HLT Hilton Worldwide

Jill Slattery Senior Director of Investor Relations
Chris Nassetta President and Chief Executive Officer
Kevin Jacobs Executive Vice President and Chief Financial Officer
Joe Greff JP Morgan
Carlo Santarelli Deutsche Bank
Shaun Kelley Bank of America
Bill Crow Raymond James
Felicia Hendrix Barclays
Brian Dobson Nomura Instinet
Stephen Grambling Goldman Sachs.
Thomas Allen Morgan Stanley
Smedes Rose Citi
Jeff Donnelly Wells Fargo
Robin Farley UBS
Jared Shojaian Wolfe Research
Patrick Scholes SunTrust
Call transcript
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Good morning and welcome to the Hilton Worldwide Third Quarter 2017 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] I would like to turn the conference over to Jill Slattery, Senior Director of Investor Relations. Please go ahead.

Jill Slattery

Thank you, Denise. quarter call. third Hilton’s to XXXX earnings Welcome

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

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

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

Chris find the our GAAP XXXX. financial earnings company’s release results assume third can otherwise spinoff website measures in and of earnings for our release Unless call of details. operating Nassetta, Financial overview provide and update Officer, an our our morning quarter had Chief X, Chief on XXXX today’s the will You the January will Executive non-GAAP provide and the occurred President on press at company’s year. Vice Jacobs, outlook. the review Please that on results reconciliations to discussed second President additional and for transactions quarter our comparisons to see our This an Kevin our in Executive expectations noted current then and environment Officer,

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

Chris Nassetta

everyone. good Jill, you, morning, and Thank

support our something and time of in the brought for down briefly want Rico by who for communities, time to been their in vivid impacted our Before communities that teams all it’s another I have At thank get challenging really to around it’s recently same the Puerto Houston. team them as the I into natural like specifics and the all members world to incredibly was efforts. come and for to together inspiring disasters It’s visited I reality that one our recent their recognize I’d serve them. see teams on of an and those extraordinary quarter, been to these been

Now our ahead flow resiliency discussed as the with cash of in are well business simplified line minimal guided the our last and demonstrate of capital outlook drive continued. largely EBITDA ranges for of turning fundamentals third performance The our fee We our adjusted to shareholders. performance, above the results RevPAR we unchanged. can growth Hilton performance bottom the raising continues delivered quarter and our quarter based meaningful use the quarter our generate in new our strong year that free for are to

of with consistent the in trends and holiday Excluding what expectations generally line RevPAR been our whether all this impact with we’ve had overall quarter seen shifts they year. and

low-to-mid leisure Pacific transient to quarter up our and results. across point range at the boost growth see Group in guidance improving continue the steady the at Europe transient continues for group We markets particularly Strength of in international the high the was balance to year. position end. and and Asia system-wide business of pace

of above the system-wide come or remainder of at year in the for RevPAR a Assuming slightly we to the X% similar cadence range. guidance our expect X% midpoint to

XX% the quarter RevPAR in slightly approximately of which of ahead So system-wide October, is far contributes expectations.

average. fixed good forecasted rate fundamentals to investment macro between feel set continue we delivering remains give to at slightly beyond this point we indicators corporate X%. and U.S. a the us. supply nonresidential and year even ability increase about XXXX, to position year better growth expect modest this year-over-year. broader in business our to roughly and X% negotiated group of our increases U.S. with of look Supply XX better we In forecasted see of year environment than where we As have decent growth about XX% value XXXX the we GDP Economic with sightlines, and up around ahead what it’s and

up of X% similar system-wide X%. pricing a XXXX set to should leading guidance Given that level we have of power growth year RevPAR next to

we’ve on development around hotels into unit nearly have for next a rooms XX,XXX Year-to-date result, good the year. with net as to under deliver and we Turning XXX half expect X.X% With X.X% and unit our again to over we track unit would opened full pipeline growth growth, of approximately year. roughly our the construction, side. very of net already visibility remain

to representing We to us to last continue our and share With U.S. development. approach year. pipeline, approvals allows ultimately year with continue to enhance are evident reached this in footprint. the full City conversions. which network London year-over-year XXXX XX% our up in we In strategically portfolio. achieved that our leading York a We believe supply. the record existing our our our to of effect we market intentional and pace the global XXX,XXX of XX% that thoughtful is growth gain roughly record committed ahead will recently New grow growing We a rooms This our rooms XXX,XXX organic quarter, expand welcomed of and global forecast now was year-to-date expectations, traction exceed and to of

