Marriott International, Inc. (MAR) FY2025 10-K and Q2 FY2026 10-Q Summary

Business

From the fiscal 2025 Annual Report on Form 10-K, accession 0001048286-26-000007.

Marriott International is a worldwide franchisor, operator and licensor of hotel, residential, timeshare and other lodging properties, operating a portfolio of brands spanning several price and service points. It sells lodging through brands it does not generally own the real estate behind: consistent with its focus on franchising, management and licensing, Marriott owns or leases less than one percent of the properties in its system. Revenue therefore comes mainly from fees charged to third-party hotel owners and licensees, franchise royalties, base and incentive management fees, residential branding fees, timeshare and other license royalties, and co-branded credit card fees, rather than from room revenue itself. At year-end 2025 the system comprised 9,805 properties (1,779,936 rooms) in 145 countries and territories, with a development pipeline of roughly 4,100 properties and nearly 610,000 rooms.

The system splits by ownership type. At year-end 2025, 7,644 properties (1,183,513 rooms and timeshare units) were franchised, licensed or otherwise affiliated; 2,017 properties (580,170 rooms) were company-operated, comprising long-term management agreements plus the small owned and leased portfolio; and 144 branded residential properties (16,253 units) carried Marriott trademarks. By category the breakdown at year-end 2025 was 7,644 franchised/licensed/other, 1,966 managed, 51 owned/leased and 144 residential properties.

How the fee economics work. Hotel franchise arrangements generally produce an initial application fee plus continuing royalties, typically four to seven percent of room revenues and, for certain brands, up to four percent of food and beverage revenues, together with reimbursement for centralized programs and services such as the loyalty program, reservations and marketing. Franchise terms generally run 10 to 25 years. Management agreements produce a base fee set as a percentage of hotel revenues plus an incentive fee based on hotel profits; in the U.S. & Canada, Europe and Caribbean & Latin America regions, incentive fees are frequently subject to a specified owner return first. Management agreements typically have initial terms of 20 to 30 years with renewal options. Many permit the owner to terminate if performance or financial-return thresholds are missed and not cured, and some allow owners to convert company-operated hotels to franchises. Separate license arrangements cover timeshare (royalties from Marriott Vacations Worldwide, consisting of a fixed inflation-adjusted annual fee plus variable fees tied to sales volumes), MGM Collection with Marriott Bonvoy, Design Hotels and The Ritz-Carlton Yacht Collection. Residential licensing produces one-time branding fees on each unit sold by third-party developers, with little or no Marriott capital at risk, plus continuing fees for managing or licensing the homeowners' association.

Brands and segmentation. Brands are grouped as Classic or Distinctive and sorted into four quality tiers, Luxury, Premium, Select and Midscale, with longer-stay brands spanning multiple tiers. The company reports four segments: U.S. & Canada; Europe, Middle East & Africa (EMEA); Greater China; and Asia Pacific excluding China (APEC). The Caribbean & Latin America operating segment does not meet the accounting criteria for separate reportable disclosure and sits inside "Unallocated corporate and other," as do timeshare, the yacht collection and loyalty program results.

Marriott Bonvoy, credit cards and direct channels. The loyalty program is described as central to strategy. Members earn points on stays, on other travel offerings including Homes & Villas by Marriott Bonvoy, and through co-branded credit card spending and partner purchases. In 2025, roughly 75 percent of U.S. hotel room nights and roughly 68 percent of global hotel room nights were booked by members. Co-branded cards exist in 11 countries; in the U.S. Marriott holds multi-year agreements with JPMorgan Chase and American Express, with additional international licensed card programs in Japan, the United Arab Emirates, China, Canada and other markets. Card economics combine fixed amounts payable at contract inception with monthly variable amounts driven primarily by card usage, and card payments are a significant funding source for the loyalty program. Marriott.com, the Bonvoy mobile app and other direct digital channels anchor a multi-year worldwide transformation of its reservations, property management and loyalty systems.

Competitive position. Competition comes from regional, national and international chains, unaffiliated properties, and short-term rental platforms including Airbnb and Vrbo; the direct digital channels also compete with online travel platforms (Expedia.com, Priceline.com, Booking.com, Travelocity.com, Orbitz.com, Trip.com) and search engines. Approximately 73 percent of U.S. hotel rooms were brand-affiliated in 2025. On industry data, Marriott holds roughly a 17 percent share of the U.S. hotel market and about four percent outside the U.S., measured by rooms. Business fluctuates moderately with the seasons, more so at some resorts.

