Good day, everyone, and welcome to today's Marriott International's third quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. Later, you will have an opportunity to ask questions during the question-and-answer session. You may register to ask a question at any time by pressing the star and one on your touchtone phone. Please note, this call may be recorded. I will be standing by should you need any assistance. It is now my pleasure to turn today's program over to Jackie Burka, Senior Vice President of Investor Relations. Thank you. Good morning, everyone, and welcome to Marriott's third quarter 2021 earnings call. On the call with me are Tony Capuano, our Chief Executive Officer, Leeny Oberg, our Chief Financial Officer and Executive Vice President Business Operations, and Betsy Dahm, our Vice President of Investor Relations. We are very happy to not only be doing this call all together in person this morning, but to be doing it from the road at the beautiful JW Marriott Orlando Bonnet Creek. I will 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 filing, which could cause future results to differ materially from those expressed in or implied by our comments. Statements in our comments in the press release we issued earlier today are effective only today and will not be updated as actual events unfold. Please also note that, unless otherwise stated, our RevPAR, occupancy, and average daily rate comments reflect system-wide constant currency results for comparable hotels and include hotels temporarily closed due to COVID-19. RevPAR, occupancy, and ADR comparisons between 2021 and 2019 reflect properties that are defined as comparable as of September 30, 2021, even if they were not open and operating for the full year 2019 or they did not meet all the other criteria for comparable in 2019. 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. Now I will turn the call over to Tony. Thanks, Jackie, and good morning, everyone. Over the past few months, I've been fortunate to have spent the majority of my time back on the road. I've been speaking with our associates, meeting with customers, attending industry conferences, and engaging with our owners and franchisees, as I've been doing this week here in Orlando. My travels have taken me to Europe, the Caribbean, and Latin America, and many parts of the country here in the U.S. It's been wonderful to see so many people traveling again and to witness firsthand the resilience of global travel. This resilience was clearly evident during the third quarter. The strong global RevPAR recovery momentum we experienced in the spring continued into the summer, thanks to sustained robust leisure demand and impressive average daily rates. July worldwide RevPAR reached a new peak since the beginning of the pandemic, down just 23% compared to 2019 levels. Occupancy in July rose to 61%, an increase of over 500 basis points from June, while ADR was down less than 3% versus July of 2019. In August, global demand softened a bit, primarily as a result of the impact of the Delta variant and the subsequent delay in many companies' return to the office. However, demand stabilized in September before rising once again in October. Recovery trajectories remain varied by region and have been uneven. RevPAR in all of our regions except for Greater China improved in the third quarter compared to the second quarter. The recovery in Greater China has been choppier given its zero COVID-19 policy. Mainland China was the first market to see RevPAR return to pre-pandemic levels a quarter ago, and RevPAR rose again in July to 11% above July 2019. Demand then fell significantly in August after the government imposed strict lockdowns in response to small regional COVID outbreaks, leading to a meaningful decline in RevPAR for the month. Demand then swiftly rose again in September as soon as those restrictions were lifted. In the U.S. and Canada, third quarter RevPAR performance improved meaningfully to down less than 20% compared to the same quarter 2019. Results were driven by elevated leisure demand and ADR nearly at 2019 levels. Total occupancy reached 67% in July, retrenched a bit in August, and held steady in September before rising again in October. Third quarter RevPAR in the U.S. and Canada improved across all brand tiers and all market segments, primary, secondary, and tertiary. While primary markets are still the most challenged, these markets saw the largest RevPAR gains during the quarter as demand in gateway cities like New York continued to rise. Group demand accelerated nicely in the U.S. and Canada in the quarter. Group room revenues for the quarter were down 46% versus the third quarter of 2019, a significant improvement compared to the second quarter's decline of 76% versus the same time period in 2019. Group bookings have also been increasing. In the year, U.S. managed group bookings beat 2019 levels for each of the last five months through October as event booking windows have shortened during the pandemic. Most importantly, group ADR has continued to rise, and for full year 2022 is currently pacing nearly 4% above pre-pandemic levels. In the U.S. and Canada, Special Corporate was the segment most impacted by the Delta variant during the quarter, given the delay in return to office timelines. As a reminder, the Special Corporate segment represents business transient customers who book at Prenegotiated Rates. We estimate this segment has been accounting for roughly half of business transient room nights. Although we can't know with certainty the trip purpose for transient bookings other than Special Corporate, the Special Corporate segment, therefore, gives us the best indication of business demand trends. Special Corporate bookings showed steady recovery each month this year until we saw a slight pullback in the back half of the third quarter. The gradual upward trajectory returned in October, with bookings versus 2019 growing each week during the month. Special Corporate bookings are currently down less than 40% compared to the same time frame in 2019. From conversations with our corporate customers, we know that many of them, especially those with more client-facing jobs, are increasingly eager to get back on the road. We expect the recovery in business transient to gradually continue