York a which, second New will Conrad the hotel with key oversee as the This will product. York a renovation luxury Conrad will brand of a City XXX spacious this We New be full all-suite property in of Midtown. smart new prestigious standard and the set After property become property. reflagged

monuments. capital’s be announcing I’m London, set are Arch Buckingham at in best Palace. addresses, prestigious to mall the of Admiralty London’s Speaking one announce make debut the we to Astoria to today most Waldorf known Astoria of literally its London entrance facing is and brand will that The pleased of the Waldorf one the

and totaling than landmark, with of hotel XX restaurants. we Following opening hotels the XXX protect In Asia-Pacific there. fast quarter, largest and the an The the three and third opportunity XX,XXX with XXXth our region refurbishment and week in and luxurious a per region rooms, luxury open region one over our a world suites quarter for restore latest will extensive in Chengdu program, Astoria which accounts this plans hotel the to our iconic growth roughly represents Waldorf rooms the hotel portfolio. hotel more opened the we’re pipeline growing in China, class

in returns owners. first the deliver unique effect, global our is global our favorable for that ago, driver our owners. is best in the offers. market XXX commercial our conference attendees the celebrated increasing all of increasing the from and highly we our diversity the in for driving to is conference in together the of hosted Hilton the and ninth demonstrates Dallas on innovation. China, a effect. system program This our couple our proposition of the Innovation owners’ a the and our also The scale our the at share, arrival power leading our resort Curio brands theme critical our network attract room island, soft Over guests, and weeks returns ultimately brand for We XXXX loyalty network engines platform our country. by our with of change ability business leading global Manetobe. increased is customer A that Located to nearly given strong delivering overall asset at with value bringing to growth Hainan our relevant preference created and scale of was key brands app industry loyalty

growing app fastest enables experience of channel the our being to of deep experience. the and the allowing also mobile our lowest into direct differentiated integration addition cost devices customer guests our distribution on-property In a

Hilton globally, for well members. Honors Our room with as digital app key selection currently enables as digital check in

Through the Our most is streaming app recent members they seamlessly the be mobile-centric to will Coming directly control HVAC room room, including hotel on content. much enhancements Owners chat and benefit use their recently also preloaded also from soon entertainment preferred truly live members and operational upgrade first lighting, who seats. members a connected able room will energy check-in function enable property support and a team environmental members to upsell may that and options and airlines can improvements. launched any rooms requests have. through like for engage

feel now modest into hotels which to adjusted growth launch for capital drive EBITDA RevPAR beta our up meaningful and expect growth as and summary, quarter in with connected set and formally pleased good the head in returns room in we’re performance can really this year. next We’re shareholders. testing XXXX, In we select about

each Our little the group this multinational the just selected the quarter. teams cultures placing in for call XX to to every I’m around performing day Kevin? a success. the work, life going and critical give by to workplaces XX you to world bit were and that are I’m trust, best to once one a bring as to more With that, XXXX. this ongoing global of on top and Kevin joining turn great workplace our of culture purpose-led high world’s recognized detail in announce they to a morning, place pleased again high over the companies elite we

