Marriott International

Good day, everyone, and welcome to the Marriott International Q3 2025 earnings. At this time, all participants are in a listen-only mode. Later, there will be a question-and-answer session. You may queue for a question at any time by pressing the star key, followed by the number 1 on your telephone keypad. You may remove yourself from the queue by pressing star 2. Please be advised that today's call is being recorded. Should you require operator assistance, you may press star 0. I'd now like to turn the floor over to Jackie McConica, Senior Vice President, Investor Relations. Please go ahead.

Thank you. Good morning, everyone, and welcome to Marriott's third quarter 2025 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 Pilar Fernandez, our 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. 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. Unless otherwise stated, our RESPAR, occupancy, average daily rate, and property-level revenues comments reflect system-wide constant currency results for comparable hotels, and all changes refer to year-over-year changes for the comparable period. Statements in our comments and the press release we've 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, and good morning, everyone. We are pleased with our third quarter financial results, which were ahead of our previous expectations. Development activity remained strong, and we grew our industry-leading global portfolio of rooms by 4.7% year-over-year to over 1.75 million rooms across more than 9,700 properties at the end of September. As expected, RevPAR growth in the quarter was modest, reflecting ongoing global macroeconomic uncertainty. Our hotels continued to gain RevPAR index. Third quarter global RevPAR rose half a percent. International RevPAR grew 2.6%, again outperforming the U.S. and Canada, where RevPAR was down 0.4%. By region, RevPAR growth was strongest in APEC, which has been benefiting from solid macroeconomic growth in many countries and double-digit rooms growth. Third-quarter RevPAR in APEC increased nearly 5%, driven by robust ADR growth and higher demand from international travelers, particularly from greater China and Europe. Third quarter, REVPAR and EMEA rose 2.5% on increases in both ADR and occupancy, led by strong regional demand. Excluding the impact of the Olympics in France and the Euro 2024 in Germany last year, EMEA REVPAR would have been up 5%. REVPAR and CALA rose nearly 3%. with gains in both ADR and occupancy, and helped by citywide events in Puerto Rico and Rio. City express hotels across the region are seeing meaningful benefit from being integrated into our ecosystem and are performing very well. The operating environment in greater China remains challenged by weaker macro conditions, though our market share across the region continued to grow. With year-over-year comps easing and demand stabilizing, REVPAR was flat and would have been slightly positive, excluding the impact of multiple typhoons. Leisure demand was solid, offsetting a decline in business transient demand. A slight REVPAR decrease in the U.S. and Canada was driven by declines in select service brands, which offset nice gains in luxury, along with calendar shifts impacting group. Third quarter group REVPAR decreased 3%, while leisure was up slightly and business transient was down slightly compared to last year. Business transient was further impacted by government REVPAR declining 14%. Globally, REVPAR growth was again strongest at the higher end, as high-end consumers have demonstrated resilience to macroeconomic uncertainties and continue to prioritize traffic. Luxury REVPAR rose 4% as performance weakened down the chain scales. Our portfolio is well positioned to benefit from outperformance at the upper end, as 10% of our rooms are in the luxury segment and another 42% are in the full-service premium segment. By customer segment on a global basis, Leisure Transient continued to lead REVPAR performance, rising 1%. Business transient REVPAR was flat, and group REVPAR declined 2%, reflecting timing of events. As Leni will discuss further, REVPAR growth is anticipated to accelerate from the third quarter, with REVPAR expected to increase 1% to 2% in Q4 compared to the prior year. Full-year 2025 REVPAR is still anticipated to rise between 1.5% and 2.5% year-over-year. We also still expect strong net rooms growth in 2025 and beyond as owners continue to show preference for our brands. Despite higher construction costs and the challenging financing environment in both the U.S. and Europe, we still have excellent momentum in our global signings. During the first nine months of the year, signings reached a record year-to-date level. Our pipeline grew to a new high of more than 596,000 rooms at quarter end, with over 250,000 pipeline rooms under construction. Conversions remain a key driver of our portfolio expansion, reflecting the many revenue and cost-related benefits of being part of the Marriott ecosystem. Conversions accounted for around 30% of both signings and openings in the first nine months of the year. We remain keenly focused on driving growth and on being in more places around the world with the best brands and experiences. In September, we launched Outdoor Collection by Marriott Bonvoy, which includes postcard cabins and trail-borne hotels. This new portfolio offers guests unique outdoor-focused stays with easy access to popular activities like skiing, snowboarding, biking, and hiking. We also announced the U.S. debut of Series by Marriott less than three months after the brand's initial launch, with an agreement to convert five select service found hotels in major U.S. cities. As the largest global lodging loyalty program, Marriott Envoy serves as a powerful engine for guest engagement and brings significant value to our owners and franchisees. Membership grew to nearly 260 million members at the end of September, up 18% year over year. The power of Marriott Bonvoy is evident across our many adjacent businesses, including Marriott Bonvoy Boutiques, Marriott Media Network, Homes and Villas by Marriott Bonvoy, and our portfolio of 32 co-branded credit cards across 11 countries. Our U.S. cards are by far the largest contributor of our credit card fees. Our current U.S. deals were signed in 2017 and extended in 2020 and we are currently in active discussions with our current credit card partners. Our best estimate right now is that we could have new deals in place sometime next year that reflect the increased relevance of Marriott Bonvoy and the significant growth of our global lodging portfolio. On the technology front, we continue to progress in the multi-year evolution of our property management, reservations, and loyalty platforms, and the deployment of new cloud-based systems across our global portfolio, which we believe will enable Marriott to have an industry-leading technology stack. Leveraging best-in-class technology architecture and proprietary innovations, this tech transformation is expected to deliver a new ecosystem of capabilities and revenue-driving opportunities on properties. Owners are excited about the potential top and bottom line benefits of their hotels. The first few hotels recently started to transition onto the new systems, and associates have shared very positive feedback about the new capabilities and how they empower them to deliver on the customer experience. We plan to continue deploying our systems to hotels around the world over the next few years. We're also excited about increasingly leveraging AI across our business with a focus on areas like content creation, augmented business intelligence for associates, and more efficient processes that help associates deliver elevated customer experiences. Before I turn the call over to Lini, I want to thank our fantastic teams around the world for all that they do. Their commitment and perseverance are invaluable to our continued success, and among the many reasons I remain incredibly optimistic about Marriott's future. Lene?