Marriott International (MAR) 10-K risk factor changes: FY2020 vs FY2019

The events and consequences discussed in these risk factors could, in circumstances we may or may not be able to accurately predict, recognize, or control, have a material adverse effect on our business, [removed: growth, reputation, prospects,] [added: liquidity,] financial condition, [removed: operating] [added: and] results [removed: (including components] of [removed: our financial results), cash flows, liquidity, and stock price.][added: operations.]

[removed: *Our] [added: Our] industry is highly competitive, which may impact our ability to compete successfully for guests with other hotel properties and home sharing or rental [removed: services.*] [added: services.] We operate in markets that contain many competitors.

[removed: *Economic] [added: Economic] downturns and other global, national, and regional conditions could [added: further] impact our financial results and [removed: growth.*] [added: growth.] Because we conduct our business on a global platform, changes in global, national, or regional economies, governmental policies (including in areas such as trade, travel, immigration, healthcare, and related issues), and geopolitical [added: and social] conditions impact our activities.

[removed: Our] [added: As discussed in “Risks Relating to COVID-19,” our] performance [added: has been materially affected by some of these conditions and] could be [added: further] materially affected if these conditions [added: worsen,] arise [added: in the future,] or extend longer than anticipated, or in other circumstances that we are not able to predict or mitigate.

Risks Relating to Our [removed: Integration of Starwood][added: Industry]

[removed: *Premature] [added: Premature] termination of our management or franchise agreements could hurt our financial [removed: performance.*] [added: performance.] Our hotel management and franchise agreements may be subject to premature termination in certain circumstances, such as the bankruptcy of a hotel owner or franchisee, [added: the failure of the hotel owner or franchisee to comply with its payment or other obligations under the agreement,] a failure under some agreements to meet specified financial or performance criteria that are subject to the risks described in this section, which we fail or elect not to cure, or in certain limited cases, other negotiated contractual termination rights.

[removed: Any damages we ultimately collect could be less than the projected future value of the fees and] other amounts we would have otherwise collected under the management or franchise agreement.

A significant loss of [added: these] agreements [removed: due to premature terminations] could hurt our financial performance or our ability to grow our business.

[removed: *The] [added: The] growing significance of our operations outside of the U.S. makes us increasingly susceptible to the risks of doing business internationally, which could lower our revenues, increase our costs, reduce our profits, disrupt our business, or damage our [removed: reputation.* More than a third] [added: reputation. A significant number] of [removed: the] rooms in our system are located outside of the U.S. and its territories.

[removed: This] [added: To the extent that our international operations continue to grow, this] increasingly exposes us to the challenges and risks of doing business outside the U.S., many of which are outside of our control, and which could materially reduce our revenues or profits, materially increase our costs, result in significant liabilities or sanctions, significantly disrupt our business, or significantly damage our reputation.

These challenges [added: and risks] include: (1) compliance with complex and changing laws, regulations and government policies that may impact our operations, such as foreign ownership restrictions, import and export controls, [removed: and] trade [removed: restrictions;] [added: restrictions, and health and safety requirements;] (2) compliance with U.S. and foreign laws that affect the activities of companies abroad, such as competition laws, cybersecurity and privacy laws, [added: data localization requirements,] currency regulations, [added: national security laws, trade] and [added: economic sanctions, and] other laws affecting dealings with certain nations; (3) the difficulties involved in managing an organization doing business in many different countries; (4) uncertainties as to the enforceability of contract and intellectual property rights under local laws; [added: and] (5) rapid changes in government policy, political or civil unrest, acts of terrorism, war, [removed: pandemics,] [added: pandemics] or [added: other health emergencies, border control measures or other travel restrictions, or] the threat of international boycotts or U.S. anti-boycott [removed: legislation; and (6) currency exchange rate fluctuations, which may impact the results and cash flows of our international operations.][added: legislation.]

[removed: *Any] [added: Any] failure by our international operations to comply with anti-corruption laws or trade sanctions could increase our costs, reduce our profits, limit our growth, harm our reputation, or subject us to broader [removed: liability.*] [added: liability.] We are subject to restrictions imposed by the U.S. Foreign Corrupt Practices Act and anti-corruption laws and regulations of other countries applicable to our operations, such as the U.K. Bribery Act.

We are also subject to trade sanctions [added: and regulations] administered by the U.S. Office of Foreign Assets [removed: Control and] [added: Control,] the U.S. Department of Commerce, and [added: other U.S. government agencies, and] authorities in other countries where we do business.

The U.S. or other countries may impose additional sanctions at any time against any country in [removed: which] or with [removed: whom] [added: which, or persons or entities with whom,] we do business.

Depending on the nature of the sanctions imposed, our operations in the relevant country [added: or with the relevant individual or entity] could be restricted or otherwise adversely affected.

In addition, the operation of these laws [added: and regulations] or an imposition of further restrictions in these areas could increase our cost of operations, reduce our [removed: profits] [added: profits,] or cause us to forgo development opportunities, [removed: or] cease operations in certain countries, [added: or limit certain business operations] that would otherwise support growth.

[removed: *Exchange] [added: Exchange] rate fluctuations and foreign exchange hedging arrangements could result in significant foreign currency gains and losses and affect our business [removed: results.*] [added: results.] We earn revenues and incur expenses in foreign currencies as part of our operations outside of the U.S. Accordingly, fluctuations in currency exchange rates may significantly increase the amount of U.S. dollars required for foreign currency expenses or significantly decrease the U.S. dollars we receive from foreign currency revenues.

[removed: foreign] [added: As a result,] exchange [removed: rates] [added: rate changes between foreign currencies] and the U.S. dollar affect the amounts we record for our foreign assets, liabilities, revenues and expenses, and could have a negative effect on our financial results.

We enter into foreign exchange hedging agreements with financial institutions to [removed: reduce exposures] [added: mitigate exposure] to some of the [removed: principal currencies in which we receive management and franchise fees,] [added: foreign currency fluctuations,] but these efforts may not be successful.

[removed: *Risks] [added: Risks] relating to natural or man-made disasters, contagious disease, violence, [removed: and] [added: or] war [removed: could reduce] [added: have reduced] the demand for lodging, which [removed: may] [added: has] adversely [removed: affect] [added: affected] our [removed: revenues.*] [added: revenues.] We have seen a decline in travel and reduced demand for lodging due to so called “Acts of God,” such as hurricanes, earthquakes, tsunamis, floods, volcanic activity, wildfires, and other natural disasters, as well as man-made disasters and the spread of contagious diseases in locations where we own, manage, or franchise [removed: significant] properties and areas of the world from which we draw a large number of guests, and these circumstances could continue or worsen in the future to an extent and for durations that we are not able to predict.

[removed: Any] [added: As with the effects we have already experienced from the COVID-19 pandemic, any] one or more of these events may reduce the overall demand for lodging, limit the [removed: prices] [added: room rates] that [removed: we] can [removed: obtain, or] [added: be charged, and/or] increase our operating costs, all of which could adversely affect our profits.

If a terrorist event or other incident of violence were to involve one or more of our branded properties, demand for our properties in particular could [removed: suffer,] [added: suffer disproportionately,] which could further hurt our revenues and profits.

[removed: *Disagreements] [added: Disagreements] with owners of hotels that we manage or franchise may result in litigation or delay implementation of product or service [removed: initiatives.*] [added: initiatives.] Consistent with our focus on management and franchising, we own very few of our lodging properties.

The nature of our responsibilities under our management agreements to manage each hotel and enforce the standards required for our brands under both management and franchise agreements may be subject to interpretation and will from time to time give rise to disagreements, which may include disagreements over the need for or payment for new product, service or systems initiatives, the timing and amount of capital investments, and reimbursement for [removed: certain] [added: operating costs,] system [removed: initiatives and costs.][added: costs, or other amounts.]

Such disagreements may [removed: be] [added: become] more likely [added: in the current environment and during other periods] when hotel returns are weaker.

We seek to resolve any disagreements to develop and maintain positive relations with current and potential hotel owners, franchisees, and [removed: joint venture] [added: real estate investment] partners, but we cannot always do so.

[added: Our business depends on the quality and reputation of our Company and our brands, and any deterioration could adversely impact our market share, reputation, business, financial condition, or results of operations.] Many [removed: other] factors [removed: also] can [removed: influence our] [added: affect the] reputation [added: of one or more of our properties or brands] and the value of our brands, including service, food quality and safety, safety of our guests and associates, [added: our approach to health and cleanliness, our approach to managing and reducing our carbon footprint,] availability and management of scarce natural resources, supply chain management, [added: ability to protect and use our brands and trademarks,] diversity, human rights, and support for local communities.

Negative incidents could lead to tangible adverse effects on our business, including lost sales, boycotts, reduced enrollment and/or participation in our Loyalty Program, [removed: disruption of access to our websites and reservation systems,] loss of development opportunities, [added: adverse government attention,] or associate retention and recruiting difficulties.

[removed: *If] [added: If] our brands, goodwill or other intangible assets become impaired, we may be required to record significant non-cash charges to [removed: earnings.*] [added: earnings.] As of December 31, [removed: 2019,] [added: 2020,] we had [removed: $17.7] [added: $18.2] billion of goodwill and other intangible assets.

We review goodwill and indefinite-lived intangible assets for impairment annually or whenever events or circumstances indicate [added: impairment may have occurred.]

Because of the significance of our goodwill and other intangible assets, any future impairment of these assets could require material non-cash charges to our results of operations, which could have a material adverse effect on our [added: reported] financial condition and results of operations.

[removed: *Actions] [added: Actions] by our franchisees and licensees or others could adversely affect our image and [removed: reputation.*] [added: reputation.] We franchise and license many of our brand names and trademarks to third parties for lodging, timeshare, [removed: residential,] and [added: residential properties, and with respect to] our credit card programs.

Under the terms of their agreements with us, these [added: third] parties interact directly with guests and others under our brand and trade names.

If these third parties fail to maintain or act in accordance with applicable brand standards; experience operational problems, including any data [added: or privacy] incident involving guest information or a circumstance involving guest or associate health or safety; or project a brand image inconsistent with ours, [added: then] our image and reputation could suffer.

Although our agreements with these parties provide us with recourse and remedies in the event of a breach, including termination of the agreements under certain circumstances, it could be expensive or time consuming for us to [removed: pursue such remedies.]

[removed: *Collective] [added: Collective] bargaining activity and strikes could disrupt our operations, increase our labor costs, and interfere with the ability of our management to focus on executing our business [removed: strategies*.][added: strategies. A significant number of associates at our managed, leased, and owned hotels are covered by collective bargaining agreements.]

If relationships with our organized associates or the unions that represent them become adverse, [added: then] the properties we operate could experience labor disruptions such as strikes, lockouts, boycotts, and public [removed: demonstrations, as we saw in the fourth quarter of 2018.][added: demonstrations.]

Numerous collective bargaining agreements are typically subject to negotiation each year, and our [removed: past] ability [added: in the past] to resolve such negotiations does not mean that we will [added: be able to] resolve future negotiations without strikes, disruptions, or on terms that we consider reasonable.

