Hilton Worldwide (HLT) 26 Apr 232023 Q1 Earnings call transcript

Good morning, and welcome to the Hilton's First Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Brian Kucaj, Senior Director, Investor Relations.

You may begin.

Thank you, Chad. Quarter Call. First Hilton's to XXXX Earnings Welcome

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

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

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

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

will the overview environment first discuss and review morning, for current operating quarter outlook. the company's President, provide then and an Chief This our Global Executive Nassetta, Chris Financial and of our results Jacobs, President the Kevin our and will Officer year. expectations Development, Officer, our Chief

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

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

today. Good us thanks finishing saw maintaining guidance. bottom the trend the which high of year, we morning, the and of end to results led for half pleased our remains last for back everyone, top the that that joining both to strong, our in Brian. travel line report Thanks, demand We're and quarter above

operating performance, to cash amount and continue capital-light to business effect, return of model power capital premiums Despite continue move remain the our expect flow, an growth. fee-based As drive tailwinds to meaningful will strong, support fundamentals forward, to RevPAR growth and macroeconomic strong we industry-leading we network optimistic increasing to unit shareholders. uncertainty, and enabling continued our of that us we're secular our

segments X% In prior up to quarter, throughout Asia all XX% significant occupancy up the drive to RevPAR and of levels. X growth, the across of and lifting China XXXX, to XX%, just quarter. shy from points outperformed quarter XX% COVID Pacific expectations, restrictions year-over-year the compared the system-wide Rate peak compared XXXX. system-wide Globally, demand and drove in in continued grew first and reached recovery

result, the and since month began. the time exceeded the all for in segments a of XXXX levels first regions pandemic across As RevPAR March

our positive we're bottom line for both Given cover top more which raising detail strong full and few in Kevin a results momentum, year, just and in guidance the will minutes.

XXXX surpassing to in the occupancy XX%, to RevPAR performance. Leisure trends strong the quarter up Turning back the ahead prior reflecting the to remained Strong to for Business and details. drive travel above levels, XXXX by resiliency up continued improve Pacific. rates also throughout RevPAR mid-teens XXXX XX% approximately continue remained which demand segment of transient the our of recovered businesses, medium-sized quarter and by in roughly travel, X% driven segment mix. with small with of leisure transient fully Asia from business in surge particularly XXXX,

also bookings XX% in March future month Recovery remains strong X% with by finishing quarter group in and RevPAR each versus full year-over-year XXXX robust position improvement steady with year XXXX Demand remained X%. roughly line in and XXXX. up exceeding group with with the for

Additionally, than of to new higher increase X ended XX% in points quarter. an quarter group XXXX, prior leads compared the

year line now due some continued XX% assuming XXXX, and system-wide macroeconomic based accelerated year, and Looking of at in the top Asia the in particularly QX momentum across year the in growth the positive expect full on back X% U.S. full to between uncertainty, better-than-expected results, we the demand half the slowdown group, versus

brand's the our including XXXth Canopy and Tapestry rooms, to we opening Lifestyle China, the celebrating Canada. the the of debut Turning several Collection to properties development. totaling quarter, opening addition the our X,XXX in In the XX in of opened hotel milestones, XXXth Toronto first Yorkville, over

after also Embassy ranked brand's XXth the Aruba Hampton expanded property. resort presence We Virginia addition and XXth first a record-breaking the And with in properties the #X for XXX property a in Hilton in Magazine's Aruba international brand's marking the countries X being opened Franchise Entrepreneur row, year to recently in its by Franchise new with Suite global Beach Ecuador. Hotel XX

hotels to the While quarter rooms to were we starts by which stages progress are approximately our are part more environment, XX% this in financing We conversion currently XXX,XXX quarter, than newly-launched year. during tremendous. impact And expect signings brand XXX opening by in Hilton. half regions. The of a of all deals more construction. been various signed conversion with rollout has interest quarter year across our the the see hard deliver from from higher and outpaced initial have Spark to later in in than signings prior in working prior Spark some the rooms, economy our year, and currently the XX,XXX premium We exciting than teams benefiting the the new growing are negotiation, encouraged front. we current pipeline brand, under Signings of record this on

an Hilton global XX Inn X deals countries. XX and new engine across quarter Garden in in countries also with working XX signings over continues of growth the to be

marking our of to globe. the the luxury announced demonstrating further expanding Jaipur, of we in the world-class Waldorf Additionally, and across debut brands brand in signing the the India commitment our April, Astoria

for nearly the year-over-year. the totaled more starts in and XX% up Construction XX% than year, U.S. XX,XXX starts were over from quarter up prior rooms,

in growth all account, under X% XXXX. STR, Our over ability X% X% net this confident range deliver compared construction. industry this up continue the to still remain global we guidance within unit the unit per to to construction our our pipeline And of total to and couple lead we under to growth to is years. return year net into Taking March next in expect rooms

the Honors quarter, points basis increase an XX% In front, of program. Hilton million XXX year-over-year. year-over-year than for the and occupancy, a increase hotel members more grew loyalty fastest-growing the accounted Honors On XXX to loyalty members, remains Hilton of XX%

