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    MAR
    Earnings call· Jun 2026(Q2 FY26)

    MARRIOTT INTERNATIONAL INC /MD/ Q2 FY26 earnings call MAR

    Aug 3, 2026 Source

    Executive summary

    Marriott International Q2 FY26 — Strong RevPAR Growth and Raised Full-Year Guidance

    Marriott delivered a very strong Q2 FY26, surpassing prior expectations with robust global RevPAR growth and significant increases in adjusted EBITDA and EPS. The company raised its full-year guidance, driven by broad-based demand across most regions, while actively managing headwinds from the Middle East conflict. Strategic initiatives, including new co-branded credit card agreements and enhanced owner support, are expected to further strengthen the business and loyalty ecosystem.

    Highlights

    5

    • Global RevPAR rose 3.4% in Q2 FY26, with U.S. and Canada RevPAR up 5%, marking its highest quarterly increase in 13 quarters.

    • Adjusted diluted EPS increased 20% year-over-year to $3.19 in Q2 FY26.

    • Adjusted EBITDA grew 13% year-over-year to $1.59 billion in Q2 FY26.

    • The global development pipeline expanded nearly 7% year-over-year to a new record of approximately 629,000 rooms at the end of June.

    • New long-term co-branded credit card agreements in the U.S. are expected to drive significant value, with an incremental $30 million impact to 2026 fees and $100 million to $125 million by FY28.

    Concerns

    4

    • Middle East RevPAR declined 43% in Q2 FY26 due to regional conflict, contributing to a 5% decline in EMEA RevPAR.

    • Full-year net rooms growth is now expected towards the low end of the 4.5% to 5% range, primarily due to construction delays in the Middle East.

    • Owned, leased, and other revenue, net of expenses, decreased to $49 million in Q2 FY26 from $78 million in the prior year, impacted by a $27 million property-related litigation accrual.

    • Lower expectations for fees in Japan due to the decline in the yen partially offset gains from new co-branded credit card deals.

    Guidance & targets

    20
    CategoryTargetConfidence
    Full year global RevPAR growth
    3% to 3.5%
    high materiality
    High
    Third quarter global RevPAR growth
    3.5% to 4%
    medium materiality
    High
    Full year Greater China RevPAR growth
    2% to 3%
    medium materiality
    Medium
    Full year gross fee revenues
    $6.03 billion to $6.06 billion
    high materiality
    High
    Full year Incentive Management Fees (IMF) growth
    3% to 5%
    medium materiality
    High
    Full year global credit card fees growth
    high 30% range
    medium materiality
    High
    Full year residential branding fees increase
    55% to 65%
    low materiality
    High
    Full year owned, leased and other revenue, net of expenses
    $175 million to $185 million
    medium materiality
    High
    Full year G&A expense increase
    1% to 3%
    low materiality
    High
    Full year adjusted EBITDA increase
    11% to 12%
    high materiality
    High
    Full year adjusted effective tax rate
    26% to 26.5%
    low materiality
    High
    Full year adjusted diluted EPS growth
    16% to 18%
    high materiality
    High
    Third quarter gross fees growth
    10% to 11%
    medium materiality
    High
    Third quarter Incentive Management Fees (IMF) growth
    high single-digit to 10% range
    medium materiality
    High
    Third quarter adjusted EBITDA increase
    7% to 9%
    medium materiality
    High
    Full year investment spending
    $1.25 billion to $1.35 billion
    medium materiality
    High
    Full year shareholder returns
    over $4.5 billion
    high materiality
    High
    Net rooms growth
    mid-single-digit range
    high materiality
    High
    Full year 2026 net rooms growth
    low end of 4.5% to 5% range
    high materiality
    High
    Impact of new credit card deals on Marriott's co-brand card fees
    $100 million to $125 million
    high materiality
    Medium

    Segment performance

    8
    SegmentRevenueYoYQoQMargin
    Global
    Second quarter global RevPAR rose 3.4%.
    		—3.4%——
    U.S. and Canada
    RevPAR rose 5%, the highest quarterly increase in 13 quarters. Strength was pervasive across chain scales.
    Luxury RevPAR: up over 9%Select service RevPAR: increasing over 4%
    		—5%——
    EMEA
    RevPAR declined just over 5% as solid performance in Europe was offset by a meaningful decline in the Middle East.
    		—-5%——
    Europe
    RevPAR rose over 4%, driven by strength in leisure, particularly in Mediterranean countries.
    		—4%——
    Middle East
    RevPAR declined 43%, a bit better than prior expectations on better-than-expected domestic leisure demand.
    		—-43%——
    APAC
    RevPAR rose over 5%, surpassing previous expectations thanks to improved flight capacity and strong intraregional demand.
    		—5%——
    Greater China
    RevPAR rose over 3%, led by strong inbound leisure demand recovery. Luxury, Hong Kong, Taiwan, and Hainan were key drivers.
    		—3%——
    CALA
    RevPAR rose 3%, driven by strong luxury and leisure demand across the Caribbean.
    		—3%——

    Operational metrics

    27
    Net rooms growth
    4.5%YoY
    12 months ending June 30

    Further expanding the global portfolio to over 1.8 million rooms across more than 10,000 properties.