as more workers return to the office, guest visitation policies are relaxed, and greater numbers of employees are permitted to travel again. We also expect the traditional business trip to continue to evolve with a blurring of the lines between business and leisure travel. In the Middle East and Africa, third quarter RevPAR came in less than 20% below pre-pandemic levels, led by strong performance in the UAE and Qatar. RevPAR topped third quarter 2019 levels in Qatar thanks to preparations for the 2022 World Cup, while RevPAR in the UAE was nearly even with 2019, largely benefiting from staycations. Europe's recovery took another large step forward in the quarter. Occupancy doubled in one quarter to reach 47% as many key international borders reopened, entry restrictions eased, and almost all hotels were once again open. The Caribbean and Latin America posted third quarter RevPAR 18% below 2019 levels. Demand for our resort properties remained robust, particularly in the Caribbean and Mexico. Urban destinations, while slowly improving, still lagged. Historically, the third quarter is the region's softest quarter seasonally, yet many resorts saw record occupancy and ADRs, and our luxury ADR in the region for the quarter was ahead of 2019 levels by 32%. The recovery in Asia Pacific, excluding China, advanced more slowly in the third quarter. Results were mixed across countries, though India saw a meaningful improvement in demand as COVID caseloads dropped and restrictions lifted. Encouragingly, many countries in the region have recently taken significant steps to reopen travel, such as announcing new vaccinated travel lanes. Demand in October accelerated nicely as a result. Developer sentiment continues to improve in step with the global recovery, and the pace of signings has picked up meaningfully this year. At the end of September, our pipeline stood at nearly 477,000 rooms. Gross room openings through the third quarter of this year exceeded the first nine months of 2019 by 25% and surpassed the same period last year by almost 50%. Deletions from the pipeline remain at the low end of our long-term trend. Conversions remain a meaningful driver of rooms growth, given our impressive roster of conversion-friendly brands and the meaningful top and bottom-line benefits associated with being part of the Marriott system. We've already added more conversion rooms in the first nine months of this year than we did in all of 2019. Accounting for over 30% of all signings in the first nine months of this year, compared to around 15% of signings pre-pandemic, conversions are expected to be a significant contributor to growth over the next several years. For the full year, we still expect that gross rooms growth will accelerate to around 6%. With more clarity around our estimated full-year deletions, we now expect 2021 net rooms growth will be approximately 3.5%. The attractiveness of our brands, our increasing development activity, our momentum around conversions, and our industry-leading pipeline give us confidence that we will see meaningful rooms growth going forward. We expect that over the next several years, we will get back to our typical mid-single-digit net rooms growth that we demonstrated prior to the pandemic. However, the exact timing is hard to predict and will depend on a host of factors related to the global recovery, including the lending environment and evolving supply chain dynamics. Supply chain issues have pushed some openings and construction starts out a few months, but the deals continue to move forward. Turning to Marriott Bonvoy, global enrollments driven by digital sign-ups accelerated during the quarter, growing the program to 157 million members as of the end of September. We remain extremely focused on fostering engagement with our members. We recently rolled out numerous successful special promotions, such as our second annual Week of Wonders and the relaunch of Marriott Bonvoy Moments, where members can use points to gain VIP access to a broad variety of experiences. Additionally, we just announced several loyalty program updates, including status, award, and point extensions, which should further encourage members to stay with us as global travel rebounds. Since the start of the pandemic, we've grown our share of bookings coming through our digital and other direct channels. Over 76% of our global room nights in the first three quarters of the year were booked through our direct channels, with around half of these booked through our digital channels. In closing, I firmly believe that the long-term recovery is on track. The resilience of travel and consumers' desire to visit our 7,900 global properties is undeniable, and I'm looking ahead with a lot of optimism about our future. At this point, I'd like to turn the call over to Leeny. Leeny? Thank you, Tony. We're pleased with our third quarter results, which reflect the continued meaningful improvement in the global recovery. Third quarter worldwide RevPAR was down 26% compared to the same quarter in 2019, despite the impact of the Delta variant in the latter half of the quarter. In comparison, global RevPAR declined 44% in the second quarter versus the same period in 2019. Worldwide occupancy rose to 58% in the third quarter, and ADR was only 4% below the third quarter of 2019. We've been very pleased to see rate almost back at pre-pandemic levels in just 20 months. In comparison, global ADR had lagged the recovery in RevPAR in prior downturns, taking around five years to rebound after the 2009 recession and around four years to recover post 9/11. Importantly, the recovery in rate has not just been driven by customer mix. Our third quarter retail or rack rate in the U.S. and Canada was essentially flat with the third quarter of 2019. Gross fee revenue reached $776 million in the third quarter. Our non-RevPAR related franchise fees were again particularly strong, totaling $173 million in the third quarter, 19% ahead of 2019 levels. Credit card branding fees of $113 million were up 11% compared to the 2019 third quarter on the back of strong new account acquisitions and robust global card spending. Our residential branding fees also had another outstanding quarter, totaling $18 million. Incentive management fees, or IMFs, totaled $53 million in the