MARRIOTT INTERNATIONAL INC /MD/

Marriott International operates as a worldwide franchisor, operator, and licensor of hotel, residential, timeshare, and other lodging properties under a portfolio of brands at different price and service points. The company's system included 9,805 properties (1,779,936 rooms) in 145 countries and territories at year-end 2025, and it also had approximately 4,100 properties (nearly 610,000 rooms) in its development pipeline. The company reports operations in four reportable business segments: U.S. & Canada, Europe, Middle East & Africa (EMEA), Greater China, and Asia Pacific excluding China (APEC), with the Caribbean & Latin America (CALA) operating segment included in "Unallocated corporate and other."

Marriott faces robust competition from regional, national, and international chains including Hilton, IHG Hotels & Resorts, Hyatt, Wyndham Hotels & Resorts, Accor, Choice Hotels, and Best Western Hotels & Resorts, as well as online platforms like Airbnb and Vrbo. The company believes its strong brand recognition, Loyalty Program, marketing programs, reservation systems, and emphasis on guest service contribute to guest preference across its brands. Based on lodging industry data, Marriott has an approximately 17 percent share of the U.S. hotel market and a four percent share of the hotel market outside the U.S. (based on number of rooms). In 2025, approximately 73 percent of U.S. hotel rooms were brand-affiliated.

Marriott generates revenue through franchise fees, base management fees, incentive management fees, owned and leased hotel revenue, cost reimbursements, and other revenue including co-branded credit card fees and residential branding fees. Under its asset-light business model, the company owns or leases very few of its lodging properties (less than one percent of its system). Franchise fees typically range from four to seven percent of room revenues, plus for certain brands, up to four percent of food and beverage revenues. Management fees are typically composed of a base management fee (a percentage of hotel revenues) and an incentive management fee (based on hotel profits), with incentive management fees in many cases subject to a specified owner return. The Marriott Bonvoy loyalty program is central to the business strategy, and in 2025, approximately 75 percent of U.S. hotel room nights and approximately 68 percent of global hotel room nights were booked by Loyalty Program members.

At year-end 2025, Marriott's system included 7,644 franchised, licensed, and other properties (1,183,513 rooms and timeshare units), 2,017 company-operated properties (580,170 rooms), 51 owned/leased properties (14,406 rooms), and 144 branded residential properties (16,253 residential units). The brand portfolio is categorized by style of offering (Classic and Distinctive) and grouped into four quality tiers: Luxury, Premium, Select, and Midscale. Luxury brands include JW Marriott (130 properties, 50,891 rooms), The Ritz-Carlton (126 properties, 32,279 rooms), The Luxury Collection (132 properties, 32,724 rooms), W Hotels (72 properties, 20,233 rooms), St. Regis (66 properties, 14,241 rooms), EDITION (22 properties, 4,617 rooms), and Bvlgari (9 properties, 807 rooms). Premium brands include Marriott Hotels (619 properties, 218,237 rooms), Sheraton (436 properties, 147,958 rooms), Westin (251 properties, 89,984 rooms), Autograph Collection (362 properties, 76,399 rooms), Renaissance Hotels (180 properties, 54,077 rooms), Le Méridien (122 properties, 31,996 rooms), Delta Hotels (137 properties, 30,803 rooms), MGM Collection with Marriott Bonvoy (12 properties, 26,210 rooms), Tribute Portfolio (186 properties, 30,919 rooms), Gaylord Hotels (7 properties, 11,820 rooms), Design Hotels (223 properties, 15,488 rooms), Marriott Executive Apartments (50 properties, 7,735 rooms), Outdoor Collection by Marriott Bonvoy (32 properties, 1,532 rooms), and Apartments by Marriott Bonvoy (5 properties, 656 rooms). Select brands include Courtyard by Marriott (1,362 properties, 206,090 rooms), Fairfield by Marriott (1,381 properties, 140,748 rooms), Residence Inn (937 properties, 115,333 rooms), SpringHill Suites (579 properties, 68,370 rooms), Four Points by Sheraton (384 properties, 72,408 rooms), TownePlace Suites (571 properties, 57,577 rooms), Aloft Hotels (243 properties, 39,816 rooms), AC Hotels by Marriott (267 properties, 42,828 rooms), Moxy Hotels (181 properties, 34,042 rooms), Element Hotels (122 properties, 17,568 rooms), Protea Hotels by Marriott (65 properties, 7,020 rooms), and citizenM (37 properties, 8,789 rooms). Midscale brands include City Express by Marriott (158 properties, 18,910 rooms), Four Points Flex by Sheraton (54 properties, 7,806 rooms), Series by Marriott (39 properties, 2,761 rooms), and StudioRes (4 properties, 496 rooms). The company also had 95 timeshare properties (22,912 rooms) and 3 yacht properties (603 rooms).