    Global pipeline rooms
    629,000up nearly 7% YoY
    end of June

    New record for the global pipeline.

    Rooms under construction
    279,000
    end of June

    Includes ending conversions.

    Conversions as % of signings
    34%
    H1 FY26

    Conversions, including multiunit deals, remain a significant driver of growth.

    Conversions as % of openings
    40%
    H1 FY26

    Conversions, including multiunit deals, remain a significant driver of growth.

    Net rooms growth CAGR
    5.2%
    since end of 2023

    In line with broad guidance about mid-single-digit growth.

    Royalty charge-out rates reduction
    roughly 5%
    beginning of the year

    Implemented to strengthen hotel level economics and drive owner returns.

    Total gross fee revenues
    $1.58 billionincreased 13% YoY
    Q2 FY26

    Reflecting higher RevPAR, rooms growth, and increases in co-branded credit card fees and residential branding fees.

    Incentive management fees (IMF)
    $212 milliongrew 6%
    Q2 FY26

    Led by U.S. and Canada strength.

    Owned, leased and other revenue, net of expenses
    $49 millioncompared to $78 million in Q2 FY25
    Q2 FY26

    Primarily due to a litigation accrual and lower termination fees.

    G&A expense growth
    5%YoY
    Q2 FY26

    Primarily due to timing of compensation costs.

    Adjusted EBITDA
    $1.59 billionincreased 13%
    Q2 FY26

    Strong performance in the quarter.

    Adjusted diluted EPS
    $3.19rose 20%
    Q2 FY26

    Strong performance in the quarter.

    World Cup boost to full year global RevPAR
    45 bpsabove prior expectation of 30 to 35 bps
    FY26

    Provided a slightly larger boost than expected.

    Sensitivity of 1% change in full year 2026 RevPAR to fees
    $55 million to $65 million
    FY26

    Refers to RevPAR related fees.

    Incremental co-branded credit card fees from new U.S. deals
    $30 million
    2026

    Solely from a partial year of the new terms of Chase and AMX agreements.

    Contract acquisition costs as % of total investment spending
    40% to 45%
    FY26

    The largest bucket of investment spending.

    Digital tech transformation as % of total investment spending
    25%
    FY26

    The second largest bucket, overwhelming portion expected to be reimbursed over time.

    Leisure RevPAR growth
    5%YoY
    Q2 FY26

    Strong performance globally.

    Leisure RevPAR growth
    7%YoY
    Q2 FY26

    Strong performance in the region.

    Group RevPAR growth
    3%YoY
    Q2 FY26

    Solid growth globally.

    Group RevPAR growth
    4%YoY
    Q2 FY26

    Solid growth in the region.

    Business transient RevPAR growth
    2%YoY
    Q2 FY26

    Modest growth globally.

    Business transient RevPAR growth
    3%YoY
    Q2 FY26

    Modest growth in the region.

    Government RevPAR growth
    5%YoY
    Q2 FY26

    Benefiting from easier year-over-year comparisons.

    Nongovernment business transient RevPAR growth
    3%YoY
    Q2 FY26

    Driven by ADR increases.

    Impact of Middle East conflict on full year global RevPAR
    100 bpsvs prior guide of 100-125 bps
    FY26

    A bit better than last guide.

    Industry KPIs

    3
    MetricValueDetails
    Comparable sales comps3.4%%
    Group booking pace booking window5%%
    Net unit growth development pipeline4.5%%

    Product announcements

    2
    ProductTypeDetails
    Series by Marriottlaunch
    AI-powered conversational search experiencelaunch

    Deals & partnerships

    2
    JPMorgan Chase and American ExpressNew long-term agreements for co-branded credit card program in the U.S.long-term

    Reflects the strength of the Marriott Bonvoy brand and the value of its portfolio, driving significant value across the ecosystem.

    Unnamed partner (in Greater China)Strategic agreement to introduce Series by Marriott to Greater China.

    A multiunit deal to expand the Series by Marriott brand in a key growth market.

    Risks & headwinds

    6
    Middle East conflictQ2 FY26, continuing into H2 FY26

    RevPAR declined 43% in Q2 FY26; expected to impact full year global RevPAR by ~100 bps.

    Mitigation: Focus on domestic leisure demand in the Middle East; expectation for business to pick up quickly when conflict resolves.

    Construction delays in Middle EastFY26

    Full year net rooms growth expected at low end of 4.5% to 5% range.

