What it does
Marriott International is a worldwide franchisor, operator and licensor of hotels, residences, timeshare properties and other lodging offerings. Founded on 1993-10-08 and headquartered in Bethesda, it serves travelers while selling brand affiliation, distribution, operating services and technology to hotel owners and other counterparties. Anthony G. Capuano is President and Chief Executive Officer.
The company organizes its hotel brands by Classic and Distinctive styles and by Luxury, Premium, Select and Midscale tiers, with longer-stay brands spanning multiple tiers. Its system had 9,805 properties and 1,779,936 rooms in 145 countries and territories at year-end 2025. It owns or leases less than one percent of the lodging properties in its system.
Hotel owners can franchise a Marriott brand and use its reservations, marketing and loyalty systems, or engage Marriott to manage a property. Marriott also licenses brands and systems for timeshare, residences, yachts and selected other offerings. In managed hotels, it provides hotel-level operating and administrative services and generally hires, trains and supervises the associates needed to run the property.
Management said on the call that the system exceeded 10,000 properties and 1.8 million rooms, after net rooms grew 4.5% over the preceding 12 months.
How it makes money
Marriott earns recurring, mostly fee-based revenue from a lodging system largely owned by other parties. Its reportable regions are U.S. & Canada, Europe, Middle East & Africa, Greater China, and Asia Pacific excluding China; Caribbean & Latin America is included in unallocated corporate and other results.
Franchisees generally pay an initial application fee and continuing royalties of four to seven percent of room revenue, plus, for certain brands, up to four percent of food and beverage revenue. They also reimburse centralized programs and services, including loyalty, reservations and marketing. Agreements generally run for 10 to 25 years. At year-end 2025, franchised, licensed and other properties numbered 7,644, with 1,183,513 rooms and timeshare units.
For company-operated hotels, Marriott earns a base management fee tied to hotel revenue and an incentive fee tied to hotel profit. Some incentive fees require the owner to first achieve a specified return. These management agreements generally have initial terms of 20 to 30 years, with renewal options. Marriott had 2,017 company-operated properties with 580,170 rooms at year-end 2025.
Other fee streams include royalties from timeshare, MGM Collection with Marriott Bonvoy, Design Hotels and The Ritz-Carlton Yacht Collection; residential branding and homeowners’ association fees; and co-branded credit-card fees. Card arrangements can provide fixed payments at inception and monthly variable payments, mainly based on card usage. Hotel-owner reimbursements for centralized programs are not designed to affect Marriott’s economics over the long term.
At year-end 2025, the system totaled 9,805 properties and 1,779,936 rooms; management said on the call that second-quarter 2026 gross fee revenue was $1.58 billion and adjusted EBITDA was $1.59 billion.
Customers and how it sells
Marriott’s customers include leisure travelers, group customers, business travelers, governments, Loyalty Program members, co-branded cardholders and the hotel owners that affiliate with its brands. Hotel owners are also customers for franchise, management, licensing, reservations, marketing and other centralized services.
Marriott Bonvoy connects its brands, direct channels and travel loyalty program. Members earn points through participating properties, selected travel offerings, co-branded cards and program partners, and can redeem them for hotel stays, airline tickets or miles, rental cars, merchandise and experiences. Approximately 75 percent of U.S. hotel room nights and approximately 68 percent of global hotel room nights in 2025 were booked by Loyalty Program members. Management said on the call that Marriott Bonvoy had more than 295,000,000 loyalty-program members.
Marriott.com, the Marriott Bonvoy app and other direct digital channels provide booking, member rates and offers. The app also offers features including mobile check-in and check-out, mobile key, chat and service requests at participating hotels.
The U.S. & Canada is the largest regional system by rooms, with 1,065,108 rooms at year-end 2025. Marriott also had 167,323 rooms in Europe and 84,934 in Middle East & Africa. Management said on the call that second-quarter 2026 global leisure RevPAR rose 5%, group RevPAR rose 3%, and business-transient RevPAR rose 2%.
Suppliers and costs
Marriott’s main operating inputs are people, technology, centralized loyalty, reservation and marketing programs, and hotel-level services. It managed the employment of 414,000 associates at year-end 2025, including associates employed by Marriott and associates employed by hotel owners whose employment Marriott manages. This figure excludes personnel employed by independent franchisees, licensees and management companies hired by them.
For managed hotels, owners generally bear hotel operating costs, including centralized programs and services. Marriott incurs costs for those programs and receives reimbursements from owners and certain other counterparties; timing differences can affect reported cost reimbursements, net, but the programs are not designed to affect its economics over the long term.
The company is undertaking a multi-year transformation of its reservation, property-management and loyalty systems. Management said on the call that it had begun a phased rollout of Ask Bonvoy, a conversational search experience on Marriott.com and the Marriott Bonvoy app. The company also expects spending on its technology transformation to be reimbursed over time.
- Revenue$26.2B
- Cost of revenue−$21.0B
- Selling, general and administrative−$870.0M
- Other operating costs−$211.0M
- Operating income$4.1B
Competitive position
Marriott competes for guests, hotel owners and digital bookings. In branded lodging, named competitors include Hilton, IHG Hotels & Resorts, Hyatt, Wyndham Hotels & Resorts, Accor, Choice Hotels and Best Western Hotels & Resorts. It also competes with independent lodging properties and short-term rental platforms including Airbnb and Vrbo. Its direct channels compete with Expedia.com, Priceline.com, Booking.com, Travelocity.com, Orbitz.com, Trip.com, Google, Bing, Yahoo and Baidu.