[removed: Labor] [added: In addition, labor] regulation and the negotiation of new or existing collective bargaining agreements could lead to higher wage and benefit costs, changes in work rules that raise operating [removed: expenses,] [added: expenses and] legal costs, and [added: could impose] limitations on our ability or the ability of our third-party property owners to take cost saving measures during economic downturns.

We do not have the ability to control the negotiations of collective bargaining agreements covering unionized labor employed by [added: the operators of] our [removed: third-party property owners and franchisees.][added: franchised properties.]

Risks Relating to COVID-19

COVID-19 has had a material detrimental impact on our business and financial results, and such impact could continue and may worsen for an unknown period of time.

COVID-19 has been and continues to be a complex and evolving situation, with governments, public institutions and other organizations imposing or recommending, and businesses and individuals implementing, at various times and to varying degrees, restrictions on various activities or other actions to combat its spread, such as restrictions and bans on travel or transportation; limitations on the size of in-person gatherings; closures of, or occupancy or other operating limitations on, work facilities, lodging facilities, food and beverage establishments, schools, public buildings and businesses; cancellation of events, including sporting events, conferences and meetings; and quarantines and lock-downs.

COVID-19 and its consequences have dramatically reduced travel and demand for hotel rooms, which has and will continue to impact our business, operations, and financial results.

The extent to which COVID-19 impacts our business, operations, and financial results will depend on the

factors described above and numerous other evolving factors that we may not be able to accurately predict or assess, including the duration and scope of COVID-19; the availability and distribution of effective vaccines or treatments; COVID-19’s impact on global and regional economies and economic activity, including the duration and magnitude of its impact on unemployment rates and consumer discretionary spending; its short and longer-term impact on the demand for travel, transient and group business, and levels of consumer confidence; the ability of our owners and franchisees to successfully navigate the impacts of COVID-19; and how quickly economies, travel activity, and demand for lodging recovers after the pandemic subsides.

COVID-19 has subjected our business, operations and financial condition to a number of risks, including, but not limited to, those discussed below:

- Risks Related to Revenue: COVID-19 has negatively impacted, and will in the future negatively impact to an extent we are unable to predict, our revenues from managed and franchised hotels, which are primarily based on hotels’ revenues or profits.

In addition, COVID-19 and its impact on global and regional economies, and the hospitality industry in particular, has made it difficult for hotel owners and franchisees to obtain financing on attractive terms, or at all, and increased the probability that hotel owners and franchisees will be unable or unwilling to service, repay or refinance existing indebtedness.

This has caused, and may in the future continue to cause, some lenders to declare a default, accelerate the related debt, foreclose on the property or exercise other remedies, and some hotel owners or franchisees to declare bankruptcy.

If a significant number of our management or franchise agreements are terminated as a result of bankruptcies, sales or foreclosures, our results of operations could be materially adversely affected.

Hotel owners or franchisees in bankruptcy may not have sufficient assets to pay us termination fees or other unpaid fees or reimbursements we are owed under their agreements with us.

Even if hotel owners or franchisees do not declare bankruptcy, the significant decline in revenues for most hotels has impacted the timely payment of amounts owed to us by some hotel owners and franchisees, and could in the future materially impact the ability or willingness of hotel owners and franchisees to fund working capital or pay us other amounts that we are entitled to on a timely basis or at all, which would adversely affect our liquidity.

If a significant number of hotels exit our system as a result of COVID-19, whether as a result of a hotel owner or franchisee bankruptcy, failure to pay amounts owed to us, a negotiated termination, the exercise of contractual termination rights, or otherwise, our revenues and liquidity could be materially adversely affected.

COVID-19 has also materially impacted, and could in the future materially impact, other non-hotel related sources of revenues for us, including for example our fees from our co-brand credit card arrangements, which have been and may continue to be affected by COVID-19’s impact on spending patterns of co-brand cardholders and acquisition of new co-brand cardholders.

Also, testing our intangible assets or goodwill for impairments due to reduced revenues or cash flows could result in additional charges, which could be material.

- Risks Related to Owned and Leased Hotels and Other Real Estate Investments: COVID-19 and its impact on travel has reduced demand at nearly all hotels, including our owned and leased hotels and properties owned by entities in which we have an equity investment.

As a result, most of our owned and leased hotels and properties in which we have an investment are not generating revenue sufficient to meet expenses, which is adversely affecting our income and could in the future more significantly adversely affect the value of our owned and leased properties or investments.

In addition, we have seen and could continue to see entities in which we have an investment experience challenges securing additional or replacement financing to satisfy maturing indebtedness.

As a result of the foregoing, we have recognized, and may in the future be required to recognize, significant non-cash impairment charges to our results of operations.

- Risks Related to Operations: Because of the significant decline in the demand for hotel rooms, we have taken steps to reduce operating costs and improve efficiency, including furloughing a substantial number of our associates and implementing reduced work weeks for other associates, implementing a voluntary transition program for certain associates, eliminating a significant number of above-property and on-property positions, and modifying food and beverage offerings and other services and amenities.

Such steps, and further changes we could make in the future to reduce costs for us or our hotel owners or franchisees (including ongoing property-level restructuring plans), may negatively impact guest loyalty, owner preference, or our ability to attract and retain associates, and our reputation and market share may suffer as a result.

For example, loss of our personnel may cause us to experience operational challenges that impact guest loyalty, owner preference, and our market share, which could limit our ability to maintain or expand our business and could reduce our profits.

Further, reputational damage from, and the financial impact of, position eliminations, furloughs or reduced work weeks could lead associates to depart the Company and could make it harder for us or the managers of our franchised properties to recruit new associates in the future.

In addition, if we or our hotel owners or franchisees are unable to access capital to make physical improvements to our hotels, the quality of our hotels may suffer, which may negatively impact our reputation and guest loyalty, and our revenue and market share may suffer as a result.

We have received demands or requests from labor unions that represent our associates and may face additional demands, whether in the course of our periodic renegotiation of our collective bargaining agreements or otherwise, for additional compensation, healthcare benefits or other terms as a result of COVID-19 that

could increase costs, and we could experience labor disputes or disruptions as we continue to operate under our COVID-19 mitigation and recovery plans.

COVID-19 could also negatively affect our internal control over financial and other reporting, as many of our personnel have departed the Company as a result of our voluntary transition program and position eliminations, and our remaining personnel are often working from home.

In addition, new processes, procedures and controls could be required to respond to changes in our business environment.

- Risks Related to Expenses: COVID-19 has caused us to incur additional expenses and will continue to cause us to incur additional expenses in the future which are not fully reimbursed or offset by revenues.

For example, we have already incurred certain expenses related to furloughs, our voluntary transition program and position eliminations, and we expect additional charges related to our property-level restructuring activities discussed in Note 3 in future periods.

Also, if a hotel closes and has employees covered by an underfunded multi-employer pension plan, we may need to pay withdrawal liability to the plan as result of such closure if it is determined that there has been a complete or partial withdrawal from the plan, and we may be unable to collect reimbursement from the hotel owner.

In addition, COVID-19 could make it more likely that we have to fund shortfalls in operating profit under our agreements with some hotel owners or fund financial guarantees we have made to third-party lenders for the timely repayment of all or a portion of certain hotel owners’ or franchisees’ debt related to hotels that we manage or franchise, beyond the amounts funded or the additional guarantee reserves recorded in 2020.

COVID-19 also makes it more likely our hotel owners or franchisees will default on loans we have made to them or will fail to reimburse us for guarantee advances.

Our ability to recover loans and guarantee advances from hotel operations or from hotel owners or franchisees through the proceeds of hotel sales, refinancing of debt or otherwise may also affect our ability to recycle and raise new capital.

Even in situations where we are not obligated to provide funding to hotel owners, franchisees or entities in which we have a noncontrolling interest, we may choose to provide financial or other types of support to certain of these parties, which could materially increase our expenses.

While governments have and may continue to implement various stimulus and relief programs, it is uncertain whether existing programs will be effective in mitigating the impacts of COVID-19 and, with respect to future programs, to what extent we or our hotel owners or franchisees will be eligible to participate and whether conditions or restrictions imposed under such programs will be acceptable.

As a result of COVID-19, we and our hotel owners and franchisees have experienced and could continue to experience other short or longer-term impacts on costs, for example, related to enhanced health and hygiene requirements.

These effects have and could continue to impact our ability to generate profits even after revenues improve.

- Risks Related to Growth: Our growth has been, and may continue to be, harmed by COVID-19 and its various impacts as discussed above.

Forward-Looking Statements

We make forward-looking statements in Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this Annual Report based on the beliefs and assumptions of our management and on information currently available to us.

Forward-looking statements include information about our possible or assumed future results of operations, which follow under the captions “Business and Overview,” “Liquidity and Capital Resources,” and other statements throughout this Annual Report preceded by, followed by, or that include the words “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” or similar expressions.

Any number of risks and uncertainties could cause actual results to differ materially from those we express in our forward-looking statements, including the risks and uncertainties we describe below and other factors we describe from time to time in our periodic filings with the SEC.

We therefore caution you not to rely unduly on any forward-looking statement.

The forward-looking statements in this Annual Report speak only as of the date of this Annual Report, and we undertake no obligation to update or revise any forward-looking statement, whether due to new information, future developments, or otherwise.

Risks and Uncertainties

Because there is no way to determine in advance whether, or to what extent, any present uncertainty will ultimately impact our business, you should give equal weight to each of the following:

During the last recession when demand for hotel rooms declined significantly, particularly in 2009, we took steps to reduce operating costs and improve efficiency and such cost controls could again become necessary if demand significantly declines.

Our efforts to implement any such changes in a manner designed to maintain guest loyalty, owner preference, and associate satisfaction may not be successful, and our market share may suffer as a result.

In addition, U.S. government travel and travel associated with U.S. government operations are a significant part of our business, which can suffer due to U.S. federal spending cuts, government hiring restrictions, or other spending limitations that may result from presidential or congressional action or inaction, including for example, a U.S. federal government shutdown, such as the partial shutdown that occurred in December 2018 and January 2019.

*Some of the anticipated benefits of combining Starwood and Marriott may still not be realized and challenges related to our integration efforts could have adverse effects on our business.* Although we have achieved substantial benefits from the Starwood Combination, we cannot assure you when or that we will be able to fully realize additional benefits that we anticipated when we decided to acquire Starwood, including enhancing revenues or achieving other operating efficiencies or cost savings.

We also cannot assure you that challenges we encountered with the harmonization of our systems, our Loyalty Program, and other business practices (some of which still place a significant burden on our management and internal resources) will not have significant adverse effects on our business or reputation.

*Program changes associated with our integration efforts could have a negative effect on guest preference or behavior.* Our integration efforts involved significant changes to certain of our guest programs and services, including our Loyalty Program, co-brand credit card arrangements, and consumer-facing technology platforms and services.