Scale of the workforce. At year-end 2025 Marriott managed the employment of approximately 414,000 associates. About 148,000 were employed directly by Marriott at properties, customer care centers and above-property operations; about 266,000 were employed by hotel owners but had their employment managed by Marriott, which is common outside the U.S. Approximately 115,000 Marriott-employed associates were in the U.S., about 19,000 of whom belong to labor unions. These figures exclude hotel personnel employed by independent franchisees and licensees or their management companies.

Owned real estate. As of December 31, 2025 Marriott owned or leased 14 hotels (5,539 rooms) in U.S. & Canada and 37 hotels (8,867 rooms) internationally. Most regional offices, customer engagement centers, sales offices and the Bethesda, Maryland corporate headquarters are leased.

During 2025 Marriott terminated its licensing agreement with Sonder Holdings Inc., and all Sonder properties were removed from the portfolio.

Risk factors

From the fiscal 2025 Annual Report on Form 10-K, accession 0001048286-26-000007.

Industry and macro. The lodging market is crowded, and competitiveness depends on distinguishing the brands, loyalty program, direct digital channels, consumer technology and credit card offerings; new supply in individual markets can also suppress rate or occupancy. Because the business is global, it is exposed to economic volatility, pandemics and disease outbreaks, natural and man-made disasters, energy prices, interest rates, inflation and currency values, political instability, geopolitical disputes and armed conflict, terrorism and civil unrest, heightened travel security measures and travel disruption. Marriott enumerates the transmission channels explicitly: lower hotel revenues and therefore lower fees and weaker owner ability to pay; impaired value of owned and leased property and investments; owners less able to service, repay or refinance debt or to obtain financing; construction, opening and renovation delays; a slower rate of new pipeline signings; hotels exiting the system; higher operating costs; and a need to borrow at more expensive or more restrictive terms.

Dependence on third-party owners. Because Marriott owns almost nothing, its earnings rest on contracts with owners that can be terminated prematurely, on owner bankruptcy, payment default, uncured failure of financial or performance criteria, or negotiated termination rights. Owners sometimes assert termination rights even where agreements provide otherwise, and courts have upheld such assertions. Damages collected can fall short of the foregone future fee stream. Disagreements with owners over new product, service or systems initiatives and their costs, the timing and size of capital investments, and reimbursement of operating or system costs recur, and Marriott says such disputes increase when hotel returns are weaker; unresolved ones have gone to arbitration or litigation. Growth also depends on continuing to attract owners on acceptable terms against competitors' offers.

Distribution and AI disruption. Bookings through internet travel intermediaries cost system hotels more than direct channels, and intermediaries run their own loyalty programs that can erode brand loyalty; search engines can divert traffic. Marriott flags specifically that AI capabilities introduced by existing and emerging travel intermediaries may change how guests plan, book and pay for travel, potentially disrupting distribution, eroding brand loyalty, raising distribution costs and damaging the loyalty program. Intermediary contracts generally run two to three years, so renewal terms are a recurring exposure.

Loyalty program concentration. The loyalty program competes against programs run by other hospitality companies, banks and airlines on currency value, reward ranges, terms and co-branded card affiliations. Failure to keep it competitive, or changes forced by law or regulation, could damage member acquisition and retention and the co-branded card program. Legislative or regulatory change affecting card issuers or networks could reduce co-branded card revenue and the program's funding.

Data security and privacy. The November 2018 Starwood Data Security Incident continues to generate exposure. Numerous lawsuits and investigations followed; in 2024 Marriott reached final resolutions with the U.S. Federal Trade Commission and the attorneys general of 49 states and the District of Columbia, which impose long-term requirements on its data privacy and information security programs, with enforcement or contempt risk if Marriott is found non-compliant. Insurance may not cover expenses, fines or penalties, and some categories, such as program-enhancement spending, are inherently uninsured. Marriott states plainly that it cannot assure that all causes of past significant cybersecurity incidents have been identified and remediated, and that incidents may recur; increased reliance on cloud services, remote access, AI and emerging technologies raises exposure. Privacy and data security law is changing quickly across jurisdictions, raising compliance cost and litigation exposure, and uncertainty around cross-border data transfers may force Marriott to restrict transfers or change data flows.

