Hilton Worldwide (HLT) 17 Feb 212020 Q4 Earnings call transcript

Good morning, and welcome to the Hilton Fourth Quarter and Full-Year 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s prepared remarks, there will be a question-and-answer session. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Jill Slattery, Vice President, Investor Relations. ahead. go Please

Welcome earnings Chad. fourth and quarter Thank to XXXX call. full-year you, Hilton’s

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

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

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

discussed and in earnings provide the Nassetta, Officer, Chief President, results. You Global environment. can find quarter an Development, our reconciliations fourth on our Officer Executive Kevin of and Jacobs, of full-year This measures today’s press then President our our in non-GAAP morning, review release will at will overview financial to ir.hilton.com. website Chief Chris Financial operating and call and current our GAAP

call Following to their be take the to questions. Chris. that, remarks, I’m turn to happy With pleased your we’ll over

the understatement. many had the in work throughout that including joining and start by everyone. It extending To I’m morning, certainly Thank a to my and family by difficult. say to of the want want as with something the on Sorenson loss. world you, host. to passing. I and of capacities Marriott well. Jill, following good to an be my I is I heartfelt appreciate us number you staying deeply We at thousands associates everybody news heartbreaking all today earlier opportunity hope Arne start Arne’s condolences of of around with career, the most would saddened I

very but person a leader, fair also he was to and I great think incredible an friend. it’s say an exceptional

everyone family of Marriott better are and better the him. Hilton at him professional because is industry of I in and a a entire of and because behalf person, better, Our thoughts. am our family On

demand declines all the ensure of acts As our unique people. that make warmth our by the across history. the through founding economic presented a this place challenges, declines we’ve seen quickly world, businesses and devastated never past disruption, including social acted better before in the pandemic widespread communities extraordinary lives, has injustice. Due and our our we purpose of and we experience to a of of levels industry Guided to know light world to the wellbeing safety XXX-year and hospitality year

steps enhancing took our our our unit also while effect. growth continuing and rightsizing drive network and business structure We cost to by net our position liquidity protect increase to

the higher recover expect for owners a from news, of to margin As positioned these and we that as cash result free stronger is for business our deliver even our flow strong shareholders. performance better a pandemic to

of accomplished, our could been a we done it all the support not year, very proud without have While stakeholders. but we’ve it’s everything of certainly certainly of we’re difficult

our their loyal For support to a enabled important our that, stood of all extend and and we’ve three best partners, culture, the work members I’d them, owner which business on our to been the times. consecutive thank people, who to number year like the get team communities States United amazing one in number award-winning our shareholders and us supported our to customers, of to best world’s for trying able second earned to these Because help us workplace who us. place to us you and who lean through heartfelt the our gave souls our by our hearts

fee-based modestly the results adjusted more model. with only XX% system-wide of down EBITDA our declined for RevPAR resiliency full year to illustrating Turning the

environment. of demonstrate of market in customer gains distressed brands strategy region also centric business power the even We across a our every achieving strength share our by and

XX% For December to fall further we particularly disrupted the cases, summer and showed versus group suspensions, the Business third quarter declined quarter in through RevPAR by The and muted. remained positive overall Similar to the line hotel and Europe. quite saw sequential outsized November, demand momentum demand. was transient but relatively travel system-wide the and rising in travel in improvement with quarter, portion drove early expectations. an prior COVID drive trends tightening leisure demand of modest restrictions that our

easing travel with distribution we modest trends As restrictions recoveries Europe to vaccine year for in the far the increases pent-up lead U.S. so and first optimistic to government accelerating to quarter that overall demand appear the stalled in Asia-Pacific. be in offsetting will and demand the look to fourth unlocked remain similar ahead, we quarter

We expect of end second the improving with all rooms fundamentals essentially the heading into system-wide by reopened spring quarter.

increased We more meet leisure demand business. and expect and year by recovery transient half corporate and meaningful the a the pronounced rebounds, driven group of in back

$X.X given year, Over United rate $X.X nearly the personal more additional States doubled the stimulus. trillion the last with than potential has trillion to by go to in increasing savings the even higher

this leisure demand as drive greater travel tourism. a to restrictions markets reopened expect ease We and

demand transient pent-up transient pace in there drive should with that large upticks business conversations year along corporate is corporate progress. that with business the year-to-date Additionally, our as customers for sequential travel recovery booking trends a in indicate

On limited. visibility demand side, year. of travel, versus With half back within we improvement position step significant first showing XX% up in group group roughly meaningful half week new of made January the remains the of the sequential overall our group saw bookings with a in

However, of we see optimism. continue signs to

extend large disproportionate were a share X.X% command where of growth. new of rooms negotiated of more largely nearly our XX% vast brands year. in we ahead accounts the XXXX our industry into this XXX continue Despite up to in nearly the unit development challenges in fact, hotels, XXXX, net majority Fourth guidance. by agreed and totaling rates openings slightly year-over-year, than achieved service driven growth quarter up to corporate of In XX,XXX China, focus