quarter. Over 40% of IMFs were earned at resort properties, with IMFs from our luxury resorts around the world up almost 30% compared to the third quarter of 2019. We were pleased to see positive results from our owned and leased portfolio in the quarter, primarily due to improved performance at hotels in the U.S. and Europe. Third quarter G&A and other expense totaled $212 million and were impacted by compensation true-ups and additional legal expenses. We continue to realize meaningful savings from the significant restructuring activities undertaken last year, and we still expect full-year G&A and other to be roughly $800 million, down 15% to 2019 levels. We also recorded a $164 million pre-tax loss on extinguishment of debt during the quarter associated with the repurchase of $1 billion of our 5.75% senior notes due in May 2025. As part of our balance sheet management, we have focused on bringing down our average interest rate, lengthening our average debt maturities, and reducing our debt balances. Over the last 18 months, we have reduced our outstanding net debt by $1.4 billion. At the hotel level, we have significantly improved margins and lowered break-even occupancy levels around the world. In the third quarter, even with RevPAR for managed properties in the U.S. and Canada down 27% versus pre-pandemic levels, 97% of our managed hotels in the region had positive GOP or gross operating profit. We're proud of the work our teams have done in maximizing margins during the pandemic. We expect many of the cost reduction and productivity enhancement initiatives we have implemented will be maintained as occupancies continue to rise. Given the current labor environment, we are keeping a close eye on wage and benefit inflation as associates are hired back and open positions are filled. Our cost reduction efforts could offset this inflation in future years. As demand continues to rise, we're working closely with our owners and franchisees to maximize hotel profitability while delivering the outstanding guest experiences our customers expect from our brands. We're close to completing an extensive review of our brand standards and are already implementing numerous changes intended to help reduce hotel operating expenses while improving flexibility based on customer needs as occupancies rise. Looking ahead, we are still not in a position to be able to give specific RevPAR or earnings guidance, but I would like to share some general observations and provide color on certain additional items where we do have some visibility. We're optimistic about the pace of global recovery as we look ahead into next year as more markets reopen around the world. With meaningful continued improvement in business transient and group demand, continued growth in leisure demand, and healthy levels of ADR, we expect to make substantial progress in closing the gap to 2019 RevPAR levels by the end of next year, assuming no major setbacks in the pandemic recovery. To further help your modeling for 2021, as a reminder, the fourth and the first quarters of the year historically have seen lower demand than the second and third quarters. In 2019, global occupancy fell around 6% points from the third quarter to the fourth quarter. Turning to fees, at current RevPAR levels, we still expect the sensitivity of a one-point change in full year 2021 RevPAR versus 2019 could be $35 million-$40 million of fees. As we have seen, the relationship is not linear given the variabilities of IMFs and the inclusion of non-RevPAR related franchise fees. We expect our non-RevPAR related fees to continue to benefit from strong credit card and residential branding fees. Interest expense is now anticipated to be around $420 million. Full year cash taxes are now expected to be $350 million-$375 million. Our anticipated full year cash flow from the Loyalty Program has not changed from our expectation a quarter ago. We still expect it to be positive for the full year before factoring in the reduced payments we will receive from the credit card companies. After factoring in these reduced payments, which are expected to effectively repay around one third of the total $920 million we received in 2020, we continue to anticipate modestly negative cash flows from loyalty. We remain focused on carefully watching capital expenditures, and we now expect full year investment spending of $525 million-$550 million, below our expectation of $575 million-$625 million that we shared last quarter. Total investment spending includes capital and technology expenditures, loan advances, contract acquisition costs, and other investing activities. As we think about capital allocation, retaining our investment grade credit rating remains a top priority. We're making excellent progress bringing our credit ratios back in line as we continue to generate positive cash flow and manage our spending levels. Assuming this progress continues, we could be in a position to restart capital returns in the back half of 2022. We're very enthusiastic about how our business is performing, and we're happy now to take your questions. Operator? At this time, if you would like to ask a question, please press star and one on your touchtone phone. You may remove yourself from the queue at any time by pressing the pound key. Once again, that is star and one if you would like to ask a question, and we will take our first question from Joe Greff with JP Morgan. Your line is now open. Good morning, everybody. Good morning. Good morning, Joe. Thank you for taking my question. I know you don't wanna necessarily talk about 2022 with any, you know, great specificity. But I just wanna get a sense of how you're thinking about the leisure segment as we head into next year. Obviously, that's a segment this year where demand has recovered the most and, you know, pricing has been fairly inelastic and price obviously up significantly. Do you think leisure can maintain some sort of growth trajectory in 2022? Or do you think that has to come down? Obviously, it's more than compensated by the growth in the transient, the business transient segment. How are you thinking about that right now? Thanks for the question, Joe. We continue to be quite bullish about leisure. We think there's lots more run room in terms of this leisure-led recovery. You