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    MAR
    Earnings call· Sep 2025(Q3 FY25)

    MARRIOTT INTERNATIONAL INC /MD/ MAR

    Nov 4, 2025 Source

    Executive summary

    Marriott Q3 FY25 — Strong Rooms Growth and Credit Card Fee Performance

    Marriott delivered strong Q3 FY25 results, exceeding expectations, driven by robust rooms growth and significant increases in co-branded credit card fees. Despite modest global RevPAR growth of 0.5% amid macroeconomic uncertainty, the company saw strong development activity, record signings, and outperformance in its luxury segment. Management is actively negotiating new credit card deals for next year, anticipating increased relevance for Marriott Bonvoy, and expects continued mid-single-digit net rooms growth.

    Highlights

    5

    • Global portfolio of rooms grew by 4.7% year-over-year to over 1.75 million rooms.

    • Adjusted EBITDA rose 10% and adjusted EPS grew 9% in Q3 FY25.

    • Co-branded credit card fees rose 13% year-over-year, with international cards up nearly 20%.

    • Pipeline grew to a new high of over 596,000 rooms, with signings reaching a record year-to-date level.

    • Luxury RevPAR rose 4%, outperforming other chain scales and demonstrating high-end consumer resilience.

    Concerns

    5

    • Global RevPAR growth was modest at 0.5% in Q3 FY25, reflecting ongoing global macroeconomic uncertainty.

    • U.S. and Canada RevPAR was down 0.4% in Q3 FY25, driven by declines in select service brands and calendar shifts impacting group.

    • Business transient RevPAR was flat globally, with government RevPAR declining 14%.

    • Incentive management fees (IMFs) decreased 7% year-over-year in Q3 FY25.

    • Full-year 2025 residential branding fees are anticipated to decline around 20%.

    Guidance & targets

    24
    CategoryTargetConfidence
    Global RevPAR growth
    1% to 2%
    high materiality
    High
    Full-year Global RevPAR growth
    1.5% and a 2.5%
    high materiality
    High
    Global RevPAR growth
    similar to the 1.5% to 2.5% growth expected this year
    high materiality
    Medium
    Gross fee growth
    4% to 5%
    medium materiality
    High
    Incentive management fees (IMFs) growth
    low to mid-single-digit range
    medium materiality
    High
    Full-year Incentive management fees (IMFs)
    around flat with last year
    medium materiality
    High
    Adjusted EBITDA growth
    7% to 9%
    high materiality
    High
    Full-year gross fees growth
    around 4.5% to 5%
    high materiality
    High
    Full-year co-brand credit card fees growth
    roughly 9%
    high materiality
    High
    Full-year Timeshare fees
    around $110 million
    medium materiality
    High
    Full-year residential branding fees decline
    around 20%
    medium materiality
    High
    Full-year Owned, leased and other revenue, net of expenses
    around $370 million
    medium materiality
    High
    Full-year G&A expense decline
    8% to 9%
    medium materiality
    High
    Full-year G&A expense
    $975 million to $985 million
    medium materiality
    High
    Full-year adjusted EBITDA growth
    between 7% and 8%
    high materiality
    High
    Full-year adjusted EBITDA
    $5.35 billion to $5.38 billion
    high materiality
    High
    Full-year adjusted EPS
    $9.98 to $10.06
    high materiality
    High
    Full-year adjusted effective tax rate
    just over 1 percentage point higher than a year ago
    low materiality
    High
    Full-year core cash tax rate
    low 20% range
    low materiality
    High
    Net rooms growth
    approach 5%
    high materiality
    High
    Global net rooms growth
    mid-single-digit range
    high materiality
    High
    Total investment spending
    roughly $1.1 billion or $1.45 billion when you include around $350 million for the citizenM transaction
    medium materiality
    High
    Capital returns to shareholders
    roughly $4 billion
    high materiality
    High
    Net debt-to-EBITDA range
    3 to 3.5x
    medium materiality
    High

    Segment performance

    11
    SegmentRevenueYoYQoQMargin
    Global
    Modest RevPAR growth in line with expectations, driven by ADR offsetting occupancy decline.
    ADR growth: nearly 1%Occupancy decline: 30 basis points
    		—0.5%——
    International
    Outperformed U.S. and Canada RevPAR.
    		—2.6%——
    U.S. and Canada
    Driven by declines in select service brands, offset by luxury gains, and calendar shifts impacting group.
    		—-0.4%——
    APEC
    Benefiting from solid macroeconomic growth and double-digit rooms growth.
    ADR growth: robustDemand: higher from international travelers (Greater China, Europe)
    		—nearly 5%——
    EMEA
    Led by strong regional demand. Would have been up 5% excluding Olympics and Euro 2024 impact from last year.
    ADR: increasedOccupancy: increased
    		—2.5%——
    CALA
    Helped by citywide events in Puerto Rico and Rio. City Express hotels performing very well after integration.
    ADR: gainsOccupancy: gains
    		—nearly 3%——
    Greater China
    Operating environment challenged by weaker macro conditions. Would have been slightly positive excluding typhoons. Domestic travelers still high (low 80%).
    Market share: continued to growLeisure demand: solidBusiness transient demand: declined
    		—flat——
    Luxury
    Strongest RevPAR growth, demonstrating high-end consumer resilience. Represents 10% of total rooms.
    		—4%——
    Leisure transient
    Continued to lead RevPAR performance globally.
    		—1%——
    Business transient
    Globally flat, but down slightly compared to last year. Government RevPAR significantly impacted.
    Government RevPAR: down 14%
    		—flat——
    Group
    Reflecting timing of events.
    		—-2%——

