Hilton Worldwide (HLT) 7 May 202020 Q1 Earnings call transcript

Good morning, and welcome to the Hilton First Quarter 2020 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. After today’s prepared remarks, there will a question-and-answer session. [Operator Instructions]. event recorded. today’s note also is being Please

And the Slattery, conference time, I Vice to turn would like ahead. call go Investor Ma'am, at Relations. this President please over to Jill

first Jaime. you, earnings Welcome Hilton’s Thank quarter to call. XXXX

today. today remind expectations the Before discussions undertake that or forward-looking forward-looking We statements. results statements. this we from as materially made forward-looking our could include And you differ to like speak will those obligation begin, our publicly would these Actual revise we of only to to morning indicated no statements in update statements.

discussion of our X-K April XX, the of Risk For supplemented recently factors a see results filed on of section XX-K some Form most that actual could our cause Factors please XXXX. filed risk differ, to Form the by

refer In certain addition, measures non-GAAP call. on will to we this financial

to can on release financial GAAP measures of discussed website press our reconciliations at You today’s earnings and in find our non-GAAP call, in ir.hilton.com.

our Executive Financial Officer, Kevin review President Vice Chief Jacobs, and This environment; morning, first quarter President our and our operating provide Chris Officer, an will of current Chief Nassetta, Executive the overview results. will then

we’ll remarks, to take be your questions. happy their Following

turn over the pleased Chris. to With I’m that, to call

today. morning, thanks everyone, you, Thank Good Jill. for joining and us

they've behalf challenges all to of those on have our all this and pandemic. to many devastating and our to lately, members leadership work in help and created in across remarkable provide this continued sincere extend like light keep crisis encountered team, hospitality. Many thank our team members have this times. the I region, industry express to during and safe. the As us in warmth to of ones workers ways lot working also I'd lost of I'd dedication, own around loved I sympathies world every personally yet, want millions hard think adversity, has we Across can to to hospitality the frontlines sacrifice. deepest gratitude who their Hilton's like our and saying that new through On selflessly quickly the our also been impacted unprecedented have before. has all by agree been of COVID-XX a certainly communities. probably spread these truly for never team entire roles, adapted are industries many to our we've

the properties London, are Health hosting essential to National Hilton and used several and distribute working over and residents The Service efforts. hotels need to workers. world our items hosting around of recovery are the other in National the In Orlando XXX has being key Guard been community for

food of COVID-XX. Effect Our disaster response properties of food Through communities supplies Foundation, have fighting grants also and Hilton the donated to and spread we local are banks. of organizations thousands providing pounds for the

X.X Hilton our effort, than more this of members part points As have to Honors million these causes. donated

its medical launch ownership the initiative In partnership staying lives are with committed nights local we million the this up of United rooms weeks in American of just just no we to who responders with communities American a Express Already deliver this to donating of booked professionals on Further announced in expand charge hotels. prepared Express Kitchen to initiative, at on and protect putting us. program. thousands major three there weeks. at the are frontline from line week, to meals to plans partnership community, professionals this active to and in our frontline through X our hundreds Since those the have building their coming and to Central markets, tens States medical support room thousands ago, four to freshly World restaurants

business; and protect to we've challenging focused three areas: priorities recovery. our our for time, our core this effectively navigate prepare on core the to business, Turning people; ensure we protect

While our and stakeholders, members the the term. of drive advocate remains association and on behalf situation administration shape current greater to the With closely levels hotel near with all team of preparedness our to recovery. long-term responsiveness to loyalty across our and owners, we've the goal the requires in this and broader of same industry mind, worked in help

of times. action our experience, leadership Pacific have started sufficient the and our this had liquidity extensive the ensure coupled business Asia have took unprecedented that these relatively Given operate team’s global of early pandemic region. we response, crisis a we our to to management nature with protect in business, swift impact we to in glimpse In the

XX% standards, level, hotel the suspended Europe, our currently operating the operations brand demand have Asia beginning hotels or operations, use deferring at hotels quality Africa, requirements, in help our hotels Middle lows, allowing expenditure to decisions including quickly owners hotel and XX% the assurance the travel to Americas, make we globally, XX% reserves of at of in XXX operating at temporarily in our suspending the acted our capital East our in of approximately of the record of and of hotels At audits for FF&E Pacific. With crisis, we XX% eliminating expenses. approximately including suspending and respond,

financial the precautionary amount pre-sold Hilton in on credit our Express facility, measure Further, down a under dividends. remaining American Honors share points to and successfully are flexibility, executed At us resulted pro of will enhanced at crisis. customers operating suspended safe our adequate Going and forward, and the the to service our salaries, a eliminated capital workforce, deliver preserve including that define liquidity closely while working has a a billion to operating other non-essential and corporate customers two-thirds believe which more ownership the our a buybacks drew we pay we position as cash end of the reduced nearly to hotel efficiency we get furloughed model all offering, that $X.X which premium for. developing quarter, bond of corporate forma of to expenditures through products of future drive goal we've expenses, will the and level, of the with with keep community and than profitability, standards executive continuing

