Good morning, everyone, and thanks for joining us for our second panel this morning. So it's my pleasure to welcome Tony Capilano, President and Chief Executive Officer of Marriott. So Tony, thanks for having me. Good to be back. So we didn't get our pleasantries at the front end. So now I got to ask you on stage. Last year, it was silverbacks in the jungle of what Kenya were we in Kenya? Ken, no. That was in Rwanda. Rwanda. Okay. So where does the CEO of Marriott spend his summer this year? Yes, much more tame. We're very lucky to have a family farm in Tuscany. So I was there a bit. And then out of Rome, we launched the newest Ritz Carlton yacht, Luminara. And so, I was on one of the practice voyages for three days from Rome to Syracuse to Malta. And it was all over social media. I'm sure you saw I was the least famous person on the boat by a wide margin, but it was great and the ship is beautiful. Now, is that time for the really important wedding that was going on in that particular wedding is coming. Wedding is next May. So, have a little more time. Okay. Okay. So and the Ritz Carlton yacht collection, interesting timing, right, given some of us got the pleasure of doing a tour back in April. So maybe for the kind of quick, this is the third that's the third ship of What's the kind of the response? And how do you think Yes. About The response is terrific. This will be the first ship that has Asian itineraries. So, there's an enormous amount of enthusiasm about that. And in some ways, I think about these ships the way I think about an iPhone, right? The iPhone one was great until you got your hands on the iPhone two. So, the design of the ships is very iterative. So the first ship was 149 cabins. Ships two and three are two twenty four, so a little bigger. I think we got the pool decks right. I think we got the food and beverage right, but it's a stunning vessel. So what's the number one in demand amenity on a Ritz Carlton yacht? From a set of people who all want the best, what are they kind of what are they looking for? Yes, I think the food really bespoke food and beverage experience is at the top of the list. And I thought it was quite interesting. The biggest debate as the construction was wrapping on the first ship, there was a space where there was a portion of the team that said we should do a single malt scotch and cigar bar. And a lot of other members of the team said nobody will use it, that's silly. Ultimately, the first group prevailed. We programmed it into the first ship. They ended up having to expand it twice because it was so popular. So, have a beautiful one on Luminara, the third ship. Fantastic. I don't smoke cigars, but I would do the I think the single malt Scotch, don't go in there. Don't smell like you smoke cigars. So all right, let's zoom out. Let's It's take us a few months since everybody's kind of gotten the lay of the land. And obviously, we're all tracking what's going on with the data to the extent possible. Do the 30,000 foot level view first. How are you feeling about the world? You get a chance more than anyone in this room to speak with global business leader and political leaders. So just set the tone for us in terms of how does it feel out there right now? Yes. So all things considered, it feels pretty good. We obviously find ourselves in a world that has a fair amount of uncertainty from a macroeconomic perspective, from a sociopolitical perspective. And obviously, Marriott and the sector more broadly thrives in times of certainty and stability. So, that creates some measure of challenge. We may talk about this a little bit. Particular challenges for the lower income end of the spectrum. But, we just we're looking at July numbers. Global RevPAR was up almost zero five point in July, flat in The U. S. And Canada, as you might expect, up about one point internationally, which is exactly where we thought we'd be at the end of Q2. So, we feel pretty good about that. Group continues to be quite promising. The strength of demand for luxury continues to be very sturdy. So all things considered, I think we're feeling pretty good. Yes. I think there was a hope on the demand side as we left that second quarter earnings period thinking that things could get a little bit better from here, right? It's like I think a big part of that is just maximum leisure, a little bit more group compression. It's a bit of a wonky calendar, as I'm sure you know and we nerd out about. But just anything that you can kind of point people to on either the demand front or the bookings front post Q2 that is getting Yes. A little bit We're obviously looking at some of the demand patterns in a post Labor Day environment. Tiny little bit of uptick in BT, little bit of an uptick in leisure transient, but it's early. So and those booking windows are so short, it's hard to really hang your hat on it. We talked in the Q2 call a bit about group. We have better visibility into group because the longer booking window. We talked on the Q2 call about 26, group volume being up about 8%, which was a full point higher than where we were a quarter prior. So, those are encouraging as well. And then I mentioned luxury. If you look at July, revenue for luxury in The U. S. And Canada, our biggest market was up 6%, up 4% globally. And so this may go to some questions you have about this bifurcation of the consumer. But from my perspective, the really good news that high income consumer, whether