Q: What mix of head winds and tail winds are you seeing this year?

A: There's lots out there that gives us confidence. Corporate earnings are coming out, and they look strong; you see the jobs report, it looks strong; and you see consumer spending, and that looks strong. The Fed is getting its arms around inflation, and interest rates are starting to come down, though maybe not as fast as we would like. The Fed has maybe navigated a soft landing, and we find ourselves in a relatively stable economic environment, at least here at home. With that said, we've got multiple sociopolitical conflicts around the world. It is an unstable time, and that can have downward pressure on folks' desire to travel. We're not really seeing that in the demand yet, but it's something we monitor closely.

Q: So you believe we're in the midst of that soft landing?

A: I hope so. It seems like it. Even when most economists were predicting a recession in the back half of 2023 or in early 2024, a lot of the data seemed to go the other direction. So, for all the criticism that the Fed got, it appears so far they've navigated some version of a soft landing.

Q: What's the latest when it comes to recovery of the cross-border travel segment?

A: At the end of the third quarter, on a global basis, we were within 1 percentage point of what cross-border travel represented as a percentage of our total demand. Back in 2019, it was about 19% of total global room nights, and we were at 18% in the third quarter. Now it varies by region, but our China business has fully recovered in terms of RevPAR. And as you see more both inbound and outbound Chinese travel, that should drive both our China business and our regional and global business. If we had been sitting here in 2018 and 2019, our conversation would have been dominated by the prospects of outbound Chinese middle-class travel. And there's still a massive Chinese middle class, and the borders are opening.

Q: Why was it important for Marriott to jump into midscale in such a big way?

A: I don't want our guests and our Bonvoy members to ever have to look outside the Marriott ecosystem. And before our acquisition of City Express and the launch of platforms like StudioRes and Four Points Express, we didn't play in midscale. So for guests that for certain trip types really needed a midscale option, we were essentially pushing them outside our ecosystem. And these are platforms we think we can scale quickly. The demand is there. And even in markets like the U.S. and Europe, where the debt markets are relatively constricted, the total capitalization required to build a midscale property is a little more easily digestible.

Q: And why are you also betting big on all-inclusive?

A: When we launched the Ritz-Carlton Yacht Collection, about 75% of the passengers who either sailed or booked the Ritz-Carlton Yacht had never been on a cruise. What that tells us is that the seal of approval [of] the Ritz-Carlton brand got them excited about a travel experience that previously they had some measure of skepticism about. Similarly, I think there's a segment of the traveling public that historically has said, "All-inclusive was an experience that wasn't that interesting to me." Our expectation is that -- particularly with a brand like Marriott, which means so much to hundreds of millions of travelers -- they'll say, "Oh, well, if it's a Marriott all-inclusive, now I have an expectation about product quality and service delivery, and that's something that's interesting to me." Particularly because what we hear from our guests is that more and more travelers love the appeal and simplicity of all-inclusive pricing.