Marriott (MAR) - Q3 2025 Earnings Call
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Call Details
Call Title: Marriott International Q3 2025 Earnings Call
Date held: November 4, 2025
Management team members present:
Tony Capuano, President and Chief Executive Officer
Leni Oberg, Chief Financial Officer and Executive Vice President, Development
Jackie McConica, Senior Vice President, Investor Relations
Pilar Fernandez, Senior Director of Investor Relations
Call Summary
Financial Performance
Marriott’s Q3 2025 adjusted EBITDA rose by 10% year-over-year to $1.35 billion, reflecting the robustness of their business model amidst macroeconomic challenges.
Adjusted EPS grew by 9%, driven largely by an increase in gross fee revenues, which rose 4% year-on-year to $1.34 billion, attributed to both room growth and credit card fee revenue.
Global RevPAR increased by 0.5% in Q3, with international RevPAR outperforming the U.S. and Canada, which saw a decline of 0.4%.
RevPAR in the Asia-Pacific (APEC) region surged nearly 5%, fuelled by significant growth in average daily rate (ADR) and strong traveler demand from Greater China and Europe.
In EMEA, RevPAR rose 2.5%, and gains would have been 5% without the impact of the prior year’s significant events like the Olympics in France.
Leisure transient demand remains strong, leading to slight RevPAR increases, while group RevPAR dipped by 3%, attributed to event timing.
Luxury segment RevPAR rose by 4%, highlighting resilience among high-end consumers during economic uncertainties.
Business transient RevPAR was flat globally, severely impacted by a 14% decline in government transient demand.
Guidance
RevPAR is expected to increase by 1% to 2% in Q4 of 2025, while full-year 2025 RevPAR projections remain at a 1.5% to 2.5% growth.
Preliminary 2026 guidance suggests the same range of RevPAR growth, with expectations for a boost from the upcoming World Cup, contributing about 30-35 basis points to global growth.
Full-year adjusted EBITDA for 2025 is projected to be between $5.35 billion and $5.38 billion, marking a growth of 7% to 8%.
Co-branded credit card fee income anticipated to grow 9%, primarily due to robust third-quarter performance.
G&A expenses in 2025 are expected to decline by 8% to 9%, reflecting increased operational efficiency.
Net rooms growth is forecasted to reach about 5% in 2025, supported by strong owner interest in the Marriott brand.
Investment spending is estimated at $1.1 billion for 2025, including significant capital allocation for upcoming projects.
Capital Allocation
Marriott maintains a strong commitment to investment-grade ratings, ensuring it invests in shareholder-enhancing growth opportunities while returning excess capital.
Expected capital returns to shareholders are approximately $4 billion for the full year, indicating a strategy focused on both dividends and share repurchases.
The company continues to prioritize efficiency improvements, which are expected to yield savings benefiting both shareholders and hotel owners.
Marriott’s investment philosophy involves deliberate selection of opportunities for acquisitions, aimed at geographic growth or filling brand gaps.
Macro & Demand Trends
Global macroeconomic conditions remain uncertain, impacting RevPAR growth projections. However, luxury brands show resilience.
Leisure travel demand persists, suggesting a nuanced recovery, while business transient travel faces challenges from economic hesitance.
Indicators show a growth trajectory in international markets, particularly APEC, signaling a favorable environment for expansion and recoveries in travel.
The holiday season and World Cup events are expected to create additional demand spikes, especially in the U.S. and Canada.
Marriott emphasizes the importance of strong domestic and international traveler performance, particularly in key markets like Europe and Greater China.
Expense and Headcount Trends
General and administrative expenses decreased by 15% in Q3 2025, attributed to efficiency measures implemented across the company.
The management team highlights ongoing efforts to reduce occupancy costs to maintain competitiveness, especially regarding franchisee arrangements.
Employee feedback has been largely positive regarding the new operating system transformations, enhancing productivity and customer service capabilities.
Product Updates
Marriott launched the Outdoor Collection by Marriott Bonvoy, featuring unique outdoor-focused accommodations, responding to changing traveler preferences for experiential stays.
The company is excited about the introduction of Series by Marriott, enhancing its operational presence in select U.S. cities.
Investments in technology enhancements continue to form the backbone of Marriott’s strategy, improving management, reservations, and loyalty systems for seamless customer experiences.
NOTABLE QUOTES:
“We are pleased with our third quarter financial results, which were ahead of our previous expectations.”