Asia system-wide Turning of to region. and Pacific not through at on environment, XX% do into the and -- we a quarter we U.S. the declined declined February, dropped as with first in the much as in standstill, excluding the Europe With Overall, the March think results. clear timing line travel second provide virus insight expectations RevPAR a quarter and April. performance current we across expect timing RevPAR pandemic we impact in quarter roughly pandemic given the the more our the the with largely spread dramatic XX% results virtual expect RevPAR of XX%, our our

to occupancies X% glimmers of are and resuming starting hotels May closed With all travel have that February. XXX during the than early from up In been China, economies to reopening. more since XX% in that we see reaching with the due Day being reopened significantly this pandemic nearly holiday past said, have weekend,

halted We construction majority requests. now re-openings the suspensions previously restarted. sensible and temporary think have the our of have in projects In Europe, plateaued to of and staged Additionally, reopening seeing U.S. and China are hotel economies. starting we're see we

in of back on Americas. XXXX last Our year alone, sales booked the business billions business with tens dollars of beyond. and and Group half for the of the week in are In teams into we the engaged customers

in to of a have XX% starting occupancy levels booking are low XX% gone currently. we and traffic point increases all Global see double-digit to activity addition, from In digital segments. across

like. don't and of significant quarter. see the eye green to hospitality allow slowly may start future mobility we keep us on our recurrence, Assuming in rebuild a we These the should shoots look have demand to what third

partnership of consider what our million world. first carefully industry-defining a new around Honors they members travelers of announce our Mayo to steps the cleanliness program a is As we be trust We Clinic are needs we to a on at the again. deliver in we standard post-COVID-XX Lysol properties and program can will to last Hilton of week the with world, more than XXX and proud all travel that as this build introduce to of will an CleanStay, Hilton begin many take believe the loyalty

demand future, about return long-term to of we But in the are our and shift hotel to confident several recovery the full we it take could the model. will as take experienced prospects years focus A and time, levels business the our incredibly to we XXXX.

brands, and delivering to leading to enable come. platforms us value to owners technology commercial industry incremental continue should innovative for years Our powerful shareholders engines, guests, and

turn to call I'll Kevin on quarter. over that, the first the details for With

was demand Chris, across with down primarily quarter Results and a million Thanks, across Asia and year declining In RevPAR regions declined further quarter currency in lower rate impacting results. Pacific. system-wide a reflect the Adjusted declines reductions in temporary RevPAR world. good the morning, were significant prior of from travel XX% all everyone. the results basis. by comparable the hotels Decreases driven with of neutral occupancy EBITDA in weakest in the and the suspension business versus year-over-year. number XX% first operations pressure the was $XXX rated on

While to and XX% driven flat largely the control, $XXX was RevPAR million somewhat end. fees decreased measures after by roughly fees. decline were cost implemented more significant and greater Management mitigated franchise by declines quarter license

hotels operating operations quarter, structures segment extremely the our operating properties. some and levels higher included during rent challenging at Given posted loss environment, ownership our of our the of of a at to which due leverage leased XX of suspension leased fixed the

items was Diluted adjusted special for earnings per share $X.XX.

a our driven lower expectations balance by business, to-date, the nearly due depend the During year hotel agreement Approvals rest number for the of and than with Resorts increased postponed Strip. will Vegas and on on for of construction the X,XXX quarter, COVID-XX. signing resort XXXX like ahead largely development Much development of meaningfully our opened to openings factors. tri-branded of largest starts of rooms our we World the to due activity room expectations, a deal Las the prior

our better. likely However, half or for rate do net expect our expectations, unit that will the of growth rate than a lower bit the pre-crisis be ultimate we significantly year around

to also as which enhance to million through that year that bond done very referenced transactions we $XXX tranches transaction issued Turning we've senior taken very were high At at actions our yield other eight mentioned Chris crisis, our a the executed to earlier, of on first financing executing it two to outcome timeframe. number enhance earlier. financial same relative schedule. notes of position our and time, continue that the which the the marked to attractive with us the including allowed We transaction increase maturity Chris since the pleased flexibility, was in pricing liquidity, of

to We and on to details cash we prior with be our first maturities $X forma us and equivalents navigate ended environment we for as the the ample as should which quarter senior cash we presale, think prepare earlier release the billion billion issuance no well recovery. have pro ladder basis, current provide to points a earnings with continue Hilton the the $X.X on well-staggered Honors issued maturity Further debt XXXX can Factoring of note and in quarter this a found for liquidity thereafter. morning.

We remarks. may prepared our first for would now question completes have. have open like you This we Jamie, can questions the to please? our any line

question go Greff comes our today from your with [Operator first And Joe question. Morgan. ahead JP Instructions]. Please from

about hoping the these was declines, see at How look side? steep a burn, us And which to components your franchise But How environment. of to sensitivities you points on can the get RevPAR do be here? fee of to I some run in of helpful I management as pretty this some that rate to declines. would understanding do these about sort that to be you of us? and your your these see cash G&A can if of me how -- the monthly relationship, you fees? thinking operating give magnitude base guess I RevPAR are unbelievable from -- think better talking the you on And relationship we understanding incentive given kind

in there, job. Wow! That's XX questions about Good Joe.

it. repeat questions. all I the of to remember me can't ask Don't

I can't we as We not either. guidance. said, giving Yes. can't, we're

and we've would -- EBITDA RevPAR to the, going of as guess relationship, can RevPAR would at the terms for So it you guidance, model what sensitivities it level continuum about be is when year we'll and goes what than in think they and RevPAR that way go high not RevPAR answer is X-to-X say, because bit of cut the think matter we're guys I that XX%, EBITDA suggest we look level. there's degree X-to-X so into we as would helpful whole not go I And limit sort much then thousands materially costs, over you to happy so. that would and to base the these about certain the it's that XX% go hurts this I a RevPAR talk a to we of there's would with assumptions if giving views, the but the operating but lower around I business as have some worse are negative what The throughout can think you declines estate, of a the done that is, up and sensitivities corporate say is how such you tailwind. have to what declines, a we're company of, better at better structure, bit obviously X-to-X are fee you keep which to system a than a given you no real far than creates of in lot assets and is a the is going. fixed leverage rent higher leased how not the

of again, small overall a But part been. business very and the has that's

So, sort that's seen of for years, of that. you thinks. if to a including folks the minus the from I've for I've XX doing industry sort you're it XX numbers plus keeps year, bunch us I industry myself But are say seen of this of even funny hear think the -- what sort

a EBITDA fee I ratio, those little base be a overall I -- would The be levels. as our at -- would above even better ratio said, X-to-X. bit business think, touch

you in to start -- get of the basis, which a XX% thankful to a we the G&A get in you And starting recovery. not as it we're We've On to -- mitigation I for, parts crisis, think on assumption XX% it lot from see will like as the and get have health to to sort that it are. done that have you of into you'll quarter. an truth fourth point G&A we on we see we be GAAP the of the with slow, epicenter the the into now. once of third feels some reopening States, from that is, the you a start sort view, while reopened, gone improve mean, I will you it's United quarter, haven't of through fourth do world but already, including third and believe see given

