All right, so kicking right off with a company that needs no real introduction, which is the world's largest hotel company, Marriott International. But we're honored to have Jen Mason, newly appointed CFO, to help kick things off. I think this is your first public investor conference.

It is indeed.

So thank you for joining us. So as an intro, let's just maybe if you can just talk about your background at the company. and how that might inform your perspective as you take on this new seat.

Great. I'm so happy to be here with you, Stephen. Thank you. Good morning, everyone. Yes, so I have been with Marriott for over three decades and worked across many different disciplines and areas within the company. Prior to the CFO role, I was our treasurer and head of risk management, and for that, our CFO of our U.S. and Canada division, our largest division. but I've also had the opportunity to work in our global technology organization and strategy function as well as sales and marketing. So I certainly bring to the role kind of a breadth and depth of across the business and certainly well steeped in the culture at Marriott as well. So given my last role as treasurer in risk management and head of our capital markets strategy, I'm deeply familiar with our financial approach and discipline to how we think about capital allocation and long-term growth strategy. And so I bring that perspective into the CFO role and continue. We will continue to focus on financial discipline, our capital allocation approach, and investing in areas that deliver long-term growth and shareholder value. That's great. You know,

the other topic du jour that I referenced is just the demand environment. So we'd love to hear you know what you're seeing across different segments and how maybe the summer is looking as we look across different regions. Sure, I'll start with

April. April Red Par grew just over 1% year-over-year and that is very much in line with where we were expecting in our Q1 earnings call. U.S. and Canada continues to be strong. We have Red Par up just over 4%. Luxury continues to lead the way there but we saw strength across our chain scale. International REBPAR in April was down 6% predominantly because of the Middle East or other regions were up year-over-year. And for the Middle East in April REBPAR was down about 60%. May though is not down as much and we're still feel good about our two to four counts of REVPAR down 50%. And they're in the markets you would expect in terms of Middle East impact. It's UAE, Qatar, Saudi Arabia, where occupancies were below 50%. Avalon Europe is holding up. We have positive year-over- year REVPAR growth in April, really driven by leisure destinations like Spain, Italy, Turkey, and Greece. If you look at the summer, over Memorial Day weekend in the U.S. and Canada our red car was up nearly 3% year-over-year. Our June and July bookings in the U.S. and Canada are pacing up nicely and that's both in World Cup markets and non-World Cup markets. And then in Europe bookings for the summer are pacing up slightly. Demand is relatively in line with last year, but our rate is up low single digits year-over-year. Demand from U.S. travelers into, which is the largest source market for Europe, makes up about 30% of bookings, is down slightly year-over-year, but that is being offset

by growth in Canada and China. So you touched on this a little bit, but as we think about these different segments and regions, are there any that you feel more or less confident in? What do you think is the biggest swing factor as you look to the full year guide that you really

have your eye on? Yeah, great question. Certainly based on what we've been seeing to date, we're very confident in the leisure segment. It continues to be strong. Group travel also has been healthy with group red par up over 5% in the first quarter, and we continue to see great pace for the full year in terms of key swing factors middle east obviously um given the fluidity uncertainty the situation there were and the ripple effects we are certainly keeping an eye on that and as you know our outlook really assumes that that fluidity uncertainty continues we are expecting the impact to a full year red part to be about 100 to 125 basis points mainly coming from that middle east impact. The U.S. and Canada market, obviously it's our largest market and an important driver of our outlook. We are still projecting REBPAR at the high end of our global REBPAR 2 to 3 percent for full year. The back half of the year we are expecting to be slightly lower growth than the first half of the year. We'll keep an eye on the health of the consumer. You talked about this earlier about certainly we've seen strength in the first part of the year, and we're keeping an eye on whether the drag-on effect of higher oil prices will start to sweep in there.

Great. So maybe we can turn to development a little bit. Definitely seems like from an investor standpoint, people have shifted their focus towards fee growth and room revenue, or I should say room growth as a big component of that. So how has Marriott's pitch to developers changed as you think about both during your career and how do you think about how that might be changing or how you want to influence how that will change over the next one to three years?