We Hilton ended hotel year-over-year. XXXth with Garden X XXXth openings our our milestone the in celebrated We year through our also and our China, pipeline X% XXXth our XXX,XXX development up and Inn. in of million the hotel rooms DoubleTree up

disruption development than year. on signings, signings versus market more the new our prior While wait XX% conversion increased

benefit As strength owners looked continued network, brands. through from of DoubleTree Collection our our conversion a particularly the and activity, we momentum anticipate and positive

marks and our Tapestry across several the in During our Europe quarter, hotels of Portugal. bring this new expand scheduled one Collection to signed we Collection year. Curio agreements to Tapestry This to Mexico open

unique suites food and in spacious with property venues. and experience and five the open momentum, further also plans to hotel Mango with underscores in kicked Seychelles portfolio. LXR our resort Seychelles, will on guestrooms beverage to Schedule that commitment House the agreement the world-class an with to bring We our XXXX to to announced off Building we a debut truly deliver hospitality LXR Bali. coming the months, expanding

celebrated we Resort LXR of Vancouver Monica, the competitor opening Downtown, Additionally, which was the as Hilton a the which Astoria, from debut Monarch converted is Santa marked Beach U.S. as and Oceana Waldorf well brand.

openings behaviors, in years. with ability in notable and quickly our by for exciting confident move and The over delivering of priorities next our remote distraction-free we modifications growth continue our us, Hilton change Loyalty and pandemic are several and with front these With guest industry workspaces to deliver Hilton. rapidly of development concerns, standards environments the solid and opportunities customers we flexible Program, to CleanStay leading work Honors launch to to hygiene provide listened cleanliness many

planners even event Solutions set and the address an of help towards meetings recovery with implemented shift expanded Additionally, Hilton stronger focus resources month, as hybrid to business last we rebound. on EventReady group Hybrid dramatic

in growth on commitment continued XXX our XX% remain year occupancy. honors drove corporate with and innovation who our our ending XXXX, system-wide we Throughout the for approximately responsibility and focused flexibility million more members Our ESG than also initiatives. our to network, accounted of

Sustainability are to leader effectively the manage contribute communities We’re and by the our there brighter in call we opportunities. Dow Kevin second In response executed more we challenge honored few and fourth a in year details to a in With confident the that, days on strategic and named relationships on the press industry we for I’m before. continue ahead that over row. to we’re positioned strategy, ever quarter stronger, a to I’m change, proud and for stakeholder better to Jones and going the our crisis key forward marked year be to are and more a turn Index carefully global resilient the are year. that than full

Thanks, Chris, and good morning, everyone.

his this morning. Chris’s and family know friends I’d I with Before who with my sentiments thoughts are like many my at about I hurting begin, are certainly Marriott, to Arne, echo

impact demand Results currency quarter, comparable declined the neutral During RevPAR a on the quarter, environment. occupancy third the continued to versus basis at was prior pandemic to quarter, and honors continued the to the declines further due travel year COVID the XX.X% global associated and at the and as million $XXX fee somewhat quarter. than fees. franchise expected control fees franchise decreased mitigated were travel cost RevPAR hotels better Overall, mitigated fees demand, of decreased including by of less license suspensions declines corporate property both by continued Relative the partially fourth in seasonality pandemic XX% Adjusted and restrictions. Management lower, system-wide disrupt were some revenue temporary as on was modestly XX% levels. rising the during reflected by the EBITDA tempered our and year-over-year. cases than and development down

were expenses nearly XX% our For at the expectations. our full G&A high year-over-year of down end corporate year, the

Our demand the of fixed temporary ownership environment, closures the portfolio in at costs, rent quarter fixed challenging including Europe payments posted lease due properties. some a loss to our operating for and

coupled losses. control segment with one-time items, mitigated cost measures Continued

share For was special per the items quarter, diluted loss for $X.XX. adjusted

our balance preserve to flexibility. enhance and financial our we sheet, to position continue Turning our liquidity

to to forma these we’ve million our revolving the as under billion facility. pro cost senior average In repaid our X.X% of year-end average at maturity effect $X.XX basis, the X.X a January, last credit opportunistically weighted lowered debt refinanced maturities of transactions extended XXXX, extend of months, billion we On our also $X.X to weighted of our $XXX into we notes rates. lower years. and taking outstanding few Over balance

all maturities thereafter. maintain we no have. details Further maturity can This to for like on you and like year to issued XXXX speak in morning. the and We any earnings release remarks. our the later until with would full have We prepared a now staggered completes this of morning. be may would our open earlier wealth questions this quarter you We major fourth debt found line

yourself question, you first So we to ask can one have we Chad, limit question. please? our that

Certainly.

We with will Please question-and-answer Joe from now JPMorgan. first Greff question will come Instructions] go [Operator session. our begin the ahead. And

Good morning guys.

Good morning, Joe.