accurate or perception, they feel more insulated from some of the macroeconomic turbulence that we talked about, and they continue to prioritize spending on travel and experiences. And it's coming through in the data. So let's go there. The kind of high low dynamic is the theme, right? We hold out. I think one thing is Wall Street looks at it is you're now in a spot which is fairly rare, where it's positive in one segment, actually negative in the other segment, which doesn't and again, it's because of where we're flirting in terms of that organic growth level. But just, you also get lots of consumer data, lots of credit card data, lots of information. Help us unpack like why is this happening? Because it is, as somebody has studied these patterns for a while, it's a bigger disconnect and it's been going on for a little longer than I think sometimes makes us comfortable. Yes, I suppose there's a few things. You're right. I mean, the terrific partnerships we have with Chase and American Express on the credit card side, on the long list of benefits of those relationships, we get really great real time insights into how consumers are spending. At the high end of the income spectrum, those consumers continue to prioritize spending on travel and experiences. We see it in the performance of the luxury portfolio. It sets us up really well given our industry leadership, both in terms of footprint and pipeline and luxury. At the other end of the spectrum, it's not that that profile or that demographic doesn't want to travel, but they are feeling more directly the impact of some of these economic headwinds. One of the really interesting things we see in our business because of that impact, I think it's one of the reasons you're seeing more softness on the demand side in the lower chain scales. But within our portfolio, one of the really encouraging signs we've been seeing, our teams are doing an amazing job hanging on to rate, right? You've been through lots of cycles like I have, and there is often a reflexive response to chase occupancy at the expense of rate. Our teams are really working hard to maintain rate, even in those chain scales that are challenged from a demand perspective. That's obviously, I think, a great long term strategy and also goes a long way to helping us preserve margins in that chain scale. The other thing that the other dynamic at play, at least in The U. S, which is our biggest market, about two thirds of government demand that we accommodate is accommodated in the select brand hotels, and that's down double digits. That was exactly where I was going to go. So let's think about the select service chain build from it, because one thing that is unique is we actually think those lean a bit more towards corporate, right, especially small, medium sized businesses, which was a big engine coming out of COVID on the growth side. So what's happening there? Because we do see this when we just you just look at STR index chance scale data, you see the same bifurcation, which is which again so what are corporate leaders telling you at those two different levels? At the large corporates, how are they feeling about the world? And is that different than what the small and medium Yes. It's not a perfect analogy, but maybe one of the ways I think about it, you've got the high income transient customer continuing to feel optimistic and demonstrating that optimism in their travel spend. That's sort of the case with the larger multinational corporate accounts that we have. You go to the other end of the spectrum, the lower income transient consumer is a little more nervous, and that's reflected in the performance in the lower chain scales. Similarly, some of the smaller business clients have that same level of hesitation. So one more question on sort of the demand world. The group calendar you mentioned, obviously, 2026 shaping up so strongly. Marathon alone in this, I think every company we're seeing other. So what's driving that? Like do we expect that trend to kind of come back in as we get a little closer and we're just booking a little further out right now? Or is there something else going on? It's a good question. I think I've talked to you in the past. We do two events every year, the Association Masters and the Corporate Masters, each of which we bring about 400 of our biggest group clients, meeting planners for our biggest corporate clients or for our big association clients. And you're hearing a few trends from them. Number one, as they're planning for 'twenty six, most of them, they're in budget season now, but they're going to the budget table with increased travel budgets. They are hearing from their constituents, maybe we have a corporate policy about business transient travel with some limitations. But the frontline leaders in those organizations say, I need to be on the road. I need to be with my customers. I need to be with my colleagues from around the country or around the world. And group meetings are a powerful vehicle to try and achieve that. Now I want transfer over to the development side, correct? I mean, obviously, a hat you've worn and know super well. Help us think through the same pressures because now a few years post pandemic, we know that the curve on The U. S. Supply growth has come down a lot. What is the development community saying right now? What's their level of enthusiasm? Because we could also see where the world out there, the optimism, when