heard some of the statistics that Leeny and I shared in our prepared remarks about the performance and the pricing power that we've seen in our resort destinations. The short answer is we absolutely believe that leisure can continue to grow into 2022. Joe, one other comment I'll make is that we've seen actually since, you know, 2010, we've seen leisure trips grow faster than business trips. I think with the reality that there's still some pent-up demand as well as increased savings rates and frankly, more flexibility in travel, that we absolutely believe that leisure can continue to grow going into 2022. Great. You mentioned it on the call and you have it in the press release that you have greater visibility on deletions, and I know that the room deletions comment was really specific for this year. Can you talk about the visibility on deletions for next year and maybe where that trends? Obviously, I'm not looking for a gross or a net rooms growth number, but just, you know, how you see the visibility on deletions for 2022, maybe relative to historical percentage deletion rates. Yeah. No, great question. You know, we're in the middle of our budgeting process now, so I think we feel extremely solid about the numbers for 2021. It's too early to give you a specific number, but obviously the one-time bump that we had this year from the SVC portfolio we don't expect to happen. I do believe that it'll fall back to more normal levels in 2022 with perhaps still a tinge of COVID-related impact. I think more likely to be falling back into levels that you've seen before. Great. Thank you, guys. Thanks, Joe. We will take our next question from Shaun Kelley with Bank of America. Your line is now open. Great. Thank you and good morning, everyone. Maybe as my first, Tony, sort of ask the same question, if I could, but you know, focusing a little bit more on corporate and group. Obviously, we're right at the cusp of probably how much lead time you have. Can you just talk a little bit about corporate behavior? You gave us a little color through, you know, that things are rebounding a little bit in October. Just, you know, what little signs do we have heading into 2022 on, you know, what I consider core business transient, and then also just maybe on the group bookings front. Of course. So the biggest improvement we expect, or that we saw this quarter came from business transient, which has already picked up even a bit in October. We're quite encouraged. Special corporate bookings have improved each week in October as when we compare them to 2019. Because you ask for a little bit of granularity, I can tell you that, new special corporate bookings in October for some of our key customer categories had some really nice growth. I'll give you two examples. Accounting and consulting grew 35% over what we saw last month, and technology business grew about 31% versus last month. When I flip to group, which was the second part of your question, at the end of September, group revenue was pacing down around 43% versus 2019. We think we could see some improvement from that level given the volume of last-minute bookings, which have been quite a significant recent trend. In the fourth quarter bookings in October were above October of 2019 by the highest percentage we've seen since the pandemic began. Maybe the last thing I would tell you on group, excuse me, that is also quite encouraging. When we look at the group that's on the books for 2022, the ADR for that group is up about 3%, almost 4%, relative to the group that was on the books for 2019. Thank you. Maybe just as my follow-up, if we could you just give us a little bit. There's been more discussion in the industry than probably is normal about small and medium-sized corporates and that activity rebounding a bit faster than what we've seen in maybe the larger, you know, Fortune 500 or top 50 accounts. Could you talk a little bit about that exposure for Marriott, if you break it down that way or maybe the behaviors that you're seeing between, you know, small and medium and larger sized corporates? Yes, of course. Historically, we saw business transient coming out of small and medium-sized companies was about 60% of our business transient revenue. Now, given that the larger businesses have been a little slower to recover during the pandemic, for the first three quarters of this year, we've seen about 75% of that revenue coming from small and medium accounts. Thank you very much. Of course. We will take our next question from Thomas Allen with Morgan Stanley. Your line is now open. Thank you. Given much of your marketing spend is done through the system fund, it'd be interesting to hear just an update on where you are in your kind of marketing strategy and spend versus kind of pre-COVID. I remember back to early 2019, you did a big Bonvoy push. I'm just trying to think about, you know, what you're doing now and potential implications for distribution and market share. Thanks. You're absolutely right that broadly speaking our marketing spend is a function of the top line revenue from our hotels. That is in two places, Thomas. One is obviously in classic sales and marketing fund, but also when you think about the revenues coming into our loyalty program are also driven by a combination of our credit card spend as well as hotel revenues and penetration of Bonvoy stays at our hotels. Clearly that is still meaningfully down from 2019. However, obviously a whole lot better than it was in 2020. I'm sure you've seen lately that we've done a fabulous new campaign that has been on everywhere from airlines to sports on sports games, etc., that really emphasize how special it is to be able to travel and to have experiences that open your mind, if you will. It's been a really concentrated reminder to our consumers of how special travel is, and that new campaign has generated incredible response from all the different customers and media touch points. Okay, just as a follow-up, just can you update us on, you know, OTA distribution and your thoughts there? Thanks. Yeah, sure. It's very similar to what we've talked about before, which is that clearly the OTAs have gained share as a result of Special Corporate being down on a relative basis. We're still seeing that our digital channels are gaining share faster than