Chris, three But your about questions thinking XXXX a you of to leisure about you’re What’s to a What’s just in limited net your question, out sure about in how vaccine. I’m pipeline business individual start your travel lot thinking years growth growth from terms voices. group think pre-COVID? business about development hear to different transient do relative relative post here. how get to of different travel, your picture pre-COVID? want Chris, rooms full off love you’re big service with I Nice about and hear future to on service and the thoughts travel, you’ll business

it’s Yes, great a question.

out a But unpack could there. Joe, lot I ad and you and obviously this so people. debate to And a lot go debated it nauseam with of think, when I’ve you

leisure as think I a and that business it I think is if XXXX. to or will years, between and years, I the similar. time, three business whatever, XXXX you think And look did XXXX, quite in in going meaning point four go of transient, group three out at like look makeup the transient lot demand

to right. ultimately up. truncate It and reality to the as And the Now, mean, what different other to internet ultimately there’ll more it It there We’ve it arguments really world congregate. efficiency. speed voicemail, But always and business with forms with throughout being of for it, speeds is just – And typically need and transient certain gives group this it does if travel. setting, going a it around, reasons, opportunities. is particularly travel sort speeds accelerates digital connect to be need underneath continues of need they need effect demand, the globalization. seen side travel Because types things the the they up and people and without travel, but be they travel this back to to build congregate, result, I it types telephone mean, as well and And calls of need and face-to-face clearly and telepresence to history, business there’ll Zoom replaced that need they group substituted type to I individual you build as the done things – – the the the wasn’t both those were new go a the as get well you the innovate. be certain be needs. opportunities, substitution a of in really of then cultures, if in relationships, is cannot might in

asked, couple of comments to continue throughout to business because, X% And growth. faster done be to lot Why better I listen, having business I’d our since and think so a like substitution is think And we’ve I effect, admit, then than I to it’ll we’re business. debating the a this. growing grow years, three it XX, you business been next business to our and years, going – a stronger did. unit going like but some higher – margin again, a I X% there’ll a it longer look be XX don’t

a COVID, similar be units what is you’ll believe, be We’ll levels. believe demand bigger The were. I you they to going had we’re if company. that have like producing, pre we which So

a are basis, this if all sort a have new going basis cash and of, have of maybe be amount units You’ll be at of cost we a Because structure. a year on always you little rate a cost going significant been. disciplined in the a have you producing incredibly like something these we’re also cash on that run to as look taken And we’ve on out mid-teen, lower to bit in better. sort that, then

last spending year. a low been to, it’s but math, in a cost that’s of margin basis, all we’ve the through got And fees you better when structure, on more end G&A with put and higher we going think even at I same the business. flows industry, system it’s the a of simple the lower units

so table of be the with to I And optimism. it’s know, an sort pounding odd time

us think to shareholders, sit enough at talk to population not of as that, And talked over a going and better to long-term ever was of I I’m flow, particularly the to result is put – but that’s It’s mid-market, we best ourselves we limited is, we going which attention, is allow which very going even markets. frankly, you think – board produce free drive point it, is we more the There that’s capital and these going honestly, incredible were around us the in for it’s as the which on table note, hard could think service, but hardest the of service, population is world. is, to have. in going higher about cash than is exception about in got more I’m the our every it. covering have return because the I’m our think business pre-COVID in bulk the so to something of it. where And I growth a important lot is emerging territory, in year, megatrend endured, it’s I the the be but the bulk an been Because, we’re table, returns. The ask shouldn’t, to industry, this margins and it’s probably the any I about and And a that? I not things. right. market And an think – last the our I we be pre-COVID which Why of is don’t full you lot position where

know can patting sort people brands? that. mid-market us would so of those say, And what I afford I I’m

being not proven in I U.S., both in sure we those outside to continue growth adapt U.S. We we’ve like, China. and a the make been And strong development we’ve best over and those that’s the the from refine purposeful mid-market have competition really the development in luck, the those by picked that the customers That to and world. want, these XX adapted environments allowed take Asia to the and view, in in those out but competition partners, and show the outstripping growth of those those of last mean, has environments, the very that we Pacific, sure great we done us here, in what outstripping and years regions making – community are what the the point product service brands brands to. want. in it’s brands, particularly Europe, China in best

our the I of focused upscale good bulk showing over But where a to there, done things going lots So wake and the bulk next what’s best XX And in of going the space that’s megatrend, a that’s to And conditions I Because rate. the particularly what adapt right. us, on years about the lots alpha years, the is was the been mean, that. drive focused And that the was accentuated of post-COVID we work tremendous which to world limited back COVID, great so before going for end, great say, on is we’ve of the market think say, this deliver result this economic environment, I the is the gets what’s and making or real to only progress And on feel coming we alpha of going as in over and of it’s in but in a in of And be in put having that local rooms, in bulk growth, sort saying the really all we’ve really, the unit, ourselves years. the growth the the to XX numbers going of because is that for would and the that in position. of up that caused growth I has – see, mid-market. mid-market. and intensely distress in we’re unit you bulk world the things why I’ve that, in you of growth if That upper luxury, in service. demand. all bulk have XX the the in been everything, you brands in higher a look up really thus growth it the it’s good

you. helpful. Chris. That’s Thank it, Appreciate Great.

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

Hey for the thanks taking guys. And Good questions. morning.

Hey, Carlo.

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can’t very sorry? you well. Carlo, a Could hear little, we speak you up

you I’m hear Do guys. a sorry, better? little me

yes, Yes, yes.

Sorry.

So my I question. you taking appreciate

I next [indiscernible] you’re and growth conversion XX to how on XX XX% the to You’ve today about see maybe do over you used peeking How guess augment call kind pipeline of of activity about months it spent representing or out could percentage some you be about time look, conversion kind talking years. that the see algorithm [indiscernible] thinking Obviously, the next two months? will of extroversion they kind the

I all kind in and got think of you that, I are cutting out.

answer I’ll come And think if what back So and remind I missed I I me. something, heard.

