Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| System-wide RevPAR growth | 5.8% | year-over-year |
| Adjusted EBITDA | $1.058 billion | up 8.4% year-over-year |
| Management and franchise fees | 9.5% growth | year-over-year |
| Net unit growth | 6.0% | for the quarter |
| Diluted EPS (adjusted) | $2.45 | for the third quarter |
Guidance and outlook
- For the full year 2026, we expect RevPAR growth of 4% to 4.5%.
- For the fourth quarter, we expect system-wide RevPAR growth to be 3% to 3.5%.
- For the fourth quarter, we expect adjusted EBITDA to be between $1.047 billion and $1.067 billion.
- For the fourth quarter, we expect diluted EPS adjusted for special items to be between $2.32 and $2.38.
- For the full year 2026, we expect adjusted EBITDA of between $4.06 billion and $4.08 billion.
- For the full year 2026, we expect diluted EPS adjusted for special items of between $9.07 and $9.13.
How management sounded
Positive (+7 on our -10 to +10 scale). Management exceeded guidance, raised full-year expectations, and expressed strong conviction in their long-term growth algorithm despite specific regional challenges. Management sounded more upbeat than on 48% of the 190 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Q&A summary
2027 Demand Outlook
Asked: Dan Politzer from JPMorgan asked about the demand environment and outlook for 2027.
Answer: Management expects global RevPAR growth in the 3% to 4% range for next year, supported by U.S. momentum and potential normalization in the Middle East and Mexico.
Algorithm Growth
Asked: Lizzie Dove from Goldman Sachs asked about the company's ability to deliver on its growth algorithm given current headwinds.
Answer: Management stated they are confident in delivering algorithm growth, noting that current headwinds like Middle East conflict and timeshare license fees are temporary, not structural.
Development Environment
Asked: Shaun Kelley from Bank of America asked about the development environment and the sustainability of unit growth.
Answer: Management noted that despite higher interest rates, their brands are highly financeable and they continue to take share, maintaining confidence in 6% to 7% annual growth.
AI and Technology
Asked: Brandt Montour from Barclays asked about the impact of AI agents on direct bookings.
Answer: Management views AI as an early-stage opportunity to drive direct relationships and lower costs, leveraging their tech stack to connect with new distribution channels.
What to watch before the next call
- Normalization of RevPAR in the Middle East and Mexico regions.
- Progress on the integration and performance of the ownership portfolio.
- The impact of the new Chief Technology Officer on digital distribution and guest experience initiatives.
- Execution of the RISE 2 initiative expected in the first quarter of next year.