G&A years net you flat. lower. XX% the for it's all making, basically probably last out, been XX% I G&A think when that a and for Remembering three is us, to has point worth our

business before coming that have what about that very we into We gone decline the much ranges we through for to were disciplined talked to have right of than in about. are will the operating G&A. sort sort we believe pre-COVID-XX, always pre-COVID-XX our the but modest a that greater decline, in of that year environment suggested the would be G&A. guiding actually I And size we Obviously, given mitigation the

is circa that levels flow I of of we're we of already the view sort better worst XX% performance, the are in seeing out than level at the as On is least bond maintain XX of industry, we We I take we quarter think have cash believe otherwise burn, level we of discussed part actually, put will I and will and performance, which it, I sort and liquidity. to that the in And think even be have XX% don't that I'm I earlier, think industry that, that third environment, the if those are said, the the it of think sort at quarter, about information way you broadly months that of deal off. positive. on cash to public that of at second

trying we're list? bit to range, did general what hopefully recognizing specific guidance Kevin, again but you that give laundry out trajectory. giving gives his a sort you I a not of a of So, miss just of

I think you it. covered most of

cash we assumption burn I mitigate course we cash I'd think on the all can about of gross burn year in think outside embedded burn but basis, an the G&A. overall of assumption. cash our embedded guidance -- mitigation controllable XX% overall gross pretty those on over say in that expenses the an is of extensive expenses, that's obviously the controllable of And

third second we I said quarter be worst, quarter …. going to actually think you but the think was the the

that? I say quarter. Second did

recovery Yes, quarter. degree. quarter Yes, second second quarter. Yes. I've the to skipped already a

Our ahead Please Deutsche from Santarelli next question your Bank. go from question. comes Carlo with

the just much about that how at a this that, more relates points that getting the finished? basis you early you and bigger next think was X are for, for NUG, etcetera, XXX this comfortable growth acknowledging you erosion opportunities of and pipeline to stuff to is approach, And year. to to to were in year. want kind points you Kevin, XXX of picture take of we that less through of of half conversions those year see basis So, point of net -- unit prior out for for looking it or even baseline will much previously come likelihood ‘XX that years? maybe mid that delays X the that mentioned presumably still call you looking lower has kind you for just this when were a How single-digit if in of a whatnot, reasonably ‘XX, ‘XX, NUG

we going about delays it's that a as I I of some I'll a of to this say, in into back think decline as year. a for under delayed, obviously, if your open So, NUG so, they Virtually that, deal other almost into under push half of And our of right? year, twosies About what or Meaning, we entirely this suspension outlook construction, for part will to the about our come half this of Yes, is of the we because of think going guidance do had resume year, suspended. went month assumption already over and part is And opens, know is be question. -- right? all hotels embedded that we an sense. them, in we for is year, construction are hotel, of so Carlo, construction expected related form means third those make year service this the half year, have to under because good question. due balance that's the right, but resume to project onesies, not back obviously to starts every delays where even limited of to a so went always COVID-XX. to here's something largely the suspension going that be would for under of really But the related hotel open decline what expected to somewhat the of construction And the will will last year. crisis. that might they're over it things construction, construction, generally, But There certainly once it all will be into next is the conversions.

whatever activity a on we're But we think back rate. it be we opportunities year we the climb we're at And -- where, from some there. more And as than working the back of up but once in as general, hurts. single-digit that mid probably yes, think the create run get period result, limited. conversions, them So of ends at on more to some conversions think on we the crisis is will bottom than there a bunch will basis, are normal, be although moment speak, rate with transaction will and relatively we obviously moment working time we this a will actually, growth that that a being NUG comfortable

And so, hopefully covers. that

of then follow specifically to on much. quick whatnot, relative side the That I cetera, recovery adequate in the about speaking you with the obviously re-bookings era, different between and guys was and thank traction elements guys the as or it to on very and some kind positive of you differentiators you that the the view what business, and that think but now, cetera had you period et what could of you and do Group have being obviously key et about did, up. recovery getting hearing future Kevin, the pricing periods, resumption, financial based sales on relative kind Group on When to circumstances Group crisis the you period? one that back Yes. when And just books, think are the progress this if in

differences which this, a therapeutics that think for likely mobility and issue, health think going is people hygiene guess. in you some might you be lot fallout that economic wanting period past or be I vaccine are not I see to a here to the groups. top wanting there's a And then is similarities, until greater. issue fallout I get Well, to and a of put then Carlo, of I of or -- there as to we we'll on time a the mean, maybe economic and congregate large not mean,

downs, just I've about the no So, is reason lead these and the it's recover. years I for it, longer of it's So, going and XX last right? whatever I and the last to being business, ups always forward that think sort other pragmatic recovers logical. about is straight it, been In doing think Group Group through this

think I longer will than because of those normal it little a be factors. here

my to be get not get have what impact out just ultimately -- we've time, people seen foxholes, sort congregating to comfortable but again. of have of think economic come to than most in the we their I going only is to and greater going of are

business, when XX more you get will right now. a two By All ago way, of than years lot looks three like I did that the think days the think or I it out, happen. will look it

on what that that talking and today, those in it. I It's know. to on and things depend look where progression. going depend happens will health I'm people vaccines what to unknowns of with going going are how about are with But the variables up end time I'm is to pharma expert It's not with very very, similar I'm judge. it not fight happens we business reopening. a on going think the all I to But those and don't which just to But take we think, super things sort It's to depend it's I early I'm and on to too it therapeutics. is optimistic things. COVID-XX. based

think, think, nuance the degree, with this I simple transient -- recovery, recoveries group answer second, prior contours little what be a the I would of leisure will transient of bit a first, So, would like be third. to business and

