Marriott International (MAR) The 2nd Annual Morgan Stanley Travel & Leisure Conference 2024 summary

Industry outlook and demand trends

• Strong long-term outlook driven by consumer shift toward experiences and increased leisure travel, with robust brand strength supporting growth.

• Global RevPAR growth reached 6.5% in April, with international markets up 9% and U.S./Canada at 5.6%.

• EMEA and Asia Pacific (excluding Greater China) saw mid-teens RevPAR growth, while Greater China experienced negative growth due to economic and weather factors.

• Booking windows in China remain short, and demand is expected to stay weaker than other regions.

• Overall demand remains strong, with international markets outperforming the U.S.

Growth strategy and brand initiatives

• Targeting 5%-5.5% rooms growth CAGR for 2024-2025, supported by RevPAR growth and operating synergies.

• Emphasis on expanding luxury and mid-scale offerings, with recent high-profile conversions in North America and new mid-scale brand entries.

• StudioRes brand has 140 projects engaged and 100 more in progress, reflecting strong owner and franchisee demand.

• Digital experience enhancements to roll out next year, aiming for revenue and productivity gains.

• Bonvoy loyalty program now has mid-60s% penetration globally and close to 70% in the U.S., with expanded digital and non-RevPAR fee opportunities.

Development pipeline and conversions

• U.S. new hotel supply growth is about half of pre-COVID levels, with 25% more new construction starts than last year but still 50% below 2019.

• Conversions are increasingly replacing new builds, with about 30% of room openings expected from conversions in coming years.

• Greater China and India show strong development pipelines, with APAC delivering 10% net rooms growth last year.

• Key money is more common in luxury conversions, averaging about $1 million per deal, but less so in mid-scale.

• Fees per key are expected to rise over time due to international growth, managed properties, and non-RevPAR-related fees.