the OTAs. While I'd say the OTAs are probably now at about 14% of total bookings, you still remember that our direct channels are over 76%, and about half of that is coming through the digital channels. We're very pleased to see that digital continues to gain share very nicely. Our mobile app downloads have grown really well. The OTAs have been an important driver of business for us during this pandemic. I think from a share perspective, we're continuing to see the same trends we've been seeing. Super helpful. Thank you. We will take our next question from Patrick Scholes with Truist Securities. Your line is now open. Hi. Good morning. Good morning. Morning, morning. Hilton has been pretty vocal about having daily housekeeping on demand, and I haven't heard as much from you folks. You know, what do you think about that going forward, especially for your mid-scale types of properties? Well, it's a timely question, Patrick. As I mentioned in the opening remarks, we've just spent two full days with a significant number of our owners and franchisees here in North America. As we shared with them, we continue to run a few different proofs of concept, evaluating how we strike the right balance between guest expectations and the economic challenges that our owner community continues to face. We got tremendous engagement and input from that community, and I think we continue to move towards a more definitive and permanent position on housekeeping. Okay. Thank you. Just a quick follow-up question. You had noted eventually getting back to your mid-single digits long-term net unit growth. For next year- Yes You know, is it reasonable to assume that net unit growth percentages will be roughly similar to what they are this year? It's too early to give specific expectations. What I can tell you is we are, with increasing confidence, feeling like, in the midterm, we're gonna get back to that mid-single digit rooms growth. I think it'll be a bit challenging next year, and it'll be challenged for a few reasons. I think, number one, the continued unpredictability of the pandemic, but maybe more impactful, we have seen some delays in construction starts, some of which have been direct results of interruption to the supply chain. Again, those feel like short-term impediments. In fact, it's interesting, if you look at the pipeline, both in Q2 and Q3, the fallout we saw was the lowest we've seen in the last three years. That would certainly suggest that while we may have to struggle through a bit of these short-term delays, it actually bolsters our confidence in our ability to get back to that mid-single digit growth rate. Okay. Thank you for the update. You're welcome. We will take our next question from Stephen Grambling with Goldman Sachs. Your line is now open. Hi. Thanks. I guess to follow up on the initial 2022 expectations, what guardrails can investors think about around the more concrete expense items such as G&A? Should the relationship you've outlined between RevPAR and EBITDA generally hold as we think into future years? Sure. A couple things. On the G&A front, I think certainly you have to take into consideration what's going on with wage and benefit inflation. I think as we get back to more kind of fully loaded RevPAR numbers in the system, I think you should expect that for the next year anyway, it'll be a little bit higher than just inflation as we get the organization back to kind of full operations. But again, I still think that you're looking at overall levels of G&A reflecting the significant work that we did in 2020 to rebuild Marriott so that it still will be meaningfully lower than the kind of guidance that we gave at the beginning of 2020, which was $950 million-$960 million. Similarly, as you ask about what was your other question that you asked about, Stephen? Just as we think about the relationship between RevPAR and Oh, yeah, for EBITDA and RevPAR. Yes, I think it'll be the same except perhaps a little bit bigger. You know, as we have more and more owned lease profits coming back as well as IMFs coming back, you know, if you remember pre-pandemic, we were close to $50 million per point of RevPAR. We're obviously getting, hopefully closer to $40 million. And that's obviously hotel-related RevPAR. The non-RevPAR will tie much more into both the residential fees as well as the credit card fees. You know, it should expand, although I think again in 2022, it'll still be closer to the $40 million in 2022, and then again, continue to grow from there. Since you mentioned the non-hotel related fees and credit card fees, I think you referenced that you'd had very strong sign-ups. Can you just remind us of how a customer typically progresses once it signs up? Do you see a burst of spending right at sign-up, or is there a kind of a gradual build? Are you seeing any change in behavior on that? Yeah. Absolutely a gradual build. You're right. It absolutely kind of takes a while to get going. Great. Thanks. I'll jump back in the queue. Thank you. We will take our next question from Smedes Rose with Citi. Hi, thank you. I wanted to ask you a little bit more on the group bookings that you are seeing in the U.S. Is it fair to say that the sort of larger CBD, sort of more group-oriented properties are continuing to lag, or have you seen, you know, are you seeing any kind of uptick there? Maybe any other sort of just changes in the composition of group. Of course. Maybe I'll give you some macro observations. Before I do that, certainly we're seeing really strong social group activity, and expect that to continue. In terms of Citywides, which I think was part of your question, it was interesting. We spent the last two days with many of our full-service owners here in the U.S., and I think their view is they're seeing softness in Citywide activity in the first half of 2022, but are hopeful they'll start to see some pickup in the back half of next year. More broadly around group, you heard some of the comments I made in the prepared remarks. Q3 revenue is down 46% in group as compared to 2019, which was a big uptick compared to the statistics we shared with you last quarter, where we were down 76% versus 2019. The other statistic I would share with you that I think is interesting is quarter-over-quarter bookings in October, which are