Marriott’s 2026 investment spend mix shifts toward key money while DTT declines

Marriott investment spend trends and outlook for net investment spend (next couple of years)

1) What’s happening to investment spend now (overall direction and what’s driving it)

Marriott’s management described investment spend as having “ticked up a few hundred million” in the current discussion of trends. ¹ In the company’s updated 2026 outlook, Marriott also expects 2026 investment spending of $1.25 billion to $1.35 billion, representing an increase versus prior expectations. ²

The 2026 investment spending guide is broken into buckets:

• Contract acquisition costs: expected to be ~40% to 45% of total spending. ²
• Digital tech transformation (DTT): expected to be ~25% of total spending (second-largest bucket). ²
• Renovations and other investing activities: the remainder, described as including owned/leased renovations and other investing activities. ²

2) “Key money” trends (contract acquisition costs)

Competitive and structural backdrop

Management characterized the competitive environment as increasingly fierce and stated that “key money seems to be the weapon of choice” in many competitive circumstances. ³ They also noted that Marriott’s pipeline mix—nearly 40% of pipeline rooms in the top two quality tiers (luxury and full service)—tends to involve higher key money, though those tiers also generate higher fees and value. ³

Evidence of growth in key money usage, but with improved efficiency

Marriott stated that compared with 2019, the proportion and absolute money of key money are up (attributed to system growth). ³ Importantly, management also stated that Marriott is using less key money per signed deal versus earlier periods, describing it as reflective of brand strength and performance relative to peers. ³

Near-term implication for investment mix

For the forward-looking mix, Marriott indicated that as the system rises, key money is likely to grow (management linked this to system growth). ⁴ Additionally, management emphasized that Marriott believes contract acquisition costs are increasing as part of their next-period budgeting context. ⁵

Direct takeaway on key money

Overall, Marriott’s excerpts support a view that:

• Key money is structurally elevated vs. 2019 (more of it and more dollars overall). ³
• But key money intensity per deal improved (less key money per signed deal than peers / versus some peer deals, and less per signed deal than before). ³
• Key money is still expected to trend higher as the system expands. ⁴

3) Digital tech transformation (DTT) trends: where they are in the “innings”

Deployment status and expected spending shape

On DTT, management said “we’re still in the early phases of deployment” and that they have over 2,000 select-service hotels in the U.S. and Canada transitioned. ⁴ They also directly addressed the spending trajectory: “On tech and DTT spend, that over time will go down” while also stating that Marriott will continue to invest in technology due to its importance. ⁴

DTT still meaningful in 2026, but not the dominant long-run driver

Even with a downtrend expected over time, DTT remains a major bucket for 2026: ~25% of total 2026 investment spending. ² Management further characterized the “overwhelming portion” of DTT spending as reimbursed over time as well as through corporate systems. ²

4) Net investment spend outlook for the next couple years (especially 2027)

What management said explicitly about the near-term outlook window

Management indicated that they are “too early to talk about 2027” in a detailed way, but provided directional color on the major buckets. ⁴ In that directional framework:

• Tech/DTT spend declines over time (directionally supportive for net investment spend). ⁴
• Key money grows as the system rises (directionally a stabilizer/increase for net investment spend). ⁴
• Owned/leased/other remains a continuing use of capital, because Marriott is “never done with owned, leased” and is doing renovations. ⁴

How to reconcile “declining DTT” with “rising key money”

Given the bucket structure for 2026—key money/contract acquisition costs at ~40%–45% and DTT at ~25% ²—Marriott’s framework implies that:

• If DTT spending is “going down” over time ⁴, it could reduce net investment spend growth pressure.
• But rising contract acquisition costs/“key money” as the system expands ⁴ could offset some of that benefit.
• Renovations/owned- and leased-related investment continues, implying there is no “off switch” on the remaining categories. ⁴

Takeaway on the next couple years (directionally)

Based on the combination of:

• DTT in early deployment with progress already underway ⁴ and a material 2026 spending allocation ²,
• plus management’s expectation that DTT spend goes down over time ⁴,
• alongside expectations that key money grows with system rise ⁴ and that owned/leased is ongoing ⁴,

the most defensible directional outlook from the excerpts is:

• Net investment spend is not described as collapsing, because Marriott expects key money and owned/leased/other to remain active. ⁴
• But the incremental contribution from DTT should lessen over time, which would be a key offset to any increase from key money. ⁴

5) Summary: the “trend map” for investment spend and near-term net investment outlook

• Overall 2026 investment spend: guided higher to $1.25B–$1.35B. ²
• Key money / contract acquisition costs:
  • structurally higher vs. 2019 in both proportion and absolute dollars, driven by system growth ³
  • but key money per signed deal is lower / better negotiated relative to peers and compared with earlier periods ³
  • and management expects key money to grow as the system rises ⁴
• Digital tech transformation (DTT):
  • still early deployment, with 2,000+ select-service hotels transitioned (U.S./Canada) ⁴
  • material in 2026 (~25% of spending) ²
  • but DTT/tech spend declines over time even though Marriott will keep investing in tech ⁴
  • and much of DTT is characterized as reimbursed over time ²
• Net investment spend outlook for the next couple years:
  • Marriott states they’re too early for a 2027 detailed discussion, but directionally indicates DTT down ⁴
  • while key money and owned/leased/other remain ongoing, implying net investment spend likely remains active rather than sharply reducing. ⁴

Bottom line: The excerpts support a view that Marriott’s investment spend mix is shifting—with DTT trending downward over time as deployments mature ⁴, while key money and owned/leased investments remain durable (and key money likely rises with system size). ⁴ This combination suggests net investment spend should stay in a meaningful range rather than step down materially, at least based on the directional guidance provided for the next couple of years. ⁴