Marriott International

Hello and welcome to today's Marriott International Q4 2025 earnings call. At this time, all participants are in a listen only mode. Later, you'll have the opportunity to ask questions during the question and answer session. To register to ask a question at any time, please press star one on your telephone keypad. Please note that this call is being recorded and we're standing by should you need any assistance. It is now my pleasure to turn the meeting over to Jackie McConaughey, Senior Vice President of Investor Relations. Please go ahead, ma'am.

Good morning, everyone, and welcome to Marriott's fourth 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, 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 REVPAR, occupancy, ADR, and property-level revenues comments reflects 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 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. As you all know, this is Leany's last earnings call. There is no doubt that everyone listening has benefited greatly from her leadership, wisdom, and insight. Lene, thank you for everything. You will be greatly missed by us all. And now we'll turn the call over to Tony.

Thanks, Jackie, and good morning, everyone. I'll have some comments about Lene and her incredible career with Marriott at the end of the call. But for now, let's move on to our prepared remarks. Our team produced excellent results in 2025 as Marriott continued to experience solid momentum in our business around the world. With rooms growth as one of the top company priorities, I'm proud that Marriott's industry-leading global portfolio stood at nearly 1.78 million rooms across more than 9,800 properties in 145 countries and territories at the end of December. Conversions remained a key driver of growth, contributing around a third of our signings and openings during the year. With an incredibly strong fourth quarter for signings, our team inked nearly 1,200 deals representing 163,000 rooms excluding M&A during the year. At the end of December, our pipeline had grown to a record 610,000 rooms, up 2% from the prior quarter and up 6% from the prior year. Nearly 265,000 of the pipeline rooms were under construction, including rooms that are pending conversion, up 15% year over year. In 2025, 75% of our conversion rooms joined the system and began contributing to fee growth within 12 months of signing. For full year 2026, net rooms growth is expected to accelerate up to 4.5% to 5%. Our intent to recommend scores rose in every region around the world, and we continued to gain market share, with RevPAR index increasing globally year over year. Full-year global RevPAR rose 2%, with RevPAR in the U.S. and Canada rising 0.7%, and international RevPAR increasing over 5%. Leisure and luxury led the way, with leisure REVPAR up 3%, while group REVPAR rose 2%, and business transient REVPAR was flat for the full year. Full-year luxury REVPAR increased over 6%, while select service REVPAR declined 30 basis points. Our portfolio is well-positioned to benefit from continued expected strength at the upper end, as higher-end consumers remain resilient and continue to prioritize spending on experience and travel over goods. 10% of our open rooms globally and 10% of our pipeline rooms are in the luxury segment. Turning to the fourth quarter, we were pleased that worldwide REVPAR ended up at the high end of our guidance range. Revpar increased 1.9% thanks to a strong end of the year, with December Revpar coming in well ahead of our prior expectations. December global Revpar rose 2.8%, showing the strongest monthly year-over-year growth since February, led by strong leisure demand, particularly for our luxury and resort hotels. By region, fourth quarter Revpar was again strongest in APEC, which continues to benefit from double-digit rooms growth as well as solid macroeconomic growth in many countries. Fourth quarter REVPAR and APEC increased nearly 9% with growth broad-based across the region and double-digit REVPAR gains in key markets including India, Japan, and Australia. Fourth quarter REVPAR in EMEA rose 7% with strong growth across most of the region led by 17% growth in the UAE. Revpar in Cala rose over 2% as resilient leisure demand, especially during the festive season, was partially offset by the impact of comparisons to some citywide events in 2024. City Express hotels across the region are benefiting from being integrated into our ecosystem and are performing very well, contributing to strong signings for this brand in Cala during the year. While the operating environment in Greater China remains challenged by weak macro conditions and soft consumer sentiment, robust leisure trends and continued inbound travel recovery helped Revpar return to growth in the fourth quarter. Revpar rose over 3% driven by ADR. ADR growth was driven by stronger rates in Hong Kong, Taiwan, Hainan, and Tier 1 markets, offsetting continued softness in tertiary markets within the Chinese mainland. In the U.S. and Canada, fourth quarter Revpar was around flat. Luxury again saw solid growth, which was offset by declines in the select service tier. Leisure transient RevPAR rose 2% in the quarter, while group RevPAR increased 1%. These gains were offset by a 3% decline in business transient RevPAR, largely due to a meaningful decline in government RevPAR in the quarter. Government RevPAR was down over 30% during the 43-day U.S. government shutdown, though it has since moderated to down around 15%. During the year, we meaningfully expanded the breadth and depth of our portfolio across customer tiers, from luxury to mid-scale, and across traditional as well as alternative lodging product offerings. We extended our lead in luxury with the opening of several notable hotels, including the St. Regis Aruba, the Lake Como Edition, and Nekahui, a Ritz-Carlton Reserve in Costa Rica. We also signed a record 114 luxury deals during the year. We continue to have growing owner interest in all of our mid-scale brands, given their compelling brand design, the power of our revenue engines, and their simple bundled affiliation costs, which we believe are the lowest in the industry. Since entering the segment less than three years ago, we've experienced incredible growth. At the end of the year, we had over 450 open and pipeline Four Points Flex, Studio Res, and City Express by Marriott properties in 26 countries and territories around the world. We also had 100 open and pipeline series by Marriott properties. During 2025, we were pleased to add several new brands to our portfolio. Lifestyle Brands Citizen M, which was fully integrated onto our platforms in November, Series by Marriott, our new global collection brand for the mid-scale and upscale segments, and the Outdoor Collection by Marriott Bonvoy. Our focus on being in more places with the best brands and experiences helps fuel the growth of our powerful Marriott Bonvoy loyalty programs. Last year alone, 43 million new members joined Bonvoy, propelling the membership base to 271 million members worldwide at year end. We continue to augment the Bonvoy platform with popular collaborations like Uber and Starbucks, and with new bespoke Bonvoy moments and immersive experiences. We recently won the Points Guy Award for the Best Hotel Loyalty Program for the third year in a row. And we're thrilled that Marriott Bonvoy is now the official hotel supporter of the 2026 FIFA World Cup, with our extensive portfolio of hotels across the 16 host cities and curated fan activations poised to provide incredible, memorable experiences throughout the 104-match tournament. We are actively investing in technology, data, and A.I., both internally and with partners, to transform the guest and the associate experience. The multi-year transformation of Marriott's three major tech systems, property management, reservations, and loyalty, is well underway, and we're rolling out the new systems to a meaningful number of our hotels around the world in 2026. We see AI as an opportunity to potentially redefine the customer acquisition paradigm that has governed our industry for the past several decades. We believe our industry-leading scale, the breadth and depth of our global portfolio, our large and engaged customer base, and our strong relationships with partners across the ecosystem position us well to capitalize on the significant opportunities GenAI represents. While AI search and commerce models are still emerging, We're excited about AI's ability to further personalize and simplify the travel search and the booking process. And we're optimistic about the potential for AI to bring more consumers into the Marriott Bonvoy ecosystem and help strengthen our direct booking channels in a very efficient manner. In the first half of this year, we plan to start deploying natural language search on Marriott.com and on the Bonvoy mobile app. We're also optimizing our content for generative AI technologies, so our properties are well positioned wherever and however consumers are searching. Furthermore, we are actively collaborating with numerous tech companies across the space. For example, we are one of the initial companies working with Google on their forthcoming Google AI mode travel product and with OpenAI on their ad pilot program. Before I end my prepared remarks, I want to thank our team around the world for their hard work and care that they bring to Marriott every day. And Lene, for the last time, I'll turn the call over to you to discuss our financial results in more detail.