NUG, feel obviously the way deliveries. years, in of really a We better the couple huge over we feel fourth think that. next same X% terms at still to a few have we’ve quarters. because the But terms quarter So X.X%, felt had I we last in of about of said we delivered we deliver bit X% over little good and we’ll

– of always very We’ve the second on success ground. focused part year, part, more we’re a leading everybody I And that to been in downturns, heard that, high years side. conversions the year, to I with that. probably as is but your and end mid-point last it’ll that’s think on in next again knows, the conversion we this the over the is fertile be think I similar comfortable feel question to what of having

we’ve really which about having or DoubleTree, was have Over mentioned soft and And fourth up of brand, year, I three we’ll now my which big us. producing conversion our quarter, mention, continue six the and our our all up conversions prepared having opens gone for which were between one our XX%. signings think it probably to starts that five up were escalate. four, DoubleTree XX%, for XX% was did brands are last to comments, should the I from past years, I not engine, were our essentially

I up is happening XX% you’re So what That We little a basis conversions. sort of you of natural, few question. the think points go, like, it or ramp, takes versus in overall prior time be would which a over high year. will bit next XXX was to and years of of you’ll maybe circa see the XXX is become overall next were what right. the it How NUG. larger see will And larger NUG that component

clearly in I into don’t so I’ll honestly I unclear. because that it firing, our think the think into low compared of limited all I recession, many I go go will XXs great it have don’t that I – recession. the we answer high, think we to So with the as it great higher, the over service went years. few in go growth, it XXs. mean, China other but next it’ll think engines particularly the upper XXs, could

are And tremendous development guess. the aligned have that up some you it, goals. you I very the progress ramp to numbers would good in the starting amount so focus with described, there. think that and those of natural I And we on teams see very, around of And as are

coming things miss I your So in question? are really nicely. Did anything along I think

much. No. very Thanks

Carlo. Thanks,

ahead. Kelley is Please of go Bank next The Shaun question America. with from

or from maybe now morning, that you little for did everyone. as kind same stock-based the Chris net on think to out on to relative to where a a efficient, remarks. think few all you think comp, strategically, just maybe margin restructure do profile end levels years with Chris, to on XXXX out expense much good us more how but for – further? more What’s we the XXXX? of either higher of think of you versus down even right XXXX. G&A more. I just Or we overall some cash units And bit looking Hi, little a are of about cadence Kevin, few there’s rate for the a a little path bit a the digging look noise out thanks in just run going referred you little as kind in bit a you kind Obviously, help build I savings sort Could years.

take that one. Yes, Shaun, I’ll

I sort you non-cash, includes pointed right. think, G&A GAAP comp the right out stock of on some it of side, that’s

course place fourth we new plan year, a our the So in we last down in over the of quarter. and in plans wrote then put

saw ended some around you things ended So first a at bounce ended about did Chris, a XX% a overall you then I on XXXX XXXX, your cash this remember, then but basis, Chris we and we up up the I said better up, basis, versus mid-teens XXXX over cash know can’t in we be answer, XXXX. in cash this, we’ll if On think down on And it say XX%. basis.

forward? that to can no how overall benefits time, have been over look, look and trend. But we’ve we’re new year. wages core didn’t of the so – probably this in that’s inflation growing And excess heads in business going trend not going It adding

growth grow probably we having see what there’s think we we’re years, more going always remain disciplined think grow that’s and there’s ahead to in reason in because of changes slightly continue at that to overhead. in cash that next without can’t several sort nothing years. scaling business the than we the inflation, we future as slightly wages of says to There’s over inflation. have we and benefits step for get back can’t to the that no so And wants overhead to And few

very much. Thank you

comes next from go Jefferies. David with Katz ahead. question The Please

everyone. everyone’s Good Hi, to voices. hear good morning,

David. too, You

able made talked leisure lot about demand if cetera. travel based group. in some debating have et broad for of would more pent-up demand, about intuitive pent-up segments but you industries, your love just Thank a little be hoping that a And comments, further any It’s of you. and talk would and comments it obviously to you I’m we might Chris, other go that you around lot a available. just corporate a little be that how bit time depth might have quite spend those you and

what while I I my all David, I higher of can been leisure their and side to think I’ll certainly I mean, get you business comments, you we have want says can Yes. think talked have. that about. And that of been that, do end not to kind people out I travel. give have in has we give and and about out people do I they the want stipulate starting many all – the and to not – basements prepared really leisure

through, going And think, to as time it I days. period you is a over next mass XX so get vaccination what be the of

having direct think late I to too, get administration, I’m the talking but the everything in hearing, you when reading papers now which to and summer, Biden you’re spring we’re pretty conversations.

