the $23 million of Sonder-related charges, totaled just over $1 billion, a decline of 6% year-over-year. G&A expenses were a bit above prior expectations, primarily due to compensation expenses. Full year adjusted EBITDA rose 8% to $5.38 billion, and adjusted EPS rose 7% to 10.02.
Leeny Oberg: The year-over-year increase in the amounts prior to the reclassification reflects the inclusion of the Sheraton Grand Chicago Riverwalk and strong property results, more than offsetting the impact of renovating hotels and lower termination fees. In 2025, the company benefited from over $90 million of above property cost savings related to our enterprise-wide initiative to enhance productivity across the company that is also yielding cost savings to our owners. Full year G&A declined 8% to $870 million. G&A and other, before the reclassification, totaled $1.03 billion, and excluding the $23 million of Sonder-related charges, totaled just over $1 billion, a decline of 6% year-over-year. G&A expenses were a bit above prior expectations, primarily due to compensation expenses. Full year adjusted EBITDA rose 8% to $5.38 billion, and adjusted EPS rose 7% to 10.02.
Speaker #2: More offsetting the impact of our hotels' termination fees and renovating in 2025, Sheraton company benefited from over $90 million of property cost savings. Our enterprise initiative to enhance this across the company is also benefited.
Speaker #2: G&A a bit expenses were above prior due to primarily compensation expenses . Full year adjusted EBITDA rose 8% to 5.38 billion , and adjusted EPs rose 7% to We were pleased that with the power cash of our 10.02 .
Leeny Oberg: We were pleased that with the power of our strong cash-generating asset-light business model and our disciplined investment approach, we returned over $4 billion to shareholders through dividends and buybacks in 2025. I'll now talk about our 2026 expectations. With our growing pipeline and strong momentum in conversions, we expect net rooms growth between 4.5% and 5%, including our typical assumption of between 1% and 1.5% room deletions. For full year 2026, we expect similar global RevPAR growth to 2025, between 1.5% and 2.5%. This assumes a relatively steady macroeconomic environment.
Leeny Oberg: We were pleased that with the power of our strong cash-generating asset-light business model and our disciplined investment approach, we returned over $4 billion to shareholders through dividends and buybacks in 2025. I'll now talk about our 2026 expectations. With our growing pipeline and strong momentum in conversions, we expect net rooms growth between 4.5% and 5%, including our typical assumption of between 1% and 1.5% room deletions. For full year 2026, we expect similar global RevPAR growth to 2025, between 1.5% and 2.5%. This assumes a relatively steady macroeconomic environment.
Speaker #2: light business model and our investment asset approach , we returned 4 billion to dividends and in 2025 . I'll now about buybacks talk 2026 expectations through with our pipeline and strong momentum in We expect net rooms growing between four and a half growth including our typical our assumption of between 1 and 1.5% .
Speaker #2: Room deletions for disciplined WE 2026 are full, similar to growth, repairing between one and a half and 2025 global 2.5%. This assumes a steady macroeconomic situation, with the exception of China. Relatively, growth is greater in international regions as compared to the US and Canada, although we do expect US and Canada to be a bit higher than this, with the growth in 2025.
Leeny Oberg: With the exception of Greater China, RevPAR growth in international regions is expected to remain higher than it was in the US and Canada, although we do expect RevPAR growth in the US and Canada to be a bit stronger than in 2025. We currently anticipate RevPAR in Greater China to again be roughly flat year-over-year. The World Cup is expected to contribute around 30 to 35 basis points of global RevPAR growth for the full year. The sensitivity of 1% change in full year 2026 RevPAR versus 2025 could be around $55 to 65 million of RevPAR-related fees. For the full year, gross fee revenues could rise 8% to 10%, to $5.9 to 5.96 billion. IMFs are expected to be flat to up slightly year-over-year.
Leeny Oberg: With the exception of Greater China, RevPAR growth in international regions is expected to remain higher than it was in the US and Canada, although we do expect RevPAR growth in the US and Canada to be a bit stronger than in 2025. We currently anticipate RevPAR in Greater China to again be roughly flat year-over-year. The World Cup is expected to contribute around 30 to 35 basis points of global RevPAR growth for the full year. The sensitivity of 1% change in full year 2026 RevPAR versus 2025 could be around $55 to 65 million of RevPAR-related fees. For the full year, gross fee revenues could rise 8% to 10%, to $5.9 to 5.96 billion. IMFs are expected to be flat to up slightly year-over-year.
Speaker #2: We expected to anticipate Repar in Greater China again flat year Repar over The remain Cup is year . expected contribute around be of 30 to 35 basis in the growth for the full roughly year World .
Speaker #2: points of 1% change currently The in to 2026 Repar year repar sensitivity versus full 55 to 65 million of Repar related fees around for the full gross fee could 2025 could be revenues to year IMF are global expected to 5.9 to 5.96 billion .
Speaker #2: 8 to 10% slightly point , our guidance does Express and not any impact from these new deals . later As a program is already the largest in the and has been for industry time .
Leeny Oberg: As we have discussed, we're currently in discussions with Visa, Chase, and American Express, and expect to have new deals in the US in place later this year. At this point, our guidance does not include any impact from these new deals. As a reminder, our program is already the largest by far in the industry and has been for some time. If you remember, we combined the Starwood American Express and Marriott Chase Visa program when we acquired Starwood, and these two programs have been the strong power leaders in this industry since then. However, our, our guidance does include a meaningful expected year-over-year increase of around 35% in co-branded credit card fees going into our franchise fees line. The increase is primarily the result of two factors. The first is continued strong growth in spending across our global card portfolio.
Leeny Oberg: As we have discussed, we're currently in discussions with Visa, Chase, and American Express, and expect to have new deals in the US in place later this year. At this point, our guidance does not include any impact from these new deals. As a reminder, our program is already the largest by far in the industry and has been for some time. If you remember, we combined the Starwood American Express and Marriott Chase Visa program when we acquired Starwood, and these two programs have been the strong power leaders in this industry since then. However, our, our guidance does include a meaningful expected year-over-year increase of around 35% in co-branded credit card fees going into our franchise fees line. The increase is primarily the result of two factors. The first is continued strong growth in spending across our global card portfolio.
Speaker #2: be to year over up rise be , as we have currently in discussions with visa , Chase and expect to have American deals in the new US place this year .
Speaker #2: by If remember , we you some combined the American Express and Marriott Chase visa Starwood program when far we acquired Starwood , and these two programs have been the power leaders in this strong industry then .
Speaker #2: However , does guidance a our expected year over year increase of around 35% in co-branded card since credit franchise , fees line , the increase is primarily the fees two of continued factors .
Leeny Oberg: The second is an increase in the royalty rate or the share of payments from the card companies that Marriott recognizes in our franchise fees line. We receive money from the credit card companies to pay for points, to permit funding the benefits in our loyalty program, and Marriott receives a royalty for our licensed intellectual property that we recognize in the franchise fee line. Since the launch of Marriott Bonvoy in early 2019, we've dramatically grown our global portfolio of hotels and the number of loyalty program members, and Bonvoy penetration has increased from 58% to 68%. We've added 6 countries to our co-branded credit card program since 2019, and now have 34 cards in 11 countries, and we expect to continue to add cards in new countries around the world.
Leeny Oberg: The second is an increase in the royalty rate or the share of payments from the card companies that Marriott recognizes in our franchise fees line. We receive money from the credit card companies to pay for points, to permit funding the benefits in our loyalty program, and Marriott receives a royalty for our licensed intellectual property that we recognize in the franchise fee line. Since the launch of Marriott Bonvoy in early 2019, we've dramatically grown our global portfolio of hotels and the number of loyalty program members, and Bonvoy penetration has increased from 58% to 68%. We've added 6 countries to our co-branded credit card program since 2019, and now have 34 cards in 11 countries, and we expect to continue to add cards in new countries around the world.
Speaker #2: strong result growth in global card portfolio . into our include The increase second is an royalty across our the share rate of payments or from the card companies that Marriott recognizes in our franchise line fees spending credit the .
Speaker #2: card points to funding . The benefits loyalty from and our Marriott receives permit in the a royalty for our licensed intellectual we property that recognize in franchise .
Speaker #2: Fee launch of the Bonvoy in line . and 2019 , Marriott dramatically grown our we've We of portfolio hotels and the global program members penetration Bonvoy loyalty increased 58% from co-branded credit card program since 19 , and now early to 68% .
Speaker #2: Fee launch of the Bonvoy in line . and 2019 , Marriott dramatically grown our we've We of portfolio hotels and the global program members penetration Bonvoy loyalty increased 58% from co-branded credit card program since 19 , and now early to 68% . We've cards and 11 countries , and we expect to continue add added around the 34 cards and .
Speaker #2: Fee launch of the Bonvoy in line . and 2019 , Marriott dramatically grown our we've We of portfolio hotels and the global program members penetration Bonvoy loyalty increased 58% from co-branded credit card program since 19 , and now early to 68% . We've cards and 11 countries , and we expect to continue add added around the 34 six countries to our and a very strong Marriott Bonvoy program , we number of royalty rate .
Leeny Oberg: With COVID now in the rearview mirror and a very strong Marriott Bonvoy program, we have increased Marriott's royalty rate. We were able to do this because we recently amended a long-standing contractual limitation affecting the royalty rate. The increase in the royalty rate is supported by GAAP-required valuation analyses that were performed by third parties when the credit card deals were signed. We remain keenly focused on enhancing the value Bonvoy brings to each of its constituencies, our customers, our hotel owners, and the company. Moving on to full-year residential branding fees. These fees could increase around 40% in 2026. As a reminder, this powerful fee stream that reflects our industry-leading position in residential branded properties is very lumpy, depending on the timing of unit sales.
Leeny Oberg: With COVID now in the rearview mirror and a very strong Marriott Bonvoy program, we have increased Marriott's royalty rate. We were able to do this because we recently amended a long-standing contractual limitation affecting the royalty rate. The increase in the royalty rate is supported by GAAP-required valuation analyses that were performed by third parties when the credit card deals were signed. We remain keenly focused on enhancing the value Bonvoy brings to each of its constituencies, our customers, our hotel owners, and the company. Moving on to full-year residential branding fees. These fees could increase around 40% in 2026. As a reminder, this powerful fee stream that reflects our industry-leading position in residential branded properties is very lumpy, depending on the timing of unit sales.
Speaker #2: We were able to do this because we have world amended a standing contractual increased limitation affecting the royalty rate . The new Marriott's royalty rate mirror by GAAP required analyses that were performed by third parties credit when the card signed .
Speaker #2: We as a company are focused on valuation, enhancing the keen value of Bonvoy to each of its constituencies—customers, our recent hotel owners, and our company. We are moving to increase the residential branding fees.
Speaker #2: These fees could increase around and the in 2026 . a reminder , brings deals were powerful fee stream that to full industry position reflects our As residential in leading is very lumpy .
Leeny Oberg: Timeshare fees, as usual, are expected to be relatively in line with the prior year at $110 to 115 million. Owned, leased, and other revenue net of owned, leased, and other expense is expected to total $230 to 240 million. Results are expected to be impacted by renovations at certain large hotels in the portfolio, including W Barcelona and The Ritz-Carlton, Tokyo. 2026 G&A expense is anticipated to be up just 1 to 3% compared to 2025 levels. Full year Adjusted EBITDA could increase between 8 to 10% to roughly $5.8 to 5.9 billion.
Leeny Oberg: Timeshare fees, as usual, are expected to be relatively in line with the prior year at $110 to 115 million. Owned, leased, and other revenue net of owned, leased, and other expense is expected to total $230 to 240 million. Results are expected to be impacted by renovations at certain large hotels in the portfolio, including W Barcelona and The Ritz-Carlton, Tokyo. 2026 G&A expense is anticipated to be up just 1 to 3% compared to 2025 levels. Full year Adjusted EBITDA could increase between 8 to 10% to roughly $5.8 to 5.9 billion.
Speaker #2: Depending on the timing properties supported of sales , timeshare usual , are fees in , as the unit prior year line with at 110 to 115 million .
Speaker #2: Lease and owned other net revenue, lease and other expense, is expected to, of owned, expected to be total $230 to $240 million.
Speaker #2: Results to be expected are relatively impacted by certain large hotels in the portfolio, including W, and the renovations at Tokyo Ritz-Carlton remain.