effort expansion with partnership in further the our to and existing an Peloton, in announced Germany, bikes all an partnership U.S. available on bikes bringing with make Peloton hotels. Rico, provide Peloton elevated across our loyal experience, guests wellness our of UK, to the to in Canada Puerto properties April, we Additionally, building international

engines one travelers social we our the communities As destinations early and the Report, generations companies, our vibrant Hilton efforts and our goals, world's largest where and April, travel. hospitality hotel to of beautiful reduce while we opportunity and including XXXX to we responsibility Purpose governance live, to we our environmental come. support impact planet recognize communities of published outlining the destinations within ensure our for In preserving Travel remain protect resilient progress with of environmental, XXXX to the creating the has towards to and our latest work our serve

and social remain environmental governance operations We to committed responsible and across communities. furthering while driving our and impact and positive sound travel tourism our globally

an possible again, eighth continue of. #X All efforts to culture. the accomplishment company, recognized list, our success not to would of be U.S., Recently, the dedicated of workplace truly remarkable proud I'm our year Great team, ranked for without top-ranked Place workplace and in be the once our Work consecutive we Hilton and hospitality the on the Fortune our talented and

for brands, our well team we the uncertainty, members business believe have us resilient and dedicated future. model world-class that macroeconomic despite positioned Overall, incredibly

few the quarter our to I'll over the Kevin more for a expectations turn year. details on the and for Now full call

Thanks, and Chris, everyone. good morning,

$XXX continued strength in in as and the APAC and quarter, in and EBITDA quarter, XX% was of year currency-neutral first well exceeding range. strong a steady and in and guidance system-wide by was demand as compared grew the to our on transient versus Growth business RevPAR prior increased During travel. leisure up XX% driven comparable the million Adjusted recovery high X% basis XXXX. year-over-year end the group

by and portfolio. as performance driven was fee XX% Outperformance across Management and regions RevPAR grew growth fees ownership as year-over-year, all improvement. Japan driven franchise continued Europe benefiting better-than-expected in by strong well our

discipline good Continued results. cost benefited further

was For per the for of the items year-over-year exceeding adjusted guidance increasing and earnings range. XX% end high diluted our $X.XX, quarter, special share

Turning regional to performance. our

Performance strong the by compared to to in XXXX. XX% rate In up year-over-year leisure first XX% business RevPAR strong year-over-year higher levels. by demand. travel, peak than RevPAR driven from inbound above leisure the the consecutive increased international XX% be and U.S. led U.S. levels was at and driven performance by versus the demand second Europe, recovery group grew comparable over demand quarter RevPAR XX% strong was resort U.S., XX% benefited and particularly XXXX. RevPAR finished First RevPAR continued where was growth. peak quarter In XXXX Both outside properties grew Americas for continuing XX% strength in quarter, from Performance leisure with and year-over-year transient

by XXXX, region RevPAR, Pacific XXXX, improvement X% a strong the China, the XXXX. to versus in demand also region, better XX-point growth RevPAR improvement than saw prior restrictions. the XX% due down versus and XX% East Middle Asia was of year-over-year prior XX% group and versus led points XX% quarter increased excluding versus demand. quarter. region, compared to recovery lifting Asia as accelerated rest In quarter was The RevPAR XX representing the and XXXX, China X% of year-over-year significant with and COVID up an Africa Pacific down only first up RevPAR In rate

to Turning development.

over Our year-over-year with U.S. XX% construction. located and totals outside half rooms now XXX,XXX nearly and and sequentially pipeline the grew under

growth between the near-term still X% we X.X%. macroeconomic the unit at Looking despite and year, net uncertainty, expect full

to guidance. Moving

For growth the year-over-year. second quarter, system-wide RevPAR XX% to be and XX% expect we between

and adjusted EBITDA to be for and $XXX special and of between million million diluted $X.XX between $XXX $X.XX. items We adjusted expect EPS

XXXX, Please special adjusted We our EBITDA EPS incorporate year share forecast adjusted $X.XX. future repurchases. $X.XXX XX%. diluted full of ranges note $X.XX between items X% $X.XX of growth and and For expect for of that we and forecast guidance RevPAR between between We not billion. do billion

We for total the -- on during share million. capital Moving first dividend return. cash quarter $XX $X.XX of of paid a to per XX% a

on form to have $X.X of results also earnings found Further authorized in a the Board to Year-to-date, per can and and for billion the dividends, quarter. dividend between quarterly we buybacks $X.X return second in returned the be and first shareholders this we share quarter $X.XX than we more full morning. billion release issued in year. $XXX expect million of the details earlier our Our

as now to so of Chad, our as would the question? We to with one may question, many we yourself limit prepared would you questions We possible, you have have. you we like ask speak for can like first completes open our any to remarks. This that please. line

is from [Operator Instructions] question from And Deutsche Bank. first Carlo the Santarelli

guidance, terms about at you in the XXX points your from guys RevPAR obviously, basis just about thinking midpoint. Chris, a year, the of are the perspective, way up