you look at things like the stock market, obviously, as you're sort of your fear and greed gauge, looking pretty good on the green side. Does that correlate with what the developers are saying? Yes, you almost have to look by region of the world, but I'll start with The U. S, where I think your question really lies. The biggest impediment to driving historic volumes of new construction are the construction cost environment and the nature of the construction debt that's out there. The good news is deals are getting financed. They're not at the leverage that our partners would like. They are at higher interest rates than our partners wish they could capture, but deals are getting done. And the deals that are getting financed, the newbuild deals, have the sort of common DNA you would expect. They're in great locations. They have really strong brand affiliations. And they are with developers who have longstanding demonstrated track records of successful execution. Feels to us, I mean, you look at the data at the end of Q2, we had the largest under construction pipeline in The U. S. And Canada, our biggest market, and most rooms under construction in The U. S. And Canada. So, we feel like we're getting a disproportionate share of the opportunities that are out there. But some combination of hesitancy around desire for a more stable macroeconomic environment and the construction cost environment and the cost of financing are resulting in not the sort of volumes that we were accustomed to. And what are the complexity of these deals, right? So one thing I know Marriott has done really well is when the capital stacks get difficult, you come in, you create solutions, you solve for big full service, AWS Marriott, City Center, major projects. But that world has changed a lot, it feels like in Yes. The last five It has, but just I had my senior leadership retreat, and we were at the new Gaylord Pacific out just South of San Diego. I'm pretty sure I know my friend Bill Hornbuckle is here somewhere, so he made a dispute. But I think at one point, it was the biggest hotel under construction, maybe certainly in the country, maybe in the world. And that's a great illustration of our ability to execute on these really impactful assets, right? It strengthens our lead in the big bodated in a set of hotels. So we will continue to be creative and aggressive for those sort of needle moving projects. But for the bulk of deals that are being done, we've generally believe we've gravitated down the chain scale map a little bit, at least in The U. S. Yes, More select service, I think the extended stay select service. So what product types is Marriott leaning into? I know StudioRes, I think, is a big initiative. Yes, StudioRes is big. We opened our first one this summer down in Fort Myers. And the data is only anecdotal because it's so soon. I said, how's the intent to recommend data look? And they said, it's fantastic. I said, great. They said, we have five surveys so far. So, it's a little early to gauge much, but it's off to a good start. I think we've got another 20 or 30 under construction and the same number in the pipeline behind that. So we're getting really good traction there. What's the back stall for developers that makes these prototypes work? And how have you kind of improved that relationship maybe in that speed to market? Yes. StudioRes is an interesting one because I think it's maybe in my time with the company, one of the best illustrations of co creation of a product with some of our most prolific and aggressive development partners. So, you think about groups like Noble and Concord, they were really shoulder to shoulder with us as we solved for a prototype that not only resonated with that mid scale extended stay guest, but also solving for an economic model that generated returns they found attractive. So then let's kind of do the journey around the world a little bit on the development landscape. So place I want to start though is Yes, China. It's like, I mean, we can just have you host at this point. China is fascinating. It's obviously a critically important market for us. It's our second biggest market. I was there not long ago in Shenzhen, opening our six hundredth hotel in China, St. Regis there. We've got another 400 or 500 in the pipeline behind that. So, really important market for us. It's a really interesting set of circumstances right now. In terms of the operating environment, they've got some of the same macroeconomic challenges, some of the same consumer confidence challenges and that bifurcation as well. The high income households in Greater China are absolutely traveling, but they're outbound traveling, which is why you see markets like Japan for us with high teens, low 20s sort of RevPAR because it's that high income outbound Chinese traveler. The lower income Chinese traveler who is doing more domestic travel, they're feeling that same impact from the headwinds. So it's a tough operating environment in the short term. At the same time, you look at our signings in the first half of the year, we were up 20%. And so one of the things that demonstrates is that development community in Greater China fundamentally believes in the long term prospects for travel and tourism across China. And they're not trying to time investments for the right week or month or quarter. They're making long term investment bets. So would you consider that development environment even despite the