above quarter-over-quarter bookings from October 2019 by over 30%, which is the highest percentage increase we've seen since the beginning of the pandemic. Okay, thank you. Then I was just hoping you could talk a little bit more about what your owners are seeing on labor costs. It sounds like you're sort of somewhat optimistic about growth in IMF next year, and I'm just sort of trying to, I guess, square that with the fact—I mean, we heard from one owner last night that labor is up 20%. I just wonder, you know, what your folks are saying. Of course. Like many other companies around the country and around the world, we are seeing some challenges with labor. It won't surprise you that those challenges are most acute in the markets where we've seen the most rapid recovery in demand, so leisure destinations kind of leading the way. From our perspective, we have a multi-pronged approach to try and address those issues. We've ramped up our efforts in social and targeted marketing, highlighting the extraordinary opportunities that exist at Marriott. We have, in some instances, used one-time sign-on bonuses or temporary incentives. And we do still have many open positions to fill, but we are seeing a bit of an uptick in applicant flow and have been filling jobs pretty steadily over the last several months. I would add, we are not hearing from our owners that it's universally 20%. There may be a couple markets here and there where, you know, that could be happening in a particular situation. But broadly speaking, while it's clearly meaningfully higher than it was back in 2018 and 2019, I would say 20% is not the norm. And the only other thing I'll say is that, while ADR is still not back to 2019 levels, traditionally in our business, we have been able to see that ADR tends to be able to hold on to inflation. That we've seen ADR increases that are at least inflation, if not higher. And while clearly at the moment we're not back there yet, that should be helpful as well. All right. Thank you. We will take our next question from David Katz with Jefferies. Your line is now open. Hi. Good morning, everyone. Thanks for taking my questions. Good morning. Hi. Good Hi. Good morning. I know that we have seemingly a fair amount of time to discuss this, but with respect to capital returns, if you could just talk about what, you know, would have to happen for capital returns to maybe start earlier or later for that matter. You know, within the construct of those capital returns, you know, any changes in how you would think about the mix of buybacks versus dividends and the puts and takes around those, just so we can start the conversation now nice and early. Thank you. Sure. So first of all, similar messages to what you've heard before, which maintaining our investment grade credit rating is a top priority for Marriott. We do want to continue to get our credit ratios back to the 3-3.5 times levels of debt to EBITDAR. We are really pleased with the progress that we're making in that regard. Probably happened faster than we might have imagined a year ago. With that in mind, we are feeling increasingly confident that we'll be able to turn to returning capital to shareholders, perhaps with continued progress in the recovery in the back half of 2022. When we think about the mix of dividends versus share repurchases, I think it's instructive to look at what we did in the Great Recession, which is that as we moved closer and closer to that 3-3.5 times range, we instituted a modest, smaller than it was before cash dividend, and then returned to the normal level of cash dividend before we began share repurchases. Tony and I will be talking about that to the board and continuing to have a dialogue, but I don't think that that's a pretty good framework for you to consider as we move forward. I think from a kind of rationale, David, I think one of the things we really like about the 3-3.5 times level for us is the flexibility that it then gives us when we see an opportunistic investment come our way. We do wanna return to that area knowing that when those come up, we wanna be able to take advantage of them. In that regard, kind of reestablishing that policy and those levels, I think is where we're headed. Perfect. If I can just follow up with one, just modeling detail. When we look back historically versus this year with the differential and, you know, cost reimbursements in revenue and costs, there are, you know, periodic, you know, positives versus negatives, and this year it's been, you know, more of a positive so far. Is there any sort of input you can help us, you know, with the remainder of this year and how that evolves into next year, just to keep our model straight? Yeah, sure. I think as a reminder over time, the idea is that essentially a net neutral to the company, i.e., these are cost reimbursements without a profit component, and the timing of the revenues and the expenses can obviously vary. Just kind of to your point, as you look at what's happened this year, you have seen that the gap has narrowed between the net reimbursed revenue line, and that's really a reflection of loyalty. When you think about last year, far fewer redemptions were taking place, and we had lowered our administrative costs in the loyalty program to take into consideration the much lower RevPAR that we had in the system. Naturally, that has come back to a higher level this year, and redemptions have also grown meaningfully. Again, I think over time, you'll continue to see some variation quarter to quarter and year to year, but over time, the general direction is net neutral to the company. Got it. Thank you so much. We will take our next question from Bill Crow with Raymond James. Your line is now open. Morning, Bill. Morning, Bill. Are you there, Bill? Bill, please press the mute function on your phone. All right. Sorry about that. Good morning. Morning. Tony, I appreciate the comments on Special Corporate rate business travel and the pickup you're seeing in consulting and technology in particular. I'm curious whether the destinations have changed. You know, as we look at the STR data, it's pretty barren in some of these bigger New York, Chicago, San Francisco. Is that consistent with where you are or what you're seeing from the Special Corporate rate business? First