00:00 Speaker A
Anthony, thank you so much for being here. Maybe you can tell us some kind of high level stuff. I mentioned a little bit about the puts and takes during the quarter, but could you give us a little more detail and how that quarter unfolded?
00:15 anthony
Yes, of course. Thank you for having me. Well, I think the big headline for me is that we continue to see extraordinary demand for travel and experiences. We’ve been talking about this for several quarters now, and it feels like a fundamental and permanent shift in consumers prioritizing spending on travel and experiences over hard goods purchases. And that phenomenon is actually showing up in our results. Indeed, foreign markets are performing slightly better than domestic markets. Well, the domestic industry also took a bit of a hit from the government shutdown in the fourth quarter. Um, but with RevPAR for the fourth quarter and for the year, we’re starting to see the upper end of the rank uh guidance range. Well, we’re looking for similar RevPAR growth in 2026. And on the growth side of our business, we delivered record deals and reported record pipeline. So the business seems to be firing on all cylinders and we’re seeing particular strength in the luxury sector of our business.
01:31 brian
Anthony, it’s always nice to see you here. Thank you for visiting us even after the financial results announcement.
01:34 anthony
Nice to meet you Brian.
01:34 brian
Same. Well, let’s just keep it high-end and low-end. Ritz-Carlton’s revenue per available room, confirmed and crushed. Look at Sheridan, he’s a little weaker here. We’re putting it on screen now. Looking forward to this year, do you think lower end consumers will come back and go back to cars like the Sheridan?
01:54 anthony
Yeah, I mean, take your pick, there’s definitely a K-shaped economy, consumer polarization. We continue to see really consistent strength across luxury. For the full year, RevPAR increased 6% globally across our luxury portfolio, representing approximately 10% of our global room capacity. Well, a little less than three years ago, we entered the mid-market segment for the first time. We have hundreds of hotels open and on the way. And even low-income consumers are prioritizing spending on travel and experiences in more economical ways. So I think the timing to enter that demographic is really good.
02:42 brian
Anthony, you’re facing a matchup that could be a really big moment for Marriott this year. That is credit card fee renegotiation. You teased it a little at the financial results conference, but how much will profits increase as a result of this year’s renegotiation?
03:00 anthony
Well, there are actually two dynamics involved, Brian. We talked about the first one in detail today. That’s something we’ve worked hard over the last few years to ensure that we maintain both the financial strength and stability of the Bonvoy program, as well as the value proposition for our 271 million members. These two efforts, combined with our recent contract renegotiation, have allowed us to increase the economic share of royalties in Marriott’s income statement. That’s what we talked about in detail on the phone. We also discussed our ongoing negotiations to renew two important branded credit card relationships with JPMorgan Chase and American Express. We expect these to be completed in the second half of this year and should provide further upside based on the largest credit card program in the industry by a sizeable margin.
04:21 Speaker A
Well, I think if you look at the population of people who not only own credit cards, but also participate in the Bonvoy program, you can tell us quite a bit about who those people are. Well, how do you break it down in terms of income range and age range? And are they the ones spending the most money at your hotel?
04:51 anthony
Well, I think the profile of credit cardholders and Bonvoy members more broadly is very diverse. It’s very diverse geographically, it’s very diverse from a time point of view, it’s very diverse from an economic point of view. But I think your second question adds to the enthusiasm for this for us. It’s Bonvoy members who carry Marriott-branded credit cards the most, and they spend and focus disproportionately on travel across our broad portfolio.
05:31 brian
Anthony, um, if this is correct, you’re working on something with Open AI, but you’re a little undecided. Well, is it about the booking experience? How do you think Open AI will change the way we book travel experiences?
05:47 anthony
Yes, AI can talk for hours. Well, we think AI has the potential to impact our business in three very broad ways. At the property level, I think there is an opportunity to improve operating margins while also creating the ability for employees to better engage with guests in a very personal way. At the property level mentioned above, there is a real opportunity to move some manual processes to the use of technology to increase efficiency. And Brian, the guy you’re talking about, might be the most exciting one in some ways. It’s about how artificial intelligence will impact how travelers research and, perhaps someday, book travel. That’s why we’re partnering with leaders and Google and Open AI at an early stage to think about how we can best work together to ensure that travelers who access this technology have access to the full range of our portfolio, rich content on property descriptions, and photo and video content. So you can make an informed decision when starting your booking journey.
07:11 Speaker A
Anthony, finally, what’s behind you isn’t an AI background, is it? Where is it? We would like to know where that beautiful bar is.
07:18 brian
Yes, it should be there.
07:19 anthony
Yeah, I’m at the Pied Piper Bar in the beautiful Palace Hotel in San Francisco. This hotel was rebuilt after the San Francisco Fire in the early 1900s. This is the city’s iconic bar and the perfect place to visit after the 5am earnings call. So we’re happy to be here.
07:44 Speaker A
I hope there’s coffee in front of you off camera.
07:46 brian
Or something harder. I mean, why not?
07:48 Speaker A
Some wine, Anthony, I know you like wine.
07:51 Speaker A
If it’s 10:50 here, that’s pretty early in San Francisco. Anthony and Brian, thank you so much. appreciate.