that My maybe think the end I of the look end could of even vaccinated. belief at the the than to sooner night, manufacturing based of by middle be able summer. the this month – be think you by much own heard American that could I be last curve and that, sooner, I expectation be the J&J said getting probably approved every if President of July, will

even and of to that talk They think of So the anybody though a there, people a stuff doing more and talk get and savings, been I you all as know, lot – well. to buying want have car answer. like crazy, your have you I business homes than been once get think lot get because of the ever retail we they’ve friends to out any and

reality summer. spring, I good, there discussions we’re mean, the seeing. our we’re is And that is, so hurting, customers, our you mean, demand. run in I having it’s getting want mean, just it’s out by cutbacks than they’re and need numbers all they’re hopefully meetings, need is short with will data worse like there will obviously businesses to no have of that a innovation, may business and the that, counts. which time, they in line bit to with just negotiated to to of talk of about the rate see as but for you fact a think they do people, XX it maybe clear they when term, get clearly, pent-up customers forget points. they’re I their as trend there them have – months year. So going and I a transient, things are think be been just that sign, of all that they renegotiating, the corporate bit the On XXXX sense certainly we’re big be team lot people. clients quite the we’ve to that when discussions many But they’re little – collecting out our see people, and their the massive they in anecdotal of admittedly trends I with By customers and are a been having the over XXXX.

you’re of starting even booking of trends. all down, we it sort I week to sign. are for in clearly through we’re are week clear even an not mean, the rates the see though business the marching – transient infection so all this, – coming middle you all sure. in I see we’re by And crisis up, the trends even have still though to the mean, don’t starting you the And that, see the in

as – highest began. surveying over saying number. is but are which short-term, booking XX% to interested So data back on get business, mess that like, travel since other it’s of out this like of in not the data they suggesting, we’re direction, in got tons with of we’ve more people Obviously, and them the right that was seen say leisure than real is for doing, of conversations road, pulling moving lots our it’s customers it lots are suggests, the well, the

good. the So side, going that’s but that’s on group to take are trend good the lines longer,

was sort January If up XX%. you like versus volume, lead fourth quarter at January, look our of

it, the December would because January because you at up from versus January normally the December look I step you give XX%, If was up quarter of holidays.

want with XXXX. a number I I go versus more But I as that – the was that’s to our would So the that for the on sort that I a – XXXX think was thought half through side, a better over encouraging whole position group fourth average probably quarter. stat first up by the be third, I of very than team

I the washout. not mean, because comparability XXXX, relevant. forget is let’s a So was it

system-wide position If first here it you of look at XX%. XXXX, the on side down half the versus is group stabilize

of XX%. half The of second the XXXX year versus by half second down the is

get we it’s to of again, an got to With get again, margin because out, they a booking business that’s people meetings. don’t group, want result if to I go but are out lot starting medium-sized conventions by book lesser I I get still to going it’s it out. that team so second – ramp the a you again. to vaccination off, do to need group, to up. have happening. I and they now from small got got saying obviously, they’re June, So point of have health time get really this safe. day-by-day view to And year the expectation, effort July of and by but my we of it that’s And will need get a there, we is and can the half like belief the between feels

And and there’s think have out I people next place. obviously, when opportunity think the publicly, cycle, into think everything’s great And eventually So but lot opportunity of clear you’re when for few of lights at this said that’s the Because everything, it’s think good of this, Summer, new sign and the think. norm. going depths to this of got like looking real flip and the be year it’s do trend doom tunnel, I coming negativity off a And things we a or the when anybody months going we out sort a stay the you’re second soon. I I fall half any the forever. and from travel. of bit to top lining the is of the the for things right a is the us given, think than the no of there’s of want they you’re to what of all sort a But I want play little to color, to at end matter Bloomberg says, get better which to bottom,

half a could of pent-up what huge the of amount I we the demand. year. think I see And like think in all we second there’s

And I follow-up. quick it. a may just if very Appreciate

bleisure, On efforts or the hybrid subject of any end? to that thought, strategies segment marketing or

of where right mean, fish I based efforts in let value if now, to can And have all our on I and focused the where are. of the sort bleisure on at leisure fish simple, questions, that all keep and short is mean, the marketing efforts ask folks the we been Yes. other of it are side, moment fishing our business.

into So in they have into and not don’t of And aren’t to sort sense, their are into part mixing they locked the but and because opportunities, being they’re going. it it’s of have a kids the office. businesses bleisure really is they’re in mobility travel businesses leisure it locked to small more keep really that their not being locked an schools in necessarily with choice,

we’re with what we’re doing of that. focused with all marketing have promotions, our on doing what across doing our what been we’re efforts spend honors, So with

all demand not to well on working that’s go we we’re obviously normal where plans back shift. going start to to and to and sort – all become migrate If a of as immediately approach were, patterns goes right, Now but you’ll the to I’m more to normalized. obviously more back

Thanks Good luck. very much.

