메리어트(MAR) 2026년 3분기 실적 발표회: RevPAR 가이던스 상향

핵심 요약

• 전 세계 RevPAR는 전년 동기 대비 6.5% 증가했으며, 미국 및 캐나다에서 7.4% 성장하고 해외 시장에서 4% 이상 성장한 것을 포함합니다.
• 총 수수료 수입은 14% 증가한 15억 2,000만 달러를 기록했습니다. 조정 EBITDA는 12% 증가한 15억 1,000만 달러, 조정 희석 EPS는 22% 증가한 3.02달러를 기록했습니다.
• 경영진은 2025년 연간 실적 발표 후 제시했던 초기 전망치인 1.5%~2.5%에서 2026년 연간 전 세계 RevPAR 성장률 전망치를 4.5%~5%로 상향 조정했습니다.
• 9월 30일로 종료된 지난 12개월 동안 순 객실 수는 4.6% 증가했습니다. 메리어트의 파이프라인은 공사 중이거나 전환 대기 중인 27만 8,000개 객실을 포함해 사상 최고치인 63만 4,000개 이상의 객실을 기록했습니다.
• 메리어트 본보이(Marriott Bonvoy) 회원 수는 약 3억 9백만 명에 달했습니다. 회사는 다년간의 기술 혁신을 지속하는 한편, AI 기반 검색 및 커머스 도구를 확장하고 있습니다.
• 경영진의 예비 전망에 따르면 2027년 전 세계 RevPAR 성장률은 3.5%~4.5%로 예상되며, 유럽·중동·아프리카(EMEA)의 기저효과가 월드컵 비교 기저를 상쇄할 것으로 기대됩니다.

주요 재무 데이터

총 수수료 성장은 RevPAR 상승, 객실 추가, 제휴 신용카드 수수료를 반영했습니다. 주거용 브랜드 수수료는 분양 시점으로 인해 35% 감소했습니다.

순 소유·임대 및 기타 매출의 감소는 소유 및 임대 호텔 실적 약화, 리노베이션 영향, 2분기 미국 호텔 매각, 제3자 계약 비용 증가를 반영했습니다. 이러한 요인들은 1,200만 달러의 예상 보험금 수령으로 일부 상쇄되었습니다.

사업 및 영업 실적

레저는 여전히 메리어트의 가장 강력한 고객 부문으로 유지되었습니다. 전 세계 레저 RevPAR는 미국 및 캐나다에서의 9% 성장을 포함해 7% 상승했습니다. 단체(Group) RevPAR는 전 세계적으로 6%, 미국 및 캐나다에서 7% 증가한 반면, 상업용 상시 개별(business transient) RevPAR는 전 세계적으로 4%, 해당 지역에서 5% 증가했습니다.

럭셔리 호텔은 RevPAR가 12% 상승하며 미국 및 캐나다의 실적을 지속적으로 견인했습니다. 셀렉트 서비스(Select-service) RevPAR는 6% 이상 상승하며 3분기 연속 전년 동기 대비 견조한 성장을 기록했습니다.

아시아 태평양(APEC) 지역은 역내 및 장거리 국제 여행 수요에 힘입어 9% 이상의 RevPAR 성장률로 해외 시장을 선도했습니다. 유럽 RevPAR는 서유럽과 남유럽의 레저 수요가 특히 강세를 보이며 6% 이상 증가했습니다.

대중화권 RevPAR는 보합세를 보였습니다. 럭셔리 호텔과 홍콩, 대만, 하이난 시장의 강세는 중국 본토 대부분 지역의 내수 레저 수요 약화 및 대형 태풍으로 인한 차질로 인해 상쇄되었습니다.

카리브해 및 라틴아메리카 RevPAR는 카리브해의 럭셔리 및 레저 수요가 멕시코의 지속적인 부진을 상쇄하면서 3% 이상 증가했습니다. 중동 RevPAR는 12% 감소하여 2분기의 40% 이상 감소에서 개선되었습니다.

개발 활동은 신축과 기존 브랜드 전환(conversion) 모두에 계속 집중되었습니다. 2026년 첫 9개월 동안 전환은 체결 건수의 3분의 1 이상, 신규 개장의 40% 이상을 차지했습니다. 해당 기간 동안 미국 및 캐나다의 신축 착공 건수는 전년 동기 대비 20% 증가한 반면, 보고된 전 세계 착공 건수는 약 24% 감소했습니다.

메리어트는 실적 발표 전날 기준으로 3,000개 이상의 호텔을 새로운 기술 생태계로 이전했습니다. 미국 셀렉트 서비스 호텔 전반에서 도입이 대부분 완료되었으며, 풀서비스 호텔의 전환이 진행 중이고 2027년까지 단계적 도입이 계속될 예정입니다.

경영진 가이던스

경영진은 1%~1.5%의 예상 이탈률을 포함해 2026년 순 객실 성장률이 이전 제시 범위인 4.5%~5%의 하단에 근접할 것으로 계속 예상하고 있습니다. 향후 몇 년간은 한 자릿수 중간대의 순 객실 성장을 예상하고 있습니다.