Kevin Jacobs

and Chris morning good everyone. Thanks

RevPAR range our items largely guidance FX by versus $XXX XX% management Indeed, For the midpoint range and In travel of the and fees, of business $XX and the high strength and driven the onetime led results a was X% RevPAR million. weighing with adjusted pro driven basis. quarter, to on and was demand expected owned and license and to and X.X% special forma the on of the in benefits estimate portfolio. July major basis exceeding for of to the the fees largely Jewish in and million our segment, and $XXX year $X.XX, leased displaced our well non-RevPAR leisure timing XX% holiday Japan prior quarter, offset end earnings due group calendar versus outperformance hurricanes hotel fees and July some the year a exceeded fee guidance UK Harvey grew shifts million, strong performance system-wide franchise prior drove Irma greater and and guidance currency-neutral performance results. high in from benefit than in EBITDA shifts. the Diluted we international end the items. Adjusted System-wide better quarter increasing our the on better per above to September. by year-over-year Calendar Hotel ahead from while X% grew range. these share it shifts was demand continued Xth

offset Comparable in We continued U.S. regional in outlook. U.S. and in business negatively driven business basis less in weighed in by partially estimate the due by calendar the that estimate those major offset was our meaningful our our of premiums performance strength points with a by under leisure. calendar the industry benefit than group two particularly that convention roughly markets. RevPAR RevPAR quarter approximately to overall the flat U.S. lift shifts share in from performance the to Turning the on hurricane-related aftermath occupancy XX We hurricanes. was

was towards growth the saw RevPAR the For XXXX, full X.X% U.S. we system-wide X% quarter. to to lower Leisure our range. to demand. year transient strong prior the in half year Americas digit In RevPAR continue U.S. for single grew versus of high room the outside the Mexico, forecast due night driven X% the in which quarter growth transient by particular third strength

expect the expectations guidance due of in For full transient to the X% strength XXXX, UK, a we grew RevPAR quarter, Europe solid RevPAR in higher range. and end the of at in Spain. our the in Turkey, growth region ahead

Additionally, the quarter. international to in nearly was Europe XX% up inbound

that as performance of saw the of region than We single basis expectations, continue up the and less Africa, points and anticipated. In We ahead to digits. to year the in and significantly Egypt. reversal improving East group we second Arabia, in holiday strong XXXX shifts leisure growth was mid-to-high Saudi in Middle our the XX be full business growth in RevPAR drag the expect RevPAR the quarter of a benefited were

the by year of region, full we which growth the X.X% transient region higher strength over Greater in be increased our strength XXXX, to guidance led In in maturing showed the the RevPAR China, in assets. China expect established For end and was now up range. in both RevPAR continued at Asia-Pacific RevPAR XX%. quarter, at

X% the growth for in the to single full range. RevPAR RevPAR digits mid-to-high year with China we up XXXX, be of expect in region For

return. quarter, a of for paid year-to-date. $X.XX cash on million the $XXX We of paid during Moving a capital to dividend quarterly in total dividends

fourth quarter. also board the authorized in a cash Our dividend $X.XX quarterly of per share

per dividends we We March, an year. buybacks cap billion $X $X.X expect in to buybacks market price of and shareholders initiating return about $XXX X% million $XX.XX. shares purchased our and of billion to of through have between this at average Since or share

expect For fourth system-wide the we and XXXX, quarter X%. RevPAR between growth of X%

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

guidance growth RevPAR XXXX X%. year to full of our maintaining X% We’re

growth year of full or mentioned, above Chris range. As expect at the we slightly the midpoint

midpoint of adjusted our raising $X.XX are million than We $XX an year-over-year. the billion by more X% EBITDA increase to at outlook

items to diluted our incremental quarter we full latest incorporate $X.XX. earnings for may We’re as speak Please line range our found share this not release Further to does special adjusted our our EPS prepared of third year would completes details well that also as you raising to to with on the open guidance can note results have. $X.XX EPS ranges all issued earlier in now morning. would like be you remarks. this like questions for any We the morning. We repurchases. This

to and our can Denise, follow-up. question first So related one please we one yourself please. have limit question


JP this Please And Jacob. your go question first Morgan. Joe come Instructions] Absolutely Mr. will Greff [Operator morning ahead. of from

Joe Greff

Good morning everybody.