    Property-related litigation accrualQ2 FY26

    $27 million impact in Q2 FY26.

    Lower expectations for fees in JapanFY26

    Partially offsets gains from new U.S. co-branded credit card deals.

    Midterm electionsQ4 FY26

    Small negative impact on Q4 U.S. and Canada RevPAR.

    Difficult comparisons for Middle East in Q4 2025Q4 FY26

    Q4 2025 had several large events driving meaningful ADR increases, making Q4 2026 comparisons challenging.

    Mitigation: Anticipating recovering occupancy, but ADR will be up against strong prior-year comps.

    What to watch in Q3 FY26

    5

    Middle East RevPAR recovery

    Q3/Q4 FY26
    Current-43% in Q2 FY26
    TargetImprovement in Q3/Q4 FY26

    Why it matters

    The Middle East conflict significantly impacted EMEA results; its recovery is crucial for international performance and overall guidance.

    EMEA is expected to continue to be impacted by the conflict in the Middle East, though to a lesser extent than previously anticipated. Year-over-year RevPAR in EMEA is expected to improve in the third quarter relative to the second quarter before moderating again in the fourth quarter.

    Q&A highlights

    7

    Can you elaborate on the ITR program and the broader owner reinvestment strategy, including timing and long-term impact?

    Management emphasized the importance of owner success and the collaborative discussions with the owner community. The ITR incentive is one step to improve owner economics and benefits all constituents. The ITR program, offering up to 50 basis points of gross room revenue fee reimbursement for achieving ITR thresholds, is launching this week and will impact the owned and leased line for the back half of the year.

    “We're very focused on hotel level economics. And that really means looking at every variable in the equation and looking for opportunities, both to drive improvement in top line and look at every element of expenses and see if there are opportunities to drive margins and as a result, ultimately drive returns.”

    asked by Shaun Kelley · answered by Anthony Capuano

    2 min read5 chapters

    Detailed Narrative

    01

    Owner Relations and Hotel-Level Economics

    Marriott emphasized its deep appreciation for its owners, recognizing their foundational role in the business. The company is intensely focused on strengthening hotel-level economics and driving owner returns, implementing productivity enhancements from prior efficiency exercises. Specific steps include lowering royalty charge-out rates across the global system by approximately 5%, enhancing owner reimbursement for Bonvoy redemption stays on high-demand nights, and introducing streamlined brand standards and flexible renovation scopes. A new 'intend to recommend' (ITR) incentive program will provide fee discounts for top hotels achieving strong guest satisfaction scores in the U.S. and Canada, viewed as a reinvestment benefiting owners and enhancing brand equity.

    02

    Co-branded Credit Card Agreements

    Marriott recently executed new long-term agreements for its U.S. co-branded credit card program with JPMorgan Chase and American Express. These agreements reflect the strength of the Marriott Bonvoy brand, the value of its portfolio, and the scale of its loyalty program. The new economics and cardholder benefits are expected to drive significant value across the Marriott Bonvoy ecosystem, including for hotel owners and loyalty members. The incremental impact to 2026 co-branded credit card fees from a partial year of the new terms is approximately $30 million, with the full benefit expected to build to $100 million to $125 million by FY28 as new card products are introduced.

    03

    Technology Transformation and AI Adoption

    Marriott is making significant progress in its multiyear technology transformation, increasingly leveraging AI across the enterprise. The goal is to deliver revenue to owners more efficiently, elevate the guest experience, and automate workflows for associates. In June, the company began a phased rollout of an AI-powered conversational search experience on marriott.com and the Marriott Bonvoy app, demonstrating its commitment to using technology for enhanced customer experience and operational efficiency. Marriott is also collaborating with Google and other leading AI platform providers as their travel search and commerce tools evolve.

    04

    Development Pipeline and Conversions Momentum

    The company reported record global signings in the first half of the year, with its global pipeline growing nearly 7% year-over-year to a new record of approximately 629,000 rooms at the end of June. Marriott leads the industry with over 279,000 rooms under construction. Conversions, including multiunit deals, remain a significant driver of growth, representing 34% of signings and 40% of openings in the first half. A notable multiunit deal involves introducing Series by Marriott to Greater China, with plans to add approximately 100 hotels and the first openings expected later this year.

    05

    Regional Performance Dynamics

    While global RevPAR rose 3.4%, regional performance showed divergence. U.S. and Canada RevPAR increased 5%, its highest quarterly rise in 13 quarters, with strength across luxury and select service. In contrast, international RevPAR declined slightly, primarily due to a 43% drop in the Middle East from regional conflict, which offset solid 4% growth in Europe. APAC RevPAR rose over 5%, with Greater China up over 3%, driven by improved flight capacity, strong intraregional demand, and inbound leisure recovery.

    AI-generated summary of the company’s earnings call. Not investment advice.