2026년 제휴 신용카드 수수료는 30%대 후반의 증가세를 보일 것으로 예상되며, 주거용 브랜드 수수료는 90% 이상 증가할 것으로 현재 전망됩니다. 관련 비용을 차감한 순 소유·임대 및 기타 매출은 총 1억 7,000만~1억 7,500만 달러에 달할 것으로 예상됩니다.

투자 예산은 키머니(key money)에 40%~45%, 기술에 25%~30%, 나머지는 소유 및 임대 호텔 리노베이션과 기타 투자에 배정됩니다. 경영진은 연간 RevPAR가 1% 변동할 때마다 RevPAR 관련 수수료에 약 5,500만~6,500만 달러의 영향이 미칠 수 있다고 언급했습니다.

리스크 및 주요 관전 포인트

• 경영진은 유럽의 지속적인 강세보다 중동의 부진이 더 커짐에 따라 4분기 유럽·중동·아프리카(EMEA) RevPAR가 전년 동기 대비 감소할 것으로 예상합니다.
• 중동 지역은 2025년 4분기의 대형 이벤트에 따른 높은 기저효과, 그리고 지정학적 긴장 고조와 관련된 지속적인 여행 차질 및 취소 사태에 직면해 있습니다.
• 대중화권은 소비 지출의 불균형과 내수 레저 수요의 약화에 계속 직면해 있습니다.
• 경영진은 11월 미국 중간선거가 4분기 미국 및 캐나다 RevPAR에 미미한 부정적 영향을 줄 수 있다고 말했습니다.
• 브랜드 전환 및 시스템 확장을 위한 경쟁으로 인해 키머니와 계약 수주 비용이 계속 상승할 수 있습니다.
• 회사는 전 세계 착공 데이터가 미국 데이터보다 정밀도가 떨어지므로, 보고된 감소세로부터 결론을 도출하는 데 한계가 있다고 경고했습니다.

애널리스트 Q&A 하이라이트

경영진은 호텔 소유주들과의 논의가 투명하고 협력적이며 건설적이었다고 설명했습니다. 메리어트는 로열티 부담율(charge-out rates) 인하, 수요가 높은 포인트 상환 숙박에 대한 정산금 인상, 유연한 리노베이션 요건, 브랜드 표준 간소화를 통해 개별 호텔 차원의 수익성에 계속 집중하고 있습니다.

AI와 관련하여 경영진은 해당 기술이 현재 여행 검색 분야에서 가장 명확한 영향력을 나타내고 있는 반면, 예약 애플리케이션 개발은 더 천천히 진행되고 있다고 밝혔습니다. 메리어트는 플랫폼에 한층 풍부한 콘텐츠를 제공하고 Ask Bonvoy와 같은 도구를 도입하고 있으며, 구글(Google) 및 OpenAI와의 연동을 테스트하고 있습니다. 호텔 유통 비용에 미칠 최종적인 영향은 여전히 불확실합니다.

경영진은 신축 활동이 개선되더라도 2027년 및 그 이후까지 전환(conversion)이 순 객실 성장의 주요 동력으로 유지될 것으로 예상합니다. 또한 중급(midscale) 세그먼트 진출은 현재 운영 중이거나 파이프라인에 있는 호텔이 600개에 달해 아직 초기 단계에 있다고 밝혔습니다.

메리어트는 키머니가 지원된 계약이 키머니가 없는 계약에 비해 2025년에 객실당 평균 약 65%, 2026년 첫 9개월 동안 약 75%의 가치 프리미엄을 창출했다고 밝혔습니다.

중동 지역과 관련해 경영진은 이탈 현상이 이례적인 수준으로 발생하지는 않고 있다고 밝혔습니다. 중동은 메리어트 전체 운영 객실의 약 3%, 파이프라인의 약 6%, 2025년 전 세계 총 수수료의 약 3%를 차지합니다.

3분기 전 세계 평균 리드타임(booking window)은 약 21일이었습니다. 상업용 상시 개별 예약은 평균 17일, 레저 예약은 24일이었으며, 레저 리드타임은 전년 동기 대비 비교적 변동이 없었습니다.

실적 발표 전화회의 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Hello, and welcome, everyone joining today's Marriott International Q3 2026 earnings. [Operator Instructions] Please note this call is being recorded. We are standing by if you should need any assistance. It is now my pleasure to turn the meeting over to Jackie McConagha, Senior Vice President of Investor Relations. Please go ahead.

Jackie McConagha

Thank you. Good morning, everyone, and welcome to Marriott's Third Quarter 2026 Earnings Call. On the call today are Tony Capuano, our President and Chief Executive Officer; Jen Mason, our Executive Vice President and Chief Financial Officer; and Pilar Fernandez, Senior Director of Investor Relations.

Before we begin, I would like to remind everyone that many of our comments today are not historical facts and are considered forward-looking statements under federal securities laws. These statements are subject to numerous risks and uncertainties as described in our SEC filings, which could cause future results to differ materially from those expressed in or implied by our comments. Unless otherwise stated, our RevPAR, occupancy, ADR and property level revenues comments reflect system-wide constant currency results for comparable hotels and all changes refer to year-over-year changes for the comparable period. Statements in our comments and the press release we issued earlier today are effective only today and will not be updated as actual events unfold. You can find our earnings release and reconciliations of all non-GAAP financial measures referred to in our remarks today on our Investor Relations website.