While we believe such changes enhance these programs and services for our guests and will drive guest preference and satisfaction, these changes remain subject to various uncertainties, including whether the changes could be negatively perceived by certain guests and consumers, could affect guest preference or could alter reservation, spending or other guest or consumer behavior, all of which could adversely affect our market share, reputation, business, financial condition, or results of operations.

We expect that our international operations, and resulting revenues, will continue to grow.

As a result, changes between the

*Some of our management agreements and related contracts require us to make payments to owners if the hotels do not achieve specified levels of operating profit.* Some of our contracts with hotel owners require that we fund shortfalls if the hotels do not attain specified levels of operating profit.

We may not be able to recover any fundings of such performance guarantees, which could lower our profits and reduce our cash flows.

*Our new programs and new branded products may not be successful.* We cannot assure you that new or newly acquired brands, or any other new programs or products we have recently launched or may launch in the future, will be accepted by hotel owners, potential franchisees, or the traveling public or other guests.

We also cannot be certain that we will recover the costs we incurred in developing or acquiring the brands or any new programs or products, or that those brands, programs, or products will be successful.

*Our business depends on the quality and reputation of our company and our brands, and any deterioration could adversely impact our market share, reputation, business, financial condition, or results of operations.* Certain events, including those that may be beyond our control, could affect the reputation of one or more of our properties or more generally impact the reputation of our brands.

impairment may have occurred.

A significant number of associates at our managed, leased, and owned hotels are covered by collective bargaining agreements.

We require managed hotel owners to procure such coverage or we procure such coverage on their behalf.

For example, in 2018 and 2019 substantial increases in property insurance costs occurred due to the severe and widespread

We have a number of owned and leased properties, which are subject to the risks that generally relate to investments in real property.

We are actively pursuing sales of some of these properties, but equity real estate investments can be difficult to sell quickly, and we may not be able to do so at prices we find acceptable or at all.

For example, new or existing real estate or tax laws can make it more expensive to acquire, develop, or operate and/or expand, modify, or renovate hotels.

When interest rates increase, the cost of acquiring, developing, expanding, or renovating real property increases and real property values may decrease as the number of potential buyers decreases.

Similarly, as financing becomes less available, it becomes more difficult

both to acquire and to sell real property.

Finally, under eminent domain laws, governments can take real property, sometimes for less compensation than the owner believes the property is worth.

*Development and other investing activities that involve our co-investment with third parties may result in disputes and may decrease our ability to manage risk.* We have from time to time invested, and may continue to invest, in partnerships, joint ventures, and other business structures involving our co-investment with third parties.

These investments generally include some form of shared control over the development of the asset or operations of the business and create added risks, including the possibility that other investors in such ventures could become bankrupt or otherwise lack the financial resources to meet their obligations, could have or develop business interests, policies, or objectives that are inconsistent with ours, could take action without our approval (or, conversely, prevent us from taking action without our partner’s approval), or could make requests contrary to our policies or objectives.

Should a venture partner become bankrupt we could become liable for our partner’s share of the venture’s liabilities.

Actions by a co-venturer might subject the assets owned by the venture or partnership to additional risk, such as increased project costs, project delays, or operational difficulties following project completion.

Disagreements with our venture partners may result in litigation.

These risks may be more likely to occur in difficult business environments.

We cannot assure you that our investments through partnerships or joint ventures will be successful in light of these risks.

We are a worldwide operator, franchisor, and licensor of hotel, residential, and timeshare properties in [removed: 134] [added: 133] countries and territories under 30 brand names.

We discuss our operations in the following [added: three] reportable business segments: [removed: North American Full-Service, North American Limited-Service, and] [added: U.S. & Canada;] Asia [removed: Pacific.][added: Pacific; and Europe, Middle East and Africa (“EMEA”).]

Our [removed: Europe, Middle East and Africa, and] Caribbean and Latin America [added: (“CALA”)] operating [removed: segments do] [added: segment does] not [removed: individually] meet the [added: applicable accounting] criteria for separate disclosure as [added: a] reportable [removed: segments.] [added: business segment, and we include its results in “Unallocated corporate and other.”] In January [removed: 2020,] [added: 2021,] we modified our reportable segment structure as a result of a change in the way management intends to evaluate results and allocate resources within the Company.

We earn base management fees [removed: and in] [added: and, under] many [removed: cases] [added: agreements,] incentive management fees from the properties that we manage, and we earn franchise fees on the properties that others operate under franchise agreements with us.

[removed: In] [added: For] our [added: hotels in the] Middle East and Africa and [added: in the] Asia Pacific [removed: regions,] [added: region,] incentive management fees typically consist of a percentage of gross operating profit without adjustment for a specified owner return.

Net house profit is calculated as gross operating profit (also referred to as “house [removed: profit,” which we discuss under the “Performance Measures” section below)] [added: profit”)] less non-controllable expenses such as property insurance, real estate taxes, and capital spending reserves.

[removed: *Data] [added: *Starwood Data] Security Incident*

On November 30, 2018, we announced a data security incident involving unauthorized access to the Starwood reservations [removed: database.][added: database (the “Data Security Incident”).]

In July 2019, the ICO issued a formal notice of intent under the U.K. Data Protection Act 2018 [added: (the “U.K. DPA”)] proposing a fine in the amount of £99 million against the Company in relation to the Data Security [removed: Incident (the “Proposed ICO Fine”).][added: Incident.]

In [removed: the 2019 second quarter,] [added: 2019,] we [removed: recorded an accrual in the full amount of the Proposed ICO Fine] [added: expensed $65 million] for this loss contingency, [removed: and] in the [removed: 2019 fourth quarter, we reduced the accrual to $65 million] [added: “Restructuring and merger-related charges” caption of our Income Statements,] based on the [added: fine initially proposed by the ICO in July 2019 and the] ongoing proceeding.

See Note [removed: 7] [added: 8] for additional information.

As we expected, the cost of such insurance [added: again] increased for our current policy period, and the cost of such insurance could continue to increase [removed: in] [added: for] future [removed: years.][added: policy periods.]

We expect to incur significant expenses associated with the Data Security Incident in future periods, primarily related to legal proceedings and regulatory investigations (including possible [added: additional] fines and penalties), increased expenses and capital investments for information technology and information security and data privacy, and increased expenses for compliance activities and to meet increased legal and regulatory requirements.

See Note [removed: 7] [added: 8] for [added: additional] information related to expenses incurred in [removed: 2018] [added: 2020] and 2019, insurance recoveries, and legal proceedings and governmental investigations related to the Data Security Incident.

We believe [removed: RevPAR,] [added: Revenue per Available Room (“RevPAR”),] which we calculate by dividing room sales for comparable properties by room nights available for the period, is a meaningful indicator of our performance because it measures the period-over-period change in room revenues for comparable properties.

Occupancy, which we calculate by dividing occupied rooms by total rooms [removed: available,] [added: available (including rooms in hotels temporarily closed due to issues related to COVID-19),] measures the utilization of a property’s available capacity.

We define our comparable properties as our properties that were open and operating under one of our brands since the beginning of the last full calendar year (since January 1, [removed: 2018] [added: 2019] for the current period) and have not, in either the current or previous year: [removed: (i)] [added: (1)] undergone significant room or public space renovations or expansions, [removed: (ii)] [added: (2)] been converted between company-operated and franchised, or [removed: (iii)] [added: (3)] sustained substantial property damage or business [removed: interruption.][added: interruption, with the exception of properties closed or otherwise experiencing interruptions related to COVID-19, which we continue to classify as comparable.]

For [removed: 2019] [added: 2020] compared to [removed: 2018,] [added: 2019,] we had [removed: 4,371] [added: 4,641] comparable [removed: North American] [added: U.S. & Canada] properties and [removed: 1,232] [added: 1,340] comparable International properties.

Approximately [removed: 44] [added: 45] percent of added rooms are located outside [removed: North America,] [added: U.S. & Canada,] and [removed: 18] [added: 13] percent are conversions from competitor brands.

[removed: The pipeline] [added: At year-end 2020, we had more than 498,000 rooms in our development pipeline, which] includes hotel rooms under [removed: construction and] [added: construction, hotel rooms] under signed contracts, and [removed: approximately 23,000] [added: roughly 20,000] hotel rooms approved for development but not yet under signed contracts.

At year-end [removed: 2019,] [added: 2020,] we operated, franchised, and licensed the following properties and rooms:

| | [added: | |] Managed | | | | | | [added: | | | | | |] Franchised/Licensed | | | | | | [added: | | | | | |] Owned/Leased | | | | | | [added: | | | | | | | | | | | |] Total | | | | | [added: | | | | | | | | | |]

| | [added: | |] Properties | | | [added: | | |] Rooms | | | [added: | | |] Properties | | | [added: | | |] Rooms | | | [added: | | |] Properties | | | [added: | | |] Rooms | | | [added: | | | | | | | | | | | | | | |] Properties | | | [added: | | |] Rooms | | [added: |]

The following tables present RevPAR, occupancy, and ADR statistics for comparable properties for [removed: 2019, 2019 compared to 2018, 2018,] [added: 2020] and [removed: 2018] [added: 2020] compared to [removed: 2017.][added: 2019.]

| [removed: Comparable] [added: *Comparable] Company-Operated [removed: Properties] [added: Properties*] | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | |]

| | [added: | |] RevPAR | | | | | | | [added: | | | | |] Occupancy | | | | | | | [added: | | | | | | | |] Average Daily Rate | | | | | | [added: | | |]

| | [removed: 2019] | | [added: 2020] | | [added: | | | |] vs. [removed: 2018] [added: 2019] | | | [removed: 2019] | | | [added: 2020 | | | | | |] vs. [removed: 2018] [added: 2019] | | | | [removed: 2019] | | | | [added: | 2020 | | | | | |] vs. [removed: 2018] [added: 2019] | | [added: |]

| [removed: Comparable] [added: *Comparable] Systemwide [removed: Properties] [added: Properties*] | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | |]

[removed: | (4) | Includes Asia Pacific, Caribbean & Latin America, Europe,] [added: (1)Includes Europe] and Middle East & Africa. [removed: |]

[removed: | (5) | Includes North American - All] [added: (3)Includes U.S. & Canada] and International - All. [removed: |]

| *($ in millions)* | [added: | | 2020 | | | | | |] 2019 | | | | [removed: 2018] | | | | [removed: 2017] | | | | Change [removed: 2019] [added: 2020] vs. [removed: 2018] [added: 2019] | | | | | | | [removed: Change 2018 vs. 2017] | | | | | | [added: | | | | | | | |]

| Base management fees | [added: | |] $ | [removed: 1,180] [added: 443] | | | [added: | |] $ | [removed: 1,140] [added: 1,180] | | | [removed: $] | [removed: 1,102] | | | [added: | | | |] $ | [removed: 40] [added: (737)] | | | [removed: 4] | [added: | (62) | |] % | | [removed: $] | [removed: 38] | | | [removed: 3] | [removed: %] | [added: | | | | |]

| Incentive management fees | [removed: 637] | | [added: 87] | | [removed: 649] | | | | [removed: 607] [added: 637] | | | | [removed: (12] | | [removed: )] | | [removed: (2] | [removed: )%] | | [removed: 42] | [added: (550)] | | | [removed: 7] | [added: | | (86) | |] % | [added: | | | | | | | | | | | |]

| Gross fee revenues | [added: | | 1,683 | | | | | |] 3,823 | | | | [removed: 3,638] | | | | [removed: 3,295] | | | | [removed: 185] [added: (2,140)] | | | | [removed: 5] | [added: | (56) | |] % | | [removed: 343] | | | | [removed: 10] | [removed: %] | [added: | | | | |]

| Contract investment amortization | [removed: (62] | | [removed: )] [added: (132)] | | [removed: (58] | | [removed: )] | | [removed: (50] [added: (62)] | | [removed: )] | | [removed: 4] | | | | [removed: 7] | [removed: %] | | [removed: 8] | [added: 70] | | | [removed: 16] | [added: | | 113 | |] % | [added: | | | | | | | | | | | |]

| Net fee revenues | [added: | |] $ | [removed: 3,761] [added: 1,551] | | | [added: | |] $ | [removed: 3,580] [added: 3,761] | | | [removed: $] | [removed: 3,245] | | | [added: | | | |] $ | [removed: 181] [added: (2,210)] | | | [removed: 5] | [added: | (59) | |] % | | [removed: $] | [removed: 335] | | | [removed: 10] | [removed: %] | [added: | | | | |]

In [removed: 2019 and 2018,] [added: 2020,] we earned incentive management fees from [removed: 72] [added: 37] percent of our managed properties [removed: worldwide.][added: worldwide, compared to 72 percent in 2019.]