Great question. Our development pitch, I'd say, is stronger than ever. We, over the last decade, we've really built out kind of unmatched scale. We have... eight million rooms uh globally we have the largest kind of um loyalty platform with 283 million members very strong distribution channels um and i think what really sets us apart is we're able to leverage the our economies of scale and the power of our brands and our revenue engines to drive premium top-line results and so work and we continue to really focus on that in our value proposition we're rolling out a new technology around the world and continuing to lean into AI and so we're super excited about the development momentum we're still projecting four and a half to five percent net rooms growth for the year and where we feel good about mid single

digit range thereafter. Maybe one follow-up on that. So REBPAR last year decelerated over the year. It sounds like this year is certainly on a better footing. Is that translating to greater confidence on behalf of developers, or what do you see to try to assess that? Certainly better

REBPAR helps in that regard, but many of our developers are looking through the cycle, right? these are long-term asset holds and so they really want to be in great locations with great brands to drive those economics over the longer term so certainly if you look globally around the world and to owner sentiment is still strong in the lodging space and despite kind of what's happening geopolitically and from an economic standpoint you touched on this in your remarks, I think there's still travel demand holds up, and that certainly bodes well for development.

And you signed a multi-year deal with Sun Group, and you continue to expand in APAC. How do you think about the long-term opportunity in some of these markets, and how does the margin profile or

the contribution compare to the domestic markets? Yeah, so we certainly see long-term growth opportunity across international markets specifically Asia Pacific or in Greater China are really strong markets for us you're really seeing rising travel demand there and the expanding of the middle class and that really translates into support for hotel supply growth our newer conversion friendly mid-scale brands also create growth momentum for us certainly in those markets. For a bit of context, our international market share of open rooms is about 4%, and our share of global new construction pipeline rooms is nearly four times that level. So, it just shows the growth and development momentum and what we're seeing. More than half of our 618,000 room pipeline is located outside the U.S. and Canada, and so we continue to see that international

growth. It's a great moment. And do you have to invest in developers or technology or infrastructure as part of that, or is it just purely layering in? We have a strong network of developers around

the world already, so we're able to leverage that infrastructure, so to speak, and so we're able

to grow without adding significant G&A. Great, and then there's the series collection brand. Can you just remind us of the driver behind this launch and how it compares and contrasts with other soft

brands? Sure. So Ceres, think about it as regional and local. And it really enables us to reach new customers and even existing customers when they're at different price points. And so the brands are really able to have their own identity and keep their own identity, but leverage the Marriott channels for revenue generation growth and series really focuses on mid-scale to upscale and very domestic traveler based so we're excited about that and a bit of a difference between our other soft brands like luxury collection and autograph and tribute they tend to play more in the upper upscale to luxury space with a bit more amenities I guess maybe that goes into a broader

question of just how do you decide where to expand a brand or even new brands and how to think about the TAM of these different segments as well as does it create any additional complexity when you're talking to developers in terms of understanding each one? Yes, so as you can

imagine, we have a very rigorous process when we look at new brands. We're really trying to look at white space and we listen and work with our developers very closely to see what they're seeing in the local market. And we really, before we move forward with any new brand launch, we make sure that there's clarity of what space it's playing in, what value proposition it drives for the consumer, and making sure there's a meaningful runway for growth. But we work very, very closely

with our developers around the world on that. One of the other big investor questions we get is around fees per room and the trajectory of growth there. I know Tony has touted, you know, Marriott's quality of the development in the past, do you think about that four and a half to five and then mid-single digits that you talked about, how should that translate to fee growth? Or maybe more broadly, how do you just characterize the quality of the pipeline versus the existing

Great question. So just for context, our pipeline is very well diversified across chain scales and regions and segments around the world. So, at the end of Q1, about 38% of our pipeline rooms were in luxury and full service, and mid-scale was just about 5% of that pipeline growth. About half of the pipeline is international markets. So, back to your question on fees per room. In 2025, it grew slightly year-over-year compared to the year before, and that's despite a relatively low red power environment and certainly our growth into mid-scale. And while mid-scale certainly helps drive growth, it is still a small proportion of our overall pipeline. If you look at this year, total fees per room are growing meaningfully year-over-year, predominantly driven by credit card increase. And so I think you'll continue to see, just given the breadth and growth in chain-scale REVPAR across our portfolio, you'll continue to see that fees per room, that same range.

Right. And as part of the room growth that you've been able to drive last year, and as you think about the guidance this year, a component of that's been conversions versus necessarily new development. It's a balancing act there, but how much of that strength in conversions is a structural change in individual segments versus a cyclical component where we should assume that if development does accelerate, maybe the conversion activity goes down? How do you think about that balancing act?