Technology execution. Reservation, loyalty and other core operational systems are critical, and disruptions, including during upgrades or replacement, could cost business and data. Marriott is in the middle of a multi-year transformation of reservations, property management and loyalty systems whose deployment could involve delays, interruptions, data security compromises and impacts on financial reporting and internal control. Failing to keep pace with competitors on technology, or on AI specifically, is named as a competitive risk; incorporating generative AI is itself named as a source of new liability, including factually inaccurate or biased output.

Development and financing. Owners must access capital markets to buy, build and renovate, and financing for hotel and real estate investment has been constrained. System growth is subject to the general constraints on real estate development, site and financing availability, zoning and local approvals, projected occupancy and rate, construction costs, labor and materials. Pipeline hotels may be cancelled or delayed, and Marriott notes construction timelines have lengthened. Loans made to owners and guarantees provided to owners or lenders have produced losses and could again. If owners cannot repay or refinance mortgages, default under leases, or hit other financial difficulty, foreclosures, bankruptcies and lease terminations can terminate Marriott's franchise, management or license agreements outright.

Brand, reputation and owner conduct. Reputation rests on brand standards adherence and on incidents involving food quality and safety, guest and associate safety, health and cleanliness, sustainability, supply chain, human rights and perceived positions on political or social matters; social media can erode trust quickly. Third-party franchisees, licensees and partners interact directly with guests under Marriott's names, and their failures of brand standards, financial or operational problems, data or privacy incidents, or inconsistent brand image can damage Marriott; contractual remedies may be unavailable, costly or insufficient to repair reputational harm.

Labor. A significant number of associates at managed, leased and owned hotels are covered by collective bargaining agreements, numerous ones typically renegotiated each year, and strikes, lockouts, boycotts and demonstrations have occurred. At franchised and licensed properties Marriott does not control the negotiations. Labor regulation and new agreements can raise wage and benefit costs and impose work rules that limit cost-saving during downturns. Separately, recruiting and retaining associates is a stated constraint on growth and a source of wage inflation, and loss of senior executives is named as a risk.

Impairment, insurance, currency and real estate. Goodwill and other intangibles are a large share of the balance sheet, and changes in business climate, competition, legal or regulatory developments, brand perception, interest rates, cash flows or market capitalization could force material non-cash charges. Property and liability insurance for system hotels may become unavailable, narrower or far more expensive, Marriott cites significant cost increases across property and liability markets following severe natural-disaster losses, and catastrophic losses may be effectively uninsurable. Non-U.S. revenue and expense create both transaction and translation currency exposure; hedging is partial and carries its own cash flow, credit and counterparty costs. Owned and leased properties and joint venture interests carry ordinary real estate risk, including difficulty selling equity real estate at acceptable prices. Residential licensing adds exposure to residential real estate demand, mortgage rates and mortgage availability.

Climate and weather. Marriott states it has already seen declines in travel and reduced lodging demand from natural disasters and extreme weather in some markets and in guest-source regions, and expects the prevalence and impact of such events may increase. Compliance with climate legislation and regulation and its own sustainability initiatives have been and are expected to remain complex and costly.

General. Delaware law and the governing corporate documents contain anti-takeover provisions, the Delaware business combination statute's three-year restriction on a 15-percent holder, supermajority votes for mergers and similar transactions, and the Board could implement further defenses such as a rights plan without stockholder approval. Changes in tax law or its interpretation, and tax authority audits across the many jurisdictions in which Marriott operates, could materially increase tax costs.

Cybersecurity governance. Cybersecurity risk is managed through the enterprise risk management process overseen by the Board, with a global information security program informed by NIST and ISO frameworks, a Global Information Security & Privacy Incident Response Plan, and Board-level oversight through a Technology and Information Security Oversight Committee that meets at least four times a year. Marriott does not believe cybersecurity threats, including from prior incidents, have materially affected or are reasonably likely to materially affect its long-term business strategy, results or financial condition. The annual report disclosed that the Chief Information Security Officer would depart voluntarily in late February 2026 for a position in another industry, that a search for a replacement was underway, and that an interim information security professional reporting to the Global Chief Information Officer would perform the CISO functions in the meantime.

Management's discussion, fiscal 2025

From the fiscal 2025 Annual Report on Form 10-K, accession 0001048286-26-000007.