We earned incentive management fees from [removed: 57] [added: 3] percent of managed properties in [removed: North America] [added: U.S. & Canada] and [removed: 81] [added: 56] percent of managed properties outside [removed: North America] [added: U.S. & Canada] in [removed: 2019,] [added: 2020,] compared to [removed: 59] [added: 57] percent in [removed: North America] [added: U.S. & Canada] and [removed: 82] [added: 81] percent outside [removed: North America] [added: U.S. & Canada] in [removed: 2018.][added: 2019.]

In addition, [removed: 65] [added: 92] percent of our total incentive management fees in [removed: 2019] [added: 2020] came from our managed properties outside [removed: North America] [added: U.S. & Canada, primarily in Asia Pacific,] versus [removed: 63] [added: 65] percent in [removed: 2018.][added: 2019.]

| Owned, leased, and other revenue | [added: | |] $ | [removed: 1,612] [added: 568] | | | [added: | |] $ | [removed: 1,635] [added: 1,612] | | | [removed: $] | [removed: 1,752] | | | [added: | | | |] $ | [removed: (23] [added: (1,044)] | [removed: )] | | [removed: (1] | [removed: )%] | [added: (65)] | [removed: $] | [removed: (117] [added: %] | [removed: )] | | [removed: (7] | [removed: )%] | [added: | | | | | | | |]

*A discussion regarding our financial condition and results of operations for year-end 2019 compared to year-end 2018 can be found in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as filed with the SEC on February 27, 2020.*

Beginning with the 2021 first quarter, we will report the following two operating segments: U.S. & Canada and International.

Additionally, we earn franchise fees for use of our intellectual property, including fees from our co-brand credit card, timeshare, and residential programs.

In October 2020, the ICO issued a final decision under the U.K. DPA, which includes a fine of £18.4 million.

The Company did not appeal the ICO’s decision, but has made no admission of liability in relation to the decision or the underlying allegations.

In 2020, we recorded a $39 million reversal of expense, based on the ICO’s issuance of the final decision.

We paid a portion of the ICO fine in the 2020 fourth quarter, and the remainder is payable over the next two years.

Our accrual for this loss contingency, which we present in the “Accrued expenses and other” and “Other noncurrent liabilities” captions of our Balance Sheets, was $65 million at year-end 2019 and $17 million at year-end 2020.

*Impact of COVID-19*

COVID-19 continues to have a material impact on our business, our Company, and our industry.

COVID-19 first impacted our business in Greater China beginning in January 2020, moved quickly into the rest of Asia Pacific and the European markets, and spread globally by March 2020.

As the pandemic accelerated around the world, worldwide comparable systemwide constant dollar RevPAR fell sharply.

Global occupancy levels and RevPAR have since improved compared to the extremely low levels reached in April 2020, but the pace of recovery generally slowed in most regions in the 2020 fourth quarter and into January 2021 due to the sharp rise in COVID-19 cases.

As a result, our fee revenue and revenue from owned and leased properties declined significantly during 2020, and we expect that there will not be a significant rebound in travel and lodging demand until there is widespread distribution of effective vaccines.

Worldwide comparable systemwide constant dollar RevPAR declined 23 percent in the 2020 first quarter, 84 percent in the 2020 second quarter, 66 percent in the 2020 third quarter, and 64 percent in the 2020 fourth quarter, compared to the same periods in 2019.

Worldwide, approximately six percent of our hotels were closed as of February 15, 2021, compared to the peak of more than 25 percent closed on April 26, 2020.

However, the progress of recovery is uneven.

The spread of COVID-19 has constrained and continues to constrain the speed of recovery and will continue to have a dampening impact on demand.

Demand is still being primarily driven by leisure travelers, and we have not seen meaningful demand return from business and group travelers.

Of our geographic regions, Greater China experienced the greatest improvement in demand compared to the 2020 second quarter, driven initially by domestic leisure travel with business transient and group business improving through the year, while demand in the rest of Asia Pacific has generally improved at a much slower pace.

In our Europe, Middle East, and Africa region, leisure demand drove RevPAR improvements in the 2020 third quarter compared to the 2020 second quarter, though increases in COVID-19 cases in Europe and resulting increases in government restrictions began anew in September 2020, which negatively impacted the recovery in the 2020 fourth quarter.

In U.S. & Canada, demand improved during the remainder of 2020 from the lows seen in April 2020, primarily driven by leisure travel and by travelers within driving range of their destinations.

We continue to take substantial measures to mitigate the negative financial and operational impacts for our hotel owners and our own business.

Business contingency plans have been implemented around the world, and we continue to adjust these in response to the global situation.

At the corporate level, our actions to date have substantially reduced the monthly run rate of corporate general and administrative costs compared to the monthly costs initially budgeted for 2020, excluding our provision for credit losses.

We reduced spending on capital expenditures and other investments, and as previously announced, we suspended share repurchases and cash dividends.

We have taken a number of steps to reorganize the Company in response to the decline in lodging demand caused by COVID-19.

We implemented temporary furloughs and reduced work week schedules for both above-property and on-property associates, most of which ended in September 2020 for above-property associates.

As part of the realignment of our organization, we implemented a voluntary transition program for certain associates, and we eliminated a significant number of positions.

While we have substantially completed the programs related to our above-property organization, we are continuing to develop restructuring plans, which could result in additional on-property position eliminations, to achieve cost savings specific to each of our company-operated properties.

At the property level, we continue to work with owners and franchisees to lower their cash outlays.

The steps we have taken to date include deferring renovations, certain hotel initiatives and brand standard audits for hotel owners and franchisees; reducing the amount of certain charges for systemwide programs and services; offering a delay in payment terms for certain charges in the 2020 second quarter; supporting owners and franchisees who are working with their lenders to utilize furniture, fixtures, and equipment (FF&E) reserves to meet working capital needs; and waiving required FF&E funding through 2021.

We have significantly lowered the reimbursed expenses we incur on behalf of our owners and franchisees to provide centralized programs and services such as the Loyalty Program, reservations, marketing and sales, which we generally collect through cost reimbursement revenue on the basis of hotel revenue or program usage.

In 2020, we applied for Employee Retention Tax Credit refunds from the U.S. Treasury under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) totaling $164 million.

In the 2020 fourth quarter, we received $119 million, $94 million of which we passed through to the related hotels that we manage on behalf of owners.

We expect to receive the remaining refund in 2021, the majority of which we expect will inure to the benefit of our hotel owners.

We continue to evaluate the availability of credits and benefits under the CARES Act and other legislation.

The impact of COVID-19 on the Company remains fluid, as does our corporate and property-level response, and we expect to continue to assess and may implement additional measures to adapt our operations and plans as we continue to evaluate the implications of COVID-19 on our business.

The overall operational and financial impact is highly dependent on

the breadth and duration of COVID-19, including the availability and distribution of effective vaccines or treatments, and could be affected by other factors we are not currently able to predict.

Beginning with the first quarter of 2020, we will present the following reportable business segments: North America; Asia Pacific; and Europe, Middle East, and Africa.

Our Caribbean and Latin America operating segment will be included in a combined Caribbean and Latin America and “Unallocated corporate” caption.


Our emphasis on long-term management contracts and franchising tends to provide more stable earnings in periods of economic softness, while adding new hotels to our system generates growth, typically with little or no investment by the Company.

This strategy has driven substantial growth while minimizing financial leverage and risk in a cyclical industry.

In addition, we believe minimizing our capital investments and adopting a strategy of recycling our investments maximizes and maintains our financial flexibility.

We remain focused on doing the things that we do well; that is, selling rooms, taking care of our guests, and making sure we control costs both at company-operated properties and at the corporate level (“above-property”).

We provide our guests new and memorable experiences through our portfolio of brands, innovative technology, personalized guest recognition, and access to travel experiences through our Marriott Bonvoy Tours & Activities program.

Our brands remain strong due to our skilled management teams, dedicated associates, superior guest service with an emphasis on guest and associate satisfaction, significant distribution, Loyalty Program, multichannel reservation systems, and desirable property amenities.

We strive to effectively leverage our size and broad distribution.

We believe that our Loyalty Program generates substantial repeat business that might otherwise go to competing hotels, and we strategically market to the program’s large and growing member base to generate revenue.

We, along with owners and franchisees, continue to invest in our brands by means of new, refreshed, and reinvented properties, new room and public space designs, and enhanced amenities, technology offerings, and guest experiences.

We address, through various means, hotels in our system that do not meet our standards.

We continue to enhance the appeal of our proprietary, information-rich, and easy-to-use websites, and of our associated mobile applications, through functionality and service improvements.

Our profitability, as well as that of owners and franchisees, has benefited from our approach to property-level and above-property productivity.

Managed properties in our system continue to maintain tight cost controls.

We also control above-property costs, some of which we allocate to hotels, by remaining focused on systems, processing, and support areas.

To date, we have not seen a meaningful impact on demand as a result of the Data Security Incident.

We mutually agreed with the ICO to an extension of the regulatory process until June 1, 2020 and the ICO proceeding is ongoing.

For 2018 compared to 2017, we had 4,109 comparable North American properties and 1,173 comparable International properties.

We also believe company-operated house profit margin, which is the ratio of property-level gross operating profit to total property-level revenue, is a meaningful indicator of our performance because this ratio measures our overall ability as the operator to produce property-level profits by generating sales and controlling the operating expenses over which we have the most direct control.