Chris Nassetta

morning, Joe. Good

Joe Greff

store can up on and talk same your appreciate But I days how and guidance know from perspective how for a you from the for from it’s think early a versus just early then we read the is segmentation so XXXX? region, XXXX. the RevPAR corporate do to about much about XXXX, of geographic Chris, here, comments rolled you a it relative it and

Chris Nassetta

good one on number sort question the Yes, know front of of Joe, us. is in probably mind, what’s I and question, people’s

as middle do in year, every sort go the we we budgets we’re now. season So of of

We but good Certainly, of we stages why level that, to which honest, to of towards happy give later be complete we’re some the it. have with very sense there. topline, a the guidance on is are not

regional on a it year, a do those budget. granular on region all global describe worked so, of the hotel up every And we to would global is aggregate to Every basis. it a budget, are what every case and very world has in budget the I and then rolled as a

happens certainly from this about this So aggregating guidance get down, in we’re all mean In the used it you bottoms expect, up. typically top any us is top not up. way I have is what down. you’d would we which is but

to have downside We a a we’re to and budget trying an upside that. create and

to So be going have budget. expectations should said way, another the generally are we

fairly environment going So of described demand as the that is, range. the which nonresidential up, our lead in they’re particularly investment in a my introductory growth And that that picking is going somewhere sort that covered, I supply basis the we U.S. it comments, is that The in I side, generally growth. guidance for midpoint of think numbers world seeing we’re are that is to here believe and fixed as to still to this bit up. should some incremental out demand optimistic but which or I in be everybody little below, to is things the various are I and at stable. different tick of still side the around too me mean than generally a we’re not is steady to year. U.S. terribly there, somewhere a says little better. what seeing it’s mean bit numbers growth going two the Everybody GDP

have at look least we’re budgets, a We we assessment going at to all look those look the at now. you of I So we regions next world. that year as put think things best right our it two and together, at is year,

we’re this going next year We’re a have year to like – seeing much year.

geographic the going to growth at similar representation, of end range, the expect topline I high to here of a terms low range. the at again high to probably the this midpoint the think level sort to international the to be I we In would year. and midpoint in is the at probably say so would growth that be the of U.S. greater, of it’s

Joe Greff

you. Thank

Chris Nassetta



go Santarelli of from come question Bank. will next Please ahead. a Deutsche The Carlo

Carlo Santarelli

for Hey, guys thanks question. taking my

guys think about foresee if you business form thoughts about When perspective. currently least see think a reform. A, proposals start you were think to up do you of as that the transient kind one kind get – and expanded but results, impact the tax of around lot at kind from on of of now, what obviously and three you operating a XXXX. some in being So do of long how having to of the right you that your show B, on Chris, thrown you kind to you

Chris Nassetta

a tax there question. well a I politics the you the to as here been care Congress a personally than definitely some very lot to coming I the bunch path are inside will, whole of out of the as think are things the are live Washington. two, particularly There the of consistent different is and house about obviously pretty then our trying in what for those I that good into wish that And reform heavy themes spending and will so we the reform is get Beltway, think get or take. quite organization become is inside given in We our are with together, in over in sort tax when clearer those administration rather the another engaged Beltway week I Senate. that. I’m there, it I individually. of here that becoming because next will with – now I’m forms figure knew rapidly, moving Yes, over answer and reasons, others very industry directly dose general there flow

with it’s would to say there in that personal week the level that a think tax good that done. much say more headed into the going just very reform dialogue. gets opportunity so would And in you’re to opinion than specificity is I good high I start this next a my think I generally direction, real or details, see I

about I’d of I community think state think lag what be, is will premature the quarter, quarter honestly. much what way. on anything time it’s level that. will those say, generally happens. Again, would and asked good industry, this the flowing play, But there get something on I effect through good, tell. the say standpoint forms matters that knowing I’d feeling but what you based know to you done I this better like the industry, the is I which think talk is high in versus lag we’re lag, from can’t where would just I’m depends But in I and others the the that a that I it a optimistic psychology, economy trick quarter that, more two business think I that of But I me tell One business. slightly gets then the very I’ll is exactly Hilton done and say things is happening, is think a for there’s and going. happens about it last and