And now I will turn the call over to Tony.

Anthony Capuano

Thanks, Jackie. Good morning, and good afternoon, everyone. We're joining you today from the beautiful JW Marriott Grosvenor House in London, and we're excited to share our third quarter results. We reported an excellent quarter this morning with RevPAR and financial results above our prior expectations. Development activity remains strong and we grew net rooms by 4.6% over the 12 months ending September 30. Third quarter global RevPAR rose 6.5%. RevPAR in the U.S. & Canada region rose 7.4%, improving on a strong first half of the year and reflecting strength in both World Cup and non-World Cup markets. Excluding the World Cup, third quarter RevPAR in the U.S. & Canada rose 6.2%. Growth continued to be broad-based across customer segments and chain scales. Luxury and resort hotels again led the region in the quarter, with luxury RevPAR increasing 12%, while select service RevPAR had its third quarter of solid year-over-year growth rising over 6% compared to the prior year quarter. Third quarter international RevPAR rose over 4%, led by the APEC region, where RevPAR increased more than 9%. Performance in APEC reflected broad-based sustained demand across the region, supported by robust intra-regional and long-haul international travel. RevPAR in Greater China was around flat in the quarter, reflecting an uneven consumer spending environment and the impact of major typhoons across the region. Continued strength in luxury and in the Hong Kong, Taiwan and Hainan markets, was offset by slower domestic leisure demand across much of the rest of the Chinese mainland.

RevPAR in the Caribbean and Latin American region rose over 3% in the third quarter, driven by strong luxury and leisure demand across the Caribbean, which offset continued softness in Mexico. RevPAR in EMEA rose over 4% with Europe and the Middle East both outperforming prior expectations. RevPAR in Europe rose over 6% in the third quarter, with strength broad-based across key markets, chain scales and customer segments. Middle East RevPAR declined 12% in the quarter, a meaningful improvement from the second quarter when RevPAR declined over 40%, helped by healthy local and regional demand. As Jen will discuss further, with strong base demand across chain scales generally expected to continue, we are again raising our full year 2026 guidance.

We now expect 4.5% to 5% global RevPAR growth. This is well above the 1.5% to 2.5% growth range we initially forecast on our year-end 2025 earnings call, as travel demand has been remarkably robust this year despite geopolitical uncertainty.

Turning to results by customer segments. In the third quarter, leisure RevPAR rose 7% globally and 9% in the U.S. & Canada, as people around the world continue to prioritize in-person experiences like travel. Group RevPAR rose 6% globally and 7% in the U.S. & Canada. Third quarter business transient RevPAR rose 4% globally and 5% in the U.S. & Canada.

On the development front, signings activity remains strong, particularly in international markets, and we achieved record global organic signings in the first 9 months of the year. We continue to have the largest pipeline in the industry. Our global pipeline grew over 6% year-over-year to a new record of over 634,000 rooms at the end of September, with an industry-leading 278,000 rooms under construction including pending conversions. We are still seeing terrific momentum in conversions, including multiunit deals given the many top and bottom line benefits of joining the Marriott portfolio. In the first 9 months of the year, conversions accounted for over 1/3 of our signings and over 40% of our openings.

For the full year 2026, we still expect net rooms growth towards the low end of our prior 4.5% to 5% range, including our typical assumption of between 1% and 1.5% room deletions. With our growing pipeline and conversion momentum, we still expect net rooms growth to grow in the mid-single-digit range over the next several years. Our relationships with our hotel owners are of paramount importance to us. We remain deeply committed to working alongside them to continue to leverage our industry-leading scale to enhance property level economics and deliver sustainable long-term value. As we've discussed before, we've taken a number of steps to drive hotel level economics. These steps include lowering loyalty charge-out rates, enhancing reimbursement for Bonvoy redemption stays on high demand nights, rolling out flexible renovation scopes and streamline brand standards and introducing an intent to recommend incentive in the U.S. and Canada.

Our owners, associates and guests are also expected to benefit from our significant multiyear technology transformation, which is well underway. We are excited about the benefits this transformation will deliver across our stakeholder groups. One recent innovation developed in-house on our proprietary technology platform is an in-app complementary upgrade list that is currently in beta. The feature will give eligible elite members greater visibility into potential upgrades before arrival by showing their position on the upgrade list, and an estimate of available upgrades that match their reservation while still preserving premium room upsell opportunities for our owners.

Additionally, we're expanding our use of AI across the enterprise to enhance hotel performance, drive measurable business value and enhance the associate and guest experience. As AI reshapes how people discover, plan and book travel, we are focused on optimizing Marriott's presence in the AI-generated arena, introducing conversational AI in our own channels through features such as Ask Bonvoy and testing new search and commerce experiences through integrations with leading platforms like Google and OpenAI.

Our powerful award-winning Marriott Bonvoy Loyalty Program now has approximately 309 million members around the world. Members continue to engage with us across our unmatched portfolio of brands and experiences as well as through our numerous collaborations, including our co-branded credit cards. Marriott Bonvoy deepens our relationships with guests, drives valuable direct bookings for our owners and is a key reason that owners and developers choose to join the Marriott system.

Before I conclude, I want to thank our Marriott teams around the world whose hard work and dedication help make these strong results possible. And now I'll turn the call over to Jen for more details on our financial results. Jen?

