v3.26.1
Revenue Recognition
 6 Months Ended
Jun. 30, 2026
Revenue from Contract with Customer [Abstract]  
Revenue Recognition
3. REVENUE RECOGNITION
Deferred Revenues
Deferred revenues, or contract liabilities, generally represent payments or consideration received in advance for goods or services that the Company has not yet provided to the customer. Deferred revenues as of June 30, 2026 and December 31, 2025 are as follows:
June 30, 2026December 31, 2025
Deferred initial franchise fee revenues
$155 $151 
Deferred loyalty program revenues
108 91 
Deferred co-branded credit card program revenues
91 98 
Deferred other revenues
17 14 
Total
$371 $354 
Deferred initial franchise fees represent payments received in advance from prospective franchisees upon the signing of a franchise agreement and are generally recognized to revenue within 13 years. Deferred loyalty revenues represent the portion of loyalty program fees charged to franchisees, net of redemption costs, that have been deferred and will be recognized over time based upon loyalty point redemption patterns. Deferred co-branded credit card program revenue represents payments received in advance from the Company’s co-branded credit card partners, primarily for card member activity.
Performance Obligations
A performance obligation is a promise in a contract to transfer a distinct good or service to a customer. The consideration received from a customer is allocated to each distinct performance obligation and recognized as revenue when, or as, each performance obligation is satisfied. The following table summarizes the Company’s remaining performance obligations for the twelve-month periods set forth below:
7/1/2026 - 6/30/20277/1/2027 - 6/30/20287/1/2028 - 6/30/2029

Thereafter

Total
Initial franchise fee revenues
$18 $14 $9 $114 $155 
Loyalty program revenues
69 28 9 2 108 
Co-branded credit card program revenues
48 14 12 17 91 
Other revenues
12 1 1 3 17 
Total
$147 $57 $31 $136 $371 
Disaggregation of Net Revenues

The table below presents a disaggregation of the Company’s net revenues from contracts with customers by major services and products:
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Royalties and franchise fees
$139 $147 $253 $272 
Marketing and reservation fees122 140 220 238 
Loyalty revenue23 25 47 43 
Management fees
2 2 5 5 
Owned hotel revenues3 — 4 — 
License and other fees32 33 62 60 
Partnership fees (a)
28 24 62 47 
Other revenue26 26 49 48 
Net revenues
$375 $397 $702 $713 
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(a)    Partnership fees are related to third-party partnership agreements, including the Company's co-branded credit card program. Such fees were previously reported within other revenue as it relates to this table.
Capitalized Contract Costs
The Company incurs certain direct and incremental sales commissions costs in order to obtain hotel franchise contracts. Such costs are capitalized and subsequently amortized, beginning upon hotel opening, over the first non-cancellable period of the agreement. In the event an agreement is terminated prior to the end of the first non-cancellable period, any unamortized cost is immediately expensed. In addition, the Company also capitalizes costs associated with the sale and installation of property management systems to its franchisees, which are amortized over the remaining non-cancellable period of the franchise agreement. As of June 30, 2026 and December 31, 2025, capitalized contract costs were $87 million and $84 million, respectively, of which $6 million and $5 million, respectively, was included in other current assets and $81 million and $79 million, respectively, were included in other non-current assets on its Condensed Consolidated Balance Sheets.