I do think conversion growth is structurally improving, and that's across the industry, certainly at Marriott as well. we continue to see a lot of momentum around around conversions we have an impressive roster of conversion friendly brands our owners are seeing great benefit when they plug into our channels both top line and bottom line so that that can you you might see the mix of conversions to overall openings change a bit as new construction starts to pick up about but the sheer number of conversion hotels. I would envision continuing to increase because of that. I mean, there's still a lot of hotels, especially outside the U.S., that are unbranded. Nearly half of the supply

there is, so there's still a lot of opportunity. Right. That's great. So, you did talk to the co-brand credit cards as contributing to fee growth this year. I do believe that your outlook excludes any of the impact from renegotiating your card agreements. So what are the range of outcomes, timing, and the durability of any uplift associated with these negotiations? Yeah, so we do look forward to

some additional upside for our credit card deals once they're signed. These are U.S. card deals. Though the full impact of that is after the cards have been relaunched right and so that does take time it's important to keep in mind we already are the largest by far credit card business in the lodging industry so any incremental growth from that should really be in that context in terms of the durability non red par fee growth credit cards is the largest contributor there but we also have a residential business as well and a few others. And so the durability of that, we feel very good about that over time. And so we look forward to continuing to leverage our platforms to grow in that space. What are the drivers that

we should be thinking about for some of these other non-room fees that aren't COBRA? I mean,

the drivers, I think more broadly, look, our entire business, if you step back from it, it is driven by the macro environment and prioritization of travel, and we'll continue to look at ways to leverage our platform to deliver kind of opportunities to grow in the space kind of

beyond traditional hotel fees. And I know that with the co-brand, it was helpful during the pandemic. There's less data available back in 2008, 2009, so how do you assess the cyclicality of co-brand credit card fees across different cycles, but also some of the other fees that are in there, like residential, or sorry, the residential business, or even timeshare.

Yeah, look, we did see during COVID and other downturns that the credit card business continues, right, and is not quite as cyclical as the hotel fees. But look, the broader macroeconomic economic outlook is obviously going to impact all of this, right, as it's driven by the health of the consumer. So there's certainly an impact. It just may not be as dramatic as REVPAR would be.

Fair enough. You started off by saying that one of the things that will continue in your new role as CFO is the financial discipline. Talk about acquisitions. How does the acquisition environment look today versus history as we think about things like synergies, valuation, opportunity within development, maybe there's pipelines of rooms?

Look, the vast majority of our group comes from organic, and we are constantly looking for and setting consumer behavior and expectations to make sure we are creating experiences and we are in locations and price points that they're very interested in being a part of. So our approach to growth isn't going to change, right? Again, predominantly focused on organic. We do opportunistically look at acquisitions, but they would need to be really filling white space or location or region that we don't have a presence in. And, of course, we put a lot of due diligence and rigor to make sure that that would be something that's worth investing in and has a real growth trajectory.

So I guess the follow-up there is, is it then more likely that you'd be looking at more kind of small, mid-sized deals, or is there still potential for larger scale consolidation? It seems like the FTC has been a little bit more lenient. I don't know if I'm supposed to say that out loud, but I'm sure our bankers are. Stay tuned for that panel. But what are you seeing out there?

Yeah, I mean, look, again, we predominantly focus on organic growth. And we, in the past, as you know, have done small tuck-on type acquisitions that are hitting kind of a niche area that we think is worth investing in an acquisition versus growing the brand organically. and I would expect that would continue.

Does AI or new technology that you're implementing influence that at all, or is that creating greater synergies, greater outcomes?

Look, I think technology and the pace with which it is rapidly evolving impacts every aspect of our business. Certainly, as you think about acquisitions and the investments we're making in technology that enables us to get folks online faster, and that helps. We also are constantly looking and learning from what's happening in the ecosystem and pulling in those learnings across the portfolio. And our technology transformation really helps us in these aspects of both traditional, think about your reservation platform, your PMS, but also AI investments. all of those things pulled together is something that continue to help our growth.

I'd say another part of financial discipline is around costs. You went through a major G&A cost containment exercise last year. You're still guiding to very limited G&A growth this year. What's the right way for investors to think about G&A growth going forward, and how much flexibility is there in this line when you think about different macro environments?

Yeah, so we're always looking for ways to do things smarter, faster, more innovative, and we continue to challenge ourselves to do that. As you referenced, we did go through a pretty extensive exercise. We saw the benefit of that last year where we really looked at efficiencies and improved productivity, and we're always looking for ways to continue to do business smarter as we grow. So I would think about G&A as we'll continue to be very focused on maintaining that at a low level relative to our growth trajectory, which will create operating leverage. To answer your second question on how would other environments, if we were to go into a downturn, I mean, for sure, it is not as linear, right, if Red Power were to decline. Not purely variable. But we do always, certainly in an environment, if we were to have a recession or a downturn in REVPAR, we would look at things, projects we can stop, other things that we can do to constrain G&A in an environment like that.