Jennifer Mason

Thank you, Tony. I will start by reviewing our strong third quarter results. Total gross fee revenues rose 14% year-over-year to $1.52 billion, driven by higher RevPAR rooms growth and higher co-branded credit card fees. We delivered this growth even as residential branding fees declined 35% due to timing of unit sales. Incentive Management Fees, or IMF, rose 22% to $181 million in the third quarter, led by a meaningful increase in the U.S. & Canada that reflected strong RevPAR growth and a solid improvement in hotel margins. Third quarter IMF also grew year-over-year in all international regions, including EMEA where strong results in Europe more than offset a decline in the Middle East. Owned, leased and other revenue, net of owned, leased and other expenses totaled $41 million, compared to $70 million in the third quarter of last year. The decline reflected lower owned, leased hotel results, including the impact of renovations, the second quarter sale of a hotel in the U.S. and higher costs associated with a third-party agreement, partially offset by a $12 million expected insurance recovery associated with the accrual taken in the second quarter for a property-related litigation matter.

Our disciplined focus on controlling costs, combined with lower litigation expenses, led to third quarter G&A rising just 2% year-over-year. Third quarter adjusted EBITDA increased 12% to $1.51 billion and adjusted diluted EPS rose 22% to $3.02.

Now let's talk about our outlook. As Tony mentioned, we are raising our full year 2026 global RevPAR guidance to 4.5% to 5% reflecting our third quarter global out-performance as well as a stronger outlook in the fourth quarter. Recall that the strong World Cup performance in June and July provided a slightly larger boost to full year global RevPAR than expected at around 45 basis points. Global RevPAR in the fourth quarter is anticipated to increase 4.5% to 5%. In the U.S. & Canada, we expect the strong demand trends that we saw in the third quarter across chain scales and customer segments to continue, although there could be a small negative impact from the November midterm elections. Internationally, fourth quarter RevPAR growth is expected to decelerate compared to third quarter growth, primarily due to an anticipated year-over-year RevPAR decline in EMEA.

In EMEA, continued strength in Europe is anticipated to be more than offset by declines in the Middle East. As we have discussed, the Middle East faces difficult comparisons from the fourth quarter of 2025 when several large events drove meaningful ADR increases. Saudi Arabia has also recently seen the cancellation of some [indiscernible] followed by -- following the heightened tensions there. As a result, we expect a more meaningful year-over-year RevPAR decline in the Middle East in the fourth quarter than in the third. And because the Middle East entered its peak tourism season in October, the Middle East region's performance will have a greater impact on EMEA's fourth quarter results than it did in the third quarter.

As we look ahead to next year, while we are still working on our budget, we currently expect continued strong demand trends. Our preliminary view is that the 2027 year-over-year global RevPAR growth could be 3.5% to 4.5%. Note that while we are comping the World Cup, this is expected to be offset by easier comparisons in EMEA.

Turning to [indiscernible] financials. In the fourth quarter, gross fees could rise 13%, reflecting robust RevPAR and rooms growth as well as strong growth in residential branding fees and credit cards. IMFs are expected to be around flat year-over-year with increases in the U.S. and Canada, APEC and Europe, offset by declines in the Middle East and Greater China. Fourth quarter adjusted EBITDA is expected to increase 12% to 14%. For the full year, we are raising our gross fee guidance to an increase of around 13% with IMF now expected to rise in the high single-digit range. The sensitivity of 1% change in full year 2026 RevPAR versus 2025 could be around $55 million to $65 million of RevPAR-related fees. Full year co-branded credit card fees are still expected to rise in the high 30% range. Residential branding fees are now expected to rise over 90%. Timeshare fees are still expected to be relatively in line with the prior year at $110 million to $115 million. Owned, leased and other revenue, net of owned, lease and other expenses, is now anticipated to total $170 million to $175 million in 2026. Note that the full year outlook reflects the sale of two U.S. hotels, one was sold in the second quarter and one is expected to be sold later this quarter. The first hotel is now under a new long-term management agreement, and we expect the second hotel will be as well upon closing. We are pleased with the sale of these two properties and remain focused on recycling owned and lease assets when the timing and pricing are right.

2026 G&A expense is anticipated to rise just 1% to 2% compared to 2025 levels. Full year adjusted EBITDA is expected to rise around 13%. Strong adjusted EBITDA growth, combined with a meaningful reduction in share count, leads to expected full year adjusted diluted EPS growth of 20% to 21%. Our outlook for full year 2026 key money and total investment spending has not changed. Investment spending is still expected to be $1.25 billion to $1.35 billion with key money anticipated to be 40% to 45% of the total amount. Spending on technology is expected to be another 25% to 30%, and the remaining portion is spending related to renovations that owned and leased hotels as well as other investing activities.

Our capital allocation philosophy also remains the same. We are committed to our investment-grade rating and investing in growth that is accretive to shareholder value. Excess capital is returned to shareholders through a combination of share repurchases and a modest cash dividend, which has risen meaningfully over time. Considering our strong year-to-date cash flow performance, and our higher adjusted EBITDA outlook, our full year 2026 capital returns to shareholders are now expected to be at least $4.8 billion. Full year guidance details for the fourth quarter and the full year are in our press release. Tony and I are now happy to take your questions. Operator?