Speaker #2: Results to be expected relatively impacted by certain large hotels in the portfolio , including W and the renovations at , Tokyo Ritz-Carlton remain Barcelona 2026 G&A anticipated to be expense is up just 1 to 3% , compared to 2025 levels adjusted EBITDA increase 8 to 10% to roughly 5.8 to 5.9 billion .
Leeny Oberg: Our adjusted effective tax rate for 2026 is expected to remain between 26 and 26.5%, and our underlying core cash tax rate is anticipated to remain in the low 20% range. Strong Adjusted EBITDA growth, combined with a meaningful reduction in share count, leads to expected full year Adjusted diluted EPS growth between 13 and 15%. For Q1, global RevPAR could increase 1 to 2%, reflecting the positive impact of the Olympics in EMEA, being offset by the negative impact of the timing of Easter and Chinese New Year, as well as the US and Canada having tough comparisons versus the US inauguration last year. Q1 gross fee revenues could increase 7 to 8%.
Leeny Oberg: Our adjusted effective tax rate for 2026 is expected to remain between 26 and 26.5%, and our underlying core cash tax rate is anticipated to remain in the low 20% range. Strong Adjusted EBITDA growth, combined with a meaningful reduction in share count, leads to expected full year Adjusted diluted EPS growth between 13 and 15%. For Q1, global RevPAR could increase 1 to 2%, reflecting the positive impact of the Olympics in EMEA, being offset by the negative impact of the timing of Easter and Chinese New Year, as well as the US and Canada having tough comparisons versus the US inauguration last year. Q1 gross fee revenues could increase 7 to 8%.
Speaker #2: Our adjusted could for remain between tax 26 26.5% , . underlying expected to core 2026 is tax Full year anticipated rate is to in the low effective and Strong 20% range .
Speaker #2: Adjusted EBITDA growth, combined with a reduction in share count, leads to expected EPS for the full year, adjusted, with diluted, meaningful growth between 13% and 15% in the first quarter.
Speaker #2: for the Global Repar could increase 1 to 2% , reflecting the positive in Emia impact of the being offset by the negative between impact of Chinese timing of Easter Year , as the as well US and Canada having tough versus the US comparisons inauguration year .
Leeny Oberg: The increase is expected to be driven by meaningful growth in co-branded credit card fees, partially offset by an approximately 10 to 15% decline in residential branding fees due to timing. IMFs are expected to be around flat compared to Q1 of last year. Owned, leased, and other revenue net of owned, leased, and other expense is expected to ramp up over the year. In Q1, it could total around $15 million compared to $29 million in Q1 2025, largely due to renovations at several large hotels and a couple other small items. Of course, this is with our new reclassification. Our Q1 adjusted effective tax rate is expected to be around 24.5%, two percentage points higher than last year's Q1 tax rate, which was lower due to last year's release of a reserve.
Leeny Oberg: The increase is expected to be driven by meaningful growth in co-branded credit card fees, partially offset by an approximately 10 to 15% decline in residential branding fees due to timing. IMFs are expected to be around flat compared to Q1 of last year. Owned, leased, and other revenue net of owned, leased, and other expense is expected to ramp up over the year. In Q1, it could total around $15 million compared to $29 million in Q1 2025, largely due to renovations at several large hotels and a couple other small items. Of course, this is with our new reclassification. Our Q1 adjusted effective tax rate is expected to be around 24.5%, two percentage points higher than last year's Q1 tax rate, which was lower due to last year's release of a reserve.
Speaker #2: fee revenues increase last First quarter gross the expected to be 7 to 8% . meaningful growth in co-branded credit Olympics fees , partially offset by an approximately 10 to 15% decline in residential branding due to timing fees , IMF are expected to be flat compared to the last year first quarter of .
Speaker #2: Owned , leased and other revenue , of net leased and other expense is expected to ramp over the up year . In the it could total around around 15 million , compared owned , to first quarter , 29 million first quarter in the due to of 25 , at several large renovations couple other a largely hotels and small items .
Speaker #2: Of course , this is new with our reclassification . Our first quarter affected adjusted effective tax rate is expected to be around 24.5% , two percentage points higher than last year's first quarter was rate , which tax lower to due release of a reserve .
Leeny Oberg: We expect $1 to 1.1 billion of investment spending in 2026, similar to 2025 spending, excluding citizenM. Let me talk about the three broad buckets of investment. First, around 25% is related to renovations to owned and leased hotels. Second, roughly 35% to 40% is expected to come from continued spending on our digital tech transformation, the overwhelming portion of which is expected to be reimbursed over time, as well as other corporate systems. The remaining 35% to 40% is expected investment in our contracts for both existing units, typically used in connection with valuable contract renewals, extensions, or renovations that result in incremental fee revenue over time, and for new units as we continue to expand our global portfolio.
Leeny Oberg: We expect $1 to 1.1 billion of investment spending in 2026, similar to 2025 spending, excluding citizenM. Let me talk about the three broad buckets of investment. First, around 25% is related to renovations to owned and leased hotels. Second, roughly 35% to 40% is expected to come from continued spending on our digital tech transformation, the overwhelming portion of which is expected to be reimbursed over time, as well as other corporate systems. The remaining 35% to 40% is expected investment in our contracts for both existing units, typically used in connection with valuable contract renewals, extensions, or renovations that result in incremental fee revenue over time, and for new units as we continue to expand our global portfolio.
Speaker #2: We expect $1 to $1.1 billion of investment spending in '26, with similar 2025 spending, excluding CitizenM. Let me talk about buckets of the three broad investment areas.
Speaker #2: First, around 25% is related to renovations to owned and leased hotels. Second, roughly 35 to 40% is expected to continue to come from spending on digital tech transformation.
Speaker #2: The overwhelming portion of this is on our time as other corporate reimbursed over, as well as systems. The remaining 35 to 40% is expected to be investment in our contracts for both existing units, typically used in connection with valuable renewals, renovations that result in incremental fee extensions or revenue over time, and for new units as we add them.
Leeny Oberg: Our approach to using key money has not changed, and deals that use key money historically have yielded significantly more value than deals without key money. Our capital allocation philosophy has not changed. We're committed to our investment-grade rating and investing in growth that is accretive to shareholder value. Excess capital is returned to shareholders through a combination of share repurchases and a modest cash dividend, which has risen meaningfully over time. In 2026, we expect another year of strong capital returns of over $4.3 billion. Full guidance details for Q1 and the full year are in the press release, and Tony and I are now happy to take your questions. Operator?
Leeny Oberg: Our approach to using key money has not changed, and deals that use key money historically have yielded significantly more value than deals without key money. Our capital allocation philosophy has not changed. We're committed to our investment-grade rating and investing in growth that is accretive to shareholder value. Excess capital is returned to shareholders through a combination of share repurchases and a modest cash dividend, which has risen meaningfully over time. In 2026, we expect another year of strong capital returns of over $4.3 billion. Full guidance details for Q1 and the full year are in the press release, and Tony and I are now happy to take your questions. Operator?
Speaker #2: As we continue to expand our global portfolio, our approach to using key money has not materially changed, and deals that use key money historically have yielded significantly more than deals without key money.
Speaker #2: Our capital allocation philosophy has not changed. We're committed to our investment-grade rating and investing in growth that is accretive to shareholder value.
Speaker #2: Excess capital is returned to through a combination of share shareholders repurchases and a modest cash dividend , which has risen meaningfully time . over In 2026 , expect another year of strong capital returns of 4.3 billion .
Speaker #2: over Full guidance details for the first quarter and the full year are in the And press to take now happy your release . .
Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad. To leave the queue at any time, please press star two. Once again, that is star one to ask a question. We will pause for just a moment to allow questions to queue. Thank you. Our first question will come from Sean Kelly with Bank of America. Your line is open.
Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad. To leave the queue at any time, please press star two. Once again, that is star one to ask a question. We will pause for just a moment to allow questions to queue. Thank you. Our first question will come from Sean Kelly with Bank of America. Your line is open.
Speaker #2: Operator .
Speaker #3: you . If you would like to a ask question , please
Speaker #3: press Star One on your telephone keypad . To leave the queue time , at any please press star two . Once again , that is star one .
Speaker #3: ask a To question . We pause for just . moment to allow questions to queue Thank . Thank you . Our from first question will come Sean Kelly with Bank of America .
Shaun Kelley: Hi, good morning, everyone. Leeny, it's hard to believe it's been a decade of working together, so congratulations on an outstanding career, and thanks for all you've done. It's been a real privilege, so appreciate it.
Shaun Kelley: Hi, good morning, everyone. Leeny, it's hard to believe it's been a decade of working together, so congratulations on an outstanding career, and thanks for all you've done. It's been a real privilege, so appreciate it.
Speaker #3: open Your .
Speaker #4: Hi . Good morning everyone . it's hard it's to believe Lenny , decade of working together . So congratulations on an outstanding you've done .
Leeny Oberg: Thank you, Sean.
Leeny Oberg: Thank you, Sean.
Shaun Kelley: ... So, you know, for whoever who wants to take it, you know, Tony, I think as is often the case with these calls, a lot of attention on net rooms growth, and this is our first look for 2026. So, you know, an acceleration is obviously great to see, and especially at your size and scale. So can you just talk a little bit about what you think is kind of most important in driving the pipeline forward and obviously what you're seeing in terms of openings this year, what brands you're going to lean on the most within that pipeline to drive the numbers that you're seeing on the 4.5% to 5%? Thanks.
Shaun Kelley: ... So, you know, for whoever who wants to take it, you know, Tony, I think as is often the case with these calls, a lot of attention on net rooms growth, and this is our first look for 2026. So, you know, an acceleration is obviously great to see, and especially at your size and scale. So can you just talk a little bit about what you think is kind of most important in driving the pipeline forward and obviously what you're seeing in terms of openings this year, what brands you're going to lean on the most within that pipeline to drive the numbers that you're seeing on the 4.5% to 5%? Thanks.
Speaker #4: career . been a been a real So privilege . it And appreciate .
Speaker #2: Sean Thank you .
Speaker #4: So you know for forever who it . wants to Tony , I take is often the case with these think a lot of attention on on net as rooms growth .
Speaker #4: This is our first— and look, 2026. So, you know, an acceleration is great to see, obviously. And especially at your scale.
Speaker #4: size and So can you little bit about think is kind of most important . In driving the pipeline forward . And what you're obviously seeing in terms just talk a of year , what brands you're going to lean on the most within that what you pipeline to drive the numbers that you're seeing on the four and a half to 5% , thanks .
Anthony Capuano: Sure. I'll give you a broad answer, and then I'll let my Head of Global Development chime in with some color commentary. You know, I think, again, you heard in the prepared remarks that both in terms of signings and openings, about 1/3 are coming from conversions. We've talked about that phenomenon in some of the prior quarters. It's a combination of factors, Sean, that gives me a lot of confidence about the momentum we have in conversions. Number one, we have a more attractive stack of conversion-friendly brands than at any time in my career. I think we've got dedicated resources in the continents that are specifically focused on both individual asset conversions and portfolio conversions.
Tony Capuano: Sure. I'll give you a broad answer, and then I'll let my Head of Global Development chime in with some color commentary. You know, I think, again, you heard in the prepared remarks that both in terms of signings and openings, about 1/3 are coming from conversions. We've talked about that phenomenon in some of the prior quarters. It's a combination of factors, Sean, that gives me a lot of confidence about the momentum we have in conversions. Number one, we have a more attractive stack of conversion-friendly brands than at any time in my career. I think we've got dedicated resources in the continents that are specifically focused on both individual asset conversions and portfolio conversions.
Speaker #1: Sure . I'll give you a broad answer , and then I'll let my head of global development chime in with some color commentary .
Speaker #1: You know , think , again , you heard in the prepared remarks that I both in terms signings of openings , about a third are coming from conversions .
Speaker #1: We've talked about that phenomenon in some of the prior quarters . it's combination of We a of Sean , that gives me a lot confidence about the in momentum .
Speaker #1: We have conversions . we have a more attractive stack of conversion friendly brands than at in my I think we've got dedicated resources in the continents that are specifically focused on both individual conversions asset and portfolio conversions , and I think the organization has rallied around a level of creativity in terms of how we both identify close any time transactions for career .
Anthony Capuano: I think the organization has rallied around a level of creativity in terms of how we both identify, close, transactions for conversions and get them open. You heard in the opening comments; it is a remarkable statistic that about 75% of our conversion openings opened within 12 months of signing. So to be sure, conversions and some of the conversion-friendly brands, like our soft brand collections, Luxury Collection, Autograph and Tribute, certainly St. Regis, some of those sorts of brands will be among the biggest drivers. And then when you look internationally, there is an almost insatiable demand for luxury. We're seeing that across many of our markets, and we're seeing a parallel momentum in luxury demand. Finally, midscale.