Revenue and earnings. Total revenues were $26,186 million in 2025 against $25,100 million in 2024 and $23,713 million in 2023. Operating income was $4,141 million versus $3,767 million; net income was $2,601 million versus $2,375 million, and diluted earnings per share $9.51 versus $8.33. Note that the great bulk of reported revenue is pass-through: cost reimbursement revenue was $19,204 million of the $26,186 million total, with $19,503 million of matching reimbursed expenses. The economically meaningful top line is net fee revenues, $5,303 million in 2025 against $5,067 million in 2024, up 5 percent.

Fee composition. Gross fee revenues were $5,438 million, up 5 percent. Franchise fees rose 7 percent to $3,325 million, driven by higher co-branded credit card and other brand-related fees ($105 million) and rooms growth ($94 million). Base management fees rose 3 percent to $1,322 million on higher RevPAR plus rooms growth ($25 million). Incentive management fees rose 3 percent to $791 million on higher managed-hotel profits. Contract investment amortization was a $135 million offset, up from $103 million. In both 2025 and 2024 Marriott earned incentive fees from 69 percent of managed hotels worldwide, 32 percent in U.S. & Canada and 85 percent internationally in 2025, and in both years 67 percent of total incentive fees came from international managed hotels, primarily EMEA and APEC.

Demand. Worldwide systemwide RevPAR rose 2.0 percent in 2025, almost entirely rate-driven: ADR was up 2.1 percent and occupancy was flat at 69.3 percent. U.S. & Canada RevPAR rose only 0.7 percent, reflecting strong luxury demand offset by softer select-service demand hurt by weaker business transient travel, partly from declines in government travel. International RevPAR rose 5.1 percent on higher demand across APEC, EMEA and Caribbean & Latin America; Greater China rose just 0.4 percent on soft macroeconomic conditions. Middle East & Africa was the standout at 10.4 percent systemwide RevPAR growth. Worldwide systemwide RevPAR for the year was $128.80 at an ADR of $185.81.

Other operating lines. Owned, leased and other revenue net of its expense was $218 million, down $4 million, as $23 million of expense tied to the Sonder licensing termination offset stronger U.S. & Canada owned and leased results that included the Sheraton Grand Chicago acquired in the prior-year fourth quarter. Cost reimbursements net was negative $299 million against negative $317 million, reflecting higher loyalty program revenues partly offset by higher net program expenses. General and administrative fell 8 percent to $870 million on lower compensation costs ($39 million). Restructuring and merger-related items swung to a $2 million recovery from a $77 million charge, on insurance recoveries related to the Data Security Incident ($47 million), lower employee termination benefit charges ($34 million) and a prior-year reserve for a loan commitment tied to the Starwood acquisition ($30 million). Depreciation, amortization and other rose to $213 million from $183 million.

Below the line. Interest expense rose to $809 million from $695 million, primarily on higher debt balances from senior note issuances net of maturities ($129 million). The tax provision was $793 million against $776 million, as higher non-U.S. taxes from increased tax rates ($90 million) and higher pre-tax income ($62 million) were partly offset by a current-year release of tax reserves ($137 million).

Segments. U.S. & Canada net fee revenues were $2,921 million with segment profit of $2,679 million, up 2 percent and 1 percent; profit included $56 million of higher owned, leased and other net revenue offset by $34 million of lower net cost reimbursement. EMEA net fee revenues were $621 million (up 8 percent) with $525 million of profit. Greater China net fee revenues were $260 million with profit of $185 million, down $1 million. APEC net fee revenues were $370 million (up 9 percent) with profit of $301 million (up 8 percent).

System growth. The system grew from 9,361 properties (1,706,331 rooms) to 9,805 properties (1,779,936 rooms), reflecting gross additions of 703 properties (99,459 rooms), including 37 properties (8,789 rooms) from the citizenM brand acquisition, against deletions of 253 properties (25,643 rooms), with all Sonder properties removed. Nearly 64,000 of the gross room additions were outside U.S. & Canada and roughly 33,400 were conversions from competitor brands. Marriott signed nearly 1,200 development deals in 2025 (excluding citizenM) representing approximately 163,000 rooms, with over 30 percent of signed rooms from conversions, and signed 55 residential agreements. Three brands were added during the year: citizenM, Series by Marriott and the Outdoor Collection by Marriott Bonvoy. The year-end pipeline stood at roughly 4,100 properties and nearly 610,000 rooms, of which over 35,000 rooms were approved but not yet under signed contract and nearly 265,000 rooms (43 percent) were under construction including conversions in process; over half of pipeline rooms were outside U.S. & Canada.

