Marriott International (MAR) Q1 FY26 earnings call: guidance and Q&A

What are the key drivers of the recent strength in U.S. RevPAR, particularly the resurgence in activity and improvement in the low-end segments?

Tony Capuano highlighted broad-based strength across segments (leisure, group, business transient excluding government) and chain scales (luxury, select service, which saw 3.5% RevPAR growth). He noted continued strength in April and the positive impact of the World Cup.

“one of the things that's encouraging is it's really across segments, right? We talked in our prepared remarks about the continued strength in leisure. Group continues to be solid. And if you exclude government, business transient is pretty solid as well.”

asked by Shaun Kelley · answered by Anthony Capuano

Can you provide more detail on the Middle East impact, including any signs of recovery, full-year booking trends, and the assumptions for Q2 and the second half given the 100-125 bps global RevPAR impact?

Jen Mason stated that while booking activity shows some recovery from March lows, the impact on Middle East properties is expected through year-end. Q2 RevPAR is anticipated to be down approximately 50%, with sequential improvement in Q3 and Q4, though Q4 faces tough comps from prior year's strong performance.

“The hardest hit quarter we are looking at or we're anticipating about a 50% reduction in RevPAR in Q2, but that it will continue to impact Q3 and Q4, but it will get better consecutively across the quarters.”

asked by Richard Clarke · answered by Jennifer Mason

The investment spend guidance increased; how should we think about future investment spend, and will AI require incremental capital or create fee/owner optionality?

Tony Capuano clarified the Q1 uptick in investment spend was primarily due to the Lefay brand. Jen Mason added that future investment categories (contracts, tech, owned lease) are expected to remain consistent, and AI is seen as a lower capital spend that creates optionality for fees and owners.

“For this year, the bit of an uptick is almost entirely tied to the investment we're making in Lefay, our new luxury wellness platform.”

asked by Stephen Grambling · answered by Anthony Capuano

Have group bookings and pace seen a similar uptick to transient, and will tech upgrades benefit group meeting planners or Marriott's market share?

Jen Mason confirmed satisfaction with group performance, with pace up about 5% for the year. Tony Capuano expects tech upgrades to benefit all stakeholders, particularly in enhancing the generation of group RFPs.

“we expect the tech upgrades to help all the constituents we serve, our guests, our associates and our owners and to be impactful across every sector where we do business. The most notable place where I think there will be an impact of both the new technology platforms and our continued work on the AI front is in the generation of group RFPs.”

asked by Michael Bellisario · answered by Anthony Capuano

What specifically is driving the broadening of U.S. demand and the inflection in select service performance over the last 90-180 days?

Tony Capuano attributed the trend to a pivot towards domestic and drive-to destinations, the positive impact of tax refunds, low supply growth, and consumers prioritizing travel experiences over hard goods, which benefits lower chain scales.

“I do think you're seeing some pivot to domestic travel because of some of the uncertainty. You are seeing some pivot to drive to destinations versus fly to destinations given the impact of rising fuel prices on airline fares.”

asked by Daniel Politzer · answered by Anthony Capuano

Can you elaborate on the slight decline in business transient room nights outside of government, and provide more color on maintaining World Cup expectations despite reports of softer demand?

Tony Capuano detailed global business transient RevPAR up 1% (ADR +3%, room nights -2%), with U.S. & Canada BT RevPAR up 2% (ADR +3%, room nights -1%), and government BT down 6%. Jen Mason reiterated confidence in the 30-35 bps World Cup impact, noting extensive research, pacing up nicely, and expected FIFA room block cancellations.

“Despite what you're hearing and reading in the press, we continue to feel confident in our 30 to 35 basis point impact globally from World Cup.”

asked by Aryeh Klein · answered by Jennifer Mason

What is the latest thinking on rooms growth, the contribution from conversions vs. new builds, specific brands, and any impact from the Middle East on the pipeline?

Tony Capuano highlighted the strong conversion story (35% of signings, 40% of openings) and traction in mid-scale growth. Jen Mason confirmed the 4.5%-5% full-year net rooms growth guidance, noting that Middle East openings are generally proceeding as planned and account for only about 4% of expected full-year net rooms.

“We still feel comfortable with 4.5% to 5% global outlook for full year. Though as a reminder, it's more instructive to look over a multiyear CAGR. We still expect anticipated openings in the Middle East to generally proceed as planned, although we are absolutely watching it very closely.”

asked by Lizzie Dove · answered by Jennifer Mason

How is the AI interface evolving in the online booking space, and where might it land between Marriott and other players competing for customer attention?

Tony Capuano acknowledged the uncertainty but emphasized Marriott's advantageous position due to its scale, data, and direct booking capabilities. He expressed optimism that AI could strengthen direct channels and bring more consumers into the Marriott Bonvoy ecosystem, with early monetization leaning towards advertising rather than transactions.

“we do think that Marriott's industry-leading scale creates a really advantageous position due to our physical and geographic footprint, our scale and data, that creates a natural digital content and search advantage relative to some of our peers.”

asked by Brandt Montour · answered by Anthony Capuano