At the same time you went through that cost containment exercise, you've also been in the middle of a multi-year technology transformation. That includes investing in reservations, property management, loyalty systems. What are some of the tangible KPIs that investors should expect from this transformation?

Yes, we're very excited about the transformation. As you referenced, it's pretty extensive in terms of the areas that we're focused on.

And some of the things we're looking at from a KPI standpoint, think about revenue website.

With the new technology we'll have in our reservation system, we'll be able to have the ability to sell things to customers like connecting rooms or easier to upgrade rooms or sell the corner room with a great view or the ocean view versus an interior view. So we'll be able to merchandise that better. So revenue upside is one of the KPIs we're looking at. Improved conversion on our Merit.com site or our apps? Are we converting folks faster because they can find what they're looking for easier? Intent to recommend scores, right? With our new property management system, we're going to free up time at the front desk for associates to better engage with our customers so that they can do more value-add things versus being behind the computer with It's 14 keystrokes trying to check somebody in. We also will have shorter training on the desk as well. These are much more intuitive systems that when you bring somebody in and you hire them, they're going to be able to get going a lot faster. So we always think about things through the lens of our associates, our guests, our owners, and this technology transformation really drives value across all three.

And I guess are there milestones that we should be looking out for? What's the timing on this? Where are we in that process?

Yeah. So, as we talked about in our last earnings call, we're over 1,000 properties deployed, and we're going around the world on that. So, our rollout continues for at least another year or so. And it takes, right, it'll take a minute to get folks up to speed and rolling on it, and then we should start to see.

Maybe going back to a bit of development, a bit of capital return or capital deployment, we're hearing more and more about the use of key money to drive growth in the industry. Also, to protect some brands from encroachment, how are you thinking about the use of key money and how is that varying across the globe?

Yeah, so increasingly, competitors are offering a bit more key money, as you referenced, right? it's a competitive industry we our philosophy continues to be the same we really approach the use of key money as you can imagine very rigorously looking at the net present value and the and both from a new unit development and any existing unit renewals or renovations it really does vary across the globe in terms of usage of key money us in Canada it's much more prevalent although we are We're starting to see other pockets of the world use it as well. And the deals that have key money in them drive more value than those that don't, so we still feel really good about our usage of that.

Let's turn to AI and maybe just remind us of what you're currently testing and implementing as it relates to AI, with a focus perhaps on agentic AI specifically.

We have a lot going on in AI, as I know many do. And again, we really approach our agentic AI strategy through the lens of value creation to associates, guests, and owners. And so we have use cases in all of those areas. From Amerit.com and a Bonvoy app, we're launching conversational search, and so we're super excited about that. And that will help it be more native when you're searching for places to stay and things to do within our ecosystem. We also are partnering with Google and on their Google AI mode where you can actually book in that experience. We're also working with OpenAI in their ad pilot program and we also were launching a Marriott ChatGPT app. I think the clear thing we're doing is where this all goes is very difficult for any one of us to say today, but we want to be in the conversation. We want to influence what's happening. We certainly see an opportunity here in distribution, and so we want to be at the forefront of that. We really feel like our brands, our experiences, our hotels around the world really create a competitive advantage, and that content and that information helps create that moat to push people to look direct or even if it's not direct in a lower cost way and so we really are leaning into this and our loyalty program all these other this ecosystem that we've built we feel like really helps drive that that stickiness and so that's what we're looking for and so we're just very involved in this space we think there's

great potential. Are there initial KPIs you can share or things that you're tracking to try to ascertain the success of some of these that are being rolled out? It sounds like the analogy of throwing spaghetti against the wall seeing what sticks, but anything initially that is?

I would say what we're looking at is levels of engagement and stickiness. Are customers interacting in our ecosystem and how do we keep them in there? So we're looking at things like conversion rates. we're looking at things like down the line of hotel revenue and so there's a lot of great I think work going on here and we'll continue to focus on

conversions and revenue is there a risk that over time the LLM's became become effectively an AI gatekeeper that could end up driving distribution costs higher or how do you safeguard against that? Because I know there was the Stop Flicking Around campaign and OTAs were viewed at one point as this, you know, frenemy and that they could take control of the customer. So how do you think about safeguarding against that or the outcomes?