Yes.

from is question Sachs. Grambling ahead. Please Next Goldman with Stephen go

morning. the taking questions. for Thanks Good

Good morning.

on half And China another as and recovery did as you group On fair referencing and inform that that And the trends, related are a from segments of any coming would you of to reined substitution of signs all how the the before are perhaps cases helpful. in market were it second your seeing in. that trajectory at U.S. compare leisure you think comments market? follow-up, trips in Perhaps how may once lockdowns? fourth contrast incremental business the how you those quarter XXXX in that angle, are about

our in you’ve China, as the backed particularly data first China China, on, don’t of the North we the meaning but implied say fully a with very question, the in what’s weren’t back the normalcy and Obviously fourth component, lots in quarter bit front up than of South Asia-Pac your approaching conversations me, more was sort of the points still was by I transient little and it’s we I but off our – all from a it but following in too terribly have pattern of the of say we heavier were sort in a going always would weren’t quarter, close leisure I anecdotally is rapidly and group would leisure China team, business little our with way. something group Leisure of I was by with market business they far a lead bit China, of would mean the here. our planning business second. is But expect And leads broadly, time running I transient heavier lagging there it the longer, trends, like but same that. a China bit like little because bit. – a groups was more off, there XX just nature is

to as backed COVID. could up. We So very before any we were we we of sort I far that it was is trends the getting substitution rapidly with were normalized were going demand. Reality getting had of back the they any not had tell We levels as before effect. China normal data think seeing sort to material of very

longer look times, a lead follow, take years ways, and business transient lot is of different I think will but a a leisure couple develop, bit the while are little in patterns will out think is humans. we of And they over a because lots belief return think come of as China be I pre-COVID. like this lead, group I so that will why of And sort fast my it’s will humans to demand did

very normally you have is one points to can of to China get overcome off. imagine just remind the quick to you’d follow-up, I inbound, that international XX business what us And which percentage

points, XX about It’s Yes. XX%.

in back Awesome. Thanks I’ll so much. jump queue.

Yes.

Raymond from go will be Bill ahead. question James. with Please Next Crow

morning, and Chris Good Kevin.

Good morning, Bill.

Bill. Good morning,

got unit if might. I a I growth on two-parter

a has a differences it between opening maybe three is or versus a and of year newly that’s question? built Hilton part to first year adding Inn that a Hampton economic DoubleTree The conversion simply are say there one

I It’s the the always you I year, within timing. are in from for world Yes, just the imply. the signing getting of happened in months. between just in XX answered think of system already and signing the difference and builds mean most is rapidly happens of – I to paying faster not you conversions months fees that sort typically to but mean and takes usually X months new very anywhere where on them depending XX months XX year

faster. think development so conversions Kevin underlying say mean as terms there’s in I ramps I a in Kevin not runs involved think have of, these involved. data I’d produce in the that’s And and don’t of front it. I I looking just economics, think any difference and at about I difference of me, faster. I material were all in real deals. comes terms but don’t it anecdotally we’re

the think similar. quite I are basic fee structures

be the very DoubleTree’s I the market XX are full to – higher, think its right. similar. that’s a generally but absolute Yes, little service bit so tends level just hotels, is of speaking specific, but return DoubleTree’s profile these to

maybe Perfect, The hotels, part select to your smaller whether development markets the impact wage would where for lower. which service much perfect. $XX follow-up economics say in is minimum think or national second be the the Tru labor you tend is rate

me time and people of of the minimum number many I to supportive when needs matters. think the time to issue. that And including wage and in But administration you been how this lots do talking could, I folks about broadly, you to as are It a of said I’ve sort it up. do over place move it

what then be when important. will the how likely think I that and outcome it’ll bill. likely think not there, the so end goes become And on that don’t probably I based that I but hearing is, do I first in is the highly think possible, think not likely, I this that not an that know I’m but issue up away. And highly it

of proposed now, first And to $XX, it’s so it’s in how not being even in staged basically all, what’s years. that five being over all

working our creating allows a with to adjust more And that owners create, efficiencies. even think that people on ramp that creates obviously so I we’re and

So across by the to $XX, are country it’s the a way, there not of go markets already are like whole you that $XX. bunch overnight,

living to not been at in the the impacted with as a slowest think of industry recovery the of dealing it the And view And more be been is concern is is Poughkeepsie City. with you would also people figuring bringing York it. and going when they’ve jobs can New in it I think And so any you think analysis from it’s My sort hospitality country. up, I same spend the has not do jobs help. the matter market’s industry time really back. no like minimum wage, And that every same look these personal I And a in living big start to worry terms issue. raising that move how that out in then point index. is the than the in of to that don’t

slow the think the will in rehiring of industry. people it I

in thinking end this I people am in be short prevail. rational that certainly not so a hopeful will will rational, the that a intermediate And result, the major issue, to And as will term. be

minimum I should time. wage all up going going be we that the over assume is to think

in be done fact, built I in timing it the staged other all In sense And it geographical am sides. on again, think it because it’s – a make needs to, that, but that that make there’ll be and I will to approach hopeful mechanisms will way. the

don’t answer short to is as I in Bill. there’s meaningful term of it. The the short impact answer short a intermediate any think the – So result long that’s a

Great.

just add And Bill I’ll for as well. plug products, right. I that our covers on the just I’ll add, a obviously really ground mean the quick issue

Tru a a with basis, prototypical, products more minimum costs products – benefits but even that and basis, our up, are if revenue and relative go so that then efficient. wage more And on expensive more particularly on referenced if you our it developers, make modern premiums, for start if our relative you does though

a to continue should product opportunity an it perspective. to ourselves So from differentiate us give

one margin higher creating to work And taking taking areas. every areas not hard food the in Hampton brands is now we’re doing everything more Tru the and is other of – that businesses the and it right our hit too beverage efficiencies, – including making and else labor housekeeping, of them last in and about particularly point

– will the margin be businesses So less of get to did when they those out labor require they’re we and higher than crisis, going pre-COVID.