House profit includes room, food and beverage, and other revenue and the related expenses including payroll and benefits expenses, as well as repairs and maintenance, utility, general and administrative, and sales and marketing

expenses.

House profit does not include the impact of management fees, furniture, fixtures and equipment replacement reserves, insurance, taxes, or other fixed expenses.

*Business Trends*

Our 2019 full-year results reflected a year-over-year increase in the number of properties in our system, strong demand for our brands in many markets around the world, and generally favorable economic conditions.

Comparable worldwide systemwide RevPAR for 2019 increased 1.3 percent to $117.30, ADR increased 0.8 percent on a constant dollar basis to $160.55, and occupancy increased 0.4 percentage points to 73.1 percent, compared to 2018.

In North America, RevPAR increased modestly in 2019, driven by higher ADR, partially constrained by new lodging supply in certain markets.

In our Asia Pacific segment in 2019, RevPAR growth was driven by India and major urban markets in Greater China but was partially constrained by lower demand in Hong Kong.

Our Europe region experienced higher demand in 2019, led by strong demand from U.S. travelers in the U.K., Italy, and Spain.

In our Middle East and Africa region, RevPAR remained relatively stable in 2019 due to RevPAR growth in Africa, partially offset by ongoing geopolitical and economic instability and supply growth in the Middle East.

RevPAR grew across our Caribbean and Latin America region, driven by higher ADR, partially constrained by lower demand in Mexico.

For our company-operated properties, we continue to focus on enhancing property-level house profit margins and making productivity improvements.

North American company-operated house profit margins decreased by 20 basis points in 2019 compared to 2018 at comparable properties, primarily due to wage increases and modest RevPAR growth, partially offset by cost controls and synergy savings from the Starwood Combination.

International company-operated house profit margins increased by 20 basis points in 2019 compared to 2018 at comparable properties, primarily due to RevPAR growth in our Asia Pacific segment and Europe region and cost controls and synergy savings from the Starwood Combination.

The Coronavirus outbreak currently is impacting our operations in China and other parts of our Asia Pacific segment by necessitating the closure of numerous hotels in mainland China and significantly reducing demand in Greater China and certain other Asia Pacific markets.

We cannot presently estimate the overall operational and financial impact, which could be material to our 2020 results, and which is highly dependent on the breadth and duration of the outbreak and could be affected by other factors we are not currently able to predict.

In 2019, we added 516 properties with 78,142 rooms around the world across our portfolio of brands.

In 2019, 70 properties (11,908 rooms) exited our system.

At year-end 2019, our development pipeline grew to a record 515,000 rooms, with more than half located outside of North America.

We are also subject to risk from changes in debt prices from our investments in debt securities and fluctuations in stock price from our [removed: investment] [added: investments] in [removed: a] publicly traded [removed: company.][added: companies.]

We use derivative instruments, including cash flow hedges, [added: fair value hedges,] net investment in non-U.S. operations hedges, and other derivative instruments, as part of our overall strategy to manage our exposure to market risks associated with fluctuations in interest rates and currency exchange rates.

The following table sets forth the scheduled maturities and the total fair value as of year-end [removed: 2019] [added: 2020] for our financial instruments that are impacted by market risks:

| | [added: | |] Maturities by Period | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | |]

| *($ in millions)* | [removed: 2020] | | [added: 2021] | | [removed: 2021] | | | | 2022 | | | | [added: | |] 2023 | | | | [added: | |] 2024 | | | | [removed: There- after] | | [added: 2025] | | [removed: Total Carrying Amount] | | | | [removed: Total Fair Value] [added: There- after] | | | [added: | | | Total Carrying Amount | | | | | | Total Fair Value | | |]

| Assets - Maturities represent expected principal receipts, fair values represent assets. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | |]

| Fixed-rate notes receivable | [added: | |] $ | [removed: 5] [added: 2] | | | [added: | |] $ | [removed: 3] [added: 2] | | | [added: | |] $ | [removed: 3] [added: 1] | | | [added: | |] $ | 1 | | | [added: | |] $ | 1 | | | [added: | |] $ | [removed: 31] [added: 35] | | | [added: | |] $ | [removed: 44] [added: 42] | | | [added: | |] $ | [removed: 44] [added: 33] | |

| Average interest rate | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 1.27] | | [added: | | | | | | | | | | | | 0.83 | |] % | | | | | [added: | |]

| Floating-rate notes receivable | [added: | |] $ | [removed: 4] [added: 2] | | | [added: | |] $ | [removed: 29] [added: 83] | | | [added: | |] $ | [removed: 25] [added: 1] | | | [added: | |] $ | [removed: 1] [added: 13] | | | [added: | |] $ | [removed: 7] [added: 1] | | | [added: | |] $ | [removed: 16] [added: 21] | | | [added: | |] $ | [removed: 82] [added: 121] | | | [added: | |] $ | [removed: 77] [added: 112] | |

| Average interest rate | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 4.36] | | [added: | | | | | | | | | | | | 3.77 | |] % | | | | | [added: | |]

| Liabilities - Maturities represent expected principal payments, fair values represent liabilities. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | |]

| Average interest rate | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 3.44] | | [added: | | | | | | | | | | | | 4.06 | |] % | | | | | [added: | |]

| Average interest rate | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 2.30] | | [added: | | | | | | | | | | | | 1.63 | |] % | | | | | [added: | |]

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Fixed-rate debt | | | $ | (849) | | | | | $ | (572) | | | | | $ | (674) | | | | | $ | — | | | | | $ | (2,293) | | | | | $ | (3,804) | | | | | $ | (8,192) | | | | | $ | (9,100) | |

| Floating-rate debt | | | $ | (317) | | | | | $ | (228) | | | | | $ | — | | | | | $ | (1,486) | | | | | $ | — | | | | | $ | — | | | | | $ | (2,031) | | | | | $ | (2,035) | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Fixed-rate debt | $ | (422 | ) | | $ | (859 | ) | | $ | (1,107 | ) | | $ | (686 | ) | | $ | (14 | ) | | $ | (2,543 | ) | | $ | (5,631 | ) | | $ | (5,880 | ) |

| Floating-rate debt | $ | (549 | ) | | $ | (299 | ) | | $ | (543 | ) | | $ | — | | | $ | (3,761 | ) | | $ | — | | | $ | (5,152 | ) | | $ | (5,179 | ) |

| | |

| --- | --- |

We believe that our [added: brand] portfolio [removed: of brands, shown in the following table, is] [added: offers] the [removed: largest and] most compelling range of brands and [removed: properties of any lodging company] [added: hotels] in [removed: the world.][added: hospitality.]

[removed: ][added: ]

In January [removed: 2020,] [added: 2021,] we modified our reportable segment structure as a result of a change in the way management intends to evaluate results and allocate resources within the Company.

We refer to [removed: our business associated with brands that were in our portfolio before] the Starwood [removed: Combination as “Legacy-Marriott” and to the Starwood] business and brands that we acquired as “Legacy-Starwood.”

For further information about [removed: the Data Security Incident,] [added: COVID-19’s impact to our business,] see Part [added: I, Item 1A “Risk Factors” and Part] II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations” and “Data Security Incident” in Note 7 in Part II, Item 8.][added: Operations.”]

At year-end [removed: 2019,] [added: 2020,] we had [removed: 2,144] [added: 2,149] company-operated properties [removed: (584,879] [added: (585,132] rooms), which included properties under long-term management or lease agreements with property owners (management and lease agreements together, the “Operating Agreements”), properties that we own, and home and condominium communities for which we manage the related owners’ associations.

Such agreements are generally for initial periods of [removed: 20] [added: 15] to 30 years, with options for us to renew for up to [removed: 50] [added: 10] or more additional years.

[removed: *Franchised, Licensed,] [added: *Franchised] and [removed: Unconsolidated Joint Venture] [added: Licensed] Properties*

We have [removed: franchising, licensing,] [added: franchising] and [removed: joint venture programs] [added: licensing arrangements] that permit hotel owners and operators to use many of our lodging brand names and systems.

Under our hotel franchising [removed: programs,] [added: arrangements,] we generally receive an initial application fee and continuing royalty fees, which typically range from four to seven percent of room revenues for all brands, plus two to three percent of food and beverage revenues for certain full-service brands.

Franchisees [removed: and certain joint ventures] contribute to our marketing and advertising programs and pay fees for use of our centralized reservation systems.

At year-end [removed: 2019,] [added: 2020,] we had [removed: 5,205] [added: 5,493] franchised and licensed properties [removed: (796,042] [added: (837,912] rooms).

We have used or licensed [removed: our] [added: the] JW Marriott, The Ritz-Carlton, Ritz-Carlton Reserve, W, The Luxury Collection, St. Regis, EDITION, Bulgari, [added: Renaissance, Le Méridien,] Marriott, Sheraton, Westin, Four Points, Delta and Autograph Collection brand names and trademarks for residential real estate sales.

In general, business at company-operated and franchised properties fluctuates moderately with the [removed: seasons and is relatively stable.][added: seasons.]

[removed: We believe that our brand portfolio offers the largest and most compelling range of] [added: Our Classic] brands [removed: and properties in hospitality, with two overall styles of hotels -- Classic, offering] [added: offer] time-honored hospitality for the modern traveler, and [removed: Distinctive, offering] [added: our Distinctive brands offer] memorable experiences with a unique perspective [removed: --] [added: -] each of which we group into three quality tiers: Luxury, Premium, and Select.

Select offers smart and easy amenities and [removed: services] [added: services,] with our longer stay brands offering amenities that mirror the comforts of home.