of some contributes obviously quarter that lift. First

you half How guys visibility pushing of on the will get some tougher fourth understand lot of trying your second your the on context situation a year guidance, the call. if Just the in or you're to macroeconomic change a of spoke any out of obviously, the guys outlook changed You when you've or you second have quarter half you macroeconomic quarter? believe has that of from the quarter, conditions contribution to within kind in as had first second when much toughen. interpreting the

returned good the and an second what has uncertain way. environment. think for continues prepared to or used a great there to just in trends, segments. numbers you I is, is strong. our deal heard pricing, Business But in times levels the Yes, think, uncertainty in half today because its in gestation good question. very is year, with quarter, and I peak a the I I to saw a on across macroeconomic get prior of our mean, in the be both get two certainty. seeing three is Leisure in transient really super on reason based we're It's all as to and group longer of going Obviously, comments you what there. the motoring the it's strength demand there

representing world. view? issues cracks? issues any my And momentum. truth There not point we but you didn't of question are a executive we're regionally? we're of very seeing So entire of really at of any this the -- seeing I demand ask, is just every the ask region of seeing committee, demand way, is I table sit broadly? I it. Any first every lot with you is cracks with a morning the it patterns. not part And Monday from issues not this it terms think Any are Any in segment

around places said an and we in the the Having other know U.S. many that, here inflation there's world, in issue.

deal Fed it some slowing believe has to And being means becoming to think going the a that with I impact at is is U.S., managed. It's it. of has that, at to of -- I their being here process not economic there. word. Now continue going it's in particularly environment -- the but some have in broader take I it's -- that And on it's them you're it said have to the the ultimately, us. point, normalizing,

for It hasn't a have still demand; a of a I broadly. benefiting reasons, are in we we two, still bunch shift think lot I yet patterns suggested: of one, from spending pent-up secular

may have spend, they're lot experiences spending people less more it things. of a while So to it a and less little of on on

keeping see opening back it in on travel anywhere momentum throughout all are up, And finally, the in economy. been, demand a the near is steep You that has up-slope. international China the travel where while of not And is it's things international with those business. really

to capacity going stay at lows that way, additions probably are for and Recognizing are also, while. there by a historical the

quickly said suggest my But is Demand for the a for comments, I in basic we the anemic. the good supply, are share fundamentals of I our are us. Thankfully, supply industry business remain supply in more the demand. strong, so in reasons I good. than fundamentals when good fair very that's and get fundamentals is So the mean, that lot

we that, down. expect of will slow all said things do Having

going a we're I ask, You that a think. the higher of ago. going have number to this have what resilient. a be have We're that but have I'm say, to confidence I'm a I you will tamed. lot degree not it land to I I'll than confidence to be I of deep which appears this well, higher quarter reasonably like is a degree the asked at And point. feels say one, not Fed yes, the would any plane will actually maybe would It tell well I right more question differently Inflation going I kind do to a sitting a of the slowdown, at a reasonably dark modest person recession. did is, I here point. more recession. being and economy feel which answer,

So I feel better about that.

have just has And bit. One, I gone pushed by. things a like out time definitely feel little been

now a the we our QX. into bunch this at done. sight We're that understanding a point year. deep of not half I the lines momentum second under left, We have but There's quarter into feels of And belt. have good quarter we're continuing. the mean, pretty like is

gives sort a get you under confidence. you a So of belt. more It half year your

enough And on business. bottom better without in our of the this able much confidence There's so is why I Fed about, thus resilient. I more feel broadly increased because The like we havoc. do line guidance and our in to there's the being too sort top economy feel wreaking momentum pretty line

will point, sentient I'd some I see that, at we intentionally So on, a net-net, we bit yes, said in prepared say better. and comments, assume you are that I because Having some going the did said know we and what's feel it we do slowing.

honestly next the more quarter there's the consumer kicks the broader third it the year, strength and realistically, I a it's into fourth I momentum chance quarter. of think into and think given late broadly.

know. don't I But

modest And that in the tried to slowdown. so guidance and some, other build this eventually efforts see the our we've world Fed expectation at do here least, is, these in what that we're of work an and of -- parts will going in to

year. still of And our think better tried in we for uncertainty, so that's half did. feel there's we've the in sort of that to of the guidance and than what we -- lot second factor We a

franchise of was I Thank The X.X. think if the fees the I'm with obviously, one period, fees fees assuming franchise that's managed in growth non-RevPAR that, XX%. could, comp Chris. XX%. grew about side And on RevPAR XQ was a In Great. franchise ancillary Unit -- I just you, follow-up. then 'XX? some quick issue the

of to basis. supercharged than have over think and would particularly intermediate, grow Correct. they're license term, we're on the fee a about, think because to we Yes. assume quarter. is better on of to ancillary all in those normalizing way we of I in you rates, side, typical first our typical algorithm But sort otherwise, growth, fees think even Omicron, way fee the rate those same-store the those growth. growth still think I algorithm growth the above the are But above a mean, is growth longer going about

just You're in have yes, on Omicron you -- some normalization year-over-year impact. going

has concentrated And the been a little U.S. a little more growth of business where the in is U.S. RevPAR mix bit so as robust well, as as outside franchise not the