of all, as we talked about, the smaller and medium-sized business transient has been relatively stronger, and that, to your point, is more likely to be in secondary and tertiary markets. However, during Q3, we saw the best improvement in our big cities in Special Corporate that we've seen since the pandemic. I think it is absolutely moving in the right direction, including those larger cities. My follow-up is kind of on a bigger picture basis. Should we be putting a bigger risk premium on the fee income coming out of China, given the changes and kind of government attitudes going on there? Well, how much time do we have, Bill? You know, I think, listen, China is a really important market for us. It is a dynamic and evolving market. Like anybody that's got a significant footprint in China, we continue to watch with great interest and great focus the evolving landscape there. But when you look at the composition of ownership that we have, when you look at the percentage of our portfolio that has whole or partial ownership by state-owned enterprises, I don't think we look at it as having any really remarkably higher risk profile than we've thought for the last number of quarters. One reminder, as I'm sure you know all too well, we typically do not have an owner's priority on our IMF there. The IMFs actually behave very similarly to base fees. Okay. Thank you for the comments. Thank you. We will take our next question from Dori Kesten with Wells Fargo. Your line is now open. Thanks. Good morning. Based on early con- Morning. Based on early conversations that you're having with developers, how do you expect signings to trend over the next several quarters? And are there certain markets that you're having to provide additional incentives that you haven't historically? Well, as I mentioned earlier, the pace of global signings has picked up significantly since the bottom of the trough created by the pandemic. Year-to-date, our signings are up about 30% compared to where we were same time last year. What we hear anecdotally from our partners, financing for acquisitions and conversions of existing assets continues to be pretty readily available. Construction financing for new builds is more challenging. The construction financing that is out there, as we've seen in other more conventional down markets, tends to rely heavily on relationship lending, tends to rely heavily on quality of sponsorship, and tends to rely heavily on the quality of the brand affiliation. In terms of additional investment, we are not seeing any sort of remarkable spike in the use of the company's balance sheet. The guiding principles that have guided our deal-making in good and bad markets remain intact. In instances where we see a strategic imperative, or in instances where we think we can drive premium fees and earnings for the company, we will consider use of the company's balance sheet. I may have missed this, but what was the reasoning for the lower investment spending in 2020? I'm sorry, in 2021? No, that's fine. As we've talked about before, a couple things. One is that we did talk about how some construction starts have pushed forward a little bit, and so that would then impact some of when the key money goes out the door. Probably more importantly and larger is we just really are able to refine the amount of CapEx that we're going to spend on system CapEx as well as the company's new headquarters building. When you put those together, you get the reduction that we described today in the press release. Okay, great. Thank you. Thank you. We will take our next question from Rich Hightower with Evercore. Your line is now open. Hey, good morning, everybody. Morning. Morning. Just in terms of the development pipeline, again, I guess given that it's a little more heavily skewed towards luxury and upper upscale than maybe some of your peers, you know, wondering if you could describe any differences in the economics of those tiers specifically versus the select service tiers, and even by geography. I mean, are there any pockets of tightness, you know, more so than the average around construction costs, lending availability, et cetera, that we should be aware of? Sure. Maybe I'll remind you, we got a question on this topic a quarter ago. I think the specific question we got was within our portfolio in terms of the economics to MI or to Marriott, from a fee perspective, how would a luxury hotel like a Ritz-Carlton compare to a lower tier product like a Fairfield Inn? The response we gave a quarter ago was obviously subject to variability by geography. It's about 10x. We see about 10 times the fee potential in a luxury hotel that we typically achieve in a select service hotel. They are more complex projects. They are more capital-intensive projects. The complexities of getting them financed are not insignificant. As evidenced by the volume of luxury and upper upscale in our portfolio, the strength of our brands, I think, commands pretty effective ability to source debt for those projects. Yeah. Thanks. I appreciate that. Maybe I'll turn it on its head for a second. The economics to the owners, as well, I mean, are there any key differences in that regard versus what actually impacts Marriott itself? Well, as I said, these are complex projects. You heard in Leeny's prepared comments some pretty extraordinary numbers about our branded residential business. With increasing frequency, we see luxury projects being developed as mixed-use projects that include a branded residential component. That's often critical in underwriting those projects and getting them financed. In leisure destinations, the premiums we've seen in luxury rates over the last couple quarters have been extraordinary. All right. Thank you. Of course. We will take our next question from Robin Farley with UBS. Your line is now open. Great. Thanks. I wanted to circle back on the group booking outlook. I know you talked about price or rates being up 4% next year. I'm wondering if you could give us a sense of what kind of group bookings is relative to 2019. You know, I think there's this idea that there's gonna be a lot of pent-up demand for it. But I'm wondering, you know, if that's actually translated into bookings yet. You know, maybe obviously not for Q1, but are there quarters in Q2, three, or