Operator

[Operator Instructions] We'll take our first question from the line of Shaun Kelley with Bank of America.

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Shaun Kelley

Tony, Jen, congrats on the strong results. It's great to see the travel environment where it sits. Tony, I want to take it in a slightly different direction, though. I'd love to just get an updated -- your updated thoughts on the owner relation topic. You gave a lot of color on this last quarter. And mostly what I wanted to get your sense was from as we said a quarter later, some of the feedback you received from owners, specifically around the ITR incentive, things you're looking to adjust or improve and just kind of where we sit from this time right here today?

Anthony Capuano

Of course. Thank you for the question, Shaun. The Yes, I do have some more to add. We've continued to be engaged with a broad cross-section of the owner community. To state the obvious, our owners are foundational to our business. The health of the owner and franchisee communities are of paramount importance. And we are across the leadership team, appreciative of the consistent and in many cases, decades-long engagement we've had with those owners. We also appreciate the mutual recognition of how intertwined our success is, and we're equally appreciative of the recognition that structurally, our business models are different. And I think it's that long-standing recognition that leads to the sort of regular constructive discussions we have on a wide range of issues, normally quite proactively in the case of a subset of the owners in a reactive way. But I think that communication is reflective of how we approach the business more broadly.

We are laser-focused on hotel level economics, both on driving top line and looking at every expense line in the P&L. You heard in my prepared remarks, a number of the steps we've already taken and continue to take to try and drive hotel level economics. We'll continue to talk to this subset of owners, but we'll continue to talk to all of our owners regularly. And I think we'll continue to make progress with this specific group. The tenor of these discussions that I've been involved with, I would describe as transparent, I would describe as collaborative, and I would describe as constructive.

The other thing I would share with you, since we spoke about this a quarter ago, many of Marriott's senior leaders were down in Miami for a U.S. and Canada full service and luxury owner conference we had [indiscernible] last month. Again, lots of candid productive conversations, lots of mutual acknowledgment of how inexorably linked our successive and lots of focus on Marriott's ability to leverage its industry-leading scales in a way that directly impacts their economic performance. And then the last thing I would say to you, sometimes I get the sense there is an expectation of a big reveal. We will continue to focus on each of the constituents we serve every day. We work every day to create opportunities for our associates. We work every day to enhance the travel experiences of our guests and Bonvoy members. And we have and will continue to work every day to drive economic performance for our owners.

Operator

And we'll take our next question from Richard Clarke with Bernstein.

Richard Clarke

I guess you're using -- in your prepared remark like broad-based demand across the different chain scales. But if I look at the gap between your luxury performance in the U.S. and the select service, I think it's actually widened a bit to 5.5% RevPAR growth. If you look ahead to kind of Q4 and maybe into your remarks you gave on 2027. Are you expecting that to continue? Or are you expecting the gap between the different chain scales maybe to actually contract from here?

Jennifer Mason

Yes. We're certainly pleased with the performance across all chain scales. You're correct that luxury continued to outperform. But select service being up 6%, and that's an improvement quarter-over-quarter. So we -- and we continue in bookings through October to feel good about the performance of our Select brand hotels.

Anthony Capuano

Yes, I think that's right, Richard. The -- maybe not a surprise that luxury continues to be so strong, a really encouraging sign to see 3 consecutive quarters of such strong RevPAR performance at the other end of the chain scales.

Operator

And our next question comes from Stephen Grambling with Morgan Stanley.

Stephen Grambling

Your comments on the owner relationship is probably a good segue into agentic AI actually. I recognize this is still an evolving topic, but would love to hear any color on the initial impact to distribution as we think mix or [indiscernible]? And then more broadly, just how you think about both the near term and maybe longer-term impact to both owners and your business?

Anthony Capuano

Yes. Thank you. There's a lot in there, Steve. I'll give it a shot. Jen may jump in and help me a little bit. I continue to be a firm believer that AI is going to profoundly impact virtually every industry, certainly, the travel vertical. As we've discussed in the past, the real challenge and opportunity for us is to take advantage of the emerging technologies without losing the human-centric approach that's guided us for nearly a century.

In some ways, we're in the early innings of AI's entry into travel. Right now, our view is that AI is largely reshaping travel discovery. That doesn't mean at some point, it won't have a similar impact on bookings, but that piece seems to be moving more slowly. So we are very engaged with a number of the AI platforms to ensure that as discovery, as search is out there, that we are populating these platforms with as accurate and rich set of content as possible. So those users really have terrific insights into all that our portfolio has to offer. In terms of distribution costs, again, I think it's early. A number of the platforms if they are looking to monetize, they're leaning more towards more traditional advertising monetization as opposed to booking. They are starting to dip their toes some of them into what that might look like. intuition would suggest it would be compelling from an economic perspective for our owners, but I think that's a story that largely remains to be told.

Operator

And our next question comes from Patrick Scholes with Truist Securities.

Charles Scholes

When we think about that initial 3.5% to 4.5% RevPAR guidance for next year, within that, what is your expectation for the composition of room rate growth versus occupancy certainly in the most recent quarter, with the upside for incentive management fees and high ADR growth is increasingly important. Think about the composition. So just your thoughts around that?