Joe And next Greff from is from JPMorgan. the question

now, the what capital the forward that more to financing. your in requesting are environment, think limited expectation hear you circumvent to then maybe regional growth a on maybe banking are right for service pulling year? about just for and And particularly you of on of balance and from developers your they future reliant in the markets you guys? views maybe bank Are given maybe help love I'd more your feeling the Chris, for Do they're changes with credit some talk understanding have I deals pipeline tightening? what is an developers Can follow-up. effort

it's I early. mean, Yes.

seen ownership issues a that obviously of to anecdotally as finance. there's would the much range So from, say banking have go we've taken sort hold. a been still broad our getting talking I And lot of impact. we community We're haven't

in As up. U.S. numbers you our far in the starts can being so in see

of owners getting still Now best of and done, was local banking part share our are the best before the They're getting part up. issues, tougher market relationships set in that but deals it environment regional with their was of after. the banking, goes a the

middle we and to their talking we find to that "Hey, the going they're industry, banks be are the saying the are like folks saying that you. typically there their some do also saying, in others better. for to and hard have banks are money relative to we're But proportionately very in So even

days. Just give like me XX

see I out." to think all it's early me Let And so plays this how know.

I this the I some is pretty sure I banks a there it, managing through week think broadly. seems am There's about of Fed, but be ongoing being always to run I trying on, which think, isn't the things or committed sort Fed regional think to to I well. think objective on reasonably this going be, today making

think we're shape So I reasonably that in good way.

of credit as of period because share fair less that for I brands our net be we'll okay? term, didn't there'll historically times financing, are the get when than go do first show in it think to get think to I hard for shown and et But up. intermediate It there's more to our up that be It the tougher in better the we a believe not is result going But quarter. see time, hasn't our we'll still impact. performing, cetera. up some available, share it's short

in think the think I people, going for but yet, our to the point pipeline, growing. of year it keep terms expectation this seen haven't is at We is I pipeline

to bigger data. it you the was heard, In construction. first good, conversion the very the very, as in question is going under be The quarter,

will that challenging. more get think I

I think it just stands challenging. to reason that will get more

us world. And -- so share our news a for the big to listen, It's up. we tend good get is goes

on sort be contributor. China is the slower a up While a next big it's I little to year, I been up we think has side, about of development think to steam, as picking going net it particularly bit think, steam pick

at relative think, think but banking a of which next if this very are conversion, year been We a XXX% a to by ours. do more low community. somewhat this year of little I as lot, very be conversion conversions overall by is on big aided we'll delivery all, bit, meaningfully very, lightly, of and the dependent cost as focus -- in year entry And a a percentage have Spark, continue

better the of quite why the just all So but it We we that's did is did and not management, to in good. right serve, timing Spark. actually reasons, better Spark time a effect, for bigger create network

but it's add it this said, not year, over and to think we I As next year do starting significantly. lot a will going -- for beyond,

a is financed survive. Joe, We all of -- expect for board. the little net answering that of to service, on in which But a what's going the and the to and going local banking slow limited I'm again, disproportionately is, by give to that's in through banks, less regional to be bit. the across to bit color that, going get them going that going system, to They're trying horns. they're do particularly down are things available, Most there's their credit pull this, of going but

beyond given you the flat, fee just of Chris. that about second growth Thank term, what's last into you're Great. half growth, And the anything that, of sort is years? think you do think the if the my question rooms baked this, in we guidance. which But is is not follow-up for the second guiding can system-wide RevPAR intermediate half, for just few excess be in to the just growth RevPAR it

It being we've tick should by X%. of over X% the yes. we'll that described. as just of on And is a believe manage be the maybe back way we impacted things couple to unit I our continue growth. the in be, that Should even up so We mathematically, as to to next plus years the even do some algorithm yes. you through environment X-ish, is, COVID, The an average over, been same-store know, delivering

even certainly as the so can you now environment, we're environment, see, even in a grow continue what And with is unit not in no experiencing growth. for growth but would fees which that to record, same-store

from America. Bank is from Kelley Shaun And question the next of

during Chris, let's stick from development I help longer activity, played And us a bit crisis a global bit pull experience this maybe term. out little a little bit. financial with wanted of out you kind little to your the of but could how go of if the just

than a system; then might the about, unit of the of on I us three think growth, back then; stronger financial international kind side. domestic we that of decently about drivers, think, you've interesting obviously, Just about brands and got help pretty even where if be some the there's think -- conversion the pipeline reliant activity,

us it, mid-single-digit get broadly? protected scenarios help trying here just And macro weight? think about the broader much should more difficult buckets X? about Can 'XX growth to a call sort we those of variety think, to carry X think could on people of you let's as net and a 'XX, do and how help you And financing as and broad a unit in be target from fallout different are again, how