The following table shows the geographic distribution of our brands at year-end [removed: 2019:][added: 2020:]

| | | [removed: North America] | [added: | | | U.S. & Canada | | |] Europe | [added: | |] Middle East & Africa | [added: | |] Asia Pacific | [added: | |] Caribbean & Latin America | [added: | |] Total | [added: | |]

| Luxury | | | | | | | | [added: | | | | | | | | | | | | | | | |]

| JW Marriott® | [added: | |] Properties | [removed: 30] | [added: | 34 | | |] 7 | [added: | |] 6 | [removed: 40] | [added: | 42 | | |] 13 | [removed: 96] | [added: | 102 | | |]

| The Ritz-Carlton® | [added: | |] Properties | [added: | |] 39 | [added: | |] 13 | [added: | |] 13 | [removed: 33] | [added: | 36 | | |] 8 | [removed: 106] | [added: | 109 | | |]

| W® Hotels | [added: | |] Properties | [removed: 26] | [added: | 24 | | |] 7 | [added: | |] 5 | [removed: 14] | [removed: 6] | [removed: 58] [added: 16] | [added: | | 7 | | | 59 | | |]

| The Luxury Collection® (1) | [added: | |] Properties | [removed: 16] | [removed: 47] | [added: 17 | | | 48 | | |] 10 | [removed: 31] | [added: | 30 | | |] 14 | [removed: 118] | [added: | 119 | | |]

| St. Regis® | [added: | |] Properties | [added: | |] 10 | [added: | |] 7 | [removed: 5] | [added: | 6 | | |] 20 | [added: | |] 3 | [removed: 45] | [added: | 46 | | |]

| Rooms | [added: | |] 1,968 | [added: | |] 1,002 | [removed: 1,426] | [removed: 4,812] | [added: 1,788 | | | 4,811 | | |] 448 | [removed: 9,656] | | [added: 10,017 | | | | | |]

| EDITION® | [added: | |] Properties | [added: | |] 4 | [added: | |] 3 | [added: | |] 1 | [removed: 2] | [added: | 3 | | |] — | [removed: 10] | [added: | 11 | | |]

| Rooms | [added: | |] 1,209 | [added: | |] 381 | [added: | |] 255 | [removed: 651] | [added: | 852 | | |] — | [removed: 2,496] | | [added: 2,697 | | | | | |]

| Bulgari® | [added: | |] Properties | [added: | |] — | [added: | |] 2 | [added: | |] 1 | [added: | |] 3 | [added: | |] — | [added: | |] 6 | [added: | |]

| Rooms | [added: | |] — | [added: | |] 143 | [added: | |] 120 | [added: | |] 260 | [added: | |] — | [added: | |] 523 | | [added: | | | |]

| Premium | | | | | | | | [added: | | | | | | | | | | | | | | | |]

| Marriott Hotels® | [added: | |] Properties | [added: | |] 340 | [removed: 97] | [removed: 25] | [removed: 83] [added: 100] | [removed: 30] | [removed: 575] | [added: 26 | | | 90 | | | 29 | | | 585 | | |]

| Westin® | [added: | |] Properties | [added: | |] 130 | [removed: 18] | [added: | 17 | | |] 7 | [added: | |] 58 | [removed: 12] | [added: | 13 | | |] 225 | [added: | |]

| Renaissance® Hotels | [added: | |] Properties | [removed: 86] | [removed: 34] | [added: 87 | | | 33 | | |] 4 | [removed: 42] | [added: | 43 | | |] 9 | [removed: 175] | [added: | 176 | | |]

| Le Méridien® | [added: | |] Properties | [removed: 21] | [removed: 15] | [removed: 23] [added: 22] | [removed: 49] | [added: | 16 | | | 22 | | | 47 | | |] 2 | [removed: 110] | [added: | 109 | | |]

| Autograph Collection® Hotels (2) | [added: | |] Properties | [removed: 108] | [removed: 53] | [removed: 9] [added: 123] | [removed: 9] | [added: | 54 | | | 7 | | | 12 | | |] 13 | [removed: 192] | [added: | 209 | | |]

| Delta Hotels by [removed: MarriottTM] [added: Marriott®] (Delta Hotels®) | [added: | |] Properties | [removed: 72] | [added: | 77 | | |] 5 | [removed: 1] | [added: |] 1 | [added: | | 2 | | |] — | [removed: 79] | [added: | 85 | | |]

| Gaylord Hotels® | [added: | |] Properties | [added: | |] 6 | [added: | |] — | [added: | |] — | [added: | |] — | [added: | |] — | [added: | |] 6 | [added: | |]

| Rooms | [added: | |] 9,918 | [added: | |] — | [added: | |] — | [added: | |] — | [added: | |] — | [added: | |] 9,918 | | [added: | | | |]

| Marriott Executive Apartments® | [added: | |] Properties | [added: | |] — | [added: | |] 4 | [removed: 9] | [removed: 17] | [added: 10 | | | 18 | | |] 2 | [removed: 32] | [added: | 34 | | |]

| Tribute Portfolio® | [added: | |] Properties | [removed: 21] | [removed: 8] | [added: 26 | | | 11 | | |] — | [added: | |] 8 | [added: | |] 3 | [removed: 40] | [added: | 48 | | |]

The following table shows our portfolio of brands at year-end 2020.

We discuss our operations in the following three reportable business segments: United States and Canada (“U.S. & Canada”), Asia Pacific, and Europe, Middle East and Africa (“EMEA”).

Our Caribbean and Latin America (“CALA”) operating segment does not meet the applicable accounting criteria for separate disclosure as a reportable business segment, and we include its results in “Unallocated corporate and other.” In the 2020 fourth quarter, we changed the name of our largest segment from “North America” to “U.S. & Canada.” Other than the name change, we made no other changes to the composition of this segment.

Beginning with the 2021 first quarter, we will report the following two operating segments: U.S. & Canada and International.

*COVID-19*

COVID-19 has had an unprecedented impact on the travel industry and the Company.

As the virus and efforts to contain it spread around the world, demand at our hotels dropped significantly.

While 2020 generally got off to a great start, we saw sudden, sharp declines in hotel occupancy, beginning in Greater China in January 2020 and then extending around the world.

In April 2020, comparable systemwide constant dollar RevPAR experienced a record decline, decreasing 90 percent worldwide compared to the prior year period, and 27 percent of our hotels were temporarily closed.

Although business at our hotels improved throughout the remainder of 2020 as compared to the extremely low levels in April 2020, COVID-19 continues to constrain recovery and to have a significant negative impact on demand.

COVID-19 also resulted in significantly lower new room additions than we had budgeted for 2020 and historically high levels of cancellations by group and other travelers for future periods.

As a result, our revenues and profitability declined dramatically in 2020 compared to 2019.

We continue to take substantial measures to mitigate the negative financial and operational impacts of COVID-19 for our hotel owners and our own business, and we remain focused on taking care of our guests and associates.

We have made significant changes to our business and enhanced our liquidity position, while remaining focused on how to best position ourselves for recovery and for growth over the longer term.

At the property level, we implemented plans to help our hotel owners and franchisees reduce their cash outlays and mitigate costs, and we implemented a multi-pronged platform to elevate cleanliness standards and hospitality norms for the health and safety of our guests and associates.

At the corporate level, we made significant cuts in general and administrative costs and spending on capital and other investments.

We have substantially completed our above-property restructuring program, and we have implemented and are continuing to develop restructuring plans to achieve cost savings specific to each of our company-operated properties.

With the steps we have taken, and any additional measures we may take to adapt our operations and plans to the evolving situation, along with the power of our Marriott Bonvoy loyalty program, our strengthened liquidity position, and our incredible team of associates around the world, we believe that our business is well positioned now and for the future.

Our brands are categorized by style of offering - Classic and Distinctive.

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Rooms | | | 18,658 | | | 2,205 | | | 3,325 | | | 15,574 | | | 3,597 | | | 43,359 | | | | | |

| Rooms | | | 11,833 | | | 3,080 | | | 3,523 | | | 8,754 | | | 2,081 | | | 29,271 | | | | | |

| Rooms | | | 7,182 | | | 1,423 | | | 1,850 | | | 4,245 | | | 1,752 | | | 16,452 | | | | | |

| Rooms | | | 5,090 | | | 7,092 | | | 2,369 | | | 7,715 | | | 1,188 | | | 23,454 | | | | | |

| Rooms | | | 133,972 | | | 25,946 | | | 8,110 | | | 30,008 | | | 7,789 | | | 205,825 | | | | | |

| Sheraton® | | | Properties | | | 183 | | | 62 | | | 30 | | | 136 | | | 31 | | | 442 | | |

| Rooms | | | 70,245 | | | 16,900 | | | 9,299 | | | 49,399 | | | 8,613 | | | 154,456 | | | | | |

| Rooms | | | 52,705 | | | 5,686 | | | 1,839 | | | 17,751 | | | 3,819 | | | 81,800 | | | | | |

| Rooms | | | 28,880 | | | 7,846 | | | 1,035 | | | 14,972 | | | 2,745 | | | 55,478 | | | | | |

| Rooms | | | 4,748 | | | 4,997 | | | 6,588 | | | 12,683 | | | 271 | | | 29,287 | | | | | |

| Rooms | | | 25,449 | | | 6,468 | | | 1,640 | | | 3,245 | | | 3,751 | | | 40,553 | | | | | |

| Rooms | | | 18,226 | | | 728 | | | 360 | | | 978 | | | — | | | 20,292 | | | | | |

| Rooms | | | — | | | 361 | | | 1,116 | | | 3,161 | | | 240 | | | 4,878 | | | | | |

| Rooms | | | 4,571 | | | 1,139 | | | — | | | 1,106 | | | 155 | | | 6,971 | | | | | |

| Rooms | | | 853 | | | 799 | | | — | | | — | | | — | | | 1,652 | | | | | |

| Rooms | | | 146,913 | | | 13,551 | | | 1,684 | | | 18,454 | | | 6,717 | | | 187,319 | | | | | |

| Rooms | | | 105,273 | | | 1,569 | | | 294 | | | — | | | 544 | | | 107,680 | | | | | |

| Rooms | | | 99,901 | | | — | | | — | | | 9,300 | | | 1,863 | | | 111,064 | | | | | |

| Rooms | | | 57,590 | | | — | | | — | | | — | | | — | | | 57,590 | | | | | |

We were organized as a corporation in Delaware in 1997 and became a public company in 1998 when we were “spun off” as a separate entity by the company formerly named “Marriott International, Inc.”

We discuss our operations in the following reportable business segments: North American Full-Service, North American Limited-Service, and Asia Pacific.

Our Europe, Middle East and Africa, and Caribbean and Latin America operating segments do not individually meet the criteria for separate disclosure as reportable segments.

Beginning with the first quarter of 2020, we will present the following reportable business segments: North America; Asia Pacific; and Europe, Middle East, and Africa.

Our Caribbean and Latin America operating segment will be included in a combined Caribbean and Latin America and “Unallocated corporate” caption.

*Acquisition of Elegant*

On December 9, 2019, we completed the acquisition of Elegant Hotels Group plc (“Elegant”), and Elegant became an indirect wholly-owned subsidiary of the Company.

See Note 3 for more information.

*Starwood Reservations Database Security Incident*

On November 30, 2018, we announced a data security incident involving unauthorized access to the Starwood reservations database (the “Data Security Incident”).

The Starwood reservations database is no longer used for business operations.

*Relationship with Major Customer*

We operate or franchise properties that are owned or leased by Host Hotels & Resorts, Inc. (“Host”).

In addition, Host is a partner in several partnerships that own properties that we operate under long-term management agreements.

See Note 17 for more information.