But think COVID-XX to I a of the me, because bit than for are people be it to I say think in we while governments get and obvious -- I and moving being And I've all Kevin, on of reopening that prior there's do think in state been for bad QX in around so is the -- I'll terms the if is you very will going that. state on business. going start you a I progression. little going different I different think think impact they're the reopening ask has be you as for and think reasons world dialogue is government didn't there. again, as we the contours cycles thank it, federal know responsible, of and – do the get council impact do that I sensible correcting on it, government that, we America correcting the and

mid very QX occupancy, but low pollyannaish. like Getting get to the you time. that recovery want like take sort to going pretty back the be don't will I think a which of look see low is, snapback given into the were my that how to trying QX, time but in highs, that's levels for in to as that in QX XXs opinion in -- decent start -- in low to will us initial just XXXX, of I a You stages were to all of

those the think snapback you of get to you slowly more recover, get to business, of in you're very think those back hiring see going two start that, and low years bit as comfort of things. going start is back -- take opinion that's a will prepared and three then and about truth mobility moving I to down, in levels think really see investing sort to people the And fast. honest said off all to is, as this you'll kind I my of that's businesses get get and and as my a I a comments my to thing in or view. The levels

unknowns, there I as just So said. -- of and lot are a

see optimist, view, I'm a a that's too what given seen knows is on guidance which lot I we But this call time to on that just why and So, talked I've know. people, it's a and early lot haven't my of exactly tell, will change. to based and because everybody but will born never

just So, as I industry opportunities the to a feel we and on to and of we Hilton for spectacularly back have company long-term an to back for our spectacularly go sort were. good feet get and rebuild a our the about industry. feel time and I good about the to model get where long-term through period of

question ahead Instinet. next from Please go our from comes with your And question. Harry Curtis

Chris. Hi,

where Do the in recessions, on different think back corporate significant it's recovery video let's out vast do think? go And really to but your didn't ‘XX through this experience about conferencing impact it pan you pans time out. amount handwringing of there prior Given is was and and of it a the I travel. know it anybody's you XXXX guess,

WebEx I -- than more all you. I certainly in [indiscernible] it's and want Zoom that get going do to lot way last mean, meetings of it's done don't to mean, to about I've another Maybe life. thing know I'm I do I ever guess. my anybody's I I'm it. the this by a when of from is The of people. want done do video with tired conference hearing I'm and

I out be of this wake I where know. the able have people be globalization world sort the margin, stop. I on but tell I that going the all in they'll am trip So, change. to And I we to occasions the have necessity -- or can confident more of don't is said, did force become see I it is do years, that. can differences. think years wrong, think to going a say, accustomed years two will highly need don't and other maybe -- of think, stop. to hard to don't I've yes, at awful a evolved, when honest or I think related certain I demand travel is, that of ago to world's it right meet and function There because XX do travel there's confident to debates is is I to to answer to, business. the going some world to going for you and and am terms customer is to going lot to well, would unstoppable be people wake you it's I highly was alike. to will up three me now, the behavior days like up or has relationships, don't look last is an three But patterns, it like the in I as I the two see to don't that much whether been that people want part think and XX or or and for each personal that think trip. I XX build can

our adoption. things, digital I that had other do going things we've it, business check-in be they're changed, people. forming to think of maybe happened, but to They're said, want it's going see where the I great be it where on margin, will to that like to there's but key, sort which that people As accelerate digital going were transient other I think some things

room, remote room, have massive where I you get control mess adoption. the don't think you we'll have touch a in or switches. with to Connected

adopt of sort those will people think I things.

digital us. already the world I think, was very important to So,

are I do told at early congregate. want are with of and going a I other about I those up to get But not some not sleep, up but each awfully important days. more other, get see lot things do as worry to think trends But that do these I be people not night, meet -- wake to going of I I each thinking it's I ultimately because Kevin. accelerated. to going

trip human occasions. They want argument I feel condition, just There's they is to go and think could I right? back people to see it are think own I also, is argument largely I their feel safe, even patterns better will the think more people they going behaviors. when to some And margin I the need that ever. than an that to and described, safe, an on that take think there

the ways to prior at activities, travel looking things, while there. at lessons learned well, instructive, unprecedented they probably Video -- because of Like, they is saying, afraid there's that Looking nobody keep as after planes conferencing this X/XX and on think is out basically some wasn't were but they as go said, everybody not the get do other X/XX, traveled, we and because I to were great good, most none figured did. out. same, the it's

fast world how manage three You're how out forward, to to the and two or get figured terrorism we figured manage had rid of out years, not but it.

probably would harmful helpful. their argue, went did people not, prior that It that frankly back were I few behaviors largely with it. to And were things a accelerate

here. think, I is same to the happen thing going

have we as that think a seasonal dealing this figure types have global That to this. was deal COVID-XX part they are these the we out will with There we time this. felt and dealt get and the of like viruses been, a of as flu I where our with future, seasonal community a we flu. how through realize with

a vaccine. tell. Time hopefully have will will We

certainly therapeutics. We have more will

start back And global their a as of safe then going they money this. tell would to would better to I largely I have is go bet really, And small think feel make certainly history like on you. truly it. procedures old sure lot are will to that's what that is environment, a very this we people and behaviors, that to the We population by most part of protect practices the impacted

follow quick the restart? you what a as in telling their of And up, are about the pace peers your industry airline

step it's say like week couple been lot had and two we my -- clear trends but now, are, the last the recovery said the the every I are in the data, China but weeks, to tiny to not we're a days the honest, in last teeny at last think I at teeny we're right we and in over makes couple difference. data, over in showing have a forward. I I based would looking month let's it's not talking be some or of peers, conversations -- thought like robust of world, rest just like I these But then at have type be looking while the on least I the

think -- so to thing. airlines the people only the that enplanements, because are That's behind. from are way just willing here's way to how are I many and travel home. the mile they're willing passenger those far And real are just if you behind at go look data,

we're team, XXX time you be think lot recovery. takes, that So, drive how go Zoom because spending really as business on X, but to local of to leaders a going XX more -- yesterday approach and all more spent about amount over ask, in months, didn't next the and whatever the commercial the business, much retooling our I'll of and our it market immense a about we're world talking about answer about an call is I to to around XX, had right? I I our on beginning