The citizenM acquisition. Marriott announced in the 2025 second quarter an agreement with citizenM Holding BV and certain affiliates to acquire the citizenM brand and related intellectual property for $355 million, completing the acquisition in the 2025 third quarter and integrating 37 open select-service hotels (8,789 rooms) in the fourth quarter. Earn-out payments of up to $110 million may be owed to the seller based on the brand's future growth over a specified multi-year period, and would not begin until the fourth year after closing. Accounted for as an asset acquisition, the cost was allocated on a relative fair value basis to an indefinite-lived brand asset of approximately $290 million and contract assets of $60 million with a weighted-average term of 20 years. Cash outflow for the acquisition was $350 million in 2025.

Cash flow and capital returns. Net cash from operating activities was $3,212 million, up $463 million, the increase reflecting a prior-year $300 million outflow for settlement of the guarantee liability associated with the Sheraton Grand Chicago purchase. Capital and technology expenditures were $604 million against $750 million, down $146 million mainly because 2024 included roughly $200 million of Sheraton Grand Chicago capitalized asset spend. Investing outflows totalled $948 million. Financing used $2,318 million: $3,436 million of long-term debt issued against $1,309 million repaid and $403 million of net commercial paper repayment, $3,300 million of treasury stock purchased and $718 million of dividends paid. Marriott repurchased 12.1 million shares for $3.3 billion in 2025 and a further 1.1 million shares for $350 million through February 6, 2026. Quarterly dividends in 2025 were $0.63 per share (declared February 13) and $0.67 per share in each of the three following quarters.

Debt and liquidity. Debt rose $1,757 million to $16,204 million at year-end 2025 from $14,447 million, driven by the Series RR and SS note issuances ($1,960 million) and the Series TT, UU and VV issuances ($1,477 million), partly offset by the maturities of the Series P, V and EE notes ($350 million, $318 million and $600 million) and $403 million of net commercial paper repayment. Weighted average interest rate on total long-term debt including swaps was 4.5 percent, weighted average maturity approximately 5.4 years, and fixed-rate to total long-term debt 0.9 to 1.0. The $4.5 billion multicurrency revolving credit facility backstops commercial paper and general corporate needs, prices at SOFR plus a ratings-based spread, carries a single financial covenant capping Adjusted Total Debt to EBITDA at 4.5 to 1.0, and at the time of the annual report was set to expire December 14, 2027. The current ratio was 0.4 to 1.0 at both year-ends. Material cash requirements at year-end 2025 comprised $16,204 million of debt plus $4,159 million of future interest, of which $1,896 million was payable within twelve months, plus operating leases, guarantees and letters of credit and the citizenM earn-out. Capital expenditures and other investments for 2026 were then expected to total approximately $1.0 billion to $1.1 billion excluding any property or brand acquisitions, and net rooms growth of 4.5 to 5.0 percent was expected for 2026.

Critical estimates. The loyalty program is the key estimate: a one percent decrease in the breakage estimate for points, holding other factors constant and on conditions existing at December 31, 2025, could increase the guest loyalty program liability by approximately $50 million. The 2025 fourth-quarter annual goodwill impairment test produced no charges, and the estimated fair values of all reporting units significantly exceeded carrying amounts; no material impairment of intangibles or long-lived assets was recorded in 2025.

Current period, second quarter and first half 2026

From the Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, accession 0001048286-26-000035, with quarterly results commentary and outlook from the earnings release furnished on Form 8-K, accession 0001048286-26-000033.

Headline results. Second quarter total revenues were $7,071 million against $6,744 million a year earlier, with net fee revenues of $1,547 million up 13 percent from $1,371 million. Gross fee revenues were $1,578 million, up 13 percent. Operating income was $1,229 million against $1,236 million, down year over year despite the fee growth, and net income was $766 million against $763 million, with diluted EPS of $2.90 against $2.78. For the first half, revenues were $13,725 million against $13,007 million, net fee revenues $2,945 million (up 12 percent), operating income $2,293 million against $2,184 million, and net income $1,414 million against $1,428 million, with diluted EPS of $5.32 against $5.17. The company reported adjusted EBITDA of $1,592 million for the quarter, 13 percent above the prior-year $1,415 million, and adjusted diluted EPS of $3.19 against $2.65.