Competition concerns brand recognition and reputation, location, guest satisfaction, room rates, service, amenities, loyalty programs and co-branded cards. Marriott also competes to win or retain owner affiliations. Hotel owners can terminate management agreements in some circumstances, including when specified performance metrics or financial-return levels are not met and deficiencies are not cured.
Approximately 73 percent of U.S. hotel rooms were brand-affiliated in 2025. Based on lodging-industry data, Marriott has an approximately 17 percent share of the U.S. hotel market and a four percent share outside the U.S., measured by rooms.
Our reading: Marriott’s brand portfolio, global reservation and marketing systems, and owner-facing services are a meaningful moat because they are integral to both guest acquisition and hotel-owner affiliation across a large system.
Our reading: Marriott Bonvoy is a meaningful moat because members accounted for majorities of U.S. and global room nights in 2025, and co-branded cards fund the program and add cardholder engagement.
Our reading: Its direct digital channels and technology systems are a moderate moat, but they operate alongside major online travel platforms and search engines.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| Hilton | Global branded hotel lodging and owner affiliations | High |
| IHG Hotels & Resorts | Global branded hotel lodging and owner affiliations | High |
| Hyatt | Global branded hotel lodging and owner affiliations | High |
| Wyndham Hotels & Resorts | Branded lodging and hotel-owner affiliations | High |
| Accor | Global branded hotel lodging and owner affiliations | Medium |
| Choice Hotels | Branded lodging and hotel-owner affiliations | Medium |
| Best Western Hotels & Resorts | Branded lodging and hotel-owner affiliations | Medium |
| Airbnb | Short-term rental alternatives to hotel rooms | High |
Growth opportunities
Marriott’s principal growth path is adding rooms under franchise, management and licensing arrangements, including new construction, conversions from other brands and multi-unit agreements. Its system grew from 9,361 properties and 1,706,331 rooms at year-end 2024 to 9,805 properties and 1,779,936 rooms at year-end 2025. Gross additions included 703 properties and 99,459 rooms, while deletions totaled 253 properties and 25,643 rooms.
At year-end 2025, the development pipeline included approximately 4,100 properties and nearly 610,000 rooms, with over half of rooms outside U.S. & Canada. Management said on the call that the pipeline was 629,000 rooms, including 279,000 rooms under construction. It also said conversions represented 34% of first-half 2026 signings and 40% of openings.
Management said on the call that the company expects full-year 2026 net rooms growth to be toward the low end of its previous 4.5% to 5% range, principally because of construction delays in the Middle East. It said the company expects net rooms to grow in the mid-single-digit range over the next few years.
Other growth avenues include residential branding, midscale expansion, co-branded cards, direct digital channels and technology. Management said on the call that Marriott executed new long-term U.S. co-branded credit-card agreements with JPMorgan Chase and American Express. It also said that Series by Marriott is planned for approximately 100 hotels in Greater China, with first openings expected in 2026, and that Ask Bonvoy has entered phased rollout.
- $13.9BFY2021
- $20.8BFY2022
- $23.7BFY2023
- $25.1BFY2024
- $26.2BFY2025
- $0.03FY2026 guidance
Structural risks
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Hotel demand and competition: Competition can reduce hotel revenue, which can reduce Marriott’s fees and amounts owed to it. Demand also varies by season, and resort properties can be more seasonal depending on location.
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Hotel-owner finances and development: Owners depend on capital to buy, develop and improve hotels. Financing constraints can delay construction, openings and renovations, reduce projects entering the pipeline, cause hotels to leave the system, or impair owners’ ability to meet obligations.
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Agreement termination: Management and other agreements can end early. Some hotel owners may terminate management arrangements when performance metrics or financial returns do not meet defined levels and Marriott does not cure deficiencies.
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Technology, privacy and data security: Disruption to reservation, Loyalty Program or other core systems, or the use of new technologies, could harm the business. The company remains unable to reasonably estimate the range of total possible financial impact beyond recorded expenses from the Starwood Data Security Incident.
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Middle East exposure: Management said on the call that the Middle East conflict was expected to reduce full-year 2026 global RevPAR by about 100 basis points. It also said roughly 35% of Middle East full-year revenue occurs in the fourth quarter, when the region enters peak tourism season.
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Loyalty-program estimates: Estimates of points breakage, card-issued points and certificates, credit-card consideration and stand-alone selling prices affect loyalty liabilities and revenue. A one percent decrease in the estimated breakage of points could increase the loyalty-program liability by approximately $50 million, holding other factors constant.
Bottom line
Our reading
Our reading: Marriott is an asset-light lodging platform whose recurring economics depend primarily on fees from hotel owners, room demand and the continued expansion of its branded system.
Our reading: Marriott Bonvoy, direct booking channels, co-branded cards and centralized systems tie guest demand to hotel-owner affiliation, while management agreements and owner financing needs create operational and development dependencies.
Our reading: The large development pipeline and conversion activity support room-growth opportunities, but Middle East disruption, competitive owner incentives, hotel demand and technology or data-security issues can affect fees and growth.