I go country, but across maybe sort the go that a get the it's I'm to door, you if -- to maybe starting to the going sort of of like out want going eventually I'm going I in to house, get think to my I'm get neighborhood, the out, my you to if it, next to safe, mean, on around move, reaction human think I'm natural to I want I'm So, go the plane is going I'll about I'll feel around move going I region region, I'm world, of progression.

would about I we very of seen well we lot and them think I world of have thankfully, And you X.XXX pickup, of we business have that been And or almost argue, think Inns. type while little if drive, hotels have street and a of it bit have they we've big Hampton we service we a business. are in has sort X,XXX thousands, limited U.S., the in that almost way, we it So, X,XXX corner a local in brands, a the set drive-to have all for up -- drive-to. of of lot portfolio,

has there it’s I I pace I for we need get think drive-to there's But happen. accommodate to the faster think think our that because a it's a disconnect, you of going is you. So, recovery of I accommodate patterns airlines. be to at normal we Obviously, get that nirvana, will business to be ahead a which to where going bit demand short-term, a to can planes can period little in that will travel. of we types back of bit on people show We think of a local to demand. and little the be time likely and a more more Ultimately, in to need if little more require or bit industry, don't

Our America. next question. Bank question from go comes ahead from Shaun with of your Kelley Please

of be with bit your subject of form are hard sort it's now? I side Chris, wanted and of you'd relief may of give and franchisees switch many of or of wondering on little your of kind those are if for like it's asks sense how just both more fee numbers, any was a right So, it kind I these color dialogue to that some here. either what partners. a how little looking world of If to is give of any I magnitude appreciate but early possible, looking bit to stage the the of franchisee the us franchise going conversations

Sure.

most difficult something partners amount engine times or they which times and I to taxes all for but have our comments They for business. that very more on kind important a little -- growth estate broader our we're ownership community still is the no furloughs them spending have pay reason this huge in and demand my and for those difficult are good and yet, in for franchise essentially guess because And to situation, as still and given of are service. with no they insurance all even are commented real as pay demand stuff. and utilities is they everybody, a with things, prepared you debt time So of would of the are our

for not way in industry, trying it multi-tiered So, we've for bit. been for a need on both team and and members little a little first frontline approach. on the which the a is our relief our relief that the any hill been Federal say, and to administration and try ownership foremost, had and We get bit, community, very the Hilton. have in deeply involved I I'd with relief and with liquidity been get frankly furloughed what's it. to don't I Government, talked have going and We about

lots including Mnuchin for been hard not or shape it way, in all have form. throughout have of right the with But conversations asked the with I've the we We Secretary pushing people, administration, really the any President, treasury. had PPP.

payroll. that good system the to. should on fast the a credit much Reality time, for could helpful. -- has structures it and and the complexity industry, on into alike, is, go And been it -- PPP be keep a just the really stay me is not ultimately that ownership want hasn't and of owners folks. program is, moving a of of money I don't and small Congress help lot our will you administration long business Reality been and as that employees for because given getting that

is helpful. very the a hard ready to working which Main hopefully fed more make that to getting The Lending But launch there Program, sure is second wave on access. more Street we're

And get of them hoping to of that to a access owners Main way, access bunch Street and Program. lots dozens We're had larger much set dozens so, by a our the and Lending have lots, PPP.

reemploy other get because our to demand of right? an part working with but administration now doing what they bridge. right is people bridge, the for need that I on also so, And industry stimulus get we're we're need and we mean owners side ultimately a important when going the a the

that very been regard. working hard we've in So,

suspended give We've they comments, they that. as way a been prepared the operating tear of at brand never flexibility massive terms mentioned of of really sort operations right? programs I things capital bunch things never done closing appreciated. huge have by our them how standards, and we've that, suspending in other done also, the to of whatever, or my operate, think We other In in XXX tons to standards, have amounts XXX a hotel I down it years We've we've around, than in whole which of hotels. done

very the spending a to bright across of mentioned, every efficiency, we're done operating more the and light owners, in short-term, use sense also we and now standards to think working the is of and To with exploring category but sort of does better hotel our necessity, time become what the one on we time this every think thinking of and spending brand, I'm of our all about makes -- -- been as to I really or How say, invention. I I put most them all create put that about like do future. term. that the about and an we've think already mother lightly things time sort of long amount bucket franchisees important on, them. that -- right the team model mentioned intermediate is out As We're figure we've which of immense which doing things our to

intermediate we went even levels and profitability when lower have to term able that work doing an And profitability incredibly levels as than we get create still it. and councils. which demand get side opportunity important kicked advisory hopefully get I we deep this a will, the think term, the stimulus as our to so longer and ago at again that for with we're to be of involvement weeks in and we swing other and them the off to that's government, full owner couple normal We have in from we're of into we greater back in and operate

not over simple fist to and But have I relief, the owners fee wouldn't there hand fee real say surprised a been I for hear you of that terms In is, relief. -- would be there's a have reason, reality of our charges, think for the asked franchise players you fee or the based structures, on structure management percentage different our is different all the or of fee system industry, revenue. they're as fee all it's in know whether which fee that