macro volatility unchanged from a year ago? Because it felt like a year ago, same pattern, but there was this kind of confidence in the fact that some of the money and the capital that sits behind these products was looking at a different time frame than current. So the same or a little bit more hesitant? Yes. Mean, for us, we're seeing an acceleration. Now, how much of that is an acceleration of the gross number of volume or whether we continue to take share, which is my instinct, but we are seeing an acceleration. And conversions, so we're starting to hear about like a generational shift, that first vintage of a lot of Chinese hotel build out is starting to come back to market as a possible opportunity. Is there a great point? Mean, as you know, conversions are a huge part of Marriott's growth story. Until relatively recently, it was sort of a one off exception that we would do a conversion in China. The vast majority of our deal volume continues to be new construction, 70% or 75% of that volume is in the select brands, which is an exciting development for us, because it opens up a lot of the secondary and tertiary markets. But we are seeing a volume of conversions that is meaningfully ahead of what we've experienced historically. And that would extend that kind of around the world, both other international markets you'd pick or you'd highlight on the development side? And then same thing for where conversion is working today and what brands are in demand? Yes. I think about our strategy a little bit, I was just in Singapore with our APAC team, which has the entirety of Asia except Greater China. And we were having a conversation with the team. If you rewind back to when BRIC was the most important acronym many years ago. I think many of the big lodging companies over indexed on China and India. And to be sure, we made a big commitment to those markets. In fact, we're the biggest lodging company in India right now and growing rapidly. But we didn't make those decisions to the exclusion of the balance of the markets across the region. And so we've got tremendous activity in Japan. We've got tremendous activity in Vietnam, tremendous activity in Indonesia. And so, I think the APAC region broadly is a really compelling set of markets in terms of unit growth. Similarly, Middle East, we're seeing great volume. And across much of Europe, we're seeing good volume as well. It's really a conversion story there because you obviously don't have the volume of greenfield development sites in many of the certainly, the gateway cities. And last year or two years ago where we had I think it was two years ago where we had the MGM deal announcement, which I think would actually coincide with this exact morning. So help us kind of think through both that special partnership, and we will have Bill here a later today to talk about it on their side. I know they're really pleased with how it's performed. But also just what that what these kind of partnership opportunities mean? Are there other things in your future? Yes, you're asking it much more elegantly than some. Usually, people say, are you going to do more of these deals? And when and what are they going to look like? It's a really unique transaction. I mean, when you step back and look at it from 100,000 feet, essentially, you took the biggest lodging company in the world and the biggest gaming company in the world and pulled them together to take advantage of their respective strengths. I'll be anxious to hear Bill's perspective. But certainly, from our perspective, in terms of transient volume generation, in terms of group lead generation, which I think in some ways has been the most pleasant surprise from their side. They obviously had a very robust group business there. And I think when we really we got the deal done and we started to compare notes, there was not as much overlap as they had expected, which was great news for them, because there were deep pockets of potential group clients that they weren't necessarily penetrating in the fashion that they would like. It's been a huge win from our perspective for Bonvoy. It's obviously one of the most desirable destinations in the world. And to be able to offer that to our transient guests is a big win. And the group piece, we shouldn't skip over. I think when I'm at the association or the corporate masters, often the meeting planners kind of jokingly, I always say to them, what can we be doing better for you? They say, why can't we book fifteen years out? And they say it a little bit tongue in cheek, but I think the issue is, if you're running one of these huge associations with peak night of 2,500 rooms, it's a relatively short list of destinations that can accommodate what you want to do year in and year out. And so, to add 37,000 rooms, to add 5,000,000 square feet of state of the art meeting space in a highly desirable, easily accessed destination was a big, big win for how we think about our multiyear group sales approach. You're to F1 this year? I am going to F1 this year. Miami or Vegas? Going to Vegas. Happened to be I was traveling in Australia, and so I went to the first race of the season in Melbourne, which was amazing. That's the only one I've made this year. Is Bonvoy a sponsor? We are. We're a big sponsor of the AMG Patronus, Mercedes team. All right. So you and Toto? Me and Toto. When I was in Melbourne, I met their newest driver, Kimmy, who's 18 years old, very nice young man. Of