Anthony Capuano

Sure. It's probably a little early for me to give you too much insight. We are up to our eyeballs in the budget process right now. What I can tell you, and I might ask Jen to give you a little more texture to this. But when we look at the performance through the first couple of quarters of this year, one of the things that's been encouraging is in many of the markets, we've seen a nice blend of both room night and ADR growth. And we'll obviously be investigating that closely as we put the finishing touches on the '27 budget.

Jennifer Mason

Yes. Well said, Tony. On your question on IMF, right, for Q4. Well, certainly, we see upside in U.S., Canada and APEC and other places the Middle East, as we've talked about on our call, we expect to be impacted -- continue to be impacted in Q4. So that offsets the upside from the other comments.

Operator

And our next question comes from Trey Bowers with Wells Fargo.

Raymond Bowers

I think we talk about this most of these calls, but maybe you guys could just dig in a little bit on capital intensity thoughts as we move forward, especially around key money kind of in that now $500 million to $600 million range. Is that the new normal from here? Is that expected to grow from here? And just any color around that would be great.

Anthony Capuano

Sure. Thank you for the question. I'll let Jen give you a little perspective on a go-forward basis. But to state the obvious, it is a competitive environment out there, particularly given the increasing importance of conversions. Whether we like it or not, key money seems to be the weapon of choice against that competitive landscape. The two things I would want to leave you with. One, the rigor that we've always applied to the use of MI capital irrespective of what type of capital remains. We put all deals where we consider investment through that rigorous evaluation, and anticipating we might have some conversation about that. We did a little work.

One of the things that's quite interesting, I think, deals that use key money historically have yielded significantly more value than deals without key money. And I'll just give you two statistics to frame that. If you look at all the deals we did in calendar 2025, the deals where Marriott participated with key money had an average value premium per room of about 65%. Year-to-date, through the first 3 quarters this year, those deals where we deployed key money had an average premium per room of about 75%.

Jennifer Mason

Yes. And on your question on broadly investment spending, as we talked about in the prepared remarks, we still expect investment spending this year to total $1.25 billion to $1.35 billion. As a reminder, 40% to 45% of that is for contract acquisition costs, which includes both new and existing units, 25% to 30% of that is for the digital technology transformation and the rest is spending, have renovations on own, leased hotels. For next year, it's really still too early, right? We're working through our budgets. But you could expect kind of similar color and market dynamics on that key money and contract acquisition costs are likely to continue to rise given the system growth. And while DTT and technology spend is expected to come down a bit, we'll continue to invest heavily in technology. And then for owned, lease and other investments, some of our properties owned, undergoing renovations in '26 will be done, but we'll also have others that will go under renovation next year.

Operator

And our next question comes from Michael Bellisario from Baird.

Michael Bellisario

Tony, on development, can you just update us on the trajectory of construction starts and how that part of the pipeline is trending in both the U.S. and ex U.S. markets? And also any early kind of directional comments on your view of rooms growth into next year versus this year's 4.5%?

Anthony Capuano

Yes. Of course, Michael. Thank you for the question. The new build construction starts in the U.S. and Canada. Last year, we're up about 7% versus the prior year. Through the first 3 quarters this year, new build construction starts are up 20% year-over-year. Again, we're not quite back to where we were in 2019, but the trend line is certainly encouraging.

Globally, which I think was the second part of your question, year-to-date through the first 3 quarters of the year. New-build construction starts were down about 24% and, but I would maybe put an asterisk on that data. The quality of the data we get is maybe not as precise as what we get in the U.S. But I think the fact that construction starts while building are not back to where we were pre-pandemic, probably illustrates the importance of the success we're having on the conversion side. where, as I mentioned, about 1/3 of our signings, about 40% of our openings are being derived through the very deliberate approach our development teams are taking to capturing a disproportionate share of the conversion opportunities that are out there.

Operator

And our next question will come from David Katz with Jefferies.

David Katz

I wanted to just focus on the Middle East. And if we were to use an assumption of kind of an ongoing low intensity circumstance over there. I assume you're looking for various permutations of what could be for the market. But given it's so important for NUG and RevPAR. How can we think about that market? Can we be comfortable that the units that have been in the pipeline can still get done? And can that market get back to at least flat RevPAR or enough where it's not an offset to otherwise pretty strong results everywhere else in the world?

Anthony Capuano

Thank you, David. Maybe before I try to answer your couple of questions, let me just for the group, remind you or ground you, while a critically important market through a lot of different -- or a set of markets through a variety of lenses. The Middle East represents just 3% of our open rooms globally, about [ 6% ] of our pipeline, and last year represented about 3% of our global gross fees. Your intuition is right as we start to take an early peak in what 2027 might look like, on one hand, we'll benefit once we get through the first quarter from relatively easier comps. We're currently assuming ongoing travel disruption with some gradual improvement during the course of 2027. I wish I had a better crystal ball. It's obviously a highly volatile situation. But what I will tell you is we are not seeing fallout from the pipeline, whether it be in the Middle East or on a global basis -- that is anywhere close to outside what we have experienced around the world in normal circumstances.