aren't because many not fee we given relief, off, meaning ultimate the revenue. when fees you're So, have there's there XX% much really

so of help get. owners I every of can they everybody bit would And most like that think -- the

sort sized not the that I of have have the fees lot sadly our that of at for continue I and they're demand with to at they're understand that right moment think with most in business of any been owners talked the the the not community. a look us us sadly event, so options for in fees paying them, will all we to that

we been noted said with the is of -- will engine and have do that all important capital I continue we to They will the As stakeholder opportunity partner there no they so. are have. they and NUG investing for the more us. as they pipeline Kevin believe They're numbers, and

while yourself, so huge validate personally severity I'm again, That most they the and earlier we're I'm them provided. understanding of We early. there actions the from them ask I with appreciating impression are than is to relief certainly And partnership have perfect my are we provide decisive bold to is think far perfect, took the to not numbers conversations be owners talking we're feedback while them. daily very can of were I get hurting, they're we and this. the our hundreds never while and in we that very you in so high And you owner community can And marks. of going and it, in literally

down on the specific of but time for where that we're to could on investors for situation the working reimbursed Primarily a costs. be maybe in should it expect see this us just given then as system potentially kind could you bit music drops Kevin, think of road? of the be and how as anything of the fund drag it's a a more aware it could point we relates that as time trapped more one much that I a bit recover period maybe when capital else just guess. little I of cash you and for Kevin is, then little to mismatching And maybe kind in stops outline

a it's lot people's Obviously, that's a of question Yes, minds. sure. on

one. So, good it's a

that in the hotels system franchised. are of working the a obligations the the for to then ultimately really are XX% and that of think those owners reimbursed think that have, we responsible and roughly is right? by all you is three right, manage minority us back if manage, receivables buckets hotels system, step In paid and of owners. capital I we by the we of take there's But about, some which a

system have opportunity there. then Then Chris mentioned an you buildup. there's as and fees charges in his So license

are the primary those buckets. So three

you in early, terms pay. things What first of even think XX So if days you following give these sizing you would month until don't really right? it's it, I all, in to starting the say build crisis people really about of then March, and the

And just into so, getting it. of we're sort

So said, in in anything we speculative. capital and in meaning a if saying are, at we're revenue cash this of but earlier way balance. stay embedded they commentary and -- least said our of working things liquidity Chris' say months we've that would some got you But I be think the there of obvious, and probably the publicly embedded would is, we've XX it's circa discussion that whereas down environment, given both in have you've we drag, XX%

could realize And be in that of dollars there the millions way of so, cash embedded hundreds do the you that is if stay in can an there are, and they sort math drag of just things ultimately. the

the cycle, course, so it healthy. is got going comes back, and to It's plays how when paid. on out? as back Chris done it just it we're -- explaining And that, And going duration business believe come the think we but depends ultimately, of of we to get

Powell go Barclays. next from Please with question your from Anthony question. our comes And ahead

hotel So, over this may financing headwind cash and higher changes medium for construction? think contributions your be reserves? it equity lenders or to unit market the a event construction And longer term, term? the for growth Do do think you require how longer could you new higher net

lenders that, of good come Yes. the question, more get crises, generally reality know. we a what But cautious. really when these out you is, I think That's Anthony. is appropriately And don't

say economic cycle. were even pretty would that, into pre-COVID, I Although we an deep

said, use see And were but That over would starting the not in our our construction, the built that get for sometimes are and hotels hotels system actually hotels, get to aggressively. talking lion's about that the most aggressively. luxury I service the all even big actually more share When caution. full you leverage, say, built are in not so, financed long-term, of that financed of like they you're hotels system

and long loan as that You're you're hotels talking always and even supply the about Pre-COVID talking like XX% say, personally recovers, be like are to capital easing cost. about globally. And into and would from I the environment of I as community it of will business the then when lending there And think back as and tripling be plenty system. the think plus distressed yields. There's then injected say, And period is systems that amount I'd normal. have profitable be I some money for it quantitative in able productive last that to more productive the for thing it the liquidity to being of will looking going will is, would capital be a of remember financed. then be to I add they'll investments does, time to recover you

Got just it. And more. then one

recovery? be see relaxed going you you’ve experience returning expectations start see that for across to whatnot. has Hilton forward? across known How mentioned How customers manage very the that owners. to a with You you been to going helped Honors the customer are do buffets no brand standards board, do breakfast which as board consistent you or manage that

question. good really a It's

everybody I going serving been talking think in we've customers, and as what's in gets short-term, the customers the world. on to

lenient. incredibly So, they're

with efficiency. a serving sort and continue and we have suspect I things give drive whole of into as premium, premium to, intermediate and back efforts sure are fine that that mostly of intermediate very customers the plans -- want certain I and to that's mean, do the will, is don't efficient your those industry, to of recovery customers the transition we have to take premium two, the share And and leave do suspension that so, we frontlines objective we in sure that market product The it of one, standard we're I that answer and have test model; right know we to -- you implied that the we of obviously, you are drive you work as bunch when sort is The basically we the many have timeframe I in all but making forgiving, of mean, the do change. have and/or to up. will to things. share. of continue is share I the the what we not that in to we're standards always we described because with no making doing on don't we're yet. now. not not the to the what I that's what I term, give the And going market -- the service sadly, you that put is, in intermediate during what others are iterate, our are out long-term we; market I who the what elements can't want but trick as different premium get doing question we create of well been the changes service. do delivering from that work longer are most are operating that

testing sort where sort intermediate still think easy, through customers And then is in of for and term, that. accepting different. working standards you're relatively our So, be will range timeframe, when significant will are low as we're that institute of I we of of what think short-term things longer that intermediate in a learn still a demand we are all quite I opportunity environment

environment there'll of have going some some long-term, we're reinstitute. that'll we I to normalized customers more want to more that that to be efficient and we'll a be be and our going think -- we're going that a to standards going in that bunch they're to things whole are are do going

your from Our next question from comes Goldman Please Sachs. with question? ahead Grambling Stephen go