In 2025, gross fee revenues were $5,438 million ¹, consisting of franchise fees of $3,325 million ², base management fees of $1,322 million ³, and incentive management fees of $791 million ⁴. Net fee revenues after contract investment amortization of $135 million ⁵ were $5,303 million ⁶. Owned, leased, and other revenue was $1,679 million ⁷ with related expense of $1,461 million ⁸, yielding net of $218 million ⁹. Cost reimbursement revenue was $19,204 million ¹⁰ and reimbursed expenses were $19,503 million ¹¹, resulting in a net negative of $299 million ¹². In both 2025 and 2024, the company earned incentive management fees from 69 percent of its managed hotels worldwide, with 32 percent of U.S. & Canada managed hotels and 85 percent of International managed hotels earning incentive management fees in 2025. In both 2025 and 2024, 67 percent of total incentive management fees came from International managed hotels, primarily in EMEA and APEC.

During 2025, Marriott completed the acquisition of the citizenM brand and related intellectual property for $355 million ¹³, with potential earn-out payments up to $110 million ¹⁴ based on future brand growth over a specified multi-year timeframe. The company integrated 37 open select-service hotels (8,789 rooms) ¹⁵ into its system. Marriott added three new brands to its portfolio through the citizenM brand acquisition and the introductions of Series by Marriott and the Outdoor Collection by Marriott Bonvoy. The company signed nearly 1,200 development deals ¹⁶ representing approximately 163,000 rooms ¹⁷ globally, with over 30 percent of rooms signed driven by conversion opportunities. Marriott also signed 55 residential agreements ¹⁸ in 2025. The company repurchased 12.1 million shares ¹⁹ of its common stock for $3.3 billion ²⁰ in 2025. In February 2025, Marriott issued $500 million ²¹ aggregate principal amount of 5.100 percent Series RR Notes due April 15, 2032 and $1.5 billion ²² aggregate principal amount of 5.500 percent Series SS Notes due April 15, 2037, with net proceeds of approximately $1.960 billion ²³. In August 2025, the company issued $400 million ²⁴ aggregate principal amount of 4.200 percent Series TT Notes due July 15, 2027, $500 million ²⁵ aggregate principal amount of 4.500 percent Series UU Notes due October 15, 2031, and $600 million ²⁶ aggregate principal amount of 5.250 percent Series VV Notes due October 15, 2035, with net proceeds of approximately $1.477 billion ²⁷. The Board increased the common stock repurchase authorization by an additional 25 million shares ²⁸ on August 7, 2025, and at year-end 2025, 26.6 million shares ²⁹ remained available for repurchase under the program.

Total revenues for fiscal year 2025 were $26,186 million ³⁰, compared to $25,100 million ³¹ in 2024 and $23,713 million ³² in 2023. Net income was $2,601 million ³³ in 2025, compared to $2,375 million ³⁴ in 2024 and $3,083 million ³⁵ in 2023. Diluted earnings per share were $9.51 ³⁶ in 2025, compared to $8.33 ³⁷ in 2024 and $10.18 ³⁸ in 2023. Operating income was $4,141 million ³⁹ in 2025, compared to $3,767 million ⁴⁰ in 2024. Net cash provided by operating activities was $3,212 million ⁴¹ in 2025, compared to $2,749 million ⁴² in 2024. Worldwide RevPAR increased 2.0 percent ⁴³ in 2025 compared to 2024, driven by ADR growth of 2.1 percent ⁴⁴. U.S. & Canada RevPAR increased 0.7 percent ⁴⁵, while International RevPAR increased 5.1 percent ⁴⁶.

For 2026, Marriott expects net rooms growth of 4.5 to 5.0 percent ⁴⁷. The company expects capital expenditures and other investments will total approximately $1.0 billion to $1.1 billion ⁴⁸ for 2026, including capital and technology expenditures, loan advances, contract acquisition costs, and other investing activities, but excluding any potential property or brand acquisitions.