    Operational metrics

    31
    Global rooms
    1.75 million
    Q3 FY25

    Industry-leading global portfolio.

    Global rooms growth
    4.7%year-over-year
    Q3 FY25
    Pipeline rooms
    over 596,000new high
    Q3 FY25

    Grew to a new high at quarter end.

    Signings
    recordyear-to-date level
    YTD Q3 FY25

    Record year-to-date level.

    Conversions as % of signings
    around 30%
    YTD Q3 FY25

    Key driver of portfolio expansion.

    Conversions as % of openings
    around 30%
    YTD Q3 FY25

    Key driver of portfolio expansion.

    Marriott Bonvoy members
    nearly 260 millionup 18% year-over-year
    Q3 FY25

    Largest global lodging loyalty program.

    Total gross fee revenues
    $1.34 billionincreased 4% year-over-year
    Q3 FY25

    Primarily reflects rooms growth and strong co-branded credit card fee growth.

    Co-branded credit card fees growth
    13%year-over-year
    Q3 FY25
    International co-branded credit card fees growth
    nearly 20%year-over-year
    Q3 FY25

    International cards continue to ramp nicely.

    Incentive management fees (IMFs)
    $148 milliondown 7% year-over-year
    Q3 FY25

    Higher than previously anticipated.

    Owned, leased and other revenue, net of expenses growth
    16%compared to prior year
    Q3 FY25

    Surpassed expectations.

    G&A decline
    15%compared to last year's third quarter
    Q3 FY25
    Adjusted EBITDA growth
    10%
    Q3 FY25

    Above the high end of guidance.

    Adjusted EPS growth
    9%
    Q3 FY25
    Credit card branding fees
    $660 million
    FY24

    Reference for current year growth.

    Above property savings from efficiency initiatives
    roughly $90 million
    FY25

    Expected to yield cost savings to owners.

    Net debt-to-EBITDA
    lower part
    FY25

    Maintaining leverage in this range.

    Group pace
    7%up
    FY26

    Similar to a quarter ago.

    Group pace
    8%up
    FY26
    U.S. customers in Europe
    36%vs 33% full year last year
    Q3 FY25

    No huge shift in mix.

    Mid-scale hotels open
    200
    current

    In mid-scale space for a couple of years.

    Mid-scale hotels in pipeline
    well over 200
    current
    Mid-scale hotels in pipeline
    150
    current
    Room signings growth
    24%year-over-year
    YTD Q3 FY25

    Quantifies Greater China momentum.

    Existing rooms share
    8%
    current

    Compared to pipeline share.

    Pipeline rooms share
    15%
    current

    Compared to existing rooms share.

    Existing rooms share
    11%
    current

    Compared to pipeline share.

    Pipeline rooms share
    18%
    current

    Compared to existing rooms share.

    U.S. new build construction signings share
    29%
    current

    Leading share.

    U.S. new build construction under construction share
    28%
    current

    Leading share.

    Industry KPIs

    3
    MetricValueDetails
    Comparable sales comps0.5%%
    Group booking pace booking window7%%
    Net unit growth development pipeline4.7%%

    Product announcements

    2
    ProductTypeDetails
    Outdoor Collection by Marriott Bonvoylaunch
    Series by Marriottlaunch

    Deals & partnerships

    2
    Amex and ChaseCo-branded credit card programdeals originally in 2017 and extended in 2020

    Dual issuer strategy provides access to complementary customer bases and broad market coverage. Marriott Bonvoy membership doubled, card accounts and global spending grew 80%, system size grew 50% since 2017.

    citizenMInvestment in citizenMaround $350 million

    A deal that applied the same financial rigor as other M&A considerations.

    Risks & headwinds

    7
    Global macroeconomic uncertaintyongoing

    modest global RevPAR growth of 0.5% in Q3 FY25

    Mitigation: Focus on high-end consumers who show resilience; strong development and loyalty program.

    Challenging financing environment and higher construction costsongoing

    new build construction starts meaningfully below 2019 levels

    Mitigation: Focus on conversions (30% of signings/openings); mid-scale development with lower unit costs; expecting dropping rates to help.

    Weaker macro conditions in Greater ChinaQ3 FY25

    RevPAR flat in Q3 FY25 (would have been slightly positive excluding typhoons)

    Mitigation: Market share continued to grow; leisure demand solid offsetting business transient decline; focus on upscale tier development with lower volatility.