Tony Capuano: I think the organization has rallied around a level of creativity in terms of how we both identify, close, transactions for conversions and get them open. You heard in the opening comments; it is a remarkable statistic that about 75% of our conversion openings opened within 12 months of signing. So to be sure, conversions and some of the conversion-friendly brands, like our soft brand collections, Luxury Collection, Autograph and Tribute, certainly St. Regis, some of those sorts of brands will be among the biggest drivers. And then when you look internationally, there is an almost insatiable demand for luxury. We're seeing that across many of our markets, and we're seeing a parallel momentum in luxury demand. Finally, midscale.
Speaker #1: conversions and get them open . You heard the in opening comments , it is a remarkable statistic that about 75% of our conversion openings opened within 12 months of signing .
Speaker #1: So to be sure , conversions and some of the conversion friendly brands like our soft brand collections , Luxury Collection , autograph and Tribute certainly series some of those sorts of brands will be among the biggest drivers .
Speaker #1: And then when you look internationally , there is an almost insatiable demand luxury . for We're seeing that across many of our markets and we're seeing a parallel momentum in luxury demand .
Anthony Capuano: It's hard to believe we haven't even been in the midscale tier for three years, but we shared some of the statistics by brand and across our midscale portfolio. I expect that to continue to accelerate.
Tony Capuano: It's hard to believe we haven't even been in the midscale tier for three years, but we shared some of the statistics by brand and across our midscale portfolio. I expect that to continue to accelerate.
Speaker #1: Finally, Midscale—it's hard to believe we haven't even been in the Midscale tier for three years. I've shared some of the statistics by brand and across our Midscale portfolio.
Leeny Oberg: Yeah, the only thing I would add, Sean, is a reminder of the work that we've been doing over the last 18 months, which obviously a chunk of it was about making sure that we were as streamlined as possible from an expense perspective, as we really saw the back end of COVID. But more importantly, was to be able to be quicker, to be faster, and that was really through every single part of the company, whether it was through Bonvoy, whether it was through development, in everything that we do to try to really accelerate the pace at which we grow. And from that perspective, I think you see in the pipeline, when you look at the year-over-year pipeline and even the pipeline growth from the end of the year, you can see those numbers show forth.
Leeny Oberg: Yeah, the only thing I would add, Sean, is a reminder of the work that we've been doing over the last 18 months, which obviously a chunk of it was about making sure that we were as streamlined as possible from an expense perspective, as we really saw the back end of COVID. But more importantly, was to be able to be quicker, to be faster, and that was really through every single part of the company, whether it was through Bonvoy, whether it was through development, in everything that we do to try to really accelerate the pace at which we grow. And from that perspective, I think you see in the pipeline, when you look at the year-over-year pipeline and even the pipeline growth from the end of the year, you can see those numbers show forth.
Speaker #1: I expect that to continue to accelerate .
Speaker #2: Yeah , the only thing I would add , Sean , is a reminder of the work that we've been doing over the last 18 months , which obviously a chunk of it was about making sure that we were as streamlined as possible from an expense perspective as we really saw back the end of Covid , but more importantly , was to be able to be quicker , to be faster .
Speaker #2: And that was really through every single part of the company , whether it was through Bonvoy , whether it was through development , everything do that we to try to really the at accelerate pace which we grow .
Speaker #2: And from that perspective , I think you see in the pipeline , when you look at the year over year pipeline and even the pipeline from the end of the , you can year see those numbers show forth and frankly , I'm really proud to say I expect the company to do a growth lot more of after I retire .
Leeny Oberg: And frankly, I'm really proud to say I expect the company to do a lot more of that after I retire, and that I'm excited about their opportunities to do that going forward, and that we're very comfortable with this 4.5 to 5%.
Leeny Oberg: And frankly, I'm really proud to say I expect the company to do a lot more of that after I retire, and that I'm excited about their opportunities to do that going forward, and that we're very comfortable with this 4.5 to 5%.
Speaker #2: And that I'm excited about . There opportunities to do that going forward and that we're we're very comfortable with this four and a half to 5% .
Shaun Kelley: Thank you very much.
Shaun Kelley: Thank you very much.
Operator: Thank you. Our next question comes from Dan Politzer with J.P. Morgan. Your line is open.
Operator: Thank you. Our next question comes from Dan Politzer with J.P. Morgan. Your line is open.
Speaker #4: Thank you very much .
Dan Politzer: Hey, good morning, everyone. Thanks for taking my questions. And Leeny, certainly echo that sentiment. Congratulations. It's been a pleasure working with you, and we wish you the best of luck. I wanted to touch on the credit card fees and that 35% step up. Can you maybe talk about, you know, why now? Why were you able to kind of increase the royalty rate? What drove that? Any order of magnitude on that rate, and is this something you've done in the past? And as you think about going forward and you know, the credit card deal that you're in the process of negotiating, is this, you know, is this effectively a mark-to-market that could lead to some element of a pull forward from that? Thanks.
Dan Politzer: Hey, good morning, everyone. Thanks for taking my questions. And Leeny, certainly echo that sentiment. Congratulations. It's been a pleasure working with you, and we wish you the best of luck. I wanted to touch on the credit card fees and that 35% step up. Can you maybe talk about, you know, why now? Why were you able to kind of increase the royalty rate? What drove that? Any order of magnitude on that rate, and is this something you've done in the past? And as you think about going forward and you know, the credit card deal that you're in the process of negotiating, is this, you know, is this effectively a mark-to-market that could lead to some element of a pull forward from that? Thanks.
Speaker #3: Thank you . Our next question comes from Dan Pulitzer with J.P. Morgan . Your line is open .
Speaker #5: Hey . Good morning everyone . Thanks for taking my questions . And Lenny , certainly echoed that sentiment . Congratulations . It's been a pleasure working with you , and we wish you the best of luck .
Speaker #5: I wanted to touch on the credit card fees and that
Speaker #5: talk Can you 35% step up . maybe about , you know , why now ? that Why were of to kind you able increase the royalty What drove rate ?
Speaker #5: that ? magnitude on that rate Any order of and is this something you've done in the past ? And as you think about going forward and you know , the deal that credit card you're in the process of negotiating , is this , you know , is this effectively a market mark to market lead to some element of a pull forward from that ?
Anthony Capuano: Yeah, so maybe we'll try this same approach. I'll make some overarching comments, and then Leeny can get a little more granular. As you heard in Leeny's remarks, there was an existing contractual agreement that had to be modified, and we did that. But I think the other two important factors, in response to your question of why now, we wanted to ensure that we preserve the financial strength and stability of the Bonvoy program, and simultaneously, we want to ensure that we preserve the value proposition for our 271 million members. And so the confluence of those three factors really were the catalyst to making this adjustment.
Tony Capuano: Yeah, so maybe we'll try this same approach. I'll make some overarching comments, and then Leeny can get a little more granular. As you heard in Leeny's remarks, there was an existing contractual agreement that had to be modified, and we did that. But I think the other two important factors, in response to your question of why now, we wanted to ensure that we preserve the financial strength and stability of the Bonvoy program, and simultaneously, we want to ensure that we preserve the value proposition for our 271 million members. And so the confluence of those three factors really were the catalyst to making this adjustment.
Speaker #5: Thanks .
Speaker #1: Yeah . So maybe we'll try this same approach . I'll make some overarching comments . And then Lenny can get a little more granular , as you heard in Lenny's remarks , there was a an existing contractual agreement that had to be modified .
Speaker #1: And we that . But I think did the other two important factors in response to your question of now , we wanted to ensure that we preserve the financial stability strength and of the Bonvoy why and simultaneously , we want to ensure that we preserve the value proposition for our 271 million members .
Leeny Oberg: Yeah, and I'll point to my prior answer, which is a reminder that we have spent a lot of time and energy in making sure that we found efficiencies. That certainly is a helpful component to making sure that we're balancing the needs of all our constituents. It's really critical, the value of our Bonvoy program to our customers and to our owners, and also to the company itself. And so, it's been a very careful evaluation of the appropriate level, and we're confident and comfortable with this new level of royalty fee percentage.
Leeny Oberg: Yeah, and I'll point to my prior answer, which is a reminder that we have spent a lot of time and energy in making sure that we found efficiencies. That certainly is a helpful component to making sure that we're balancing the needs of all our constituents. It's really critical, the value of our Bonvoy program to our customers and to our owners, and also to the company itself. And so, it's been a very careful evaluation of the appropriate level, and we're confident and comfortable with this new level of royalty fee percentage.
Speaker #1: And so the confluence of those three the factors really were catalyst to making this adjustment .
Speaker #2: I'll point to my Yeah . And prior answer , which is that we reminder lot of spent a have have energy time in and making sure that we've found that efficiencies are a certainly component helpful to that we're balancing making sure the needs our of all constituents .
Speaker #2: It's really critical of our Bonvoy , the value program to our customers and to our owners , and also to the itself . And so company it's been a very careful evaluation of the appropriate level .
Speaker #2: we're we're confident and comfortable And with this new level of royalty percentage fee .
Operator: Thank you. Our next question comes from Stephen Grambling with Morgan Stanley. Your line is open.
Operator: Thank you. Our next question comes from Stephen Grambling with Morgan Stanley. Your line is open.
Speaker #3: you . Our next question comes from Stephen Thank Grambling with Morgan Stanley . Your line is open .
Shaun Kelley: Hi, Leeny, thanks as well for all the insight, and look forward to keeping the dialogue going in the future. I-
Stephen Grambling: Hi, Leeny, thanks as well for all the insight, and look forward to keeping the dialogue going in the future. I-
Stephen Grambling: ... You know, Tony, I think you mentioned that the Google and OpenAI partnerships were something that's in the nascent stages, but I was hoping to get a bit more detail on what these partnerships entail. Are these more about testing distribution channels, and are you providing access to inventory and data? Or is it more about comparing these as an advertising channel, and if so, how do those costs compare to traditional search channels? Thanks.
Stephen Grambling: ... You know, Tony, I think you mentioned that the Google and OpenAI partnerships were something that's in the nascent stages, but I was hoping to get a bit more detail on what these partnerships entail. Are these more about testing distribution channels, and are you providing access to inventory and data? Or is it more about comparing these as an advertising channel, and if so, how do those costs compare to traditional search channels? Thanks.
Speaker #6: Thanks as well for all of the , Lenny . Hi and look insight going in the forward to keeping a dialogue future know , .
Speaker #6: Tony , I think you mentioned Google and that the OpenAI partnerships were something You that's nascent in the was hoping to get a detail bit more stage , but I on what these entail .
Speaker #6: more Are these about partnerships distribution testing channels , and are you access to providing data , it more inventory or is and about comparing these as an advertising and if so , those how do costs compared to channel , search traditional channels ?
Anthony Capuano: Thank you. I'll try and answer that, although I would give you the caveat, often in our industry, people talk about various facets of the business, through the lens of what inning are we in? I would suggest to you that we're pulling into the players' parking lot. We're not even in uniform or on the field, so it is quite early. But with that said, we are end of last year, November 2025, we began working with Google, and that was really to design a property search experience that will help facilitate bookings through Google's AI mode. As part of that experience, users will get to describe exactly what they're looking for in plain language, and then they'll get to compare different hotels and browse information, you know, room photos, amenities, reviews, prices, and the like.
Tony Capuano: Thank you. I'll try and answer that, although I would give you the caveat, often in our industry, people talk about various facets of the business, through the lens of what inning are we in? I would suggest to you that we're pulling into the players' parking lot. We're not even in uniform or on the field, so it is quite early. But with that said, we are end of last year, November 2025, we began working with Google, and that was really to design a property search experience that will help facilitate bookings through Google's AI mode. As part of that experience, users will get to describe exactly what they're looking for in plain language, and then they'll get to compare different hotels and browse information, you know, room photos, amenities, reviews, prices, and the like.
Speaker #6: Thanks
Speaker #6: .
Speaker #1: and I'll try you the would give Although I caveat Thank you . answer that . people talk . often in our industry , About various the through the facets of business of what lens inning are we would in suggest to ?
Speaker #1: we're you that pulling into I the parking players lot . We're not in even field . So on the it is uniform or quite early .
Speaker #1: But with that said are November of end of last We , we year , 25 . working began with Google and really to design a property search that was experience that will facilitate help bookings through Google's AI mode .