“Global RevPAR rose half a percent, with international RevPAR outperforming the U.S.”
“Business transient was further impacted by government RevPAR declining 14%.”
“We remain keenly focused on driving growth and on being in more places around the world with the best brands and experiences.”
“The power of Marriott Bonvoy is evident across our many adjacent businesses.”
“Our technology transformation is expected to deliver a new ecosystem of capabilities and revenue-driving opportunities.”
“The reduction in the loyalty chargeout rate was an example of an ongoing effort to identify opportunities to reduce affiliation costs.”
“We continue to expect global RevPAR to increase 1% to 2% in the fourth quarter.”
“Our net rooms growth is still anticipated to approach 5%.”
“We are still in active and fluid negotiations regarding our credit card partnerships.”
Q&A SUMMARY:
Q: Sean Kelly (Bank of America), Can you provide updates on the credit card program conversations, including what to expect relative to growth rates going forward?
A: Tony Capuano responded that while they are in active discussions and can’t disclose specifics, the overall valuation of the Bonvoy loyalty program makes them an attractive partner for financial institutions. “The value that Marriott and Bonvoy bring to these partnerships has grown exponentially.” They continue to see growth in cardholder bases and anticipate emphasizing the success of the dual issuer strategy.
Q: Michael Bellisario (Baird), How do you see the health of franchisee economics shaping up as you consider future net unit growth?
A: Tony Capuano highlighted that record signings demonstrate a strong relationship with owners, noting that “we believe we have the lowest affiliation cost relative to revenue in the industry.” Ongoing enhancements in revenue-driving technology are expected to strengthen engagement with the owner and franchise community.
Q: David Katz (Jefferies), Can you elaborate on the investment spending trend upward beyond earlier estimates?
A: Leni Oberg explained that increased visibility around expenditures beyond just development-related costs contributed to this trend, such as tech investments and existing property upgrades. The approach to key money remains consistent, and the overall increase isn’t indicative of a strategy shift.
Q: Dan Pulitzer (J.P. Morgan), How do you expect different segments (leisure, business transient, group) to perform in 2026?
A: Leni Oberg noted that while the general environment will remain similar, they expect U.S. performance to show slight improvement. She mentioned a particularly encouraging group pace, stating, “Group pace for the U.S. is up 8%,” reflecting positive trends alongside leisure travel.
Q: Connor Cunningham (Melius Research), What benefits do you see from partnering with two credit card issuers rather than one?
A: Tony Capuano described the benefits as significant, stating that dual issuers provide broad market coverage and cater to complementary customer bases, fostering greater reach and sales potential.
Q: Stephen Grambling (Morgan Stanley), Can you provide insights on the current pipeline strength regarding under-construction projects?
A: Leni Oberg attributed the robust pipeline growth to ongoing conversions, noting, “Third of our room openings this year will be conversion rooms,” and emphasized expanding Marriott’s footprint in high-demand areas.
Q: Patrick Scholes (Truist), What current trends are you observing in development specifically for APAC and China?
A: Leni Oberg indicated that both regions are experiencing strong growth, with Greater China seeing a notable 24% year-over-year increase in room signings, attributing this to the growing demand and brand strength of the Marriott portfolio.
Q: Ari Klein (BMO Capital Markets), How are competition and recent developments in premium card offerings at Amex and Chase affecting the upcoming negotiations?
A: Tony Capuano admitted that while these developments are noteworthy, they believe their unique value proposition enables their cards to coexist within the marketplace. “We think those cards can coexist and be complementary.”
Q: Richard Clark (Bernstein), Can you discuss how AI is being integrated into hotel discoverability and bookings?
A: Tony Capuano noted that AI represents “an emerging category” in their distribution strategy, with plans to optimize content across all platforms for enhanced customer engagement, indicating the growing importance of AI in booking processes.
Q: Lizzie Dove (Goldman Sachs), Do you have appetite for small M&A or partnerships, like the CitizenM example?
A: Tony Capuano affirmed their openness to M&A. “We don’t feel any burning need... but we will look for opportunities that enhance our brand or fill gaps.”
Q: Meredith Jensen (HSBC), How could the launch of the Bonvoy Outdoor enhance digital distribution?
A: Tony Capuano described it as connected to larger tech transformations, emphasizing that it allows guests to search based on interests rather than geography, indicating a shift toward personalized guest experiences.
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