I said, ask. it right that's the been why around impact. to through in above. we that we question to said, see maybe mean, period way described. also down do range directly, We've backed into X we've But to say Yes. in or And I the of being we'll system, I the time, I Through that's And some of there. sort able yes, expect tick it toughest cycle about the over history. say their a good sort as things these through of recorded work more but feel that we you think COVID, X-ish stayed be next I'll

products to better, Well, going going market we share higher. it? one, in we to highest business. brands have perform to do going market our share We're share we're keep are pushing and How gain because the the

to And to work activity we that. of an hard so share will to larger less get new even while going potentially plan domestically, build there's be

upgrade Spark shots probably is that thing we're is where on not We'll bunch of believe it's to again, still pressure going by really convert not it Spark, they're but to suited the of types where Recession of and -- I'm conversions, customers, uniquely But little The transactions on in properties of Conversions, more terms a only puts But most of we Most asset do that on that financing. depend we other point, people lower around but change do also, terms done brands. goal of change we'll depends a because a think seller having helpful ever relative properties. of lot product. of a I'm good there's have still at ownership, of a and -- all, Great conversions changing long happen conversions -- disruptive A on financing. little a not that no it term, lot price giving and the the other convenient buyer that. ownership and brands very in timing certainly change say

is in growth guess Spark unit that XX,XXX rooms. the of I we'll about keep again, sense giving because, you're But talking

for newbuilds versus of talking even million bogey point, a about and that You're get that. higher our $X and/or much than to lowest at $XX require checks most price million in financing $XX convert somebody system million, cases, sort the writing of into or,

So conversions will play it. a big in part

said, as And already I big world. a it's

a thing. at and of little obviously So here largely whole where Europe The U.S. unlike sort the is really in is of touched of banking bit this the the on system with system in U.S. free Recession moment is what's going a it the Switzerland, Great fall, more the financial a imperiled around world thing, was but has U.S. be been sort continued to

you have opportunities the so rest world. the of whole the And around

said, or that in Notably, sense as China taking the a China, two more. quarter I probably is

but a would because So the I and what have it be up. are contribute year, cranking it I for in 'XX will really process. just It's made up hoped won't I China think would 'XX this engines next think

share be U.S. and will what it So done of increased conversions, growth in international does get the market

to The thing in at getting I'll other another efficient have end the ownership a with mid-scale, -- that and a our we working on will will mid-scale, very that below is launch We're tickle that the going maybe cost. little of we've ready, and build sort we is a end, brand launched the -- been it low the space very while be community customers at ready lower newbuild home ivories to We're be of extended-stay getting on product, bit. Spark. it

because things margin through that build Great have The risk it my the your Recession, make fastest. the the Those the lower living high and -- are So money doing this they're that all very get products cost that lowest people again, is ones most that going financed. they're history the -- to easiest are of and the

people next the won't we that didn't probably build this brand develop a a starting or it, 'XX ready in to year want as want margins likely a But customers it latter And effect can will build 'XX, unit getting we at hopefully, build it. launched deliver but very look per because again, owners of XX it more part so on efficient the lot any of We cost, think this. excitement. to of we're again, this just brand XX days astronomical because launch, that have

-- think been HomeX otherwise of the margin. than very a hooks high make and point. It's much lower are margins the at throughout COVID price customers demand It's We off this. higher people are such love in But going to that. has because customers even different. all it, it's something love

And so is as those more it's of view, get brand point opportunity we likely think we challenging environment that about been think to that's time will it do, mega -- take that for 'XX, fastest. the again, 'XX, come financing financing challenging us more an as products more in always they that, even a markets is really back but from gestate and a done that

combo that that of and couple to and I about around over will And so spoke X to platter X it and back of good those to. be things years, we you X all said just a feel being of headed the next

Citi. question the Rose from from And next Smedes is

seen think wanted is from do what they different are just wondering in our extended-stay And We it's We so that seeing we We've was And that data. segment. quickly leading don't data into interest customers? or just just you brands see of I people many products another get sort shifts don't scale launch. abandoning just to of launch case, data within to the so that at I driving on being that, to you get segment much extended-stay mid-scale? the launched what of specifically. sector. ask extended-stay from curious, chain lot least a you're I'm

from were work mobility stuff. it pay to there and different for pre-COVID, and they like, already wanted places. commit. one didn't they that all And long and going were -- an They're get to apartment fun they a year's deposit people We be there enough and housing and was -- demand workforce seeing places in be just lives to where their a more

demand And already are outstripping so we that was supply. seeing

And a this thing is while normalized, times, of then idea mobility. about one accelerated prior the have I've and a things happened lot of the on COVID of hit. talked it bunch that calls And