Speaker #1: of that As part users experience , will get to describe exactly what they're in looking for plain language , and then they'll get to compare different hotels browse and information , you know , room photos , amenities , reviews , like .
Anthony Capuano: And then they'll be able to follow up and refine those options, and then the booking will be pre-processed through AI mode. With OpenAI, this is really just the early days of their Ad Pilot program. So what I would say to you is, philosophically, we are working very closely and very collaboratively with the subject matter experts, the biggest, most innovative and creative companies in the space, both to learn from them, but also to shape or have some word in shaping this evolving distribution landscape.
Tony Capuano: And then they'll be able to follow up and refine those options, and then the booking will be pre-processed through AI mode. With OpenAI, this is really just the early days of their Ad Pilot program. So what I would say to you is, philosophically, we are working very closely and very collaboratively with the subject matter experts, the biggest, most innovative and creative companies in the space, both to learn from them, but also to shape or have some word in shaping this evolving distribution landscape.
Speaker #1: prices and the they'll be able and refine those to follow up options . And booking will be processed through AI mode with open AI .
Speaker #1: really This is early just the days of their ad pilot program . So what I would say to you is philosophically , we are working very closely and very collaboratively with the subject matter experts .
Speaker #1: biggest The , most innovative and creative companies in the space , both to learn from them , but also to shape or have some word in shaping this evolving distribution landscape .
Operator: Thank you. Our next question will come from Michael, Michael Belisario with Baird. Your line is open.
Operator: Thank you. Our next question will come from Michael, Michael Belisario with Baird. Your line is open.
Speaker #3: Thank you. Our next question will come from Michael. Michael Bellisario with Baird, your line is open.
Michael Bellisario: Thanks. First, congrats, Leenie, on a great run. My question's for Tony. You recently talked about, in an interview, just sort of the economic model for franchisees becoming less favorable, but maybe that was more about new construction. But could you just expand on that a little bit? I guess, what are you doing to make the math better pencil for both existing and prospective franchisees? Thanks.
Michael Bellisario: Thanks. First, congrats, Leenie, on a great run. My question's for Tony. You recently talked about, in an interview, just sort of the economic model for franchisees becoming less favorable, but maybe that was more about new construction. But could you just expand on that a little bit? I guess, what are you doing to make the math better pencil for both existing and prospective franchisees? Thanks.
Speaker #7: Thanks . First , congrats on a great run . My questions for Tony . You recently talked about in an interview . Just sort of the economic model for franchisees becoming less favorable .
Speaker #7: But maybe that was more about new construction . But could you just expand on that a little bit ? I guess . What are you doing to make the math better ?
Anthony Capuano: Thanks for the question. I appreciate it. The reality is, while you've seen tremendous performance from the big global brand companies, we recognize and focus every day on the fact that the owner and franchise community is at a different stage in their recovery from the damage done by the pandemic. And our recognition of that really drives our focus around looking at and attacking every variable in the equation that drives owner returns. To state the obvious, we are an asset-light business model with a focus on high growth. So we have got to do everything in our power to ensure that those returns recover and recover quickly. So what does that mean precisely? Of course, the work we do every day to drive top-line revenue. The work we do every day to enhance margins.
Tony Capuano: Thanks for the question. I appreciate it. The reality is, while you've seen tremendous performance from the big global brand companies, we recognize and focus every day on the fact that the owner and franchise community is at a different stage in their recovery from the damage done by the pandemic. And our recognition of that really drives our focus around looking at and attacking every variable in the equation that drives owner returns. To state the obvious, we are an asset-light business model with a focus on high growth. So we have got to do everything in our power to ensure that those returns recover and recover quickly. So what does that mean precisely? Of course, the work we do every day to drive top-line revenue. The work we do every day to enhance margins.
Speaker #7: for Pencil both existing and prospective franchisees . Thanks .
Speaker #1: Thanks for the question . I appreciate The it . the reality is , while you've seen tremendous performance from the big global brand companies , we recognize and focus every day on the fact that the owner and franchise community is at a different stage in their recovery from the damage done by the pandemic , and our recognition of that really drives our focus around looking at and attacking every variable in the equation that drives owner returns .
Speaker #1: the To state obvious , we an are asset light business model with focus on high growth . So a we have got to do everything in our power to ensure that those returns recover and recover quickly .
Speaker #1: So what does that mean precisely ? Of course , the work we do every drive top line revenue , day to the work we do every day to enhance margins , at every looking facet of affiliation , costs with a marriott brand and seeing if there are opportunities , you'll recall from a few ago , we shared quarters you that we had lowered the charge out rate Bonvoy program .
Speaker #1: So what does that mean precisely ? Of course , the work we do every drive top line revenue , day to the work we do every day to enhance margins , at every looking facet of affiliation , costs with a marriott brand and seeing if there are opportunities , you'll recall from a few ago , we shared quarters you that we had lowered the charge out rate Bonvoy for We'll continue to look at every aspect of the affiliation costs and see can what we do to try and drive margins .
Anthony Capuano: Looking at every facet of affiliation costs with a Marriott brand and seeing if there are opportunities. You'll recall from a few quarters ago, we shared with you that we had lowered the charge outlay rate for Bonvoy program. We'll continue to look at every aspect of the affiliation costs and see what we can do to try and drive margins. We're also, maybe the last piece, we are in some ways looking with a blank sheet of paper at the entirety of the hotel operating model. The services we provide, the staffing models that we use, how we schedule, how we purchase. All of the things that influence the profitability at the property level are being evaluated by our teams around the world.
Tony Capuano: Looking at every facet of affiliation costs with a Marriott brand and seeing if there are opportunities. You'll recall from a few quarters ago, we shared with you that we had lowered the charge outlay rate for Bonvoy program. We'll continue to look at every aspect of the affiliation costs and see what we can do to try and drive margins. We're also, maybe the last piece, we are in some ways looking with a blank sheet of paper at the entirety of the hotel operating model. The services we provide, the staffing models that we use, how we schedule, how we purchase. All of the things that influence the profitability at the property level are being evaluated by our teams around the world.
Speaker #1: also maybe the We're last piece we are in some ways looking with a blank sheet of paper at the entirety of the operating hotel model .
Speaker #1: The services we provide , the staffing models that we use , how we schedule , how we purchase all of the things that influence the profitability of the property level are being evaluated by our teams around the world .
Operator: Thank you. Our next question comes from Lizzie Dove with Goldman Sachs. Your line is open.
Operator: Thank you. Our next question comes from Lizzie Dove with Goldman Sachs. Your line is open.
Stephen Grambling: Hi there. Thanks for taking the question, and echo everyone's sentiments, Leeny, you'll definitely be missed. I'm wondering if you could maybe expand a little on what you're seeing in a bit of a pulse check on the consumer here, I suppose, particularly in the US. You know, you mentioned US and Canada RevPAR would be a little bit better this year, some World Cup in that, but any more details you can share in just what you're seeing, whether in booking windows, leisure, business transient groups, kind of across the board, any more color? Thanks.
Lizzie Dove: Hi there. Thanks for taking the question, and echo everyone's sentiments, Leeny, you'll definitely be missed. I'm wondering if you could maybe expand a little on what you're seeing in a bit of a pulse check on the consumer here, I suppose, particularly in the US. You know, you mentioned US and Canada RevPAR would be a little bit better this year, some World Cup in that, but any more details you can share in just what you're seeing, whether in booking windows, leisure, business transient groups, kind of across the board, any more color? Thanks.
Speaker #3: Thank you . Our next question comes from Lizzie Dove with Goldman line is Sachs . Your open .
Speaker #8: Hi there . Thanks for taking the question . And echo everyone's sentiments . You'll definitely be missed . I'm wondering if you could maybe a expand little on what seeing in you're a bit of pulse check a on the consumer here .
Speaker #8: suppose , particularly in the I US . You know , you mentioned US and Canada a little bit repa be this better year .
Speaker #8: Some in that . World Cup But any more details you can just what you're share and seeing , whether in booking Windows Leisure business , Transient groups kind the board , any more color of across thanks .
Leeny Oberg: Yeah, sure. Thanks, Lizzie, very much. So I, you know, I'd say steady as she goes. You know, clearly, leisure continues to be the meaningful outperformer. You know, up Q4 globally, leisure was up 4%, group up 2%, while BT was down. Some of that was related to the government shutdown. But clearly, when you look overall, you continue to see both nights and rates very strong globally in the leisure sector, and that extends down into our premium resorts, and certain large cities where you've got great leisure demand. And when I think about kind of group, it also continues to be steady. Attrition has actually been positive, and as we look at the group pace going into next year, it's up 6%.
Leeny Oberg: Yeah, sure. Thanks, Lizzie, very much. So I, you know, I'd say steady as she goes. You know, clearly, leisure continues to be the meaningful outperformer. You know, up Q4 globally, leisure was up 4%, group up 2%, while BT was down. Some of that was related to the government shutdown. But clearly, when you look overall, you continue to see both nights and rates very strong globally in the leisure sector, and that extends down into our premium resorts, and certain large cities where you've got great leisure demand. And when I think about kind of group, it also continues to be steady. Attrition has actually been positive, and as we look at the group pace going into next year, it's up 6%.
Speaker #2: Sure . Thanks , Yep . very much . So you know , I'd steady as say she goes . You know , clearly leisure continues to the be meaningful outperformer , you know , up leisure Q4 globally was up 4% , group up 2% , while BT was down .
Speaker #2: was Some of that related the to government but shutdown . But clearly when you look overall , you continue to see nights both and rate very globally strong in the leisure sector .
Speaker #2: And that down extends our into premium resorts and certain large cities where you've got great leisure And when demand . think I about kind of group , it also continues to be .
Speaker #2: steady Attrition has actually been positive . And as we look at the group pace going into next year , it's And up 6% .
Leeny Oberg: And while that's down one percentage point, compared to a quarter ago, that's quite normal as you enter a year. And, we actually expect to see across all three segments in 2026 that they will be up, low single digits when you look about leisure, BT, and group. In terms of the booking window, again, fairly similar, 22 days, in the fourth quarter. Business transient always about a week shorter, and, leisure a little bit longer. And we continue to see the same trend in Greater China, which is that they have a meaningfully shorter booking window. So I think, we've clearly got some extraordinary events in the US and Canada that will help us, to the tune of probably 40-ish basis points from our expectations from World Cup.
Leeny Oberg: And while that's down one percentage point, compared to a quarter ago, that's quite normal as you enter a year. And, we actually expect to see across all three segments in 2026 that they will be up, low single digits when you look about leisure, BT, and group. In terms of the booking window, again, fairly similar, 22 days, in the fourth quarter. Business transient always about a week shorter, and, leisure a little bit longer. And we continue to see the same trend in Greater China, which is that they have a meaningfully shorter booking window. So I think, we've clearly got some extraordinary events in the US and Canada that will help us, to the tune of probably 40-ish basis points from our expectations from World Cup.
Speaker #2: while that's down one percentage point compared to a quarter ago , that's quite normal . As you enter a year . And we actually expect to see across all in three segments 26 that they will be low , single up digits .
Speaker #2: When you look about leisure , BT and Group , in terms of the booking window , again , fairly similar . 22 days in the fourth quarter , business always transient about a week shorter and leisure a little bit longer .
Speaker #2: And we continue to see the same trend in Greater China , which is that they have a meaningfully shorter booking window . So I think we've clearly got some extraordinary events in the US and Canada that will help us to the tune of 40 ish basis points from our expectations from World Cup .
Leeny Oberg: But, I think you'll also-- you know, you can recognize that we really start to see extraordinary, events and experiences happening almost every year, that we start explaining the benefit from it, because the reality is people love to travel, to have experiences. So that trend of those, expenditures by consumers growing faster than, goods continues, and we expect that to go forward. At the same time, that view of the K distribution, where our lower-end, consumer and guests have had a tougher time, I think that we expect to also stay the same. Government business ended up, the year about 15% down, and that clearly impacts our, our lower-end hotels. So this disparity between the top end and the bottom end, we expect to continue, although perhaps not to be quite as wide as it was in 2025.
Leeny Oberg: But, I think you'll also-- you know, you can recognize that we really start to see extraordinary, events and experiences happening almost every year, that we start explaining the benefit from it, because the reality is people love to travel, to have experiences. So that trend of those, expenditures by consumers growing faster than, goods continues, and we expect that to go forward. At the same time, that view of the K distribution, where our lower-end, consumer and guests have had a tougher time, I think that we expect to also stay the same. Government business ended up, the year about 15% down, and that clearly impacts our, our lower-end hotels. So this disparity between the top end and the bottom end, we expect to continue, although perhaps not to be quite as wide as it was in 2025.
