Near-Term Policy Uncertainty Challenging Marriott's US Demand, but Long-Term Brand Strength Intact

While US consumer sentiment has waned recently, we expect demand for Marriott's brands to endure and for the hotelier's global share to increase further over the next several years, due to its strong intangible assets, the source of its wide moat that is valued by both hotel owners and travelers. In the past few years, Marriott has added several new brands, which support our constructive stance. In fact, recent brands StudioRes, City Express, citizenM, and Four Points not only extend Marriott's reach into the midscale and extended-stay segments but could also add several hundred hotels each over the next several years. Additionally, its August 2024 partnership with Sonder adds about 10,000 rooms to a growing homes, villas, and apartments portfolio, and in 2025, the company acquired citizenM, which added about 8,000 rooms. Further, we believe the 2016 acquisition of Starwood and the 2023 partnership with MGM's Vegas portfolio have strengthened Marriott's long-term brand advantage, as Starwood's global luxury portfolio and MGM's leading presence in the gaming mecca complement Marriott's dominant upper-scale position in North America. Also, we see Marriott as having an industry-leading loyalty program, with 248 million members (as of June 30, 2025), which incentivizes third-party hotel owners to join the company's brands.