    Decline in government business transient demandQ3 FY25

    government RevPAR declining 14% in Q3 FY25

    Mitigation: Global BT RevPAR up 1% excluding government; larger companies showing strength.

    Hesitancy from SMEs (small and medium-sized enterprises) in business transientQ3 FY25

    relatively more weakness in smaller and medium-sized businesses

    Mitigation: Impacts select service brands; larger corporate BT showing strength.

    Impact of large hotel renovations and insurance proceeds on IMFsQ3 FY25

    IMFs down 7% year-over-year in Q3 FY25

    Mitigation: Timing of some fees shifted to Q3; full year IMFs anticipated to be around flat.

    Volatility in residential branding feesFY25

    full year residential branding fees anticipated to decline around 20%

    Mitigation: Meaningful improvement compared to expectations at the beginning of the year; reflects continued success of residential business.

    What to watch in Q4 FY25

    5

    Credit card program renewal

    sometime next year
    CurrentActive discussions with current partners
    TargetNew deals in place

    Why it matters

    New deals are expected to reflect the increased relevance of Marriott Bonvoy and significant growth of the global lodging portfolio, impacting future fee revenue.

    Our best estimate right now is that we could have new deals in place, sometimes next -- sometime next year that reflect the increased relevance of Marriott Bonvoy and the significant growth of our global lodging portfolio.

    Q&A highlights

    6

    Asked for parameters on the credit card program, current size, what's negotiable, and timing of new deals.

    Management confirmed active negotiations, highlighting the exponential growth of Bonvoy (membership doubled, card accounts/spend up 80%, system size up 50%) since the last deals. They emphasized the value Marriott brings to partners and explained the variable payment structure based on cardholder spend, with Marriott recognizing a royalty rate. Timing is fluid but diligent.

    “The value that Marriott and Bonvoy brings to these partnerships has grown exponentially. So I mean, when we did the deal in '17, Bonvoy didn't even exist. We launched it in '19. The membership in our loyalty platform had more than doubled from 110 million members back in '17 to the nearly 260 million that we described earlier on the call.”

    asked by Shaun Kelley · answered by Anthony Capuano

    2 min read7 chapters

    Detailed Narrative

    01

    Q3 FY25 Performance Overview

    Marriott reported Q3 FY25 financial results ahead of expectations, with adjusted EBITDA rising 10% and adjusted EPS growing 9%. Global RevPAR increased 0.5%, driven by 1% ADR growth, despite a 30 basis point decline in occupancy. Total gross fee revenues increased 4% year-over-year to $1.34 billion, primarily reflecting rooms growth and strong co-branded credit card fee growth.

    02

    Global Portfolio Growth and Development Momentum

    The company's global portfolio expanded by 4.7% year-over-year, reaching over 1.75 million rooms across more than 9,700 properties. Development activity remained strong, with record year-to-date signings and a pipeline growing to a new high of over 596,000 rooms, including over 250,000 under construction. Conversions accounted for approximately 30% of both signings and openings in the first nine months of the year.

    03

    Marriott Bonvoy and Credit Card Program

    Marriott Bonvoy membership grew 18% year-over-year to nearly 260 million members, highlighting its power as a loyalty engine. Co-branded credit card fees rose 13%, with international cards up nearly 20%, driven by robust acquisitions and spending. The company is in active discussions to renew its U.S. credit card deals, anticipating new agreements next year that reflect the increased relevance of Bonvoy and the significant growth of its global portfolio.

    04

    Technology Transformation and AI Integration

    Marriott is progressing with a multi-year evolution of its property management, reservations, and loyalty platforms, deploying new cloud-based systems globally. This tech transformation is expected to deliver new capabilities and revenue-driving opportunities, with initial hotel transitions receiving positive feedback. The company is also increasingly leveraging AI for content creation, augmented business intelligence, and enhanced customer experiences.

    05

    Geographic and Segment RevPAR Trends

    International RevPAR grew 2.6%, outperforming the U.S. and Canada, which saw a 0.4% decline. APEC RevPAR increased nearly 5%, driven by robust ADR and international travelers, while EMEA rose 2.5%. Luxury RevPAR was up 4%, demonstrating resilience among high-end consumers, contrasting with declines in select service brands and a 2% decrease in global group RevPAR.

    06

    Owner and Franchisee Support

    Marriott continues to focus on supporting its owners and franchisees by driving enhanced top-line performance through technology and reducing affiliation costs, exemplified by the loyalty charge-out rate reduction. The company believes its affiliation costs are the lowest in the industry relative to revenue and aims for further improvements through economies of scale.

    07

    Development Environment and Mid-Scale Growth

    While new build construction starts remain below 2019 levels due to financing costs and higher labor/construction expenses, Marriott sees steady interest, particularly in conversions. The company is also actively growing its mid-scale portfolio with brands like StudioRes, City Express, and Four Points Express, having 200 rooms open and over 200 more in the pipeline, including 150 mid-scale hotels in the U.S. and Canada pipeline.

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