Speaker #2: But I think you'll also , you know , you can recognize that we really start to see extraordinary events and experiences happening almost every year that we start explaining the benefit from it , because the reality is love to people travel , to have experiences .
Speaker #2: So that trend of those expenditures by consumers growing faster than goods continues . And we expect that to go forward at the same time , that view of the K distribution , where our lower end consumer and guest have had a tougher time , I think that we expect to also stay the same government business ended up the year about 15% down , and that clearly impacts our lower end hotels .
Speaker #2: So this disparity between the top end and the bottom end , we expect to continue . Although perhaps not to quite be as wide as it was in 25 .
Operator: Thank you. Our next question will come from Richard Clarke with Bernstein. Your line is open.
Operator: Thank you. Our next question will come from Richard Clarke with Bernstein. Your line is open.
Richard Clarke: Hi, thanks for taking my questions. And, yeah, just echoing, been a pleasure working with you the last, six or seven years, Leeny. Just a couple of sort of follow-ups, I guess, on the credit card point you've made. Would you have expected credit card spending to have accelerated, or is the acceleration up to sort of 35% growth all to do with the royalty changes? And secondly, has there been any sort of change in anything, maybe your negotiations with Chase or American Express, you know, since those concerns around interest rate caps or the CCCA reform negotiations? Like, has that changed those negotiations or are those fully on track as they were before?
Richard Clarke: Hi, thanks for taking my questions. And, yeah, just echoing, been a pleasure working with you the last, six or seven years, Leeny. Just a couple of sort of follow-ups, I guess, on the credit card point you've made. Would you have expected credit card spending to have accelerated, or is the acceleration up to sort of 35% growth all to do with the royalty changes? And secondly, has there been any sort of change in anything, maybe your negotiations with Chase or American Express, you know, since those concerns around interest rate caps or the CCCA reform negotiations? Like, has that changed those negotiations or are those fully on track as they were before?
Speaker #3: you . Thank Our next question will come from Richard Clarke with Bernstein . Your line is open
Speaker #9: Thanks for Hi . taking my questions . And yeah , echoing the with you just been a pleasure working last 6 or 7 years .
Speaker #9: Just a couple of sort of follow ups , I guess , on the on the credit card point you've made , would you have expected credit card spending to have accelerated or is the acceleration up to sort of 35% growth all to do with the royalty changes ?
Speaker #9: And secondly , has there been any sort of change in anything maybe on negotiations with Chase or American Express , you know , since those concerns around interest rate caps or the .
Leeny Oberg: So thanks very much, Richard, and likewise. Good reminder. No, we do expect the basic credit card business to show the same high single-digit growth rate that we've been seeing continue on into 2026. And that again is separate and apart from a new credit card deal. And then it is the other component that leads us to the approximately 35% increase in the credit card guidance for 2026. On the second question, I'll-
Leeny Oberg: So thanks very much, Richard, and likewise. Good reminder. No, we do expect the basic credit card business to show the same high single-digit growth rate that we've been seeing continue on into 2026. And that again is separate and apart from a new credit card deal. And then it is the other component that leads us to the approximately 35% increase in the credit card guidance for 2026. On the second question, I'll-
Speaker #9: Reform negotiations , like , has that changed those negotiations or those fully on track as they were before ?
Speaker #2: So thank you very much , Richard . And likewise , so good No , we do reminder . expect the the basic credit card business to show the same single high growth rate digit we've been that seeing .
Speaker #2: Continue on into 26 . And that , again , is separate and apart from a new credit card deal . And then it is the the other component that leads us to the approximately 35% increase in the credit card guidance for 2026 .
Anthony Capuano: Yeah, on the second question, Richard, obviously we are in close contact with both Chase and American Express, but broadly, we've not seen some of the discussions on Capitol Hill have any measurable impact on the pace or the progress we've made on our credit card deal negotiations.
Tony Capuano: Yeah, on the second question, Richard, obviously we are in close contact with both Chase and American Express, but broadly, we've not seen some of the discussions on Capitol Hill have any measurable impact on the pace or the progress we've made on our credit card deal negotiations.
Speaker #2: On the second question ,
Speaker #1: Yeah , on the second question , Richard , obviously we close are in contact with both Chase and American Express , but broadly , we've not seen some of the discussions on Capitol Hill .
Speaker #1: Have any measurable impact on the pace the the or progress we've made on our credit card deal negotiations .
Operator: Thank you. Our next question will come from David Katz with Jefferies. Your line is open.
Operator: Thank you. Our next question will come from David Katz with Jefferies. Your line is open.
Speaker #3: Thank you . Our next question will come from David Katz with Jefferies . Your line is open .
David Katz: Morning, and thanks for taking my questions. Leeny, at the risk of dating both of us, you know, for a new person picking up the space, the patience and grace of the IR team, you know, sets the tone for everything. All the best.
David Katz: Morning, and thanks for taking my questions. Leeny, at the risk of dating both of us, you know, for a new person picking up the space, the patience and grace of the IR team, you know, sets the tone for everything. All the best.
Speaker #10: Morning . And . Taking my questions at the risk of dating both of us , you know , for for a new person picking up the the space , patients and grace of the IR team , you know , for everything .
Leeny Oberg: Thank you very much.
Leeny Oberg: Thank you very much.
David Katz: I wanted to ask about, you know, NUG and the investment spending, you know, they're in. To, at the risk of parsing your words, you know, Leeny, I think you said your policy on key money and investment hasn't changed. Is the amount year over year that's included in this guide versus, you know, last year's Q1, you know, changing in some way? And hypothetically, if you wanted to accelerate your NUG, right, we always look at the growth rates, you know, versus everyone else's. You know, could you theoretically spend more to drive it higher? You know, just curious what's all in there. Thank you.
David Katz: I wanted to ask about, you know, NUG and the investment spending, you know, they're in. To, at the risk of parsing your words, you know, Leeny, I think you said your policy on key money and investment hasn't changed. Is the amount year over year that's included in this guide versus, you know, last year's Q1, you know, changing in some way? And hypothetically, if you wanted to accelerate your NUG, right, we always look at the growth rates, you know, versus everyone else's. You know, could you theoretically spend more to drive it higher? You know, just curious what's all in there. Thank you.
Speaker #10: All sets the tone the best .
Speaker #11: you very Thank much .
Speaker #10: I wanted to ask about , you know the , NUG and investment spending . You know , there in I to the risk of parsing your words , you know , I think you said your policy on key money and investment hasn't changed is the amount year over year .
Speaker #10: That's included in this guide versus , you know , last year's one one , you know , changing in some way . And hypothetically , if you wanted to accelerate your NUG , right .
Speaker #10: We always look at the growth rates . Versus everyone else's , you know , could you theoretically spend more to to drive it higher ?
Leeny Oberg: Yeah, sure. Absolutely. Great question. I'll try to cover what I can and leave the rest for Tony. There were several questions in there. So first to your point, over time, we have seen a bit more key money required across all the tiers, and I emphasize the a bit. When you think about the way that financing interest rates, cost of construction, and you think about the cap stack for a hotel, that makes sense, and you can be sure it is industry-wide, that is the case. We also have a distinctly strong pipeline in luxury and full service, which at the margin tend to have a bit more key money, but generate meaningfully higher fees and NPV, from that perspective.
Leeny Oberg: Yeah, sure. Absolutely. Great question. I'll try to cover what I can and leave the rest for Tony. There were several questions in there. So first to your point, over time, we have seen a bit more key money required across all the tiers, and I emphasize the a bit. When you think about the way that financing interest rates, cost of construction, and you think about the cap stack for a hotel, that makes sense, and you can be sure it is industry-wide, that is the case. We also have a distinctly strong pipeline in luxury and full service, which at the margin tend to have a bit more key money, but generate meaningfully higher fees and NPV, from that perspective.
Speaker #10: You know , just just curious what's what's all in there ? Thank you .
Speaker #2: Yeah , sure . Absolutely . Great question . I'll try to cover what I can and leave the rest for Tony . There were several questions in there first to your point So .
Speaker #2: , over time we have seen a bit more key money required across all the tiers . And I'm emphasize the a bit when you think about the way that financing interest rates , cost of construction and you think about the cap stack for a hotel , that makes sense and you can be sure it is industry wide that that that is the case .
Speaker #2: We also have a distinctly strong pipeline in luxury and full service , which at the margin tend to have a bit more key money .
Leeny Oberg: The other thing is that when I talk about that roughly 40%, remember that there is, it is in the borderline of, you know, kind of close to 50%, that you will see spent on extending, renovating, getting new and better agreements for existing hotels, that then also improve our fee stream, as well as for new development. So when I look at the overall new development, the numbers relative to last year for new development are not meaningfully different.... I remind you of our business model. We don't have an issue with having to constrain key money. When we have great deals come to us, we have, as you know, the free cash flow to absolutely go and spend it.
Leeny Oberg: The other thing is that when I talk about that roughly 40%, remember that there is, it is in the borderline of, you know, kind of close to 50%, that you will see spent on extending, renovating, getting new and better agreements for existing hotels, that then also improve our fee stream, as well as for new development. So when I look at the overall new development, the numbers relative to last year for new development are not meaningfully different.... I remind you of our business model. We don't have an issue with having to constrain key money. When we have great deals come to us, we have, as you know, the free cash flow to absolutely go and spend it.
Speaker #2: But generate meaningfully higher fees . And NPV from that perspective , the other thing is that when I talk about that , roughly 40% , remember that there is it is in the borderline of know , you , kind of close to 50% that you will see spent on extending , renovating , getting new and better agreements for existing hotels , that then also improve our fee stream , as well as for new development .
Speaker #2: when I So look at the overall new development , the numbers relative to last year for new development are not meaningfully And I different .
Speaker #2: remind you of our business model , we don't have an issue with having to constrain key money when we have great deals come to us , we have , as you know , the free cash flow to absolutely go and spend it .
Leeny Oberg: However, we're very disciplined, and we do find that where we use our key money, those deals are more valuable per key than deals that don't require key money. So I, I think that financial discipline to make sure that we're getting a great ROICC, is, is very important overall. Then I'll turn to Tony.
Leeny Oberg: However, we're very disciplined, and we do find that where we use our key money, those deals are more valuable per key than deals that don't require key money. So I, I think that financial discipline to make sure that we're getting a great ROICC, is, is very important overall. Then I'll turn to Tony.
Speaker #2: However, we're very disciplined, and we do find that when we use our key money, those are more deals valuable per key than deals that don't require key money.
Speaker #2: So I that think financial discipline to sure make that we're getting a great ROI . Is , is very important overall . And I'll turn to Tony .
Anthony Capuano: Yeah, and David, the only thing I would add, I might just double click on Leeny's comment about the discipline we use. I suppose there is a path out there to just buy deals in a non-economic way. That has not ever been our model, nor will it be going forward. We deploy the company's capital when we think we can drive outsized economics for the shareholders, as you heard from Leeny. And I'll just give you one statistic maybe that underscores that a little bit.
Tony Capuano: Yeah, and David, the only thing I would add, I might just double click on Leeny's comment about the discipline we use. I suppose there is a path out there to just buy deals in a non-economic way. That has not ever been our model, nor will it be going forward. We deploy the company's capital when we think we can drive outsized economics for the shareholders, as you heard from Leeny. And I'll just give you one statistic maybe that underscores that a little bit.
Speaker #1: Yeah . And only David , the thing I would add the I might just double click on Lenny's about comment the discipline . We , use we .
Speaker #1: I suppose there is a path out there to just buy deals in a non-economic way. That is not ever our model, nor will it be going forward.
Speaker #1: We deploy the company's capital when we think we can drive outsized economics for the shareholders, as you heard from Lenny. And I'll just give you one statistic, maybe that underscores that a little bit.
Anthony Capuano: While the aggregate amount of key money may have increased when you're driving the sort of record deal volumes we have with 1,200 deals signed just last year, the amount of key money per deal signed last year was actually lower than what it was back in 2019, and about flat to where it was in 2024. So I think that's a good illustration of the continued discipline we apply to the deployment of MI Capital.
Tony Capuano: While the aggregate amount of key money may have increased when you're driving the sort of record deal volumes we have with 1,200 deals signed just last year, the amount of key money per deal signed last year was actually lower than what it was back in 2019, and about flat to where it was in 2024. So I think that's a good illustration of the continued discipline we apply to the deployment of MI Capital.