What drove the fee line. Franchise fees rose 19 percent in the quarter to $1,023 million and 18 percent in the half to $1,895 million, reflecting higher co-branded credit card fees ($73 million in the quarter, $132 million in the half), higher franchised-property revenue from rooms growth ($30 million and $53 million), higher RevPAR and other items; the first-half increase also included $32 million of higher residential branding fees. Base management fees were $343 million in the quarter (up 1 percent) and $682 million in the half. Incentive management fees were $212 million and $434 million, up 6 and 7 percent, on higher managed-hotel profits in U.S. & Canada; managed hotels in international markets contributed over half the incentive fees earned in the quarter.

Why operating income fell despite higher fees. Three items sit against the fee growth. Depreciation, amortization and other more than doubled to $115 million from $53 million in the quarter ($169 million from $104 million in the half), driven by a $68 million impairment charge taken on a U.S. & Canada hotel. Owned, leased and other revenue net of its expense fell to $49 million from $78 million in the quarter and to $84 million from $107 million in the half, primarily on a $27 million property-related litigation accrual recorded in the quarter, about $20 million after tax, or $0.08 per share, and lower termination fees; at the owned and leased hotels themselves, higher revenues were largely offset by higher expenses, with strong performance at many hotels partly offset by hotels under renovation. Cost reimbursements net swung to negative $42 million from positive $58 million in the quarter and to negative $134 million from negative $9 million in the half, on higher expenses net of revenues across many centralized programs and services, with loyalty program activity reducing the quarter further on lower revenue while partly offsetting the first-half decline on lower expenses. General and administrative was $220 million in the quarter and $439 million in the half, the first-half increase reflecting $26 million of higher compensation costs. Restructuring and merger-related items were a $10 million recovery in the quarter and a $6 million recovery in the half.

Below the line. Interest expense was $221 million in the quarter and $435 million in the half, against $203 million and $395 million a year earlier, the increases primarily on higher debt balances from senior note issuances net of maturities ($28 million and $55 million respectively). Interest income was $20 million and $30 million. Gains and other income net was $11 million and $14 million. Equity in earnings was $5 million in the quarter and nil in the half. The quarterly tax provision was $278 million against $291 million, with the effective rate down on lower tax on non-U.S. income; the first-half provision rose to $488 million from $390 million, mainly because the prior year included a release of tax reserves ($91 million), plus higher pre-tax income ($42 million), partly offset by lower tax on non-U.S. income ($18 million) and a $17 million tax benefit on the hotel impairment. Cash paid for income taxes net of refunds was $350 million in the first half against $534 million a year earlier.

Demand: a two-speed quarter. Worldwide systemwide RevPAR rose 3.4 percent in the quarter and 3.8 percent in the half, driven primarily by ADR (up 3.5 percent and 3.3 percent). U.S. & Canada RevPAR rose 5.0 percent in the quarter and 4.6 percent in the half on strong demand across all brand tiers and customer segments, helped by demand from the World Cup in June 2026. International RevPAR declined 0.5 percent in the quarter while growing 2.0 percent in the half. The swing factor was the conflict in the Middle East, which produced a sharp RevPAR decline in Middle East & Africa beginning in March 2026, systemwide Middle East & Africa RevPAR fell 33.1 percent in the quarter, with occupancy down 15.8 points and ADR down 12.1 percent, and the company stated the impact continued into the third quarter, with the further operational and financial effect depending on the duration and extent of travel disruption. Elsewhere internationally, Europe RevPAR rose 4.2 percent, APEC 5.3 percent, Greater China 3.2 percent and Caribbean & Latin America 3.0 percent on a systemwide basis. Worldwide systemwide RevPAR was $138.74 at an ADR of $193.66 and occupancy of 71.6 percent.

Credit card agreements. During 2026 Marriott executed new multi-year U.S. agreements with JPMorgan Chase and American Express for its co-branded credit card program. It expects the agreements to benefit total revenues in future periods, primarily in the cost reimbursement revenue caption and secondarily in franchise fees. Marriott Bonvoy had grown to more than 295 million members at quarter end.

System and pipeline. At the end of the second quarter the system comprised 10,082 properties (1,813,698 rooms), against 9,805 properties (1,779,936 rooms) at year-end 2025 and 9,601 properties (1,735,819 rooms) a year earlier, a 4 percent rooms increase, with net rooms up 4.5 percent year over year. Roughly 33,800 net rooms were added in the first half and roughly 17,900 in the second quarter, about 11,000 of the quarter's additions in international markets. By segment, rooms rose 2 percent in U.S. & Canada to 1,080,409, 7 percent in EMEA to 257,247, 11 percent in Greater China to 197,320 and 10 percent in APEC to 160,552. The pipeline reached a record: 4,186 properties and approximately 629,000 rooms, up nearly 7 percent from a year earlier, including 253 properties with over 34,000 rooms approved but not yet under signed contract and 1,757 properties with over 279,000 rooms (44 percent) under construction including conversions in process. Over half of pipeline rooms were outside U.S. & Canada. Management described record global signings for the first six months, with conversions over a third of signings and 40 percent of openings in the half.