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| Rooms | 16,853 | 2,205 | 3,327 | 15,080 | 3,597 | 41,062 | |

| Rooms | 11,410 | 3,079 | 3,523 | 8,207 | 2,081 | 28,300 | |

| Rooms | 7,672 | 1,423 | 1,850 | 3,788 | 1,074 | 15,807 | |

| Rooms | 4,799 | 6,962 | 2,411 | 7,883 | 1,188 | 23,243 | |

| Rooms | 134,412 | 24,595 | 8,119 | 28,000 | 8,033 | 203,159 | |

| Sheraton® | Properties | 189 | 62 | 31 | 130 | 35 | 447 |

| Rooms | 72,039 | 17,054 | 9,910 | 47,878 | 9,682 | 156,563 | |

| Rooms | 53,097 | 6,024 | 1,839 | 17,872 | 3,640 | 82,472 | |

| Rooms | 28,597 | 8,049 | 1,035 | 14,535 | 2,745 | 54,961 | |

| Rooms | 4,480 | 5,021 | 6,526 | 12,903 | 271 | 29,201 | |

| Rooms | 22,463 | 7,165 | 1,906 | 2,364 | 3,751 | 37,649 | |

| Rooms | 17,376 | 729 | 360 | 339 | — | 18,804 | |

| Rooms | — | 361 | 1,029 | 2,959 | 240 | 4,589 | |

| Rooms | 4,445 | 905 | — | 1,107 | 155 | 6,612 | |

| Rooms | 248 | 542 | — | — | — | 790 | |

| Rooms | 146,602 | 12,892 | 1,487 | 16,931 | 6,717 | 184,629 | |

| Rooms | 103,038 | 1,477 | 301 | — | 249 | 105,065 | |

| Rooms | 94,063 | — | — | 7,050 | 2,036 | 103,149 | |

| Rooms | 54,033 | — | — | — | — | 54,033 | |

| Rooms | 23,847 | 2,778 | 4,371 | 18,561 | 2,686 | 52,243 | |

| Rooms | 42,378 | — | — | — | — | 42,378 | |

| Rooms | 17,647 | 1,801 | 2,012 | 6,598 | 1,644 | 29,702 | |

| Rooms | 10,720 | 10,631 | 188 | — | 1,922 | 23,461 | |

See the information under the “Litigation, Claims, and Government Investigations” caption in Note [removed: 7,] [added: 8,] which we incorporate here by reference.

[removed: While management presently believes that the ultimate outcome of these other proceedings, individually and in aggregate, will not materially harm our] financial position, cash flows, or overall trends in results of operations, legal proceedings are inherently uncertain, and unfavorable rulings could, individually or in aggregate, have a material adverse effect on our business, financial condition, or operating results.

Within this section, we use a threshold of $1 million in disclosing material environmental proceedings involving a governmental authority.

In May 2020, we received a notice from the District Attorneys of the Counties of Placer, Riverside, San Francisco and San Mateo in California asserting that nine properties in California have failed to comply with certain state statutes regulating hazardous and other waste handling and disposal.

We are cooperating with the District Attorneys’ requests for information and have entered into a tolling agreement with the District Attorneys.

We cannot predict the ultimate outcome of this matter; however, management does not believe that the outcome will have a material adverse effect on the Company.

While management presently believes that the ultimate outcome of these other proceedings, individually and in aggregate, will not materially harm our

| | |

| --- | --- |

[removed: FORM 10-K][added: FORM 10-K]

| ☒ | [added: | |] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

For the Fiscal Year [removed: Ended December] [added: Ended December] 31, [removed: 2019][added: 2020]

| ☐ | [added: | |] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

Commission File [removed: No. 1-13881][added: No. 1-13881]

[removed: ][added: ]

| Delaware | | | | | | [added: | | | | | | | | | | | |] 52-2055918 | [added: | |]

| (State or other jurisdiction [removed: of incorporation] [added: of incorporation] or organization) | | | | | | [added: | | | | | | | | | | | |] (IRS [removed: Employer Identification] [added: Employer Identification] No.) | [added: | |]

| 10400 Fernwood Road | | [added: | | | |] Bethesda | | [added: | | | |] Maryland | | [added: | | | |] 20817 | [added: | |]

| (Address of Principal Executive Offices) | | | | | | [added: | | | | | | | | | | | |] (Zip Code) | [added: | |]

Registrant’s Telephone Number, Including Area Code [removed: (301) 380-3000][added: (301) 380-3000]

| Title of Each Class | | [added: | | | |] Trading Symbol(s) | | [added: | | | |] Name of Each Exchange on Which Registered | [added: | |]

| Class A Common Stock, $0.01 par value | | [added: | | | |] MAR | | [added: | | | |] Nasdaq Global Select Market | [added: | |]

Yes [removed: ý] [added: ☒] No o

Yes o No [removed: ý][added: ☒]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T [added: (§ 232.405 of this chapter)] during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

| Large accelerated filer | [removed: ý] | | [added: ☒ | | | | | |] Accelerated filer | [added: | |] o | [added: | |]

| Non-accelerated filer | [added: | |] o | | [added: | | | |] Smaller reporting company | [added: | |] ☐ | [added: | |]

| | | | [added: | | | | | |] Emerging growth company | [added: | |] ☐ | [added: | |]

| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o | | | | | [added: | | | | | | | | | |]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the [removed: Exchange] Act).

Yes [removed: ☐] [added: ☒] No [removed: ý][added: o]

The aggregate market value of shares of common stock held by non-affiliates at June [removed: 28, 2019,] [added: 30, 2020,] was [removed: $38,730,375,024.][added: $23,156,431,539.]

There were [removed: 324,214,545] [added: 324,414,150] shares of Class A Common Stock, par value $0.01 per share, outstanding at February [removed: 20, 2020.][added: 10, 2021.]

Portions of the Proxy Statement prepared for the [removed: 2020] [added: 2021] Annual Meeting of [removed: Shareholders] [added: Stockholders] are incorporated by reference into Part III of this report.

FISCAL YEAR [removed: ENDED DECEMBER] [added: ENDED DECEMBER] 31, [removed: 2019][added: 2020]

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| [Item [removed: 9.](#sEFFA3AB9FB1C592B9A3A4617E54D1329)] [added: 9.](#i89d1b9e9f3f84b88ad458af651fd058f_274)] | [added: | |] [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#sEFFA3AB9FB1C592B9A3A4617E54D1329)] [added: Disclosure](#i89d1b9e9f3f84b88ad458af651fd058f_274)] | [removed: [80](#sEFFA3AB9FB1C592B9A3A4617E54D1329)] | [added: | [77](#i89d1b9e9f3f84b88ad458af651fd058f_274) | | |]

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Yes ☒ No o

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Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

Yes ☐ No ☒

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| [Part I.](#i89d1b9e9f3f84b88ad458af651fd058f_13) | | | | | | | | |

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| | | | [Signatures](#i89d1b9e9f3f84b88ad458af651fd058f_2730) | | | [88](#i89d1b9e9f3f84b88ad458af651fd058f_2730) | | |

Cautionary Statement

All statements in this report are made as of the date this Form 10-K is filed with the U.S. Securities and Exchange Commission (the “SEC”).

We undertake no obligation to publicly update or revise these statements, whether as a result of new information, future events or otherwise.

We make forward-looking statements in Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this report based on the beliefs and assumptions of our management and on information available to us through the date this Form 10-K is filed with the SEC.

Forward-looking statements include information related to the possible effects on our business of the coronavirus pandemic and efforts to contain it (“COVID-19”), including the performance of the Company’s hotels; Revenue per Available Room (“RevPAR”) and occupancy trends and expectations; the nature and impact of contingency plans, restructuring plans and cost reduction plans; rooms growth; our expectations regarding our ability to meet our liquidity requirements; our expectations regarding COVID-19’s impact on our cash from operations; our capital expenditures and other investment spending expectations; statements related to leadership changes and the structure of the Company’s management operations; other statements throughout this report that are preceded by, followed by, or include the words “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “foresees,” or similar expressions; and similar statements concerning anticipated future events and expectations that are not historical facts.

We caution you that these statements are not guarantees of future performance and are subject to numerous evolving risks and uncertainties that we may not be able to accurately predict or assess, including the risks and uncertainties we describe below and other factors we describe from time to time in our periodic filings with the SEC.

Risks that could affect our results of operations, liquidity and capital resources, and other aspects of our business discussed in this Form 10-K include the duration and scope of COVID-19, including the availability and distribution of effective vaccines or treatments; its short and longer-term impact on the demand for travel, transient and group business, and levels of consumer confidence; actions governments, businesses and individuals have taken or may take in response to the pandemic, including limiting or banning travel and/or in-person gatherings or imposing occupancy or other restrictions on lodging or other facilities; the impact of the pandemic and actions taken in response to the pandemic on global and regional economies, travel, and economic activity, including the duration and magnitude of its impact on unemployment rates and consumer discretionary spending; the ability of our owners and franchisees to successfully navigate the impacts of COVID-19; the pace of recovery when the pandemic subsides or effective treatments or vaccines become widely available; general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth; the effects of steps we and our property owners and franchisees have taken and may continue to take to reduce operating costs and/or enhance certain health and cleanliness protocols at our hotels; the impacts of our employee furloughs and reduced work week schedules, our voluntary transition program and our other restructuring activities; competitive conditions in the lodging industry; relationships with customers and property owners; the availability of capital to finance hotel growth and refurbishment; the extent to which we experience adverse effects from data security incidents; and changes in tax laws in countries in which we earn significant income.

As discussed in this Form 10-K, COVID-19 is materially impacting our operations and financial results.

COVID-19, and the volatile regional and global economic conditions stemming from it, and additional or unforeseen effects from the COVID-19 pandemic, could also give rise to or aggravate the other risk factors that we identify within Part I, Item 1A of this report, which in turn could materially adversely affect our business, liquidity, financial condition, and results of operations.

Further, COVID-19 may also affect our operating and financial results in a manner that is not presently known to us or that we currently do not consider to present significant risks to our operations.

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| Class A Common Stock, $0.01 par value | | MAR | | Chicago Stock Exchange |

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| [Part I.](#s1BEFC343552D53FE801CCF0614417F43) | | |

| | [Signatures](#sA9117F0A5D8C56E9B1F151EF8CCDE0C4) | [93](#sA9117F0A5D8C56E9B1F151EF8CCDE0C4) |

