Marriott (MAR) Q3 2025: Pipeline Surges to 596,000 Rooms as International Outpaces U.S.

November 4, 2025 | By EarningsIQ Research

Marriott’s Q3 2025 results highlight robust global pipeline expansion and accelerating international momentum, even as U.S. select service softness persists. The company is leveraging brand scale, loyalty growth, and conversions to offset tepid RevPAR in mature markets. Ongoing credit card negotiations and tech transformation signal additional earnings levers for 2026 and beyond.

Summary

• International Outperformance: Global pipeline and signings hit record highs, led by Asia-Pacific and Greater China growth.
• Brand and Loyalty Leverage: Marriott Bonvoy membership surged, fueling ancillary revenue and strengthening owner value proposition.
• 2026 Visibility Builds: Management signals stable RevPAR growth and incremental benefit from the 2026 World Cup.

Performance Analysis

Marriott’s Q3 2025 results reflect a business model built on scale, brand power, and fee-based earnings, even as macro headwinds constrain top-line growth in mature regions. The global RevPAR (revenue per available room) rose modestly, with international markets delivering outsized gains—Asia-Pacific (APEC) led with nearly 5% RevPAR growth, while U.S. and Canada saw a slight decline, particularly in select service brands. Luxury and premium segments continued to outperform, affirming the company’s strategic weighting toward higher-end offerings.

Fee revenue growth remains a core earnings driver, up 4% year over year, propelled by net rooms growth and a 13% jump in co-branded credit card fees. Owned, leased, and other revenue also contributed, buoyed by portfolio additions and improved hotel performance. Cost discipline was evident: G&A expenses declined 15%, reflecting last year’s efficiency initiatives. Adjusted EBITDA rose 10%, exceeding guidance, and cash flow generation supported $4 billion in capital returns to shareholders year-to-date.

• Geographic Divergence: International RevPAR up 2.6% versus U.S./Canada down 0.4%, with APEC and EMEA driving growth.
• Segment Skew: Luxury RevPAR rose 4%, while select service softness weighed on U.S. results.
• Fee Engine: Co-branded credit card fees and conversions remain outsized contributors to earnings momentum.

While U.S. business transient and group demand remain subdued, management points to a 7% increase in group booking pace for 2026, and expects World Cup events to provide a further lift. The company’s strong pipeline—now at over 596,000 rooms—positions Marriott for continued net rooms growth in the mid-single digits.

Executive Commentary

Strategic Positioning

1. Global Pipeline Acceleration

Marriott’s record pipeline of 596,000 rooms, with over 250,000 under construction, underscores the company’s ability to attract owners globally despite higher construction costs and financing constraints. Conversions, the process of rebranding existing hotels, accounted for roughly 30% of signings and openings year-to-date, highlighting Marriott’s value proposition for independent owners seeking scale and distribution.

2. Loyalty Ecosystem and Credit Card Leverage

Marriott Bonvoy, the company’s loyalty program, reached nearly 260 million members, up 18% year over year. This scale drives not only repeat business but also ancillary revenue through co-branded credit card partnerships, which now contribute more than half of the program’s funding. Ongoing negotiations for new U.S. credit card deals are expected to unlock further value, with management citing an 80% increase in card accounts and global spend since 2017.

3. Technology and Digital Transformation

Marriott’s multi-year tech transformation, including new property management and reservations systems, is designed to enhance both guest experience and owner economics. Early feedback from hotels on the new platform is positive, and management expects this to be a key driver of top-line and margin improvement as deployment scales globally. The company is also investing in AI to optimize content, business intelligence, and process efficiency.

4. Geographic Diversification and Chain Scale Mix

International markets—especially APEC and Greater China— are generating double-digit rooms growth and a disproportionate share of new signings. Marriott’s pipeline in these regions is weighted toward upscale and midscale brands, reflecting local demand and development economics. In the U.S., select service remains pressured, but conversions and midscale expansion (Studio Res, City Express, Four Points Flex) are mitigating some of the softness.

5. Cost Efficiency and Owner Value Proposition

Marriott continues to drive affiliation cost reductions for owners, with management claiming the lowest affiliation cost relative to revenue in the industry. Enterprise-wide efficiency initiatives are expected to yield $90 million in above-property savings this year, benefiting both the company and its franchisees.

Key Considerations

This quarter’s results highlight the interplay between global growth, fee-based earnings, and ongoing investment in technology and loyalty. Investors should weigh the following:

Key Considerations:

• International Growth Outpaces Domestic: Asia-Pacific and Greater China are driving pipeline and signings, offsetting U.S. select service softness.
• Loyalty and Credit Card Economics: Bonvoy’s scale is translating into robust fee growth and is a critical lever in ongoing credit card negotiations.
• Conversions Drive Portfolio Expansion: One-third of new rooms are conversions, accelerating Marriott’s ability to grow without new construction risk.
• Tech Transformation as Margin Catalyst: New systems and AI initiatives are positioned to unlock revenue and cost efficiencies across the portfolio.
• Owner/Franchisee Health: Affiliation cost reductions and renovation frameworks are supporting owner economics and underpinning future net rooms growth.

Risks

Continued macroeconomic uncertainty, particularly in the U.S. and China, may constrain RevPAR and new build activity. Financing and construction cost headwinds remain a drag on select service development, while competitive pressure in the co-branded credit card space could impact future fee economics. Execution risk around technology transformation and the timing of credit card deal renewals also warrant close monitoring.

Forward Outlook

For Q4 2025, Marriott guided to:

• Global RevPAR growth of 1% to 2%, with international outperformance
• Gross fee revenue growth in the 4% to 5% range

For full-year 2025, management maintained guidance:

• Global RevPAR up 1.5% to 2.5%
• Net rooms growth approaching 5%
• Adjusted EBITDA up 7% to 8% ($5.35B to $5.38B)
• Co-branded credit card fees up ~9%

Management expects:

• 2026 RevPAR growth to mirror 2025, with incremental World Cup benefit (30-35bps globally, concentrated in U.S./Canada)
• Continued higher growth internationally versus U.S. and Canada

Takeaways

Marriott’s Q3 results reinforce the durability of its fee-based model and the strategic value of its global brand and loyalty ecosystem.

• Pipeline Expansion: Record signings and a 596,000-room pipeline provide visibility into multi-year net rooms growth, especially outside the U.S.
• Loyalty as a Competitive Moat: Bonvoy’s scale is driving both direct bookings and lucrative credit card partnerships, with new deals poised to further enhance earnings power.
• Execution Watch: Investors should monitor technology rollout, U.S. select service recovery, and the outcome of credit card negotiations for signals on margin and fee trajectory in 2026 and beyond.

Conclusion

Marriott’s Q3 demonstrates the resilience and adaptability of its business model, with international growth and loyalty economics offsetting mature market pressures. Ongoing investments in technology and owner value proposition position the company to sustain earnings momentum, but macro and competitive risks remain a watchpoint for 2026.

Industry Read-Through

Marriott’s results highlight a continued bifurcation in global lodging: international and high-end segments are outperforming U.S. select service and economy tiers. Conversions and loyalty-driven ancillary revenue are emerging as critical levers for asset-light hotel operators. The scale and integration of loyalty programs—especially when paired with dual credit card partners—are proving to be a durable competitive advantage, suggesting that operators without such ecosystems may face incremental margin and growth pressure. Technology and digital distribution investments are increasingly table stakes for driving owner value and guest engagement across the industry.

MAR Consumer Discretionary Hotels Loyalty Pipeline Conversions Technology International