Marriott's growth strategy focuses on attracting hotel owners to its platform through the value and benefits of its brands, Loyalty Program, and other programs and services. The company's development pipeline at year-end 2025 included approximately 4,100 properties and nearly 610,000 rooms ⁴⁹, with over 35,000 rooms ⁵⁰ approved for development but not yet under signed contracts. The pipeline included nearly 265,000 rooms ⁵¹, or 43 percent, that were under construction, including hotels in the process of converting to the system. Over half of the rooms in the development pipeline were located outside U.S. & Canada. The company continued to expand its portfolio across chain scales, including advancing the expansion of its midscale offerings, and strengthened its residential portfolio by signing 55 residential agreements ⁵² in 2025.

Marriott is undertaking a multi-year transformation of its reservations, property management, and loyalty systems, focused on introducing new technology that delivers more choices for guests, new capabilities for associates, and new revenue opportunities for hotels in the system. The company's anticipated capital and technology expenditures include higher than typical spending on this worldwide technology systems transformation, the overwhelming portion of which is expected to be reimbursed over time, along with renovations of hotels in the owned and leased portfolio.

Marriott expects capital expenditures and other investments will total approximately $1.0 billion to $1.1 billion ⁵³ for 2026, including capital and technology expenditures, loan advances, contract acquisition costs, and other investing activities, but excluding any potential property or brand acquisitions. The company repurchased 12.1 million shares ⁵⁴ of its common stock for $3.3 billion ⁵⁵ in 2025, and year-to-date through February 6, 2026, repurchased 1.1 million shares ⁵⁶ for $350 million ⁵⁷. The Board declared quarterly cash dividends of $0.63 per share ⁵⁸ in the first quarter of 2025 and $0.67 per share ⁵⁹ in each of the second, third, and fourth quarters of 2025. The company expects to continue to return cash to stockholders through a combination of share repurchases and cash dividends.

Marriott identified several headwinds and constraints in its risk factors. The company noted that new lodging supply in individual markets could negatively impact the hotel industry and hamper its ability to maintain or increase room rates or occupancy. Economic and other global, national, and regional conditions and events, including weak or volatile economic conditions, pandemics, natural disasters, changes in energy prices, interest rates, inflation, and currency values, political instability, geopolitical disputes or conflict, and terrorist activity, have in the past materially negatively impacted and could in the future materially negatively impact the business. The company also noted that its hotel owners depend on capital to buy, develop, and improve hotels, and obtaining financing on attractive terms has been and may in the future be further constrained by the capital markets for hotel and real estate investments. Additionally, the company faces risks that more hotel projects in its development pipeline may be cancelled or delayed in opening, as construction timelines have lengthened due to various factors including challenges related to financing.

Marriott faces significant risks from the highly competitive nature of the hospitality industry, competing with chains such as Hilton, IHG, Hyatt, Wyndham, Accor, Choice Hotels, and Best Western, as well as online platforms like Airbnb and Vrbo. The company's growth strategy depends on attracting hotel owners to its platform, and future arrangements with these third parties may be less favorable depending on terms offered by competitors. Premature termination of agreements with hotel owners could materially hurt financial performance, as agreements may be subject to termination in circumstances such as bankruptcy, failure to comply with obligations, or failure to meet specified financial or performance criteria. The company's Loyalty Program faces significant competition from loyalty programs offered by other hospitality companies, banks, airlines, and others, and unfavorable developments affecting the program could adversely affect business and results of operations. Exchange rate fluctuations could result in significant foreign currency gains and losses, as the company earns revenues and incurs expenses in foreign currencies, and to the extent international operations continue to grow, exposure to foreign currency exchange rate fluctuations will grow. The company had $16,204 million ⁶⁰ of debt at year-end 2025, and changes in interest rates impact the fair value of fixed-rate long-term debt and interest expense on floating-rate debt.

Management's discussion emphasizes Marriott's focus on franchising, management, and licensing under its asset-light business model, with the company owning or leasing less than one percent of its lodging properties. The system grew from 9,361 properties (1,706,331 rooms) at year-end 2024 to 9,805 properties (1,779,936 rooms) at year-end 2025, reflecting gross additions of 703 properties (99,459 rooms) including 37 properties (8,789 rooms) from the citizenM brand acquisition, and deletions of 253 properties (25,643 rooms). The 2025 gross room additions included nearly 64,000 rooms located outside U.S. & Canada and roughly 33,400 rooms converted from competitor brands. Management expects net rooms growth of 4.5 to 5.0 percent ⁶¹ in 2026. The company's long-term financial objectives include maintaining diversified financing sources, optimizing the mix and maturity of long-term debt, and reducing working capital. Management believes the Credit Facility, access to capital markets, and cash generated from operations remain adequate to meet liquidity requirements over the next 12 months and thereafter for the foreseeable future.