course, I was a fan because he's Italian. And we were chatting with him for a bit. And he said, I'm sorry, I have to run. Have to finish my homework. Still finishing high school. They have been such a terrific partner for us. Give you pretty unique and probably a very difficult decision to streamline some corporate decision making and some of your different reporting lines. That was probably back in the late fall of last year when Yes, it was of the year last year, we were working through that. But as a CEO, I'd love to just get a little view inside the tent now that we can talk about this sort of thing about what drove that decision at the EC member, why was now the right time? Because as we look at it, hard decisions are often made when their permission is granted, meaning times are tough. Is it unique to do it at that point in Yes. Although I actually think it's the perfect timing to do it, right? We look across sectors. We see companies that are under pressure from shareholders or activists or something else. And they're often forced into these exercises, not on their own timeline, in a really compressed way, where they can't be as thoughtful as they might like on their own. I actually think when you're operating from a position of strength, it's the perfect time to do it, number one. And number two, I think it's the responsibility of every company out there. You look at the best companies and the best leaders in the world, every morning they wake up and they say, is our strategy right? And they stress test the strategy. Are the objectives that are aligned with that strategy the right objectives? Do we have the right paths to achieve those objectives? Is the work that we're doing across the enterprise impactful in our pursuit of those objectives? And if you shine a bright light on it, the answer is no, you got to have the courage to either pause or even eliminate some of that work. And for the work that is mission critical, challenge yourself every day. Are we doing it as efficiently and effectively as possible? Are we embracing technology in a way that enhances our efficiency? Are we using technology to create capacity, whether that's internally or guest facing capacity for our associates and their interaction? And so I often get asked, are you going to do it again? I think we should be doing it every day, right? That was a sort of a spike in the EKG. But every day, the challenge I've given our leaders around the world is to ask themselves those questions. As a leader, when you look back, what was the most impactful change? Was it freeing up responsibility for some people to move up in the organization? Was it the way the reporting lines work with some of the owners? What's been some of the feedback to you to Yes. Go back to Because I the pick one, maybe I'll pick two. I think number one, the level of empowerment that's pushed to the continents. Arne had great foresight to look at the pace at which we were growing our global footprint and saying a model that involved a lot of command and control from center probably was sustainable, given the pace of our global growth. And so this was a big leap forward in terms of empowering those continents to use their local market expertise and make decisions in real time. I'd say that was one. I would say two, we had been on a couple of year exercise to make sure we really understood the depth and breadth of our talent bench and start to put together very prescribed development plans for our highest potential talent. Almost the entirety of those identified high potentials sound spots in the new organization. And again, this is anecdotal, but the feedback I get from those young leaders is I'm more energized than I've ever been about my career prospects at Marriott, because I now see paths to continue to be more and more impactful to the company's future. You mentioned the role of technology, so let's touch on that. You obviously are in the midst of a multiyear journey here. Just give us kind of the quick update on where we sit and what's being rolled out because it actually some of this, I think, is select service brands? Yes. Later this year, will be rolling out. We for anybody that was disappointed because they tried to book a room in Antarctica, we had a made up hotel in Antarctica where we started to do some of our testing. That went swimmingly. As a result, we've got some other hotels in testing right now. We are up to our eyeballs in testing the functionality with an eye towards starting to roll out the platforms later this year across many of our select brands. So, it would be the first Marriott in Antarctica, right? It would. Okay. Seven continents, got them all. I may still count it in nug, but it's not real. But yes, it's exciting for us. And it's exciting, I think, I always describe our job for our company is we are serving three masters, if you will, our own associates, our guests and our owner community. And the transformative impact of this technology initiative, I think, is significant for each of those groups. For our associates, this term of swivel chair of having to look at multiple screens goes away. It creates capacity for them to be more deeply engaged with our guests on property. It gives them a wealth of information on a single screen to help them better care for our guests. For our guests, similarly, they're going to get more time kind of face to face, eye to eye with our associates. They will get the benefits