Segment results. U.S. & Canada net fee revenues rose 13 percent to $883 million in the quarter and 11 percent to $1,635 million in the half, helped by higher incentive management fees ($26 million and $35 million) and residential branding fees ($22 million and $36 million) alongside RevPAR and rooms growth, yet segment profit fell to $770 million from $786 million in the quarter and to $1,416 million from $1,430 million in the half, because of the $68 million impairment, lower net cost reimbursement revenue ($37 million in the quarter and $109 million in the half) and the $27 million litigation accrual. EMEA net fee revenues fell 6 percent to $154 million in the quarter (up 1 percent to $281 million in the half) with profit down to $144 million from $157 million and to $216 million from $231 million. Greater China net fee revenues rose 6 percent to $68 million in the quarter and 10 percent to $136 million in the half, with profit of $55 million and $100 million. APEC net fee revenues rose 5 percent to $85 million in the quarter and to $187 million in the half, but profit fell 9 percent to $69 million and 10 percent to $140 million.

The hotel sale. In April 2026 a U.S. & Canada hotel met the criteria to be classified as held for sale; because carrying amount exceeded fair value less costs to sell under a purchase and sale agreement with a third-party buyer, Marriott recorded the $68 million impairment. The sale completed in May 2026 and Marriott entered into a long-term management agreement to operate the hotel. Dispositions contributed $93 million of cash in the first half, primarily from this sale. Marriott also disclosed that it made an investment in Lefay during the second quarter, which is included in its investment spending outlook; no amount was disclosed.

Balance sheet. Total assets were $28,085 million at June 30, 2026 against $27,540 million at December 31, 2025, with brands of $6,182 million, contract acquisition costs and other of $4,283 million and goodwill of $8,876 million. Long-term debt was $16,455 million with $460 million in the current portion, against $14,995 million and $1,209 million at year-end; total debt was $16.9 billion versus $16.2 billion at year-end 2025. Marriott continues to run a stockholders' deficit, which widened to $4,525 million from $3,771 million as treasury stock grew to $29,677 million. The combined current and noncurrent guest loyalty program liability rose $452 million to $8,444 million from $7,992 million, primarily on points earned, partly offset by $1,802 million of previously deferred revenue recognized in the half; the current portion rose $183 million on higher expected near-term redemptions. The allowance for credit losses was $215 million. Guarantees carried a maximum potential future funding of $214 million against a recorded liability of $98 million, with $70 million of operating profit guarantees not yet in effect pending property openings.

Liquidity and capital returns. Cash, cash equivalents and restricted cash were $472 million at June 30, 2026, up $101 million from year-end, as $1,806 million of operating cash flow, $670 million of net long-term debt issuance, $102 million of loan collections and $93 million of dispositions were largely absorbed by $1,819 million of share repurchases, $370 million of dividends, $282 million of capital and technology expenditures and $126 million of stock-based compensation withholding taxes. The current ratio was 0.5 to 1.0. Weighted average interest rate on total long-term debt including swaps was 4.6 percent, weighted average maturity approximately 5.5 years, and fixed-rate to total long-term debt 0.8 to 1.0. In February 2026 Marriott issued $600 million of 4.500 percent Series WW Notes due May 1, 2033 and $850 million of 5.100 percent Series XX Notes due May 1, 2038, for net proceeds of approximately $1.425 billion made available for general corporate purposes. The $750 million Series R Notes matured June 15, 2026. The fair value of noncurrent senior notes was $15,039 million against a carrying amount of $15,090 million. Marriott repurchased 3.0 million shares for $1.1 billion in the quarter and 6.2 million shares for $2.2 billion year to date through July 29, 2026, returning approximately $2.6 billion to shareholders in total year to date including dividends. Quarterly dividends declared in 2026 to date were $0.67 per share (declared February 12, paid March 31) and $0.73 per share (declared May 8, paid June 30).