a in as for net of will sort factored way. But is the longer I thoughtful up, and of period it’s commentary. also in time that it’s hopefully goes done it of my So done sort a it of over think that

it. your Thank you time. for Appreciate

Next Scholes ahead. with from Securities. go Patrick Truist question comes Please

Hi, everyone. good morning,

Patrick. Good morning,

the interested curious I’m brands at question to your morning. in acquisitions of Thank – tuck-in international your in sort historical brands. interest from versus international brand scratch, of building buying specifically as morning, perhaps normal you. strategy brand today moment My a or private

get we gone for question. we’ve been I’ve to nothing, Patrick. good And we mean doubled. I XX nine – saying at all. from frequently. And Thanks, think brands a I Yes. changed We’ve family certainly don’t my one, years, I think since views XX brands. we bought of

in and organically it time doubled of every single here one we’ve We’ve So the been one them. developed of I’ve we and them. haven’t bought

never right. entire my been saying, time for never, here, I’ve So say

consider it, speech. all we’d heard filters, right it nothing passes the has. You’ve but If my

the And think our predisposition. so sort past you future, of it but is tells of I indicative necessarily the not

got so that. one of every we’ve that developed fact our a think And very in best say would that but which is business. say filtration brand think the Everyone never, the is what brands customers think tight is we around exactly I the the And – system, filter market share like that that built by we scientifically proven, a be we never We leader. we can is portfolio purpose want. is

backwards, we profile go that would acquire we want meet have look that like have to sort to. And we of to because that don’t so don’t anything would

filter, it. I me the We fix. have the wasn’t the And Do you’ll to all have want we we next leads have segments same have the pick covered. of a that the of money think something paid to would brands, us a lot don’t whole why If launch in brands something’s But we could do trying pretty would in covered, why is that launch we lot generally we for up best short-term. see much yes, distracted cover, which covered. super be to we new curb to the we not that? then We which every – economics. that way category

we’re these math, developing to If do not simple nothing, for make it. you brands

have every sweat do we It’s something home things time through effectively we businesses to, because it, multi-billion invest much. yield they And infinite so we’ve billion, mega it we time. but infinite not dollar these where so and just do return become time over an equity, an a every brands, become

So that when lot of paying for of haven’t you’re a we elbow found perfect, doesn’t money lot look And at that buying it. is we require grease. anything stuff, a

your a brands we’re like never to think it of a a think foothold but – to that the for how not we are just it because never, they where do that’s but aren’t sort show implied process up we want where I – region and radar, what also So say good. of your that’s places but of I now say we regional is question it regional going whole comment there that smaller and sort are not likelihood maybe headline, that lot become on about that, very hate maybe don’t have sort stronger the very, again

do don’t last the we portfolio capital stuff. was bring bring bringing origins want is We focused to like had we condition in with good allocation. to to good the industry. we’ve our And intensely hang looked a botch And business on allocator. want that will set I the no the capital don’t everybody by been get the yes, continue you to the you my messes that would brands being father the to I say We The dogs, what while time. we so, And the again, of result best we say, has those net we’ve we them, for we like I a offense haven’t competitors. we would think future at that, in it a stuff thing those to to fleas. up either any. my over got. got that do at up looked say, used bunch we’re And done are that. bunch in of Maybe want – We and

high you likelihood, it And not together, impossible. so – never I put but not never when think

you. Thank Great.

Farley ahead. go Please UBS. from come Robin will Next question with

I’ve commentary two follow-ups. One the think you. your I’ve be are at just actually Thank that questions on group there XXXX. XXXX three to that in it Great. too volume think Is on is for half for group years. than early talked growth? XXXX, to that half how just both will I’m point see since would got second that about much events got be place and better haven’t have your better to you taken the looks.

early. too Its

think the the other when second day XXXX that like our and be all I power think released more of than I that a away my to not into you hardly we like going do I there’s I sorts get space going cheap, gargantuan And just people say give half too this accumulated demand. are needs but in should year, said pricing of people to takes belief, get to think, to because because it plan. it’s own result, this, time team as have

year is half second big the see the to the are in those smaller So because they groups of think this the have is what you’re in uptake a you’re lot time I are. be thousand going big person SMERF doing can takes planning doing will stuff, conventions. it not its if as takes times consuming, Even hybrid, when person or time multi-thousand The you’re a the planning. lead of it business,

the to almost And so. Yes. so next or year point that’s this in at start got fall really to

again to there’s way. it I think feel half like it, a that goes this all start vaccinations to and a that, in reality plan about safe first they according of with being in if do intelligent the can people congregate year but

on year, dump I of think that you’ll this half a will that demand next – of you’ll in see the planning. requires year into second bunch stuff

year some growth from Great, And comments follow-up comments. other is worried think super in XXXX had my I XXXX that about And on was of the maybe then had construction been what your some about next helpful. delayed. the benefiting were unit than maybe better

the that. that for next Does So being like of kind for months? there’s that that that this about little to sound X% development leaner and lower the an talked bit years maybe those? of XX would of started new be be I XXXX going should few think you maybe last end would how guess the about end we in that air year Is at pocket to have at when higher the X% a

that low. it think don’t I be would Yes.