of more immediate credit for their stays, abilities to confirm upgrades, abilities to confirm with connecting rooms, all those sorts of things that our friends at the airlines have gotten travelers accustomed to. And then I think for our owners, both on the top line and the bottom line, some really exciting margin opportunities. I think most of the focus you hear is around technology innovation driving margin enhancement. And to be sure, that's an opportunity. I think what gets talked about less, and I'm quite excited about, is some of the top line revenue. And the reason I say that, if you look at our platform today, it's great if you want to go book a room. But you think about the breadth of offerings that we have to make available to our guests, food and beverage, spa, retail. It is not as seamless as we would like it to be. And this is a consumer base that's grown up on Amazon. So they are accustomed to shopping across multiple storefronts and dropping those purchases into a single cart. That's a good proxy for how our guests will book, not just their room, but every facet of their stay with us, which I think represents a meaningful revenue upside for our owners. You can't possibly do a technology conversation anymore without asking the obligatory AI part, But so here it I really would love you to touch on how do you think this is going be most impactful, especially to where you were just going, a little bit of that customer journey because I think the whole way people search for and maybe interact with travel is changing here. So I know there's going to be the standard, oh, we're to save more on data and programming back of house. But you're now probably starting to really think about how this is impacting that the front end of that travel journey and how Marriott gets found or Bonvoy gets found from the customer perspective. So can you connect those dots? Of course. Yes. I would say maybe we have two parallel streams of activity that are both really exciting in the AI space. One, one years point ago, maybe two years ago, we stood up this AI incubator. And that's where we're running some proof of concepts on some smaller projects, but things that wouldn't surprise you. How can we incorporate AI into the concierge function, those sorts of things. But then the other more transformative, which is where I think you were going, is thinking about in the future when every traveler has their own AI agent who has over time learned more about them and their family's travel preferences, and they're using that to plan the entirety of the travel journey. How do we incorporate that into how we think about selling the products and services that we have available? So, we're talking to lots of prospective partners. We're talking a lot about how do we ensure that it is still most compelling to book with us, but make it seamless with these AgenTiKi tools. So if I got on the spot, are you using it in your day to day? You still using it? Like how like what's the interaction like? We've rolled out at headquarters Microsoft Copilot, but I use that all the time. I think it's fascinating. And then with ChatGPT, I play around with it a lot. I figure I'd rather doom scroll on that than TikTok or Instagram. But I do think these are tools that you have an intellectual curiosity about them, but they are going to be impactful to every business out there. And so the challenge we have as leaders is to really think about how you take advantage of these tools and remind yourself how rapidly they're evolving. I read something the other day. There was an executive that runs Google's AI team. And he suggested that in the last five quarters, they've made thirty years of progress on their AI business. And so it's moving at a breakneck pace that requires us to be deeply engaged across every facet of our business. Do you think there's a gap or a change where the discovery process, right, where your the way you've kind of engaged with kind of traditional media and getting acknowledged, is there a gap or a moment where those where we haven't yet connected those two pieces, where they don't know you well enough to know you, but the old tools, the paid search, the clickbait, like that isn't working either? Amit, it's an interesting question. The evolution, you talked about our technology transformation. And remember, it's the transformation of our three most important platforms, of course reservations, of course PMS, but also the loyalty platform. And I do think in many ways, the Bonvoy platform is the secret weapon that goes to the core of your question. That and use whatever descriptor you want. You could argue Bonvoy is our most important brand. You could argue it's the connective tissue that pulls together this really diverse, broad portfolio of brands and geographies. And I think that's the most powerful tool we have at our disposal. If we continue to evolve it in the way that we are to make sure the traveling public, whether they are part of our quarter of a billion members or they are folks that are early in their travel journey, that they understand the depth and breadth of the Marriott offerings. I know I'm using it now for just the recommendations on the margin, right? It's done mid trip, but you're looking for, oh, what do I fill in the gap on this itinerary, to your point, on the concierge front? Yes, that's right. An absolute no brainer. Tony, thank you for the time. Thanks again for And thank you for coming.