four where the what's on the books is back to 2019 levels? Or are groups kind of not pulling the trigger just yet? Thanks. Of course. Thanks, Robyn. If I look at 2022 in aggregate, and I look at total group revenue on the books at the end of this past quarter, and compare that to what was on the books at the end of the third quarter in 2019 for 2020, we're down about 20% in gross revenue. We're down about 23% in total booked rooms. As I mentioned earlier, we're up nearly 4% in ADR. Okay, great. No, that's helpful. Thanks. Then just on the lower investment spend, and I know, Leeny, you mentioned it was kind of refining some of the headquarters and systems CapEx. Is some of it related to the, like, there's some like impaired contract investment in the quarter that was there like a significant project or maybe it's multiple ones that got canceled or something? Just wondering if that is related. No, not at all. What's driving the impaired contract investment in the quarter? Yes. No. It actually was not a contract investment. This was an initiative for some international hotels that we had begun in 2019 related to operational improvements in some international hotels, that as a result of COVID and all that is going on in those hotels, that it no longer makes sense to carry forward with that. The investment that we had put on our books to date needed to be written off. And should- It's actually a program initiative of the company for the hotels. It was not related to a hotel contract. It was like, you had kind of made loans to some hotel owners as an incentive, and then kind of now that the loans are written off. Is that roughly how it works? No, no. Actually, as you know, very often we have programs that we do for our hotels that they reimburse us for. In some cases, we actually develop the programs and over time, the hotel owners pay us back. In this case, we had begun work on the program and invested some funds to develop the program and decided once COVID came, it no longer made sense to implement that program at the hotels and have them repay us over time, so we wrote off the investment. Okay, great. Thank you. That's helpful. Sure. I don't know if one final shot. You made a comment when talking about priority of using your cash flow, kind of, you know, reinstating a smaller dividend than repurchasing the larger dividend. You mentioned the investment-grade rating to kind of take advantage of opportunities, to be opportunistic, I think was the expression you used. Is there anything, you know, acquisition-wise that you think about, where you would be looking for opportunities? I don't know if you can characterize anything. Then that's it for me. Thanks. I would say that the approach we've taken to evaluating those sorts of opportunities remains intact. If you look at our track record in this area, we don't feel any particular pressure to do acquisitions simply for the sake of scale. If we see a gap in our portfolio, whether that be a brand gap or a tier gap that we think represents significant growth opportunity or a significant gap in our geographic footprint that can be solved the way we did with AC in Spain or Protea in South Africa, we would certainly take a look at that. I think Leeny's comment is really around our capital philosophy to ensure we are in a good position should one of those opportunities present itself. Okay, great. Thank you. Thank you. We will take our next question from Chad Beynon with Macquarie. Your line is now open. Hi, thanks for taking my question. I wanted to ask about the continued recovery in rates, given how strong it's been. Tony, you talked about the outlook for group, but I'm wondering if you could kind of touch on maybe some of the differences in leisure BT in group. Have you guys been able to test and learn maybe how high you can push pricing? Or is this tough to do without kind of full compression nights? Well, there's a lot in that question. I think that the good news, what we've seen through the last couple of quarters, is the ability of the leisure segment to create compression. The creation of that compression, almost irrespective of which segment drives the compression, is driving really terrific pricing power. I think when you look at our retail rates across the portfolio, we are essentially back to 2019 levels, and that's another statistical illustration of the strength of our pricing power. What's really encouraging about that is that we're achieving that pricing power, albeit at lower occupancy levels than we were experiencing in 2019. Okay, great. Then a quick follow-up, maybe a near-term modeling help. Leeny, you mentioned that normal seasonality is for Q4 over Q3 to be down 6% sequentially from a RevPAR standpoint. Has there been a major difference looking back on leisure versus corporate, given that, you know, I think we all expect for corporate to kind of improve sequentially here? Thanks. Yeah, sure. I think when you look overall at the business, it is traditionally the case that you have lower business overall. Again, I think interestingly, I actually expect leisure could continue to strengthen because when you think about coming out of the pandemic, increasingly people are feeling comfortable traveling. Where we see festive bookings in places like CALA, etc., it's great demand and the holidays are pacing up well compared to 2019. I think we're very encouraged. The overall message we were trying to impart is that typically it is a period just with family holidays, etc., that it is a lower occupancy quarter. It's worth mentioning that, you know, when you go back to 2019 and 2018 levels and you look at our EBITDA in Q3 and Q4, as we talked about in our comments, that typically Q3 is a higher RevPAR driving quarter than Q4 typically. Okay, thanks. Appreciate it. Thanks for the help. I will now turn the program back over to Tony Capuano for any additional or closing remarks. Thank you very much. Thanks to all of you for your continued interest in the company and the recovery of the global travel and tourism industry. We are back on the road, and we look forward to running into you in our hotels around the world. Thanks again, and have a great day. This does conclude today's program. Thank you for your participation. You may disconnect at any time, and have a wonderful day.