More of not While the It's going office be of different supply. more -- a environment remote more patterns are that sort as as is what the going lot and it just and times Mondays to to permanently. amount are against of a of More building percentage Fridays. of year, people And those is people back. shift, normalizing, and of was. the times limited going have all exactly continuing it's a workforce flexibility of to are demand week,

workforce developing, And -- apartment we unmet are down I'm of work. There's but housing It's we product almost I soon. efficiency. so the like of It's fundamentals meets XX-XX. ahead XX, efficiency think so the We've XXX we've XX% hybrid. kind who have somewhere days. to somebody with great. way getting that The it. needs XX, It's coming really be we're almost many product more and an just apartment a I'd of it's XX, for mean, this needs I And that done like are think about just it's hotel. the built myself, say

average length at maybe, range, stay if XX that look to in average core most are about the talking you you're on like brands So of to XX versus somewhere days XX extended-stay of industry. probably X the of

not it's said, doing in intend we So to Homewood why it's I need, competitive serving with -- because it's far, not with different not types base, mostly meaning what we it different this and didn't totally I competitive markets. of And love serving different go as we're a we're locations, sorry. certainly different a because totally is with demand which HomeX it,

and hundreds is these. hundreds need going have wake will will is hundreds this of to X, because people And that -- uniquely think to the brands and But now hotels be XXX years, we're XX of lot in -- or and have time well is get proven these have a it done brands. growing. think, of to in mean, it HomeX. think This but And effect, lot a brands and and we launch of network we have up by I and over within I like there We'll do not X, it while you'll XX or to anybody. just the think scale than I we arena, we've company And over we that, like time. this for are not X. opportunity better I here. we've pretty build things launching do broadly an do done well doing as We'll

highest in the The delivers. market share business. system delivers the our system And

else, that So share. owner will customer going look product build similar from They product you're the a better about I'm system at higher if a with higher work ultimately, drive vote I a historically, point their think going they and an you're to vote I of view, And ultimately, margins people mean, somewhere to strength. think, feet. with thinking

but shoot And this we got the of spent deals it next stuff. many by got so the how up. of lot of we talk, good record And hopefully, out we'll will on a track again, do we about We've and got a we've doing this. pretty to lined be be it talking time time

that than just we've seen. something I quarter that seasonal in what just the is or kind quick in seemed first sort question? call of can the The wider the between -- other ask side room room gross on And a thing just Is then that there you additions difference and a or... out particular deletion that can you was of was that --

talking do between you -- the about you Smedes? if QX in the difference Are guidance,

first quarter room and gross additions the the net seem additions pickup... just just Well, then room that

for with X%, normal. We'll change right and Removals No, year. X% about is end line there's no. up the in --

don't think a Just perspective, same. what lower gross the think gross call. timing from room -- from earlier mean, I were perspective the Chris I want and But I first were said in on quarter repeat year, full a to rooms the about deletions I the timing the additions for

So difference. that's the

Stanley. is from question next Morgan Grambling the from And Stephen

brand comments deletion What Maybe any your it your some more resilient extended-stay. chain are of then the Spark you about of the into launches, in on often up these peers the think about going many new I and When lower-end following scales, some see think sounds do one evidence of like your you from you rates. term? lower current that the can Tru? scale from chain to long rates brands rates brands as seen such of higher ensure And that or of attrition attrition have another

No.

here's You is performance. of what losing too mean, really mean, simplistic hotels we commercial out and easier delivering the about by made No, not do much But meaning system? to be listen, the -- it. attrition I

And So commercial that with having dots, share. engaged that customers, are market the customers. particular commercial and in brands deliver that those that engines great service loyalty resonates resonate of brands highest with, connects strategies with the ultimately, our customers really and product level that

exited by you of in in would their the Hampton -- I choice, state think I'm or brand. any like or our physical if anymore. if of. Tru Trus don't And a almost say, those know, XX% up. XXX% that system they're probably don't new just don't Hampton so look XXX%, relatively that our But system the a is exit works at -- I that I'm It's time look meaning deals to you They're aware And none. location at that a within almost have the brands. think we I probably is --

that's And our choice. by so

little We attrition. very have

the category killers. incredibly category And They share. drive are very reason I back to where have little attrition we brands started, is mega our high

about which think Spark, have to new get brand, we we about extended-stay our right, as we we will. So as it think

to people the drive leave, really share, that. our categories. for history is will. customers, we We And product has really high So right? drives super, work good super The which have to to is want which don't what mega in

Homewood, there all. list choice. it is the vast of majority the go almost by Tru, through our of Hampton, whole attrition is vast, HomeX, you The If all our extended,

That's helpful my context, and question. one that's

question from is Jefferies. Katz next The from David

wanted just because your Are that love there. system what's hotels success you've back unlike from of If to reason that we the to switching within some of switching go those Are independents obviously, deals are I'd the into it's another? put a have I things for makeup those at for Are on enthusiasm one together, in and Spark reason it color lot that before. the another? a brands look any you've and or of other that brand? otherwise for one may or departed done looking

Of Of It's almost bang it's this Yes. around XXX little the of XXX all. I'll it, us. -- very direction. I the get say would

Hamptons there So are few a of XXX. the

that's would Hamptons that say almost will But of work on we sharing -- data exit a economy -- for And rest would otherwise probably it's I The Spark system independent work from of coming amount. think little for almost though data that it. but point, teeny is guess. So space of other bit we a have what will Hampton. wouldn't that and in brands that tiny not the spread in they the all around that even but teeny it some I'm a you of there's number

this category, your to right? add of generating upscale, follow-up fee this Fair the measure unit how and My brands? Obviously, revenue the more, upper at and structure the we revenue how is a adding enough when is does up But your look in intensity of and does other the up intensity understood. that with system? measure

probably similar Hampton is other at -- lower at We fee the $XXXs is The smaller to net $XXX. are and $XXX quite to structure structures. it the the They is Yes. $XX with rate. rate $XX versus in Tru, think is like fee a here being which

it's they're design. so So ADR Trus of a at similar lower -- by lot size a they're a and the Hamptons,