I will tell you, I was in Dubai for a few days last week. I had dinner with 65 of our UAE general managers who expressed an enormous amount of confidence in the steepness of the recovery curve when they get a sense in the region that there is some stability or resolution to the conflict. And the other thing I would tell you, you asked about pipeline and NUG. Just last week, I was with our local partners and the Ruler of Ras Al-Khaimah signing three new deals in that Emirate. And so the teams continue to move projects forward. our owner community continues to invest based on their long-term confidence in the region.

Operator

Our next question will come from Dan Politzer with JPMorgan.

Daniel Politzer

I just wanted to follow up again on the 2027 kind of early puts and takes as you think about that 3.5% to 4.5% RevPAR growth. Could you maybe unpack that across business leisure and then kind of where group is pacing?

Anthony Capuano

Yes. I would love to, Dan. We're just not there yet. We are early in the budget process, as I mentioned. We are giving you a sneak peek into what we're hearing, having gone through our quarterly business reviews around the world, but we're probably a month or 2 premature, to be able to give it to you with the sort of specificity that you're looking for.

Operator

And our next question will come from Lizzie Dove with Goldman Sachs.

Elizabeth Dove

Going back to net rooms growth, you mentioned that conversions are about 40% of openings and that you're capturing a disproportionate share of those opportunities. How do you think about that environment? We've had mixed things this earnings season and about the impact of higher rates there and other dynamics. And we look into kind of next year and beyond, should we think about conversions as being a bigger or kind of smaller part of net rooms growth?

Anthony Capuano

Yes, Lizzie, thank you. I love the question. I spent a big portion of my career leading the company's development organization and for a long time, you used to see the relative volume of new builds and conversions ebb and flow based on the macroeconomic environment. In strong economic environments, you'd see a big uptick in new build and you'd see conversion activity start to recede a bit, and then that would invert in weaker economic times.

As I've talked about on the last few calls, we've been quite deliberate in terms of how we think about conversions. And what I mean by that we've built what we see as an extraordinary stack of conversion-friendly brands. We are aligned between our development organization and our operating organization to show not at the expense of quality, but a level of creativity and flexibility in dealmaking. We have development teams who are specifically focused on driving version volume, both in the categories of individual asset conversions and portfolio conversions, which has been a tremendous success story for us. And so my expectation is, while the percentages may move around a little bit, even when we get to an environment where we see a meaningful uptick in new build, I don't anticipate that it will be at the expense of conversion volume. We've built this super tanker that's really built to take advantage of the wide range of conversion opportunities that are out there, and we intend to continue to stand on that accelerator.

And then the last thing I would say to you is, as we've discussed, we are in our [indiscernible] of infancy of entering the mid-scale tier. It's going great, between open and pipeline. We're already approaching 600 hotels in the system. But it's early. And what that early demonstrates to me is we've got lots and lots of conversion opportunities to be discovered in that quality tier as well.

Operator

And our next question will come from Brandt Montour with Barclays.

Brandt Montour

So Tony, I was hoping you could give us a little bit of a state of the union on the China business. You called out slowing domestic leisure demand over there. But remind us the split between business and leisure, if you have a view on maybe the near- to medium-term operating outlook? And then if that's affected capital formation at all and how that affects yes, the net rooms growth outlook there?

Anthony Capuano

Sure. Let me talk sort of broadly and I might ask Jen to jump in with some statistics. We went from negative in RevPAR to essentially flat. We continue to see pretty good strength in the lower chain scales, both in terms of development activity and relative performance. We continue to see pretty broad strength across what we call the Tier 1 markets. And you heard me talk about Hainan and Taiwan and some of the other Tier 1 markets that are driving particularly strong performance. But Jen, do you want to talk a little bit about mix between segments in China?

Jennifer Mason

Yes. So broadly speaking, in Greater China, our leisure segment is in the Largest segment, followed by Business and the Group. In terms of performance, I'd say group, at least for the quarter, was a bit less of the mix than leisure and business transient. But overall, to Tony's point, right, it's kind of a softening of consumer sentiment and spending and the environment is certainly difficult in terms of growth.

Operator

And the question next comes from Duane Pfennigwerth with Evercore ISI.

Duane Pfennigwerth

Similar question, different region. I wonder if you could weigh in on what is driving what seems to be acceleration in European RevPAR. Is this primarily a seasonal leisure dynamic with U.S. point-of-sale demand? Or is there something else at work?

Anthony Capuano

Well, without question, leisure is sort of a bright shining star, particularly when you look at Western and Southern Europe. Beyond that, you almost have to submarket by submarket to look at the relative contribution from each segment. But if your question is for a broad generalization, I would say leisure is among the most impactful drivers of our RevPAR performance.

Operator

And next question will come from Robin Farley with UBS.

Robin Farley

Great. And thank you for the early 2027 commentary. Just kind of circling back to you...

Anthony Capuano

That was for you, Robin. So I pushed Jen to make sure we gave you a little peak.

Robin Farley

Excellent. So drilling in on that, yes. So just looking at rooms under construction, today in the release, they're a little bit lower than they were in July. And just the comments about conversion next year, it sounded like you were sort of saying conversion is going to stay like -- is going to be as good as new construction or maybe the suggestion was sort of like the same percent of room openings here. Is it would it actually -- should we think about conversions maybe being higher? I know they're elevated a little bit this year, but would they be higher next year just given the rooms under construction kind of just like slight downtick sequentially? Or I don't know if that's just something that's either onetime in nature?

