Marriott International

Good day, everyone, and welcome to today's Marriott International Q4 2023 earnings call. At this time, all participants are in a listen-only mode. Later, you will have an opportunity to ask questions during the question-and-answer session. You may register to ask a question at any time by pressing the star and 1 on your telephone keypad. Please note this call is being recorded, and I will be standing by should you need any assistance. It is now my pleasure to turn today's program over to Jackie McConaughey.

Thank you. Good morning, everyone, and welcome to Marriott's fourth 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 SEC filings, which could cause future results to differ materially from those expressed in or implied by our comments. Please note that our discussion of revenues across different customer segments refer to property-level revenues. And unless otherwise stated, our rev part, occupancy, ADR, and property level revenue comments reflect system-wide constant currency results for comparable hotels. Statements in our comments in 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.

Thank you, Jackie, and good morning, everyone. Our team produced fantastic results in 2023. We continue to experience strong momentum in our business around the world thanks to solid demand for travel and our diverse portfolio of 30-plus leading brands. Full-year global rent par rose nearly 15%, and net rooms grew 4.7%. leading to excellent earnings and cash flow. In the fourth quarter, global REVPAR increased over 7% year over year, driven by roughly equal gains in ADR and occupancy. Groom, which comprised 23% of room nights, was again the standout customer segment. Compared to the year-ago quarter, group revenues rose 9% globally and 7% in the U.S. and Canada. And group is shaping up to have another solid year in 2024. At the end of last year, full year 2024 group revenues were pacing up nearly 13% globally and 11% in the U.S. and Canada on a year-over-year basis, driven by robust increases in both room nights and ADR. Leisure transient accounted for 44% of global room nights in the quarter. this segment has by far grown the fastest coming out of COVID, with global leisure transient revenues in the fourth quarter nearly 50% above the same quarter in 2019. Even with this strong growth, demand has remained resilient. Fourth quarter global room nights rose 5% over the year-ago quarter, leading to a 6% leisure transient revenue growth worldwide. In the US and Canada, leisure revenues were up 2%. Business Transient contributed 33% of global roommates in the fourth quarter. Demand from small and medium-sized corporates remained robust, and while large corporates are still lagging, they continued to post volume increases. Solid gains in ADR drove Business Transient revenues up 7% globally and 3% in the U.S. and Canada. Our powerful Marriott Bonvoy loyalty program grew to over 196 million members at the end of the year. Member penetration of global room nights reached new highs in the fourth quarter at 69% in the U.S. and Canada and 62% global. Our digital channels, and mobile in particular, remain key drivers of growth at a lower cost to our own. Our Marriott Bonvoy app contributed 22% more room nights in 2023 than in the prior year. We are focused on improving the customer experience across all our digital and other booking channels through the multi-year technology transformation we have underway. Enhancing engagement with our members outside of hotel stays through our numerous successful Marriott Bonvoy collaborations, including our co-branded credit cards also remains a priority. Our growing portfolio of 31 credit cards across 11 countries had record global card member acquisitions last year, and card spend for the year grew 11%. On the development front, despite a challenging financing environment in the U.S. and Europe, we signed a record 891 organic management, franchise, and license agreements in 2023, representing approximately 164,000 rooms. Additionally, we ended the year with a new high of roughly 573,000 rooms in our pipeline. We expect another year of strong global signings in 2024 and are already off to an incredible start. We also saw a meaningful acceleration in net rooms growth last year to 4.7%, the highest growth since 2019. Conversions helped again in 2023, accounting for 25% of organic room additions and 40% of organic room signings. For 2024, we anticipate net room growth of 5.5% to 6%. This includes around 37,000 rooms from MGM. The first set of these rooms at New York, New York became available on our Marriott channels at the end of January. with the remaining properties expected to be available by the middle of March. While it is very early days, we are incredibly pleased with the initial booking pace. We're excited about adding these amazing properties to our portfolio and enhancing our distribution in Las Vegas and other cities across the U.S. We remain confident in the three-year net room's compound annual growth rate we discussed at our investor meeting in September. of 5% to 5.5% from year-end 2022 to year-end 2025. As we focus on expanding our lodging offerings for owners, franchisees, and guests, we're making significant progress globally in the high-growth mid-scale space. We are in numerous deal discussions for Citi Express in the Caribbean and Latin America, or Cala region, and for Four Points Express in Europe, the Middle East, and Africa. Here in the U.S., we celebrated the first groundbreaking for Studio Res in Fort Myers, Florida in January and have over 300 additional potential deals under discussion in around 150 markets. As we strive to offer more options for our stakeholders, we're also working on a new U.S. transient mid-scale brand for both new build and conversion. At the other end of the chain scale, our luxury distribution is currently over 50% larger than our next closest competitor, and that lead is expanding. In 2023, we had record luxury signings with 58 new deals, and we added 29 new luxury hotels to our portfolio. In closing, 2023 was a banner year for Merriam, and I am optimistic about what lies ahead. The demand for all types of travel remains strong, even as the rebound impact from the pandemic has waned. The fundamentals for our industry are outstanding, and we are determined to grow our industry-leading position. We remain focused on offering the best brands and experiences to the most valuable and engaged guests while expanding the broadest and deepest portfolio of global properties and offerings so we can continue to connect people around the world through the power of travel. I want to thank our Marriott teams around the world for their remarkable dedication and excellent work. And now, let me turn the call over to Lene to discuss our financial results in more detail.