Outlook. With the August 3, 2026 release Marriott raised its full-year worldwide RevPAR growth expectation to 3.0 to 3.5 percent, and guided third quarter RevPAR growth of 3.5 to 4.0 percent. Full-year net rooms growth was guided to the low end of the 4.5 to 5.0 percent range. Full-year gross fee revenues were guided to $6,025 to $6,055 million, owned, leased and other revenue net of expense to $175 to $185 million, general and administrative expenses to $895 to $875 million, adjusted EBITDA to $5,965 to $6,025 million (11 to 12 percent above 2025's $5,383 million), adjusted diluted EPS to $11.64 to $11.81, and the adjusted effective tax rate to 26.0 to 26.5 percent. Investment spending was guided to $1,250 to $1,350 million and capital return to shareholders to over $4,500 million. Third quarter guidance was gross fee revenues of $1,474 to $1,483 million, adjusted EBITDA of $1,439 to $1,468 million and adjusted diluted EPS of $2.74 to $2.82. The outlook assumes continuation of the current macroeconomic environment and includes the expected partial-year incremental impact of the new JPMorgan Chase and American Express agreements, as well as the U.S. & Canada hotel sale and the Lefay investment; it excludes any other asset sales or property or brand acquisitions, which Marriott says it cannot forecast and which may be significant.

Litigation. Following the 2018 Data Security Incident, approximately 100 lawsuits were filed by consumers and others in U.S. federal, U.S. state and Canadian courts. In 2025 the U.S. Court of Appeals for the Fourth Circuit reversed the District Court's certification of a consumer class for the second time, after which some plaintiffs filed individual suits in New York state court under New York statutory law. Marriott stated it is progressing in mediation discussions with the U.S. consumer plaintiffs and believes it is probable it will incur losses, and that as of June 30, 2026 it had recorded an accrual for an estimated loss contingency that is not material to its financial statements. The Canadian cases remain pending. Most governmental inquiries and investigations have been resolved or no longer appear active. Marriott considers further losses in excess of amounts recorded reasonably possible but not estimable. There were no material changes to the risk factors disclosed in the fiscal 2025 annual report.

Subsequent events

The quarterly report for the period ended June 30, 2026 (accession 0001048286-26-000035) contains no separate subsequent-events note; the material post-period developments were reported separately. Two are financing and credit matters.

Senior notes issued August 13, 2026. On August 11, 2026 Marriott entered into a terms agreement with J.P. Morgan Securities LLC, PNC Capital Markets LLC, Truist Securities, Inc., U.S. Bancorp Investments, Inc. and other underwriters to issue $250,000,000 aggregate principal amount of 4.875% Series NN Notes due 2029 and $1,000,000,000 aggregate principal amount of 5.650% Series YY Notes due 2036. The notes were issued on August 13, 2026. The new Series NN Notes are an additional issuance of, and a single series with, the $500 million of 4.875% Series NN Notes due 2029 issued on February 22, 2024. Net proceeds were approximately $1.233 billion after the underwriting discount and estimated expenses and excluding accrued interest paid by purchasers at closing, intended for general corporate purposes which may include working capital, capital expenditures, acquisitions, stock repurchases or repayment of outstanding indebtedness. Interest on the Series NN Notes is payable May 15 and November 15 commencing November 15, 2026; on the Series YY Notes, March 15 and September 15 commencing March 15, 2027. The Series NN Notes mature May 15, 2029 and the Series YY Notes September 15, 2036, each redeemable in whole or in part at Marriott's option. (Form 8-K, accession 0001193125-26-349395.)

Credit facility upsized and extended, September 23, 2026. Marriott entered into the Seventh Amended and Restated Credit Agreement with Bank of America, N.A. as administrative agent and certain banks, amending and restating the $4.50 billion multicurrency revolving credit agreement dated December 14, 2022. The amendment increases aggregate commitments from $4.50 billion to $5.00 billion and raises the maximum aggregate commitments permitted on exercise of the commitment increase option from $5.00 billion to $5.50 billion. It extends the maturity date from December 14, 2027 to September 23, 2031. It also adjusts interest rate margins and facility fees, adjusts the calculation of "EBITDA," provides for the ability to amend the agreement to adjust interest rates and fees based on to-be-agreed environmental key performance indicators, and updates certain other provisions. Borrowings generally bear interest at SOFR plus a spread based on Marriott's public debt rating, with quarterly fees also set by debt rating, and the agreement includes customary events of default. Except as described, the material terms of the prior agreement generally remain unchanged. (Form 8-K, accession 0001193125-26-401051.)