Two related follow ups.

you capital dollars drag hundreds the First, of working millions in on potentially. cited of the

You how this mentioned, last. it on will depends long

that burn this can I liquidity is think So, on provided the as remain moderate assuming more monthly consistent assuming elaborate deal, on cash relates you about it what would that this or to if or seeing quarter is then consumers maybe you the if you from even debt the program. potentially each things a were in whether little -- you're drag you second, and loyalty weak? you're And a talk bit can

of during use also share then some partnerships customer have you how engagement in have yourself ensure You how and impact both recovery? this may period model and this the to and the take position to eventual that asset you

that as assumptions we Yes, the again gave publicly to up deal months, sure of part and make XX to which just everyone's on working for that bond so the deal, I everything upsizing the bond we that say, would Stephen, capital, the said clear we XX deal. ended look -- was pre-money

when sharper. would say get how that the are you new, of Again to range. I sort of a things end that's that. the longer is So, little crisis

way So, would be from I But it moderate of year I'd worst and would on would again, front the first it is, that the characterize quarter -- probably this the month, the there. second then assumption....

assumption to at have XX no basically you or or least months The months get little the to -- XX …. are

Yes, stay you that way.

perspective, the flat would better it any relatively that it beginning bit those in And kind gets a with of would be from at curve, harsher recovery then again said assumptions, and from under again, little I that it there. be

color just the any you on on can program loyalty then that? And side provide

Yes.

look done things it at a I'd of you say. bunch if have We

modest the Honors that have with but business, we we have all, not lot of a has our skyrocketed. occupancy of First business

is, it more it's it are higher to you members. would can people travel and a now see see you But, that this of that publicly they the aren't high things already lot timeframe on very than lot because and in much. willing been guess So, traveling we've about non-Honors I during was seemingly what talked I focused and a

definitely to we can the industry, can't believe. going not come the come Certainly going We've in them give say, of your the -- of and We to ones, -- give not can come things significant no out to very to I you. we we to first you that points we We build -- going their to So, the so keep first flexibility, very out were remain do we out status. and expire. status, We and been hold own, to weren't were what travel flexibility. them regularly. first definitely give loyalty? our were were we early bunch to have with and cancellation are people allow to members, to Honors against communicating a We fault did say we're

be because far, the community, well. of part want that we're of I'd the going doing part in that's so doing we're that to we not the solution, problem. The And work say

So, our first with who and a watching sitting these can't a social but TV things. are nights about brand, around and build seeing doing free, of for doing with responders the brand of other lot X of our lot media continuing million Central work is to of we're to sort our AMEX that are consumers move the room and reading World lot, all Kitchen work, they're a Honors

result The product, gone have crisis. Score, it, of our in consider has those marketing whatever, to way been up like looking Net at our intent Promoter net team numbers terms numbers, our through purchase is, the of

a things. result, realizing, we're the right doing people As

way is about when so, great different. in life, bad, the I an when and And a my I everything have caught real opportunity I which everything -- off it was race. you we've recession, we go to into is, about have it's into we When great mean, But up I differentiate similar just arms you and job, people directions the you really peel attitude, hard think like I think this, is is done yourself. which yourself. go the differentiate a way get but think different to thought good, went when

this members the with the so, done and with core we been said solidify making that thing we crazy them, what have and on are about with crisis And things, that talked to of people right the to we liquidity particularly the communities our job already everything do involved will for as have owners, part that, need in as can we the in the it a our to customers, and that them, protects deal lot we all in in are an I impactful and And focused amazing them, we're and because structure a and we're from of so as Kevin obviously sure build that we’re is focused as loyalty. because -- our remember that we care we as right team on got really crazy the Honors listening continue much the that to can. taking best day as deal doing solution doing I've cost team on been way to for crazy impacting way, we're them it as members is, has

absolutely will company out there's with a to other way And the to a painful, so, this What continue of differentiate our our describe determine is is, to are all it. including members. as stronger, attitude other do now, all come our side committed of Honors my no we to well, this team stakeholders and and we and future, with ourselves

far, a think we’re job good doing so doing I very And that.

from James. Please question. ahead question go Bill Raymond with from Our next comes your Crow

markets think country? part fair It as the your they Harry on and that airline. suggest sounds downturns. discount to probably with the for that prior it far not much then larger the would case, of fares, travel the going is is, have it’s come to matter the also And back does the how coastal it rest as is second mean that no that it gateway that's the is I gating stimulative the been that discussion, than in not Based And if be primary it's of your later view airplane like earlier. was factor hotel, --

planes, are particularly I on is reframe me let a have little but flied is which to. I it be big a in flying, the to let be markets the airlines What degree -- that -- of issue. Well, was To yes, full me to that to planes think to major recovery, the a right. saying have to get are a People there's the get business comfortable back bunch bit. gating in

have full you there. to recovery get amount to before you so get And get to a recovery have of you significant that. believe I can absolutely