Speaker #1: While the aggregate amount of key money may have increased when you're driving the sort of record deal volumes we have with 1200 deals signed just year , the last amount of key money per deal signed last year was actually lower than what was back in 2019 .
Speaker #1: And about flat to where it was in '24. I think that's a good illustration of the continued discipline we apply to the deployment of my capital.
Operator: Thank you. Our next question will come from Brandt Montour with Barclays. Your line is open.
Operator: Thank you. Our next question will come from Brandt Montour with Barclays. Your line is open.
Brandt Montour: Good morning, everybody. Congratulations, Leeny. Thank you for everything, you will be missed. So I'm just gonna ask the credit card question in a slightly different and perhaps a little bit more direct way, but does this adjustment change the way that we should think about upside from the ongoing negotiations?
Brandt Montour: Good morning, everybody. Congratulations, Leeny. Thank you for everything, you will be missed. So I'm just gonna ask the credit card question in a slightly different and perhaps a little bit more direct way, but does this adjustment change the way that we should think about upside from the ongoing negotiations?
Speaker #3: Thank you. Our question will come from next, Brandt with Montour. Your line is open.
Speaker #12: Good morning everybody . Congratulations . Thank you for everything . You will be missed . So I'm just going to ask the credit card question in a slightly different and perhaps a little bit more direct way , but but does this adjustment change the way that we should think about upside from the ongoing negotiations ?
Leeny Oberg: Again, I'll reiterate what I said, Brandt, in my comments during the script, is that, first of all, the two are totally separate. This, this is a function of an agreement that has been changed, as well as the strength and the power and size and scale of Bonvoy and the efficiency with which we run it. So that is really regarding the royalty rates. Relative to the credit cards, I just point you to the fact that we already have, by far, the largest credit card program in the industry, combining the former Amex, SPG program as well as Chase Bonvoy. We were by far the largest then.
Leeny Oberg: Again, I'll reiterate what I said, Brandt, in my comments during the script, is that, first of all, the two are totally separate. This, this is a function of an agreement that has been changed, as well as the strength and the power and size and scale of Bonvoy and the efficiency with which we run it. So that is really regarding the royalty rates. Relative to the credit cards, I just point you to the fact that we already have, by far, the largest credit card program in the industry, combining the former Amex, SPG program as well as Chase Bonvoy. We were by far the largest then.
Speaker #2: So again , I'll reiterate what I said . Brant , in my comments during the script , is that , first of all , the two are totally separate .
Speaker #2: This is a function of an agreement that has been changed as well as the strength and the power and size and scale of Bonvoy and the with which efficiency we run it .
Speaker #2: So that is really regarding the royalty rate relative to the credit cards . I just point you to the fact that we have by far credit largest the card program in the , combining the industry former Amex , SPG program as well as Chase Bonvoy .
Leeny Oberg: So again, that's not anything to do with what's going on with the royalty rate, but just a reminder that you've really got already a huge program with over $700 million in fees. And then also just to know that the way these credit card deals roll out is they involve you know introduction of new costs and refresh, and that all has to be put through the systems for the consumers. And we do expect that that will take some time for that to roll out and stabilize. So again, the two items are separate, but it's also a good reminder of the size and scale and the amount that we are already producing from our credit card programs.
Leeny Oberg: So again, that's not anything to do with what's going on with the royalty rate, but just a reminder that you've really got already a huge program with over $700 million in fees. And then also just to know that the way these credit card deals roll out is they involve you know introduction of new costs and refresh, and that all has to be put through the systems for the consumers. And we do expect that that will take some time for that to roll out and stabilize. So again, the two items are separate, but it's also a good reminder of the size and scale and the amount that we are already producing from our credit card programs.
Speaker #2: We were by far the largest then . So again , that's not anything to do with what's going on with the royalty rate .
Speaker #2: But just a reminder that you've really got, already, a program with over $700 million in fees. And then also, just to know that the way these credit card deals roll out is they involve, you know, introduction of new cards and refresh, and that all has to be put up through the systems for the consumers.
Speaker #2: And, expect we do that that will take some time for that to roll out and stabilize. So again, the two items are separate.
Speaker #2: But it's also a good reminder of the size and scale and the amount that we are already credit card our producing from programs .
Operator: Thank you. Our next question will come from Ari Klein with BMO Capital. Your line is open.
Operator: Thank you. Our next question will come from Ari Klein with BMO Capital. Your line is open.
Ari Klein: Thanks, and I'll echo the congrats, Leeny. Tony, I think you talked a little bit about some of the investments you're making on the tech side. I'm hoping you can unpack a little bit where you think we are in that investment process, and could this spend potentially accelerate as you invest in AI? And then just separately, a quick one on the World Cup. Curious what you're seeing, you know, as far as international demand. I know it's early, but I just imagine booking windows there might be a little bit longer. Thanks.
Ari Klein: Thanks, and I'll echo the congrats, Leeny. Tony, I think you talked a little bit about some of the investments you're making on the tech side. I'm hoping you can unpack a little bit where you think we are in that investment process, and could this spend potentially accelerate as you invest in AI? And then just separately, a quick one on the World Cup. Curious what you're seeing, you know, as far as international demand. I know it's early, but I just imagine booking windows there might be a little bit longer. Thanks.
Speaker #3: Thank you. Our next question will come from Ari Klein with BMO Capital. Your line is open.
Speaker #13: Thanks . And I'll echo the congrats , Lenny . Tony , I think a little you talked bit about some of the investments you're making on the tech side .
Speaker #13: I hoping you can unpack a little bit where you think we are in that investment process . And could this spend potentially accelerate as you invest in AI .
Speaker #13: And then just separately , a quick one on the World Cup . Curious what you're seeing as far as international demand . I know it's early , but I imagine booking windows there might be a little bit longer .
Anthony Capuano: Sure. So, as we've talked about in multiple discussions, the bulk of the investment is the replatforming of our three most important technology platforms: central reservations, property management system, and the loyalty platform. We have moved from development into deployment. We have started a portfolio of test hotels. Those rollouts are going great. You know, a lot fewer bugs than we expected and a lot more rapid resolution of those bugs than maybe we had hoped. So you should start to see that ramp up in a really meaningful way throughout the balance of 2026. By design, we've started to deploy these platforms in select service hotels, which have few less layers of complexity.
Tony Capuano: Sure. So, as we've talked about in multiple discussions, the bulk of the investment is the replatforming of our three most important technology platforms: central reservations, property management system, and the loyalty platform. We have moved from development into deployment. We have started a portfolio of test hotels. Those rollouts are going great. You know, a lot fewer bugs than we expected and a lot more rapid resolution of those bugs than maybe we had hoped. So you should start to see that ramp up in a really meaningful way throughout the balance of 2026. By design, we've started to deploy these platforms in select service hotels, which have few less layers of complexity.
Speaker #13: Thanks .
Speaker #1: Sure . So as we've talked about in in multiple discussions , we are the bulk of the investment is the replatforming of our three most important technology platforms .
Speaker #1: Central reservations , property management system and the loyalty platform have . We moved from development into have deployment . We started portfolio of test hotels .
Speaker #1: Those rollouts are going great . You know a lot fewer bugs than we expected and a lot more rapid resolution of those bugs than maybe we had hoped .
Speaker #1: So you should start to see that ramp up in a really meaningful way throughout the balance of 2026. By design, we've started to deploy these platforms in select service hotels, which have a few less layers of complexity.
Anthony Capuano: As we start to roll out into the full service tier and even into the luxury tier, we'll move as judiciously as we have to date to ensure we identify and resolve any bugs. But we're feeling really, really good about the pace of spending, and I don't know that it'll be materially different than what we've described over the last few quarters. And then I think on the second question about World Cup, again, it's early. I happened to be with the FIFA leadership over the weekend. I asked them specifically whether they were seeing any hesitancy from inbound international visitors for the World Cup, and they-- These are their words: They were stunned by the volume of ticket requests they've seen from around the world as soon as the website launched. So-
Tony Capuano: As we start to roll out into the full service tier and even into the luxury tier, we'll move as judiciously as we have to date to ensure we identify and resolve any bugs. But we're feeling really, really good about the pace of spending, and I don't know that it'll be materially different than what we've described over the last few quarters. And then I think on the second question about World Cup, again, it's early. I happened to be with the FIFA leadership over the weekend. I asked them specifically whether they were seeing any hesitancy from inbound international visitors for the World Cup, and they-- These are their words: They were stunned by the volume of ticket requests they've seen from around the world as soon as the website launched. So-
Speaker #1: As we start to roll out into the full-service tier and even into the luxury tier, we'll move as judiciously as we have to date to ensure we identify and resolve any bugs.
Speaker #1: But we're feeling really , really good about the pace of spending , and I don't know that it'll be materially different than what we've described described over the last few I think And then quarters .
Speaker #1: on the question about second World Cup , again , it's early . I happen to be with the FIFA leadership over the weekend .
Speaker #1: I asked them specifically whether they were seeing any hesitancy from inbound international visitors for the World Cup , and they these are their words .
Smedes Rose: ... it's early, but we're feeling really good about the early returns.
Tony Capuano: ... it's early, but we're feeling really good about the early returns.
Speaker #1: They were stunned by the volume of ticket requests they've seen from around the world . As soon as the website launched so it's early , but we're feeling really good about the early returns .
Leeny Oberg: And, just as a reminder, we did see in 2025 a decline in guests to the US although, for our entire system, cross-border was actually up 1%, because of international travel. And, we do so far, see some increase in international guests booking in our hotels. It, it's still quite early days, as you know, on many of the match dates, you don't know exactly yet which countries are gonna be playing. But, we are very pleased at what we're seeing so far. We went through an exhaustive, set of work to, really evaluate the number of matches, 104, the attendance expected, comparing to other events like this, to come up with our estimates. And, obviously, it is early days.
Leeny Oberg: And, just as a reminder, we did see in 2025 a decline in guests to the US although, for our entire system, cross-border was actually up 1%, because of international travel. And, we do so far, see some increase in international guests booking in our hotels. It, it's still quite early days, as you know, on many of the match dates, you don't know exactly yet which countries are gonna be playing. But, we are very pleased at what we're seeing so far. We went through an exhaustive, set of work to, really evaluate the number of matches, 104, the attendance expected, comparing to other events like this, to come up with our estimates. And, obviously, it is early days.
Speaker #1: .
Speaker #2: And just as a reminder , we did see in 2025 a decline in guests to the US . Although for our entire system across border was actually up a percent .
Speaker #2: Because of international travel . And we so do far see some increase in international guests booking in our hotels , it's still quite early days , as you know , on many of the match dates , you don't know exactly yet which countries are going to but be playing , we are very what we're pleased at seeing so far .
Speaker #2: We went through an exhaustive set of work to to really evaluate the number matches , of 104 the attendance expected comparing to other events like this to come up with our estimates .
Leeny Oberg: I could expect that as you get closer and closer to the finals, that you see these booking windows really get smaller and smaller. But for now, we, we are very pleased with what we're seeing from broad demand, but I would say it's too soon to say any more than that.
Leeny Oberg: I could expect that as you get closer and closer to the finals, that you see these booking windows really get smaller and smaller. But for now, we, we are very pleased with what we're seeing from broad demand, but I would say it's too soon to say any more than that.
Speaker #2: And obviously, it is early days. I could expect that as you get closer and closer to the finals, that you see these booking windows really get smaller and smaller.
Speaker #2: But but for now , we are very pleased with what we're seeing from broad demand . But I would say it's too soon to say any more than that .
Operator: Thank you. Our next question will come from Connor Cunningham with Melius Research. Your line is open.
Operator: Thank you. Our next question will come from Connor Cunningham with Melius Research. Your line is open.
Conor Cunningham: Hi, everyone. Thank you and congrats again, Leeny. Just maybe two points of clarification. Just on the change in royalty rate, sorry to talk about this more, but just is the- is it a, is it a change in revenue recognition, or is there an increased cash, you know, conversion rate, as well? And then if you could just give a little bit more color on owned and owned and leased. You know, I think you talked a little bit about that in your prepared remarks, but just any more color there would be helpful. Thank you.
