Marriott International

Good day, everyone, and welcome to today's Marriott International Third Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. You may register to ask a question at any time by pressing star 1 on your telephone keypad. You may remove yourself by pressing star 2. Please note today's call will be recorded and I'll be standing by if you should need any assistance. It is now my pleasure to turn the call over to Jackie McConaughey. Please go ahead.

Thank you. Good morning and welcome to Marriott's third quarter 2023 earnings call. On the call with me today are Tony Capuano, our President and Chief Executive Officer, Leni Oberg, our Chief Financial Officer and Executive Vice President Development, and Betsy Dahm, our Vice President 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. These statements are subject to numerous risks and uncertainties as described in our FCC filings, which could cause future results to differ materially from those expressed in or implied by our comments. Please also note that, unless otherwise stated, Our rev part occupancy and average daily rate comments reflect system-wide constant currency results for comparable hotels. 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. And now I will turn the call over to Tony.

Thanks, Jackie. Thank you all for joining us today. We've recorded terrific third quarter results this morning. Global demand for travel has remained strong and worldwide red part of the quarter rose 9% versus 2022. Red part increased over 4% in the U.S. and Canada and 22% internationally, driven by significant gains across Asia Pacific. Robust red part growth combined with nearly 5% year-over-year rooms growth, resulted in adjusted EPS of $2.11 of 25% from 2022. The third quarter tends to see a seasonally higher level of leisure transient travel, which accounted for 45% of global room nights during the quarter, about 4 percentage points above the first half. Globally, demand in this segment was again quite strong, with room nights up 7% over the 2022 third quarter, leading to 9% leisure transient revenue growth. In the US and Canada, leisure revenues rose 4% from the year-ago quarter, even as many domestic guests traveled to international locations, particularly in Europe and Asia Pacific. In the third quarter, Leisure room nights from U.S. and Canadian guests traveling outside the region were up nearly 25% over the last year, when cross-border travel was still constrained by COVID-related restrictions. Business transient demand accounted for 32% of global room nights in the quarter, while certain industries like technology and finance saw nice sequential improvement in demand during the quarter. The overall growth of the segment remained slow and steady, with business transient revenues rising 4% versus 2022 in the U.S. and Canada. Global group room night shares stood at 23% in the third quarter. Compared to the year-ago quarter, group revenues rose 9% globally and 5% in the U.S. and Canada. The performance of group coming out of the pandemic has been remarkable. and the segment is expected to continue to be a meaningful driver of revenue growth going forward. In the U.S. and Canada, fourth quarter 2023 group revenues were pacing up 12% year-over-year at the end of September, leading to full-year group revenue pacing up 19%. Of course, we have the most visibility into group given the longer booking windows. We're very pleased that as of the end of the third quarter, U.S. and Canada group revenue on the books for 2024 were pacing up 14% versus 2023, driven by a 9% rise in room nights and a 5% increase in average rates. Cross-border travel continued to strengthen, helping drive REVPAR growth in the third quarter. Asia-Pacific again saw the most meaningful quarterly increase in international visits. aided by global events like the Women's World Cup and improved airlift. The percent of global room nights from cross-border guests was about one percentage point below 2019 levels of approximately 20%. The most upside is still expected to come in Asia Pacific as international airlift to China improves. International airlift in greater China was roughly 50%, of 2019 capacity at the end of the third quarter and is expected to improve to around 60% by the end of the year. Turning to our powerful Bonvoy loyalty program, we remain focused on driving membership and fostering engagement with our 192 million members. Through our multi-year company-wide digital and technology transformation, we are increasingly leveraging the power of our more modern platform create more seamless, engaging digital experiences for our members. Adoption of our Marriott Bonvoy mobile app, which has become the channel of choice for the majority of our elite members, continues to grow, with third-quarter app downloads increasing 19% versus the same quarter last year. We also continue to drive engagement through our Bonvoy collaborations, including Uber, Eat Around Town, and our co-branded credit cards, which are currently in 11 countries. We're very excited about the opportunities our Bonavoy customers will receive from our MGM strategic licensing arrangement, which is now expected to launch in early 2024. As we think about our net rooms growth, full-year 2023 growth is now expected to be 4.2% to 4.5%, higher than our previous expectations, excluding the additional 37,000 MGMs. The MGM timing shift does not impact the three-year net rooms growth CAGR of 5% to 5.5% through 2025 that we laid out in our financial model at our September analyst day. We are pleased that over the next few years, our net rooms growth is anticipated to be squarely in the mid-single-digit range. During the quarter, our pipeline reached a new record high of nearly 557,000 rooms, a record even excluding the MGM rooms. Strong interest in conversions continues, including multi-unit opportunities. Conversions represented 20% of signings and nearly 30% of openings in the quarter. As we outlined in our analyst day, we are very excited about the global opportunity for mid-scale. We have real momentum with the Citi Express brand in Cala, Four Points Express in Europe, and Studio Res in the U.S., with terrific interest across the development community. We already have 10 signed letters of intent for Citi Express in Cala, nine of which are in new countries for the brand, four signed deals for Four Points Express in Turkey and in London, and we're in numerous additional discussions for both brands. And while we just recently issued the franchise disclosure documents for Studio Res, we are already in talks for deals in over 300 markets across the U.S. We expect there will be shovels in the ground for Studio Res projects in the next few months. As a global company, we are keenly aware that we are living in a time of heightened geopolitical tension. We are heartbroken by the devastating loss of so many innocent lives in the Israel-Hamas conflict. Our thoughts are with everyone impacted by this tragic war, as well as the ongoing war in Ukraine, and we remain hopeful for peace. I will now turn the call over to Lene to discuss our financial results in more detail.