can if tax done. I think that gets happen reform

of that positive through clearly incrementally are time trickle home, of benefits, because industry And for coming I flow amounts that industry starts for bit free the second think more done. invest of overseas more things and you’re done, get reform those that time But hire means, clearly, obviously that what of that up, play is some to that demand. quickly. with to to through a plant think cash it equipment, use to the is same ways. and to to in And investment, people, fixed those more portion of through it’s form go take helps benefits drive means of The means huge flow investments I get money have pretty those trapped they takes may just to to that’s businesses been means going repatriation little in going all businesses. going it’s hearing put flow to I’m benefit it those to have then tax if the way they should nonresidential which

net-net say, as that So I think probability the I it’s reasonable done, industry. done, get there’s they something it gets good for and a think, if I think I

at don’t just to want it exactly full us, of we depends where I looked the on parts. disclosure, of moving – so thousands nuance think the proposals, I change, could various of will it again for all We’ve come I – out. don’t know

and dialogue a reasonable have the in deep sense. in We’re

should things the talked beneficial being be I effect we’re the hearing that to would say about, net think, I us.

it’s nothing trying too do, is the table that won’t how moving I’ve just seen because parts, scale on early, good us, too many now. but that’s right certainly to it Now for I

and like put it the on of me beneficial this Everything other a positive. this because is us point businesses, would Let and more of hands hire more growth it. would a I’ve lot be more think people, right in the the economic net the we get the and seen stimulus whole beneficiary businesses make hands, investments of I cash be to table of to now more

Carlo Santarelli

you very much. thank Great, Chris,


The Bank Kelley Shaun next America. question of come go Please from will of ahead.

Shaun Kelley

morning everyone. good Hey,

the underperformed some given But at the I select quarter. U.S. the to think Just a mean, I this service the were going for into calendar big and all again – some about wanted we look light, brands a look the talk Hampton. was that bit like select particularly as the little we to broader on of of shifts brands all your a be quarter, going we portfolio of little sort flagships of decomposition, service were HCI expected

bit or So out into where to prepared able that place we of side get a as as about outlook is and there, a there to I be the mentioned little guess year? premiums portfolio and some in the year the price brands head this we progress remarks to what’s we through is, in at landscape XXXX competitive you look balance the those might occupancy question think I the for

Chris Nassetta

good this brands those the lower obviously, were end of Shaun, growth our are and quarter. of Yes, an basis absolute question, brand at RevPAR spectrum

– it. part premium rate I guess I occupancy think, hit I’ll the of

the Second, right, brands RevPAR do high but so high out RevPAR competitors, occupancy of there growth have the coming well. competitors start absolute still their brands, ahead but They up partially they because are such are part quarter really competition the in those is other higher index right, premiums. than perform first the very they

more so quarter the effect quickly, they storms, had up as hotels endure more incrementally because guess, of much filling the or not the they seen, were. those a to You brands were the other benefit I more didn’t than also so from had already, in far,

seeing rate in and haven’t which seeing in terms result, as brands, growth what GDP low, I growth. what has been seen overall strong, so as been a recovery their of has you’re you’re much those is strong been that not the as their think environment as not is inflationary rate you quite In side, has

RevPAR should in it’s this outside You is U.S. one to see RevPAR U.S. continue more the – year almost of from growth see to so XXX% rate the less contribute our growth rate,

it’s really So but bit in day those continue end bag strong of to are preference of those perform way a mixed a for brands They’re brands, still the should brands. with a they lenders the really big by us. well and owners and

Shaun Kelley

Thank you very much.


will The from go Crow James. next Bill come Raymond question of Please ahead.

Bill Crow

folks. good Hi, morning

Chris Nassetta

Good morning Bill.