Conor Cunningham: Hi, everyone. Thank you and congrats again, Leeny. Just maybe two points of clarification. Just on the change in royalty rate, sorry to talk about this more, but just is the- is it a, is it a change in revenue recognition, or is there an increased cash, you know, conversion rate, as well? And then if you could just give a little bit more color on owned and owned and leased. You know, I think you talked a little bit about that in your prepared remarks, but just any more color there would be helpful. Thank you.
Speaker #3: Thank you . Our next question will come from Connor Cunningham with Melius Research . Your line is open . .
Speaker #14: everyone . Thank Hi , you and . Lenny . congrats again maybe two points of a clarification . Just Just on the change in royalty rate .
Speaker #14: Sorry to talk about this more , but just is a is it a is it change in recognition or is revenue there an increased cash , you conversion rate as well .
Speaker #14: And then if you could more color on owned and little bit owned and just give a you leased , know , I think you talked a little bit about that in your But just prepared remarks .
Leeny Oberg: Yeah. So, just real quick on the owned lease, that is really, I'd say all things fairly, with the exception that we've clearly got a couple large owned lease renovations. We do also, later in the year, have the Barbados hotels coming back into the system more fully, which does offset some of that. The other thing in the owned lease and net is where the payment that we make to a third party; they do share a very modest, immaterial amount. And as our royalty rate goes up, they will also share in that increase. But again, a very modest, immaterial amount, and it is not related to revenue recognition.
Leeny Oberg: Yeah. So, just real quick on the owned lease, that is really, I'd say all things fairly, with the exception that we've clearly got a couple large owned lease renovations. We do also, later in the year, have the Barbados hotels coming back into the system more fully, which does offset some of that. The other thing in the owned lease and net is where the payment that we make to a third party; they do share a very modest, immaterial amount. And as our royalty rate goes up, they will also share in that increase. But again, a very modest, immaterial amount, and it is not related to revenue recognition.
Speaker #14: color there any more helpful . Thank you would be .
Speaker #2: So Yeah . just real quick on the owned lease that is really I'd things say all fairly similar with the exception that we've clearly got a couple large owned leased renovations .
Speaker #2: We do later in the also year Barbados have the hotels coming back into the system more fully , which offset some of does other in the that .
Speaker #2: lease and owned net The is thing where the the payment that we make to a third party , they do share a very modest immaterial amount .
Speaker #2: as our royalty rate goes up , they will share in also And But that again , increase . a very modest , immaterial amount it is .
Leeny Oberg: This is a function that, as we have, the payments that are negotiated with our credit card companies of what they pay to be associated with Bonvoy, we then, divide that into the buckets that I talked about before, to make sure that the program, has the resources it needs to provide great value to our guests and our members, as well as paying for the actual cost of the points, to support the program, and then also to compensate Marriott for its licensed IP. Given, both the size, scale, and work we've done on efficiencies and the relief from, a contractual requirement, we are now able to increase that royalty rate to a level that we're comfortable with.
Leeny Oberg: This is a function that, as we have, the payments that are negotiated with our credit card companies of what they pay to be associated with Bonvoy, we then, divide that into the buckets that I talked about before, to make sure that the program, has the resources it needs to provide great value to our guests and our members, as well as paying for the actual cost of the points, to support the program, and then also to compensate Marriott for its licensed IP. Given, both the size, scale, and work we've done on efficiencies and the relief from, a contractual requirement, we are now able to increase that royalty rate to a level that we're comfortable with.
Speaker #2: not And to related revenue This is recognition . function a that have , as we the payments that are negotiated with credit card our companies of what they pay to be associated with Bonvoy , we then divide that into the buckets that I talked before to make about sure that the program has the it resources needs to provide .
Speaker #2: Great value to our guests and our members , as well as paying actual for the cost of the points to support the program .
Speaker #2: And then also, to compensate Marriott for its licensed IP, and given both the size and scale and work we've done on efficiencies, and the relief from a contractual requirement, we are now able to increase that to a royalty rate level that we're comfortable with.
Conor Cunningham: Awesome. Thank you.
Conor Cunningham: Awesome. Thank you.
Operator: Thank you. Our next question comes from Smedes Rose with Citi. Your line is open.
Operator: Thank you. Our next question comes from Smedes Rose with Citi. Your line is open.
Speaker #14: Awesome . Thank you .
Speaker #3: Thank you. Our next question comes from Smead with Rose Citi. Your line is open.
Smedes Rose: Hi, thank you. Leeny, best of everything to you going forward. It's been a pleasure.
Smedes Rose: Hi, thank you. Leeny, best of everything to you going forward. It's been a pleasure.
Leeny Oberg: Thanks.
Leeny Oberg: Thanks.
Smedes Rose: I wanted to ask, you guys have covered a lot of ground, but I just wanted to ask a little bit, you mentioned the strength in leisure. That's obviously been sort of a highlight in hotel world, especially for you guys, over the course of this year. And I just wanted to ask you, are you seeing, is anything in these comments, sort of underlying trends within leisure? Are you seeing an uptick in interest in all-inclusive platforms? Are you seeing incremental redemptions for loyalty points to support your leisure stays or anything that you could just point to? I'm just wondering kind of just the sort of overall changes, if anything, within the leisure category.
Smedes Rose: I wanted to ask, you guys have covered a lot of ground, but I just wanted to ask a little bit, you mentioned the strength in leisure. That's obviously been sort of a highlight in hotel world, especially for you guys, over the course of this year. And I just wanted to ask you, are you seeing, is anything in these comments, sort of underlying trends within leisure? Are you seeing an uptick in interest in all-inclusive platforms? Are you seeing incremental redemptions for loyalty points to support your leisure stays or anything that you could just point to? I'm just wondering kind of just the sort of overall changes, if anything, within the leisure category.
Speaker #15: Hi . Thank you . Best of everything to you going forward . It's been a pleasure . I wanted to ask you guys have covered a lot of ground , but I just wanted to ask a little bit mentioned the .
Speaker #15: strength in You leisure . That's obviously been sort of a in highlight Hotel World , especially for you guys . Over the course of this year .
Speaker #15: And I wanted to ask you , just are you seeing anything with this comment sort of underlying trends within leisure ? Are you seeing an uptick in interest in all inclusives platforms ?
Speaker #15: Are you seeing incremental redemptions for loyalty points to support your leisure stays, or anything that you could just point to? I'm just wondering kind of the sort of overall changes, if anything, within the leisure category.
Leeny Oberg: Sure. I'll start and Tony can fill in. On your question about redemptions, it continues to be roughly about 5% of nights. That is, frankly, where it's been for a while, with some slight variations. So, that part remains fairly stable. We obviously are much more dynamic in our pricing now, and we are able to, you know, help for hotels that are seeing a low occupancy period, can then make it more attractive to customers to redeem, and then similarly, make sure that the highest end are getting rates that reflect the demand that they have there.
Leeny Oberg: Sure. I'll start and Tony can fill in. On your question about redemptions, it continues to be roughly about 5% of nights. That is, frankly, where it's been for a while, with some slight variations. So, that part remains fairly stable. We obviously are much more dynamic in our pricing now, and we are able to, you know, help for hotels that are seeing a low occupancy period, can then make it more attractive to customers to redeem, and then similarly, make sure that the highest end are getting rates that reflect the demand that they have there.
Speaker #15: .
Speaker #2: I'll start Sure . and fill in can Tony question about It on your redemptions . continues to roughly about be 5% of nights .
Speaker #2: is , That frankly , where it's been for a while , with some slight variations . So that part remains fairly stable . We obviously are much more dynamic in our pricing now , and we are able to , you know , help for hotels that are seeing a low occupancy period can then make it more attractive to customers to redeem .
Speaker #2: And then similarly , make sure that the highest end are getting rates that reflect the demand that they have . There . And then I would also say that within the leisure space overall , that obviously the fundamental strength of the economy matters a lot .
Leeny Oberg: And then, I would also say that within the leisure space overall, that obviously, the fundamental strength of the economy matters a lot, and so a continued strong economic performance in the markets where our hotels are is a big driver. And then when you look at the leisure demand overall, resorts and luxury continue to be the leaders.
Leeny Oberg: And then, I would also say that within the leisure space overall, that obviously, the fundamental strength of the economy matters a lot, and so a continued strong economic performance in the markets where our hotels are is a big driver. And then when you look at the leisure demand overall, resorts and luxury continue to be the leaders.
Speaker #2: And so continued strong economic performance in the markets where our hotels are is a big driver . And look you then when the leisure overall demand , resorts and luxury continue to be the the leaders .
Anthony Capuano: Smedes, maybe the only thing I would tack on, we were talking about this yesterday. At some point, there are so many tentpole special events around the world that we shouldn't call them special anymore. They become sort of the norm. But this, this, phenomenon of event travel is becoming more and more consistent. You heard some of the comments at the open about the impact we expect to hear and see from the World Cup. We've got the Winter Olympics now going on in Italy. We expect a Q1 impact of about 100 basis points on EMEA RevPAR as a by-product of travel to both Milan and Cortina.
Tony Capuano: Smedes, maybe the only thing I would tack on, we were talking about this yesterday. At some point, there are so many tentpole special events around the world that we shouldn't call them special anymore. They become sort of the norm. But this, this, phenomenon of event travel is becoming more and more consistent. You heard some of the comments at the open about the impact we expect to hear and see from the World Cup. We've got the Winter Olympics now going on in Italy. We expect a Q1 impact of about 100 basis points on EMEA RevPAR as a by-product of travel to both Milan and Cortina.
Speaker #1: And smedes , maybe the only thing I would tack on , we were talking about this yesterday at some point . are so There many tentpole special events around the world that we shouldn't call them special anymore .
Speaker #1: They become sort of the norm , but this , this phenomenon of of vent travel is becoming more and more consistent . You heard some of the comments at the open about the impact we expect to hear , and see from the World Cup .
Speaker #1: We've got the Winter Olympics now going on in Italy. We expect a Q1 impact of about 100 basis points on EMIA RevPAR as a byproduct of travel to both Milan and Cortina.
Anthony Capuano: So I think the reality is, we'll continue to see in sports and music these major events that will just be a further bolster to the trend, the base trends we're already seeing in leisure.
Tony Capuano: So I think the reality is, we'll continue to see in sports and music these major events that will just be a further bolster to the trend, the base trends we're already seeing in leisure.
Speaker #1: And so I think the reality is we'll continue to see in sports music and these these major events just be that will a further bolster to the the base trends .
Leeny Oberg: The several percentage points, Smedes, that leisure gained in share of nights since COVID, has absolutely stuck. So you're seeing leisure at 45% of our nights globally. Group continues to be in the ballpark of a quarter, and BT is the one that's still several percentage points lower than it was in 2019.
Leeny Oberg: The several percentage points, Smedes, that leisure gained in share of nights since COVID, has absolutely stuck. So you're seeing leisure at 45% of our nights globally. Group continues to be in the ballpark of a quarter, and BT is the one that's still several percentage points lower than it was in 2019.
Speaker #1: We're seeing it already in leisure.
Speaker #2: The several percentage points . Smedes that leisure gained in share of nights since Covid has absolutely stuck . So you're seeing at 45% of our nights leisure globally .
Speaker #2: Group continues to be in the ballpark of a quarter, and BT is the one that's still several percentage points lower than it was in 2019.
Operator: Thank you. Our next question comes from Robyn Farley with UBS. Your line is open.
Operator: Thank you. Our next question comes from Robyn Farley with UBS. Your line is open.
Robin Farley: Great, thank you. And, Leeny, definitely best wishes. I want to add that to, I know to everyone else's comments. Two clarifications. One is, on the unit growth, increase 4.5 to 5%. Can you just clarify, is that all organic? Would acquisitions be on top of that, or could that 4.5 to 5% be a mix of organic and acquisitions, you know, to be determined? And then my other question, and I think you've pretty much answered it. I know there's been a number of questions on the step up in the credit card co-brand fees. So the royalty rate, this sort of 20% or so of the step up in credit card fees, is that sort of a one-time adjustment?
Robin Farley: Great, thank you. And, Leeny, definitely best wishes. I want to add that to, I know to everyone else's comments. Two clarifications. One is, on the unit growth, increase 4.5 to 5%. Can you just clarify, is that all organic? Would acquisitions be on top of that, or could that 4.5 to 5% be a mix of organic and acquisitions, you know, to be determined? And then my other question, and I think you've pretty much answered it. I know there's been a number of questions on the step up in the credit card co-brand fees. So the royalty rate, this sort of 20% or so of the step up in credit card fees, is that sort of a one-time adjustment?
Speaker #3: Thank you. Our next question comes from Robin Farley with UBS. Your line is open.