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As of December 31, [removed: 2019,] [added: 2020,] we owned or leased the following hotel properties:

| Properties | | [added: | | | | | | | | | |] Location | | [added: | | | |] Rooms | | [added: |]

| [removed: *Owned] [added: *International Owned] Hotels* | | | | | | [added: | | | | | | | | | | | | | | |]

| The Westin Peachtree Plaza, Atlanta | | [added: | | | | | | | | | |] Atlanta, GA | | [added: | | | |] 1,073 | | [added: |]

| W New York - Union Square | | [added: | | | | | | | | | |] New York, NY | | [added: | | | |] 270 | | [added: |]

| Las Vegas Marriott | | [added: | | | | | | | | | |] Las Vegas, NV | | [added: | | | |] 278 | | [added: |]

| [removed: *Leased] [added: *International Leased] Hotels* | | | | | | [added: | | | | | | | | | | | | | | |]

| W New York – Times Square | | [added: | | | | | | | | | |] New York, NY | | [added: | | | |] 509 | | [added: |]

| Renaissance New York Times Square Hotel | | [added: | | | | | | | | | |] New York, NY | | [added: | | | |] 317 | | [added: |]

| Anaheim Marriott | | [added: | | | | | | | | | |] Anaheim, CA | | [added: | | | |] 1,030 | | [added: |]

| Courtyard Las Vegas Convention Center | | [added: | | | | | | | | | |] Las Vegas, NV | | [added: | | | |] 149 | | [added: |]

| Residence Inn Las Vegas Convention Center | | [added: | | | | | | | | | |] Las Vegas, NV | | [added: | | | |] 192 | | [added: |]

| Albuquerque Airport Courtyard | | [added: | | | | | | | | | |] Albuquerque, NM | | [added: | | | |] 150 | | [added: |]

| Baltimore BWI Airport Courtyard | | [added: | | | | | | | | | |] Linthicum, MD | | [added: | | | |] 149 | | [added: |]

| Baton Rouge Acadian Centre/LSU Area Courtyard | | [added: | | | | | | | | | |] Baton Rouge, LA | | [added: | | | |] 149 | | [added: |]

| Chicago O'Hare Courtyard | | [added: | | | | | | | | | |] Des Plaines, IL | | [added: | | | |] 180 | | [added: |]

| Des Moines West/Clive Courtyard | | [added: | | | | | | | | | |] Clive, IA | | [added: | | | |] 108 | | [added: |]

| Fort Worth University Drive Courtyard | | [added: | | | | | | | | | |] Fort Worth, TX | | [added: | | | |] 130 | | [added: |]

| Greensboro Courtyard | | [added: | | | | | | | | | |] Greensboro, NC | | [added: | | | |] 149 | | [added: |]

| Indianapolis Airport Courtyard | | [added: | | | | | | | | | |] Indianapolis, IN | | [added: | | | |] 151 | | [added: |]

| Irvine John Wayne Airport/Orange County Courtyard | | [added: | | | | | | | | | |] Irvine, CA | | [added: | | | |] 153 | | [added: |]

| Louisville East Courtyard | | [added: | | | | | | | | | |] Louisville, KY | | [added: | | | |] 151 | | [added: |]

| Mt. Laurel Courtyard | | [added: | | | | | | | | | |] Mt Laurel, NJ | | [added: | | | |] 151 | | [added: |]

| Newark Liberty International Airport Courtyard | | [added: | | | | | | | | | |] Newark, NJ | | [added: | | | |] 146 | | [added: |]

| Orlando Airport Courtyard | | [added: | | | | | | | | | |] Orlando, FL | | [added: | | | |] 149 | | [added: |]

| Orlando International Drive/Convention Center Courtyard | | [added: | | | | | | | | | |] Orlando, FL | | [added: | | | |] 151 | | [added: |]

| Sacramento Airport Natomas Courtyard | | [added: | | | | | | | | | |] Sacramento, CA | | [added: | | | |] 149 | | [added: |]

| San Diego Sorrento Valley Courtyard | | [added: | | | | | | | | | |] San Diego, CA | | [added: | | | |] 149 | | [added: |]

| Spokane Downtown at the Convention Center Courtyard | | [added: | | | | | | | | | |] Spokane, WA | | [added: | | | |] 149 | | [added: |]

| St. Louis Downtown West Courtyard | | [added: | | | | | | | | | |] St. Louis, MO | | [added: | | | |] 151 | | [added: |]

| The Ritz-Carlton, Tokyo | | [added: | | | | | | | | | |] Tokyo, Japan | | [removed: 250] | | [added: | | 247 | | |]

| The St. Regis Osaka | | [added: | | | | | | | | | |] Osaka, Japan | | [added: | | | |] 160 | | [added: |]

| Sheraton Grand Rio Hotel & Resort | | [added: | | | | | | | | | |] Rio de Janeiro, Brazil | | [added: | | | |] 538 | | [added: |]

| Sheraton Lima Hotel & Convention Center | | [added: | | | | | | | | | |] Lima, Peru | | [added: | | | |] 431 | | [added: |]

| Sheraton Mexico City Maria Isabel Hotel | | [added: | | | | | | | | | |] Mexico City, Mexico | | [added: | | | |] 755 | | [added: |]

| Courtyard by Marriott Toulouse Airport | | [added: | | | | | | | | | |] Toulouse, France | | [added: | | | |] 187 | | [added: |]

| Courtyard by Marriott Aberdeen Airport | | [added: | | | | | | | | | |] Aberdeen, UK | | [added: | | | |] 194 | | [added: |]

| Courtyard by Marriott Rio de Janeiro Barra da Tijuca | | [added: | | | | | | | | | |] Barra da Tijuca, Brazil | | [added: | | | |] 264 | | [added: |]

| Residence Inn Rio de Janeiro Barra da Tijuca | | [added: | | | | | | | | | |] Barra da Tijuca, Brazil | | [added: | | | |] 140 | | [added: |]

| Treasure Beach, Barbados | | [added: | | | | | | | | | |] Barbados | | [added: | | | |] 35 | | [added: |]

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| *U.S. & Canada Owned Hotels* | | | | | | | | | | | | | | | | | | | | |

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| *U.S. & Canada Leased Hotels* | | | | | | | | | | | | | | | | | | | | |

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| Properties | | | | | | | | | | | | Location | | | | | | Rooms | | |

| Marriott Puerto Vallarta Resort & Spa | | | | | | | | | | | | Mexico | | | | | | 433 | | |

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| *North American Full-Service* | | | | | |

| Sheraton Phoenix Downtown | | Phoenix, AZ | | 1,000 | |

| Kaua’i Marriott Resort | | Lihue, HI | | 356 | |

| *North American Limited-Service* | | | | | |

| *Asia Pacific* | | | | | |

| *Other International* | | | | | |

| Protea Hotel Fire & Ice! by Marriott Johannesburg Melrose Arch | | Johannesburg, South Africa | | 197 | |

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At February [removed: 20, 2020, 324,214,545] [added: 10, 2021, 324,414,150] shares of our Class A Common Stock (our “common stock”) were outstanding and were held by [removed: 34,999 shareholders] [added: 34,253 stockholders] of record.

Our common stock trades on the Nasdaq Global Select Market (“Nasdaq”) [removed: and the Chicago Stock Exchange] under the trading symbol MAR.

Fourth Quarter [removed: 2019] [added: 2020] Issuer Purchases of Equity Securities

| *(in millions, except per share amounts)* | | | | | | | | | | | | | [added: | | | | | | | | | | |]

| Period | [added: | |] Total [removed: Number of Shares Purchased] [added: Number of Shares Purchased] | | | [added: | | |] Average [removed: Price per] [added: Price per] Share | | | | [added: | |] Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) | | | [added: | | |] Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs (1) | | [added: |]

[removed: | (1) | On] [added: (1)On] February 15, 2019, we announced that our Board of Directors increased our common stock repurchase authorization by 25 million shares. [removed: At year-end 2019, 18.4 million shares remained available for repurchase under Board approved authorizations. We repurchase shares in the open market and in privately negotiated transactions. |]

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| October 1, 2020-October 31, 2020 | | | — | | | | | | $ | — | | | | | — | | | | | | 17.4 | | |

| November 1, 2020-November 30, 2020 | | | — | | | | | | $ | — | | | | | — | | | | | | 17.4 | | |

| December 1, 2020-December 31, 2020 | | | — | | | | | | $ | — | | | | | — | | | | | | 17.4 | | |

At year-end 2020, 17.4 million shares remained available for repurchase under Board approved authorizations.

We repurchase shares in the open market and in privately negotiated transactions.

We do not anticipate repurchasing additional shares until business conditions improve, and are prohibited from doing so for the duration of the Covenant Waiver Period, as discussed in Note 10, under our Credit Facility, with certain exceptions.

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| October 1, 2019-October 31, 2019 | — | | | $ | — | | | — | | | 21.5 | |

| November 1, 2019-November 30, 2019 | 1.6 | | | $ | 134.96 | | | 1.6 | | | 19.9 | |

| December 1, 2019-December 31, 2019 | 1.5 | | | $ | 145.13 | | | 1.5 | | | 18.4 | |

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The following table presents a summary of our selected historical financial data derived from our last [removed: 10] [added: five] years of Financial Statements.

Because this information is only a summary and does not provide all of the information contained in our Financial Statements, including the related notes, you should read “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our Financial Statements for each year for more detailed [removed: information including, among other items, our adoption of ASU 2014-09 “Revenue from Contracts with Customers” in 2018, our acquisition of Starwood in 2016, restructuring charges we incurred in 2016, timeshare strategy-impairment charges we incurred in 2011, and our 2011 spin-off of our former timeshare operations and timeshare development business.][added: information.]

| | [added: | |] Fiscal Year [removed: (1)] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | |]

| *($ in millions, except per share data)* | [added: | | 2020 | | | | | |] 2019 | | | | [added: | |] 2018 | | | | [added: | |] 2017 | | | | [added: | |] 2016 | | | | [removed: 2015] | | | | [removed: 2014] | | | | [removed: 2013] | | | | [removed: 2012] | | | | [removed: 2011] | | | | [removed: 2010] | | | [added: | | | | | |]

| Income Statement Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | |]

| Revenues [removed: (6)] [added: (2)] | [added: | |] $ | [added: 10,571 | | | | | $ |] 20,972 | | | [added: | |] $ | 20,758 | | | [added: | |] $ | 20,452 | | | [added: | |] $ | 15,407 | | | [removed: $] | [removed: 14,486] | | | [removed: $] | [removed: 13,796] | | | [removed: $] | [removed: 12,784] | | | [removed: $] | [removed: 11,814] | | | [removed: $] | [removed: 12,317] | | | [removed: $] | [removed: 11,691] | | [added: | | | | | |]

| Operating income (loss) [removed: (6)] [added: (2) (4)] | [added: | |] $ | [added: 84 | | | | | $ |] 1,800 | | | [added: | |] $ | 2,366 | | | [added: | |] $ | 2,504 | | | [added: | |] $ | 1,424 | | | [removed: $] | [removed: 1,350] | | | [removed: $] | [removed: 1,159] | | | [removed: $] | [removed: 988] | | | [removed: $] | [removed: 940] | | | [removed: $] | [removed: 526] | | | [removed: $] | [removed: 695] | | [added: | | | | | |]

| Net [removed: income] (loss) [removed: (6)] [added: income (2) (4)] | [added: | |] $ | [added: (267) | | | | | $ |] 1,273 | | | [added: | |] $ | 1,907 | | | [added: | |] $ | 1,459 | | | [added: | |] $ | 808 | | | [removed: $] | [removed: 859] | | | [removed: $] | [removed: 753] | | | [removed: $] | [removed: 626] | | | [removed: $] | [removed: 571] | | | [removed: $] | [removed: 198] | | | [removed: $] | [removed: 458] | | [added: | | | | | |]

| Per Share Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | |]

| Diluted [removed: earnings] (losses) [added: earnings] per share [removed: (6)] [added: (2) (4)] | [added: | |] $ | [added: (0.82) | | | | | $ |] 3.80 | | | [added: | |] $ | 5.38 | | | [added: | |] $ | 3.84 | | | [added: | |] $ | 2.73 | | | [removed: $] | [removed: 3.15] | | | [removed: $] | [removed: 2.54] | | | [removed: $] | [removed: 2.00] | | | [removed: $] | [removed: 1.72] | | | [removed: $] | [removed: 0.55] | | | [removed: $] | [removed: 1.21] | | [added: | | | | | |]