And upper little less versus so and be certainly business. upscale a bit yes, per will pound fees

network effect. in have world to trying our to remember is a You we're create

for a massive customer us. So tool acquisition is this

we people them. There's of million travel are younger in and them, traveling this while serve half not people XX of some of whom that they million XX And this many afford. is serving or segment, can all we're

in. us through of find element done. has every the get the by to best the our it customer-facing that's gate. every done product And passes name. regulate doesn't Nobody the hotel until gate be Nobody economy for is we or the comes space So system early giving hotel, them that can them they because in single to hooked get the opportunity on our

And an is so thing yield. other remember infinite the it's to

trade -- They're products. going up built deals new up. this and a the bring we getting. customers products. we standpoint going we and lot They're going And the tens to other of millions grow they're built use are our with So that and to we're to in going to our brand grease in trade work of elbow from that hard around of of

thus may they we're no per pound little I them. the for While infinite not lighter, mean, yield. a There's be paying investment.

to these build continue streams. incremental fee We

I the Hampton. $XX XXX-room I hotel. Well, about you? that and what money And And that Hampton Hampton of because suspect a you was dollars the do can ultimate rate, well is somebody ago, mean, potential, it's value I a at make slice XXX, much How bigger mean, a than Well, them, bigger billions the into because adds add thousand it when Hampton of up up. is that when you time XX years the it's few potential of pie. turns out said a of Spark

value think ultimately the new and add of We growth, as just it. ramps it's So very significantly we're going about it to the add excited company. unit to up earnings not is it to going to but overall

money meaningful no like there either? key Sounds

No.

end, David, just yes. think the little are why and I covered scale, think that. upper the working other it, say thing you and of our deals a to intensity a I mean, Yes, -- think were I in you're I'd higher right? you of So while, And much competitive the with in capital. the with Chris at is our bit, go capital just the add for is business the where I the sort chain more contributing headed you higher

perspective, from think it. intensity I revenue described Chris a

per time, fee fees out does of these when layer down. period it we of not... model per lower do in you the your per room But hotels, you'd long fee mathematically, over be go room course, surprised a As room

Keep going up.

what about algorithm. as grow often at over up going we continue keep talk and They time, we to

higher fees continues than same-store take the the you call, that rate will that earlier fees in if at So of of think to algorithm. part NUG, plus mentioned growth which we that fee because a room non-RevPAR-driven sales continue And the at and is Chris the per grow pace.

steady/continues So you model it's -- surprisingly put that and it's all in grow. to your

because going X, arithmetic. as that going pool room to continues model down And RevPAR it go There is And of up. assets to no room continue fees just on where growth XX we existing out, per the fees year are per keep we yes, years have the just up.

is from question UBS. Farley next from The Robin

of a the I you RevPAR quarter. But business of performance wanted if to you us ask could in levels. a little sense the talked about wonder transient know where I about bit ahead I being give either XXXX of sequential versus of occupancy XXXX. like transient kind of terms from improvement much QX QX the show from number It or to of quarter business nights that seemed 'XX. in compared that broader didn't in industry that change QX trends,

you And performance maybe you as strong what you'll matter say, as not when of course, RevPAR have. all at have it may

with it's not kind I'm what's on business quarter, I'm strong but going not certainly saying transient event. of curious night a that piece So

actually quarter Yes. first basis, up. business quarter to On ticked transient, fourth a global

or in above -- it was it slightly about at went time, in first prior basis quarter, occupancy and a an on where aggregate got it X.XX. peak. quarter, back So But to it for fourth actually about was the first the importantly, -- the X.XX the on

not a a global Now that's U.S., that's number.

big through we're what some big their is is impression get So met worried corporate didn't you're which Big with event, curbing really all it even appetite the had that in and why it's and America America. why everything at is that big SME. it's -- a I face simple, said happening all of uncertainty I like maybe customer travel. about a reading? is world, for America. comments, of the the corporate that, said we And in Having the corporate filtering I've It's

would all they I not much think incrementally traveling more as year-over-year, as maybe but they're thought. have

really our well. of XX% are in business, weren't really perform which continue, SMEs really, the And big event. But the any to corporates back continue