Speaker #16: Great . Thank you . And Leni definitely best wishes . I want to add that to I know to everyone else's comments to two clarifications .
Speaker #16: One is on the growth unit increased four and a half to 5% . Can you just clarify ? Is that all organic would on top acquisitions be of that , or could that four and a half to 5% be a mix of organic and acquisitions to be determined ?
Speaker #16: And then my other question , and I think you've pretty much answered it . I know there been a number of questions on the step up in the credit card co-brand fees .
Speaker #16: So the royalty rate , the sort of 20% or so of the step up in credit card fees , is , is that sort of a one time adjustment ?
Robin Farley: But, you know, you're not giving guidance for 2027 yet. But in other words, the idea is you, you really probably that high single digit increase from usage and things is what the ongoing increase would be after this sort of step up. That's more of a one-time step up in, in 2026. Thank you.
Robin Farley: But, you know, you're not giving guidance for 2027 yet. But in other words, the idea is you, you really probably that high single digit increase from usage and things is what the ongoing increase would be after this sort of step up. That's more of a one-time step up in, in 2026. Thank you.
Speaker #16: But you're not guidance for 2027 yet . But in other words , the idea is really probably that high single digit increase from usage and things is what the ongoing increase would be after this sort of step up .
Leeny Oberg: So thanks, thanks, Robyn, very much. And yes, our 4.5% to 5% is organic. That is organic growth from the work that, the team has been, diligently going after. You know, and, and also all the work that goes into openings. So yes, that's all organic. And then, yes, on, on the royalty rates, we have, as, as we have described earlier in this call, we've worked very hard to make sure, that we are, doing what's in the best interest of our constituencies, and we're very comfortable, with the change that we've made and where we are.
Leeny Oberg: So thanks, thanks, Robyn, very much. And yes, our 4.5% to 5% is organic. That is organic growth from the work that, the team has been, diligently going after. You know, and, and also all the work that goes into openings. So yes, that's all organic. And then, yes, on, on the royalty rates, we have, as, as we have described earlier in this call, we've worked very hard to make sure, that we are, doing what's in the best interest of our constituencies, and we're very comfortable, with the change that we've made and where we are.
Speaker #16: That's more of a one time step up in in 26 . Thank you .
Speaker #2: Thanks , thanks . Thanks , Robin , very much . And yes , our four and a half to 5% is organic . That is organic growth from the work that the team has been diligently going after .
Speaker #2: know , and also You all the work that goes into opening . So yes , that's all then , organic . And yes , the rates , royalty on on we have as , as we have described earlier in this call , we've worked very make hard to that we are doing best what's in the interest of our constituencies , and we're very comfortable with the we've that made and where we are .
Operator: Thank you. Our next question comes from Trey Bowers with Wells Fargo. Your line is open.
Operator: Thank you. Our next question comes from Trey Bowers with Wells Fargo. Your line is open.
Trey Bowers: Hey, guys. Leeny, sorry to see you go, especially as I transition to this side of the aisle, but it's been great working with you all these years. I'm just going to build on an earlier question around business transient travel. Do you guys expect that, that does get back to kind of pre-pandemic levels, or has just the world changed a little bit? And in that case, has it changed at all, just your thoughts around where you're looking to drive NUG, even the design of the hotels, or is your expectation eventually that fully recovers? Thanks so much.
Trey Bowers: Hey, guys. Leeny, sorry to see you go, especially as I transition to this side of the aisle, but it's been great working with you all these years. I'm just going to build on an earlier question around business transient travel. Do you guys expect that, that does get back to kind of pre-pandemic levels, or has just the world changed a little bit? And in that case, has it changed at all, just your thoughts around where you're looking to drive NUG, even the design of the hotels, or is your expectation eventually that fully recovers? Thanks so much.
Speaker #3: Thank you . Our next question comes from Trey Bowers with Wells Fargo . Your line is open .
Speaker #16: Hey , guys . Sorry to see you go . Especially as I transitioned to this side of the aisle . But it's been great working with you all these years .
Speaker #16: I'm just going to build on an earlier question around business transient travel . Do you guys expect that that does back to get kind of pre-pandemic levels , or is just the world changed a little bit ?
Speaker #16: And that case , has it changed at all ? Just your thoughts around where you're looking to drive NUG , even the design of the hotels , or is your expectation eventually that fully recovers ?
Leeny Oberg: Well, so, you know, first of all, 2019 is getting to be a longer and longer time away. You think about just how the market has evolved and how much we've grown. I mean, we've grown probably 25%, since then, and a lot of that is international and across all chain scales. So it does get harder to truly compare apples to apples. But I do think, when you look at classic business travel related to the level of economic activity, that part will continue to have the same trends it had before, which is that people need to meet person to person to do business.
Leeny Oberg: Well, so, you know, first of all, 2019 is getting to be a longer and longer time away. You think about just how the market has evolved and how much we've grown. I mean, we've grown probably 25%, since then, and a lot of that is international and across all chain scales. So it does get harder to truly compare apples to apples. But I do think, when you look at classic business travel related to the level of economic activity, that part will continue to have the same trends it had before, which is that people need to meet person to person to do business.
Speaker #16: Thanks so much .
Speaker #2: Well , so you know , first of all , 2019 is getting to be a longer and longer time away . And you think about just how the market has evolved and how much we've grown .
Speaker #2: I mean , we've grown probably 25% since then . And a lot of that is international . And across all chain scales . So it does get harder to truly compare apples to apples .
Speaker #2: But but I do think when you look at classic business travel related to the level of economic activity that that part will continue to have the same trends that had before , which is that people need to meet person to person to do business .
Leeny Oberg: There are also other elements, for example, not as many companies having five days a week in the office all the time, that I think make your traveling consultant, at 25 years old, not necessarily quite on the road quite as many days. But we do expect that certainly overall, I think you'll see the level of demand get back to 2019 levels. The counter to that is, I think leisure is going to continue to be stronger. And so from that perspective, this percentage of leisure being greater than it was before and business being less, I actually think will continue to be as it is. Although again, perhaps not quite the way it is right now.
Leeny Oberg: There are also other elements, for example, not as many companies having five days a week in the office all the time, that I think make your traveling consultant, at 25 years old, not necessarily quite on the road quite as many days. But we do expect that certainly overall, I think you'll see the level of demand get back to 2019 levels. The counter to that is, I think leisure is going to continue to be stronger. And so from that perspective, this percentage of leisure being greater than it was before and business being less, I actually think will continue to be as it is. Although again, perhaps not quite the way it is right now.
Speaker #2: There are also other elements for as many having not companies example , five days a week in the office . All the time that make I think your traveling consultant 25 years old , not necessarily quite on the road , quite as many days , but but we do expect that certainly overall , I think you'll see the level of demand get back to 2019 levels .
Speaker #2: The counter to that is , I think , leisure is going to continue to be stronger . And so from that perspective , this percentage of leisure being greater than it was before .
Speaker #2: And business being less , I actually think will continue to be as it is , although again , perhaps not quite the way it is right now .
Anthony Capuano: I might just reiterate something I said a year or two ago, and that is, while I think it is a fantastic phenomenon for our business, our ability to tell you with perfect precision, the trip purpose of every guest in our hotel has become a little murkier because you see these combined trip purposes with folks tacking on leisure to business travel. So while we might not be able to give you the exact same precise answer we might have given you in the past on market mix, I think we feel really good about the overall recovery of travel volumes.
Tony Capuano: I might just reiterate something I said a year or two ago, and that is, while I think it is a fantastic phenomenon for our business, our ability to tell you with perfect precision, the trip purpose of every guest in our hotel has become a little murkier because you see these combined trip purposes with folks tacking on leisure to business travel. So while we might not be able to give you the exact same precise answer we might have given you in the past on market mix, I think we feel really good about the overall recovery of travel volumes.
Speaker #1: And I might just reiterate something I said a year or two ago , and that is while I think it is a fantastic phenomenon for our business , our ability to tell you with perfect precision the trip purpose of every guest in our hotel has become a little , these murkier see because you combined trip purposes with folks tacking on leisure to business travel .
Speaker #1: So while we might not be able to give you the exact same precise answer we might have given you in the past on market mix , I think we feel really good about the overall recovery of travel volumes .
Operator: Thank you. At this time, we've reached the end of our allotted time for questions. I would now like to turn the call back over to Tony Capuano for any closing or final remarks.
Operator: Thank you. At this time, we've reached the end of our allotted time for questions. I would now like to turn the call back over to Tony Capuano for any closing or final remarks.
Speaker #3: Thank you . At this time , we've reached the end of our allotted time for questions . I would now like to turn the call back over to Tony Capuano or any closing or final remarks .
Anthony Capuano: Well, thank you all for calling today. For those of you that attended or may have read about the ALIS Conference, Leeny received the Financial Advisor of the Year award. She should have received the Financial Advisor of the Quarter Century. She has been an extraordinary leader, an extraordinary partner. She has an unwavering belief in the power and potential of travel and of Marriott, and has steered us through some of the most difficult, complex challenges that the company's faced over all these years. She will be deeply missed. As you might expect, for those of you that know her well, she's not spent the last year taking a victory lap. Instead, she spent the year getting everything buttoned up, preparing Jen, so that we'll have a seamless transition. But Leeny, thank you. We'll miss you.
Tony Capuano: Well, thank you all for calling today. For those of you that attended or may have read about the ALIS Conference, Leeny received the Financial Advisor of the Year award. She should have received the Financial Advisor of the Quarter Century. She has been an extraordinary leader, an extraordinary partner. She has an unwavering belief in the power and potential of travel and of Marriott, and has steered us through some of the most difficult, complex challenges that the company's faced over all these years. She will be deeply missed. As you might expect, for those of you that know her well, she's not spent the last year taking a victory lap. Instead, she spent the year getting everything buttoned up, preparing Jen, so that we'll have a seamless transition. But Leeny, thank you. We'll miss you.
Speaker #1: Well, thank you all for calling today. For those of you that attended or may have read about the Alice Conference, Leni received the Financial Advisor of the Year Award.
Speaker #1: She should have received the Financial advisor of the quarter century . She has been an extraordinary leader , an extraordinary partner . She has an unwavering belief in the power and of potential and of travel Marriott , and has steered us through some of the most difficult , complex challenges that the company has faced over all these years .
Speaker #1: She will be deeply missed , as you might expect , for those of you that know her well , she's not spent the last year taking a victory lap .
Speaker #1: Instead , she spent the year getting everything buttoned up , preparing Jen so that we'll have a seamless transition . But Leni , thank you .
Leeny Oberg: Thank you so much. I consider myself incredibly fortunate to have spent my career at Marriott. The travel and hospitality industry is extraordinarily dynamic and, frankly, with tons of growth, opportunity, and innovation ahead of us. And I know that you and Jen and Sean and the team are gonna absolutely take the company to new and greater heights after I retire. Best of all, frankly, the reality that the way you win in our business is by taking care of people and treating people well, it doesn't get any better than that. So with that, I thank you, and I thank everybody on the phone very much for all your time and energy that you put into helping understand Marriott and our strategies.
Leeny Oberg: Thank you so much. I consider myself incredibly fortunate to have spent my career at Marriott. The travel and hospitality industry is extraordinarily dynamic and, frankly, with tons of growth, opportunity, and innovation ahead of us. And I know that you and Jen and Sean and the team are gonna absolutely take the company to new and greater heights after I retire. Best of all, frankly, the reality that the way you win in our business is by taking care of people and treating people well, it doesn't get any better than that. So with that, I thank you, and I thank everybody on the phone very much for all your time and energy that you put into helping understand Marriott and our strategies.
Speaker #1: We'll miss you .
Speaker #2: Thank you so much . I consider myself incredibly fortunate to have spent my career at Marriott . The travel and hospitality industry is extraordinarily dynamic and frankly , with tons of growth , opportunity and innovation ahead of us .
Speaker #2: And I know that you and Jen and Sean and the team are going to absolutely take the company to new and greater heights after I retire.
Speaker #2: Best of frankly , the all , reality that the way you business is win in our by taking care of people and treating people well doesn't get any better than that .
Speaker #2: So with that, I thank you. And I thank everybody on the phone very much for all your time and energy that you put into helping understand Marriott and our strategies.
Anthony Capuano: Thank you all.
Tony Capuano: Thank you all.
Operator: Thank you. That brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.
Operator: Thank you. That brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.
Speaker #1: Thank you all .
Speaker #3: Thank you. That brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.