Anthony Capuano

You see, Robin, I give you an inch, and you try and take a mile. I'm not quite ready to really give you much more of a peak into '27. But let me try at least qualitatively to address your question.

The point I was trying to make, while I can't tell you with certainty what the percentage mix will be because a lot of that will be driven by whether we continue to see this continuation in an uptick in construction starts. The point I was attempting to make was our focus, the focus of our teams on trying to continue to drive brand accretive conversion volume, we won't let [indiscernible]. And so we would expect strong conversion volume, again, both single asset and portfolio to continue to be a top growth priority and a big driver of NUG into '27 and beyond.

Operator

And our next question comes from Conor Cunningham with Melius Research.

Conor Cunningham

Just on BT, I was a little surprised by the growth in the quarter. I thought it would be a little bit stronger just given what we've heard from some of the other travel companies that you can feel free to push back on that. But just curious on how you're viewing the corporate travel market, large managed versus small and medium. And just I would suspect that the performance throughout the quarter was a little bit more diverse. So if you could just talk about how you started [indiscernible] ended, I think that would be helpful.

Jennifer Mason

Yes. So I'll take that. We continue to see strength across all segments, right, both Group BT and Leisure. BT revenue was up about 4% in the quarter predominantly driven by rate growth. And we expect those trends will continue. Obviously, Leisure was our strongest performer and continues to be so, and Group has also been strong this year as well. So we feel good across the segments and kind of across small, medium, large business.

Operator

And we'll take our next question from Aryeh Klein with BMO Capital Markets.

Aryeh Klein

Tony, you touched a little bit on [indiscernible] you've been making. Curious about the PMS rollout, where that stands and what kind of impact you've seen so far?

Anthony Capuano

Yes. Of course, it's -- it's a terrific story, and I think our global team will appreciate you asking the question so that Jen and I can thank them in a public forum. As of yesterday, we had successfully moved more than 3,000 of our hotels to the new technology ecosystem. We've successfully achieved scale for our deployment wave size full waves will continue throughout 2027. We have largely finished deployment in all of our U.S. select service hotels. We've started to cut over some of the full-service hotels, so lots of good learnings there.

We were quite deliberate in starting with some of the -- I say this in quote "simpler hotels" so that we could learn along the way. Now as we move into full serve and luxury, there will be some additional layers of complexity, but our teams are well prepared to do that. And I think we're quite pleased both with the pace at which we're moving, the speed with which the integration is improving with every wave. And again, it's anecdotal as opposed to particularly statistically. But but really encouraging about the on-property impact that we're seeing from the [ cutover ].

Operator

And we'll take our next question from Alex Brignall with Rothschild & Co.

Alex Brignall

Just one question, please. If we look at your fee growth and we strip out the year-on-year increase in credit card fees. And then obviously, you've changed your residential fees, which is quite a meaningful change year-on-year, then your underlying fee growth is lagging net unit growth and RevPAR growth or better, [indiscernible] there's a slight compression in your active royalty rate if we look at the sort of gross system sales. Could you just talk about that? And then in the context of FY '27, if you could give us anything on the trajectory of credit card fees and residential fees. So then we can have a think about what that royalty rate might do next year.

Jennifer Mason

Yes. In terms of fee growth overall from [indiscernible] your question on royalties, franchise royalty and [indiscernible] royalty, there is no compression there. and we are pleased with the year-over-year growth in our franchise fees. In terms of 2027, as Tony's referenced, we're still early days [indiscernible] given any guidance yet on fee growth.

Operator

And we'll take our next question from Chad Benyon with Macquarie.

Chad Beynon

On the leisure side, I wanted to ask about the booking window. Obviously, we've seen some really nice [indiscernible] strength. You kind of gave us a preview into '27 . I don't think this has expanded, but can you just kind of drill into that a little bit and what we've seen from some of the elevated airline prices if you think that will remain compressed?

Anthony Capuano

Sure. So on the booking window in Q3, the global average booking window was about 21 days. BT was at 17 days and leisure was about 24 days, which was relatively flat year-over-year. So not a dramatic change on any of those fronts.

Operator

At this time, we have reached our allotted time questions, so we'll take our final question from Smedes Rose with Citi.

Bennett Rose

I just wanted to ask if you could share a little more on the investment management fees. So what percent of the North American portfolio is generating for [indiscernible]. And if you're able to do, say, the midpoint of that RevPAR range for next year, would those properties continue to sort of "be the money" or the expenses that will also be going up next year, maybe need that fee stream a little bit. I'm kind of wondering how that might work?

Jennifer Mason

Yes. So I'll start with your second question first. Again, it's too early to give you a read on what incentive management fees would be next year as we need to work through our budget certainly around the world. In terms of percentage of hotels earning incentive fees that varies around the world, as I know we've talked about in the past, but kind of weighted average around the world, it's about over 60-some percent.

Operator

Thank you. At this time, I would like to now turn the call back over to Tony Capuano. Please go ahead.

Anthony Capuano

Well, I want to thank you all again for your interest and your terrific coverage in Marriott. I wish you safe travels, and I look forward to seeing many of you at our analyst reception in New York in December. Thank you.

Operator

This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.