Marriott International (MAR) investor relations material

Demand environment and performance trends

• Sustained demand growth is evident across all geographies, chain scales, and demand segments, with July RevPAR up 7% globally and 8% in the U.S. and Canada, even after adjusting for World Cup effects.

• RevPAR growth is driven by both ADR and occupancy, with strong performance in luxury, premium, select, and mid-scale brands, each showing 4-5% growth in July.

• Business transient travel has rebounded, especially among small and medium-sized enterprises, while government demand is also growing.

• Group bookings show positive momentum, with anecdotal evidence suggesting increased bookings for 2027-2029 compared to 2025-2026.

• Owner health is improving as RevPAR growth outpaces inflation, and franchisees are encouraged by recent trends.

Owner initiatives and technology transformation

• Initiatives include reducing loyalty charges, leveraging procurement efficiencies, and introducing an intent to recommend incentive to lower affiliation costs by 50 basis points.

• Technology transformation aims to enhance both margin and revenue, with a new central reservation system enabling upselling of ancillary services and better merchandising of room types.

• AI is being used to improve distribution, with partnerships to enhance content visibility and the rollout of Ask Bonvoy, a conversational search tool for loyalty members.

• Some cost reductions and incentives are being funded directly, signaling commitment to owner and franchisee health.

• Capital recycling remains a focus, with plans to divest renovated assets like W New York - Union Square and Elegant Hotels in Barbados after performance stabilizes.

Development, conversions, and investment strategy

• Development faces challenges from costs, regulation, and lending, but conversions now account for 30-40% of openings and signings, with no major project cancellations in the Middle East despite delays.

• Conversion activity is expected to remain strong even as new builds recover, supported by a portfolio of conversion-friendly brands and creative approaches like white labeling.

• International conversions are a growing opportunity, with 50-60% of inventory outside the U.S. unbranded, offering significant potential.

• Investment spending has increased, particularly to support luxury and mid-scale growth, with disciplined deployment of capital for key money, mezzanine debt, and guarantees.

• Select and mid-scale brands are seeing the most new build activity, but premium and luxury projects are also advancing due to strong brand and lender relationships.