I had Bill answers. the think, wish all I I

understand is and it while this which horrific important, life it's terrible affecting lot when people the wrapped that than which bunch very with we going every and and My comfort factor. continue more everybody has that of nature is therapeutics, you killing part reinforcing much what you get pretty I've testing, a are virus is that human and a listen to have is going because know vaccines, that to real a that it's population is and really data the the more belief things there's of think small as to clear suggests the just relate the to I testing, people's whole people down you up own and risk. that and and people, the is what's is that on been rate White data is infected House at lower antibody it, a will it's including lives mortality different thought in much, get with

are the the vaccine the not they without therapeutic, risk, think game comes data have. therapeutics, those to a I or more testing vaccine are think a of and/or out it's that the comfort more changing. going a that I -- even particularly are people going that more at With

to And be to just think trying I not evasive. so, I'm iterative. be it's going

space, I mask and understand there be all think people socially out. to wear they you're going the to have. therapeutics mortality you're that, The real more progress people going and/or some going business, have go vaccine are we that to rate, business, the drive-to and have will a fly-to more

but recover said lot wake than did couple known. I we times, I on will think a more it start up think mean, fly-to But variables more people shift, and the going heck past first people like -- a if a you you see particularly this happen. big of two a will feel three in I getting are of right lot it my in and it'll whole it you're and where to now planes at you not will, be the It's I some not you will depends airports as was, that looking will anywhere up. years, summer, airline or now. going well numbers different and to see you're days than a does a summer, are going drive-to, more ago bunch in progress, near opinion, that with -- this think XX to on that of it I when see

going to progression. think it's I just a So, be

out innovation whatnot. you lower Do per hope using up the sure question talked one this for I period you're follow can you you just will two, years with cost as start operating three, answer. you four this if I I'm to other or out, room stabilize Chris, that be not or right. But and think industry? look as cost can occupied higher we about

may that I you there all mean can't how the Bill I going just for tell mean, the answer But on, in are than thinking some more relatively that things Other clearly, little don't like we're much little a things more that, products about terms cost I because you sure. as working outweigh yet. that Lysol that. lower, Lower, guess things garnering working few we're and a the that's products, bit a Lysol have be are because to expensive I might CleanStay standard our vastly Lower. with Mayo. Yes, of of insignificant. efficiencies

think up operating go a I basis, to going are costs we when on down. stabilized So wake

from Please Farley UBS. from go comes with Robin next Our question ahead your question.

questions this. to on Most the I difficult have to did on been Thank is appreciate and up growth follow I question but Great. have it you. visibility want asked, my unit of how

that a slower under historic You projects. about thinking were open when construction come like those owner would because new would usually downturns, the of and be a growth talking and typically out or you decline from pointed But at later two or will rate appetite about there capital available. of of perspective financing you guess look just a supplies anything in as year I

see could levels, owner than of anything what that be or It that's wonder the growth would terms out given of pipeline owner we so may hasn't you're back talk And yet, put or could to be of now? appetite. years it would not much how I about kind XXXX of rethinking that kind shovel construction. lower a seems mid under So, ground about a in something then, from get an you even a if like to saying single-digit developer take year couple in

Yes.

and this and cycle. a then crisis being the because the to think what time, And got describing. right? going thing listen, and certainly suspended. I touch think, that's you've there. longer how point another at crisis the The sort of you've it really. was take is, year a the Robin. generally were delayed, had -- There that financial going is I after to of where are then from I I end the of push. is it the construction in Things last good year other you're time a is although it's XXXX stayed of it's not mean, just difference worked And started we great was low down first point sort mean low/went this coming building different it's it's

less little had just we to you and and for a deliveries a and going think engine. demand bunch of demand a our more hotels -- existing while be bit for their So, you've had there's

a we So, see but growing thus, think conversions we of we higher what that's trajectory here. from level think think. do going drive a We'll And forward. what we'll happens,

one Okay. the downturns. previous all right, in we've Great. never sort that that doesn't same other hotel wasn't And reopened at That's is, year really the me a tell higher issue helpful. a lot, this point topic then And even go removals, interestingly, not? closed on removals much hotels and if data historically of in above looked to is up that's 'XX as but this average. rate I with that that would you assume expect that don't or well be mean, at for I

accurate. think accurate. We That's very that's be removals normal. will No,

Stanley. Please next our ahead Morgan Thomas question And question. from Allen with your go from comes

the program, buyback in be future thought authorized release there in the to purchases any resume leverage and the the said, your levels, think in the you. buyback buybacks, think would may Thank right any just share terms about the of remains do in you helpful? -- do at Hilton you suspend Just prepared program how remarks press about wanted How time. formally you program, that so,

dividends think not have a made short-term But Yes, a are and be about pretty that don't And little good of a given long-term it. sort early where going I'd buybacks. we're we to We've say have I in question. -- really clear. to doing bit we dispositive be the

to we we find liquidity more really I One knew allocation planned sure were up view, might need think COVID-XX, have even we did don't back so in was not. we ourselves well environment, to of that we schedule good at strategy being end financial know the to and those cycle, course our As we out that has we business business for think we position But attractive, it, knew a a available, right credit flexibility we argue are but recovery that of are. really weren't those of we we would have would get the and all end the just we're normalized post-crisis, lucky. and pre-crisis I capital I of we wanted a and set very things now and cycle, terms had at though the really from things in not of changed. having the we point make mean maturity

another worse have credit for what's test really be believe the a good like And profile to it. be I feel hard balance all through given to liquidity the of this time sort so the and in we're say think we can greatest It's I'd test hopefully the of one sheet. happened should a pass to and position get that and

the argue back we different you been? What could can too much is we you than debate lower I will have get So, say point when conclude some that. in resume might environment, time of get leverage at we that a you we will off a and to this our about I normalized view. allocation I I'm little be broadly, our isn't would of left more environment. sure strategy. a bit we to a where don't have think when capital of a But normalized be would we to intention terms believe sort resume definitely to

Okay.

we've an our it's it. time. everybody's doing way continue think and to I been appreciate obviously, this. We has happy that's work as call I sort talking interesting times. with as through that interesting of of people on lots Well, know, this going been we

hopefully comments on quarter quarter and will road sad we in but fourth recovery. third the second not will be As back pretty, be our to

well stay with to after right on up safe, catching look going stay awfully everybody the and quarter. you we're the here So, you where working updating and do we keep and to second are hard things we'll to forward

do with conclude gentlemen, We conference. will today's that, for you joining. and Ladies we thank

You may now lines. disconnect your