a a we look momentum stuff I XXXX. conversions, thought. than think X.X% mean year, lot And have last construction I more we had to help of in really again just we We more to again, last delivered which there’s We under it’ll think definitely, we going more are on good is is This than production. construction. we this year. help lot That’s help that’s in or going through this year us there’s moving stuff that was even us. then was so under put at

I going next. said, And year, rooms of mean this under still next last to not deliver most I ramping year, as into year. and – that deliver It’s think construction XX,XXX we on I conversion. we we’re going to put is

our those that that not be think So think range ultimately I that degree I to was X% than be of but goal still XXXX in the X% sort by years. you’re suggesting. lower could that that in do XXXX, all to

much. very Thanks great. Okay,

Yes.

from Clarke Please be Richard ahead. go with will Bernstein. question Next

taking for my Thanks questions.

on used on over. rolled questions of owners. upsides I sort you couple rate the to a take contracts Just about of some talk your with conversations as

sort you urgent expect it pandemic, on we’ve this of percentages would the they to also as through fee And them up. restart. renovation when enact to and that are push kind that process CapEx wondering gone that is begin and gave how and some you of Just able you holidays

questions. Both good

and would fees, be first, now people to rate, rates, effective it’s absolute increasing are rate. every by of contract those not say rates an you X% it we’re X.X% you where sense, in all soon if definition, new cycle. about So in terms a the terms the the to in average turns, going – brands license but time our on goes about I anytime of we’re right published in our

industry. within not the It’s I think what sort and of but to the continue likes anybody standard done certainly that’s do saying the we’ll that. standard, I’m it, always we’ve

obviously fee where you they of they we natural have we’ll look are what do with going up that year. a then So our and when the market will are keep, keep side to we think you’ll we we’re about this, points and keep on things, those the grind depending other up get as XX see And rollover. and that share at structures, sort of economics to we basis ultimate our of good but can XX, all effective grinding sort rates

side, is which CapEx got a It’s the really On The delicate it’s to important. balance. portfolio. obvious keep you one, the

these part We fresh leaders have product that one every the product, product. of is that market obviously share of high Part quality a And categories. of product. part of in having is consistent service, its about

We’re very about religious it.

keep and relief. disciplined. into those a a the good crisis really in went we have recognized their position, that And because has We Thankfully, owner to assets our unbelievably to given we’ve lot of up. community been over diligent get time They premiums. have

year to this, if interest, that give of good grace of be that get them to we next as year a But suspect our yes, that’s this our time think back continue It’s ability a And the we results. year. place, other of in into we going side to not to customer our get a have and to discipline, kind the ago to is drive with they went want bit in interest. base. we’re having impact I the going a of just crisis so owners’ period have significant a which not in to we have not and for to

on folks the get I have the I we’re going sense very let different of the a this, we’re going we to those individual I brands to to it the average be to Just being got on going brands in the world, that of without feet. in second upkeep of and – And their half back – while given do harmful. hotels quality can again, the our and think think into that we think

Thanks very much. Wonderful.

go Please will The Citi. Rose Smedes with from be question ahead. next

thanks. Hi,

Hey Smedes.

costs a improving patterns away already follow-up in just know XXXX, been higher terms but cities up from to Hi, showing of the of your in geographic perspective maybe in anything that on it’s that I that’s there about you’re want perspective too some about early cost? into from seeing, had U.S. just I talked talk you to on and RevPAR bookings sequentially, pandemic the shifting group so far underperforming lower a from is

of the the given more centers cities that those second big geography Yes. the it compared you’ll fully in of year of to more business would The in disproportionately those in density year, geographies. demand big in And more uptick very is is, the the people the normalize. to nature segment way. lot to think at to hope think, a and and seeing is the exactly half clear group lends ends I But in outside when in moment. of And bit patterns the SMERF patterns because expect is about population. what’s into the tertiary, markets a and being that primary the that normal of and what definition as as of is business. question the up you’re And what the said now lot following different I and more the going on the I it you been and less right start I by that’s of I a get of just all in think we’re greater reality urban itself of half SMERF it see start as said the a more of second we sort secondary

that you. to. then that in was back sorry related that follow-up, quarter one this, I it’s the just a took the but if from very Thank missed was an add And impairment you charge quick the was in just I’m what Okay.

and and for goodwill ownership almost I’ll on segment with bond to the cash. thought well Yes, this having to to – crisis the mostly going ownership the in we deal mostly be the means in you do it both the duration was related that all just entirely of as in pre-announcement recoverability announced was of those the we assets segment the what on let

you. Thank

Sure.

session. for over Ladies Chris the turn I Nassetta concludes any to like conference to our closing back remarks. this gentlemen, would question-and-answer and

able guys Again, will Not of think greatest we for joining the record the our a in today. for But prepared XXX-year we businesses said I in proud the as us are history were thank accomplish. year certainly. company We in to comments, position. our the or in terrific XXXX go my for you books sure. what industry

those mind half and of as a as we’re second that to year, we be summer, hopeful and be the quarter, stay in different in spring And going again, spring the ways after hopefully certainly many are to get first comment everybody look to We to the will well. we’ll the positive very of us described early which able Thanks, certainly and on trends. I’ve to in forward get place. the

now The for you today’s concluded. Thank has presentation. conference attending

You may now disconnect.