In terms of safeguarding, again, our strategy is to have the best brands, the best hotel experiences around the world and having that content and having that moat, let's say, the loyalty moat that creates customers that want to stay in your ecosystem is the best strategy in this type of environment. The reason we partner with a lot of different companies is we want to influence what the future becomes in terms of those additional distribution channels potentially. But where there's more competition, it's usually you see pricing go down, right? It's just big picture philosophically. And so we do see it as an opportunity from a distribution cost standpoint. But, again, we will always want our customers to book direct. They're going to get the best pricing. They're going to get the best experiences because we have their information information to help ensure the stays and their experience is the best that it can be. So we're playing in both fronts, right? How do we pull people in direct, but then also partner with others in this space that are innovating and moving fast on the distribution space to influence how those models evolve?

And this is a little bit maybe of a definitional question, but distribution costs, would that end up flowing then to the owners and then that creates the flywheel or would that end up being in your rep par as well?

That would be, so think about online travel agents today, our owners pay a fee for that. Tomorrow, if some of that business moves more to, you know, OTA, like Gemini, you insert name there, those distribution costs would be borne by the owner. But if you shift from an online travel agent to a chat GPT or something like that, you could see a cost decrease. Does that make sense? It's not net new incremental. It could be a shift.

Yeah, makes sense. And one of the things that you've also cited on the calls is this optimizing content for Gen AI. Can you just elaborate on what you mean by that? I think you talked about it a little bit with some personalization, but anything concrete in terms of optimizing content for?

Yeah, it's a great question. We want to make sure as the search algorithms change to more LLM or large language models, that the way people search, that our content shows up as easily as it can. What do I mean by that? So when people are searching and they'll, if it's a long sentence, we want to make sure we get the most common or frequently asked questions and then develop content that the AI agents can find quickly and then learn from and iterate on so that the content is most effectively used. So we're looking at how we're working on how our content is more fine-tuned to AI agent models versus the old way of searching. Right, it's like SEO for AI. Correct, well said, yeah.

With the last few minutes here, I'm going to go through my lightning round questions I'm going to ask for all the companies. You talked about this a little bit at the beginning, but you've got oil prices moving around, interest rate questions, rate volatility. How is this impacting customer behavior? And as you look out over the next one to three years, you generally anticipate demand will be kind of consistent with what you're seeing, accelerate, decelerate?

Yes, I'll start with current trends. And you referenced this in your opening remarks, travel continues to be prioritized by consumers as they spend. And around the world, travel demand is still very solid, apart from the Middle East countries that obviously are impacted by the conflict. We continue to guide 1.5 to 2.5 Red Park growth for Q2 and 2% to 3% for a full year in a healthy demand environment. We obviously are mindful of the headwinds, and we'll continue to keep a close eye on that, specifically higher oil prices, kind of an inflation, and whether that creates tailwinds in the back half of the year. And our forecast, as we've talked about, does show a bit of deceleration in Red Park growth in the U.S. and Canada in the back half of the year, although still very positive. Because beyond 2026, as you know, it's a lot harder to forecast with our booking window and will very much be driven by the macro environment and geopolitical risk. Although I would say longer term, and again, I've been here for three decades in this industry, travel is very resilient. And we've seen kind of its recovery even when there are times of shock to the system or recessions. And so longer term, I feel very good about it.

Sounds good. And then on margins, just working down the P&L, how do you think about Marriott's margins and then maybe industry-wide margins or perhaps even your franchisee margins over the next one to three years?

Yes, I'll start with Marriott margins. As we've talked about, we did a lot of work. We saw the benefit of that last year in terms of G&A margins, which helps create the operating leverage inherent in our business with fee growth and G&A relatively constrained. But the work that we did was not just G&A savings, it was savings across all of the system funds and programs and services. Our hotel, our franchisees operating margins are the top priority, one of the top priorities for our executive team. We're doing a tremendous amount of work looking at every variable in operating margin for an owner. We want to drive top line. we want to ensure that there the costs are we continue to focus on and innovate with technology and find ways to optimize the margin performance at our hotels you know we lowered the Bomboy loyalty charge rate last year we've just improved the owner redemption for high demand nights so we'll continue to we're rolling out a new technology. We're looking at brand standards. I mean, you name it, we're looking

at it and working on it. Last one, just on artificial intelligence, since we're running over a little bit, you've got to pick just one thing where you see the biggest opportunity from

AI tools and technology. Oh, that's tough. I will go back to distribution because I think that's where we all spend a lot of our time. We have some great use cases with sales planning tools and marketing and all these other areas. But distribution, I think, represents a great opportunity for all of us to help redefine what that looks like, book direct as much as we can, but also are there cost savings for owners if we can influence the distribution channels?

Well, next up, we're going to have our macro team come up here, or our economists come up here to talk about the macro. But please join me in thanking Jen Mason and the entire Marriott International team Thank you for joining us today. Thank you Steven.