-- talking had much levels, already it maybe hadn't to since them. not, not slowly, from not recover to so back. cutting flattening because prior really back of for them, they're a they built just bunch and They're come more they while they impression had may they're my they And cut so it's

the many times But few it years. last I said over

of We by it's choice, the meaning quite it's always higher It's very SMEs. business sense choice, resilient dependent of by because our that business, it's shifted XX% now XX% have, was what we fragmented the in mix nature more rated have is. were more by our we it

above, or in is trend And we're transient and alive quarter, say slightly into was although the and QX that business continues above was volume the early well. in I'd So both price and QX. first at

business then big OTA is is I the just kind to other back, And imagine leisure through down that question, distribution compared Okay, your is helpful. as one have of a coming percent Very great. of total. year, to a last small OTAs, as that transient distribution not is moving just that given your

the It's slightly it into normalizing. not relative and which with bunch. want we much expect probably to next, pre-COVID And of has a by to was, end down is we where but be year, It's elevated come certainly it normalized where will the be. it

is from Barclays. Brandt The next Montour from question

How the or hire as perhaps stack net the wondering look you potentially hotel just of it. lower more foresee the across industry, up brand at standards later of conversions. for activity the on itself financing basis looking was against those could of more year? transaction headwind maybe nervous in dig I guess factors financing headwinds to mentioned Chris, Spark from that doing pressure do down putting being trade tailwinds, independents drivers you some conversion getting well into out you even positive all a non-Spark a of as could in you the a I enforcement of brands? more if activity, and little and for taking bit

this I'll Yes, one, take Brandt.

we've as obviously, I One stronger tend to they they seek to in of Spark that, you've environment sort often, out tend of got out brand. an are outside covered brands is demand yes, seek expecting factors. where and a think people soften, I of more couple the think to

driven brands. somewhat hotels So converting demand by it's to being of independent for

it's so finance And than a easier hotel new cash-flowing, tighter, where a then I and other to cash-flowing that's acquiring construction. hotel, is credit's think right, in already the factor environment an

that the the you think the in for So transactions finance systems. softening And some demand those primary and easier environment, of demand I generally about things driven branded on think the two then drivers. and to generally are a world. around But are going more they're by

from James. Raymond is Bill question from next The Crow

we As there has is change any the been change that the guidance outside for XXXX, U.S. driven much think your And of or how positive U.S.? any areas about to by really expectations? change to

Yes.

the up the bit the in of about the and outlook a third anticipated pushing in but the quarter -- slowdown all improvement regions, the largely you it's what Bill, is it's seeing you're continuing second -- the concentrated and us think, the into all It's second kind covered strength demand regions. then this of positive across I I quarter out in taking bit, a if half with and to back little quarter the is little year, the earlier in board. in there Largely, think call, U.S. the the including Chris think change

switch financial this on does in and fully to particular, actually that that whether And there seem want actually in and demand. going flat recovery, I I'm the this follow-up, large follow-up. something credence to A that going argument issues you in travel in I just curious which recovers? early corporates are is my to just but tech services know be business their to said, never address I'm give Chris, and

Well, don't I so. mean, #X facie the evidence I prima it think has.

but I the quarter, in business ago, just Bill, data already mean, recovered. finished I the in travel of a couple questions first has So on

is where to shift, volume the meaning we With base upside more certainty on higher. of, in good travel, there's intermediate done term, in a for Rate I to were. think us job a that back what means the basis, is in it we've as environment, shifting SMEs. you we're of get sort business

big also where fits really is The still have It's banking to big size corporates you travel. corporates are the not impact technology, the the see way, one By consulting. all.

still but you they're If other lot those at a weighed the big it sectors sectors, of down. look growing, corporate

and being mode, get sales stabilize start getting as upside. do, the look which those of about think will, competitive future forces they at out and and they cost-cutting it I always As out back their sectors and to

a up volume in in prior two business will it's both be higher in we're year whenever I and a when be a -- certain we're price, environment, think that sooner we will I the think the you to more peak. than So travel, or than wake get little and later, -- hopefully opportunity

for the think I thing same the group business.

from it's and happened has -- in done done years this we're has benefiting mean, -- but pent-up lot as definitely think I but and innovation nothing customers last nothing a three people the the those things demand, congregating group the reinforced our need and to of I all that to I but for do of collaboration things. reinforce, what's done to in like, all culture be that talk of they and the fun do

So think And of -- the it. I famously said supports this lot more look through get I like than I it that's still think think largely does. like XXXX, will in kind And it I April, of May think that. a I did it data we when

takes it's group, big is come a within now, was, then the group's a leisure point because -- the about group versus and sort at mix, COVID higher segments the that's you leisure this right? And back. point. quarter lower. If business mean, like it time business point Otherwise, to is difference and look to only of where transient, right we're a I pre of transient

high-rated mix meantime, strong. that leisure as the has continue get in. we we been of in strong to But more groups back, And will ultimately,

credence not is believe do I there argument. to So that personally

I at think the supports that this argument data moment.

month. to early you seeing Look next forward

Yes. Same.

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

We're and feel and the good with we you see, we Thanks, we We capital, time the well and our feel the But open importantly, Interesting what in very good we'll making day continue what's first about more the of year. quarter. today. do that continue on But you, wide going Chad. sure the great world. keeping feel times Frankly, which the deliver, pretty to about Thank in most second we're uncertainty. do. we eyes as about can more is quarter. about full the to all -- return everybody, for delivered word

the quarter. So catching for after up look thank you the to time, we forward you and with

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

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