Marriott bets that an overly forgiving policy can retain key guests

Core Insights - Marriott has ended its partnership with Sonder, which has filed for Chapter 7 bankruptcy, indicating financial difficulties [1][2] - The hotel chain's net room growth for 2025 is now expected to reach approximately 4.5% following the removal of Sonder properties from its system [2] Financial Performance - Marriott's Q3 2025 earnings report showed mixed results, with luxury hotels contributing positively to revenue and profit [4] - Global revenue per available room (RevPAR) increased by 0.5%, with international markets growing by 2.6%, while the US and Canada saw a decline of 0.4% [8] - Net income for Q3 was $728 million, or $2.67 per share, compared to $584 million, or $2.07 per share in the previous year [8] Market Trends - The luxury segment, which comprises 10% of Marriott's rooms, is expected to outperform in 2025, driven by resilient high-end consumers [6][9] - Experts predict a shift in demand dynamics, with corporate, group, and international travel anticipated to accelerate, benefiting urban markets and higher-priced hotels [9] Strategic Developments - Marriott is undergoing a strategic review of its Customer Engagement Centers, leading to layoffs in customer service staff [11][12] - The company has formalized a "soft landing" policy for elite status customers, allowing for a gradual downgrade rather than a complete loss of status [14][15] Stock Performance - Year-to-date, Marriott's shares have increased by 4.65%, trading at $291.90 per share [16]