And we do expect to see another year of strong growth in our special corporate rate on top of very strong growth in that rate in 2023. As we talked about in seeing our group pace, which is up 14%, that’s actually got strong both rooms growth, as well as strong rate growth in the US, which does also bode well for continued sustainability in ADR. And I’ll probably throw in one extra, which is that, in luxury, you probably remember we talked about that having in Q2, RevPAR was down ever so slightly in our luxury US and Canada properties just down by 1% in Q2, but that actually moved positive again in Q3 and was actually up 2%. So, I put all those together and, of course, this does depend greatly on the overall macroeconomic conditions and we will need to see where that goes.
But given what we look at right now, we continue to feel good about the fundamentals.
Stephen Grambling: Helpful. Thanks so much.
Operator: Thank you. Our next question will come from Smedes Rose with Citi. Please go ahead.
Smedes Rose: Hi, thanks. Given those comments you’ve made with sort of like a kind of a peak into 2024. I just wanted to ask you about maybe how we should think about capital return? Is it fair to assume that you would try to reach at least level seen in this year and maybe more, given cash flow and the average level still remain below longer-term targets?
Leeny Oberg: I think at this stage of the game, since we’re really working through all of the budget work and kind of looking at investment spending, et cetera, again, the broad guidelines that we provided at the Security Analyst Meeting remain consistent. You will remember that we talked about an expectation of having the Sheraton Grand Chicago put to Marriott in 2024, which will be a use of cash we would expect at the end of 2024, and that was on top of the investment spending levels that were more normalized. But I think the philosophy, Smedes, remains exactly the same, which is, to say we do like where we are in terms of our credit ratios being at the lower end of our adjusted debt to adjusted [EBITDAR] (ph) and would expect to remain in that territory given the various kind of uncertainties that are out there.
But other than that, the basic equation that you have seen us use for quite a number of years, I would expect to be similar, which would then result in substantial amounts of capital being returned to our shareholders.
Smedes Rose: Great. Okay. Thank you.
Operator: Thank you. Our next question will come from David Katz with Jefferies. Please go ahead.
David Katz: Good morning, and thank you for taking my question early. I appreciate it. I wanted to ask something a bit more strategic because there’s been so much noise around the lower end chain scales and the competitive landscape there, and the competition for conversions, and the launch of new brands, etc, that we’ve all heard. I’d love to talk about your strategy and where you are focusing more of your resources competitively. And is that just based on the assets that you have, is that strategic thought? Where are you putting more of your attention into your growth?
Tony Capuano: Yes, great question. Maybe the way I would answer that is, I like to describe those discussions as ever being binary. We don’t look at it and say, let’s pivot our focus away from our luxury leadership, for instance, towards focus on midscale. They are not mutually exclusive. As I mentioned in my opening remarks, we are very excited about the early returns of the focused resources we’ve put against our entry into mid-scale, the fact that we’re already seeing letters of intent signed for Citi Express, even in almost 10 new countries. Then we’ve got signed deals very early in the launch of Four Points Express. Then we’ve got hundreds of identified markets for StudioRes, almost as the ink is drying on the FDD here in the US.
And so that’s extraordinarily exciting for us. But that does not require us to hit the pause button on extending our lead in the very valuable luxury segment. And so, that’s a long-winded way of saying our strategy is to continue to strengthen our leadership position in luxury and upper upscale, while expanding our growth potential in a new segment for us, which is midscale. And so, as we roll out midscale, you’ve got products like City Express, which I think at least initially will be largely new build. I think the same is true for StudioRes. On the other hand you look at a platform like Four Points Express, we think there are extraordinary opportunities to roll out conversions under that platform. And as we mentioned during the analyst presentation, we will continue to look at every market we operate in and determine is there an opportunity for mid-scale?
And if so, is it a new build opportunity, a virgin opportunity or both.
David Katz: Thank you. Am I permitted to follow up? I would ask about the midscale stuff just to be clear that you’re not finding — you’re not finding that you have to do more either in hard and soft cost in order to capture deals there and the competition level is not intensifying meaningfully or noticeably there at all, right?
Tony Capuano: No. I mean, obviously it’s early, but what I will tell you is, we have a pretty extraordinary group of franchise partners who are brimming with excitement about our entry into this tier. And we’re engaged with them on every continent talking about opportunities for midscale. So we don’t find ourselves from a deal term perspective or a capital participation perspective doing anything out of the ordinary.
David Katz: Perfect. Thank you all so much.
Tony Capuano: Thank you.
Operator: Thank you. Our next question will come from Robin Farley with UBS. Please go ahead.
Robin Farley: Great. Thank you. I wanted to ask about unit growth next year, and I know you’re not giving specific guidance yet. But if we used the CAGR when you thought MGM was going to be in 2023, it kind of implied that each of the next two years would be in the 4% to 5% range. So with MGM kind of shifting into 2024, is it — would something then in that sort of 6% to 7.5% range, right, just kind of adding MGM into 4% to 5%. Is that the range we should think about for unit growth next year? Thank you.