Bill Crow

Good morning.

the We’re economic figure trying is of year hitting growth been to away exactly that And a identified demand. And know weaker up. but time also three out is at from of profit good, still far not hasn’t corporate kind Corporate why. up. anniversary we’re we which I that confidence

of many things. highlighted You’ve those

that to with discussions us? coming or your negotiated in your wondering like this not that, you can is there cycle? you’re companies, in is this weakness helps your point from small corporate special the but And anything something that uncovering growth maybe rates, just in explain clients, anything I’m So big give companies at

Chris Nassetta

our transient moving get pace. mean small, medium our it’s And as like I’ve talked terms clients, I to studied everything. it business all big, right, going good question, with teams a the going of change it’s Yes, personally corporate to faster to forward really at a we’ve in what crazy.

but to any tell you I love have So – new have don’t. I’d some I don’t I insight, brilliant

nonresidential really I you in think though fixed consequence things indicators and economic even it’s investment a of see those improving. of broader sort

it before, been as used of calls think, prior this been just talked certainly cautionary little it’s bit a there. to I’ve a flag folks, I’ve – out think on I I still

big, some or certainly there out on we’re politically all we that. going about psychology, reform whether know So within small optimism all there there’s and business you’re said and medium though as that even stuff enough globally maybe sized improve about that reading I and tax is

back it’s that in just that people from holding to think includes I incremental decision incremental it and travel. spend spending

saying, our been new, growth comments think As That’s in and X% of talked they’re of we’ve what to particularly prepared it corporate interesting it’s talked our bunch we’ll to a have clients, X% to I’ve you heard think them, them. all sort I with we that not rate. and

Okay, all inflationary going little simply a talk hey need asked a That’s is but we’re rate? reasonably when about my where to bit. rate, you of the gosh, I you say, of increase, to wanted the things think a them see Well because stabilize there on. – We things somebody our sort in they it optimistic is. world, quasi business lot

obviously, at and bunch one, will but of sort I we’re increase et this rate think whole volumes as willing the people’s people I him expectation is constant. expectation moment my a to accept and relatively talking different be of categories, think not to and big different is I’m pretax I’m reform, cetera, inflationary a but a aggregating of bunch

expectations sort I think, little moving in that’s – what faster, broader to to That’s environment. described in built we’ve as having for of in a so we’ve my an sort continuing And of the built them To bit our prior answer year. I get uptick what next a question. economic see earlier one, bit the into

so one I I getting tax – impact wins get of think, we I going some think the you’re on want where on probability posting shoulders highest things getting is it, going the it’s that make really I significant people and anything the to most board, to reform, I loosen business purse sort like be me. to psychology the can bit. little to bit strings for some good benefit we’re change little feel a is done, from My a of the the and but the honestly, think to going have don’t to put

said I growing. having we’re growing. corporates think that, special are mean, I

of see over in transient year growing the to this You X% business range. all sort X%

would still But data or that’s backwards, because the like the on the look myself call haven’t super we look things I system bit And of we and what noise I say down this I’m somewhat is see business. bulk it the a see nature, that to – that look still little different which But I certain would at you that. the say been start what particularly and weeks going am stable. I wanted of in suggest to So not out can’t I but just But be it’s little data, it’s if think and trend not has of positive. it’s the of and that I say a the flat can of I typically optimistic, that would I’m can But nearly choppy, the this can getting I tax stage ahead getting overall sort knows bit optimistic of to mean, helpful think really settle an you at relatively a other, to I – it’s But be better. say caution. I by positive, I’d at everybody reform that will optimist cycle. been

really haven’t any material We seen uptick. of kind


come The Hendrix from Barclays. next Felicia of ahead. will go question Please

Felicia Hendrix

like has not seems Hi, nonresidential good income. year to lot. corporate doesn’t like and on morning fixed demand just visibility, meant, a the forecast, in lot try because demand fixed sorry, and demand I have the you I’m thank it metrics like And talked industry it an about this of form kind nonresidential corporate to we corporate seems GDP a – to those And I’m say investment. rely you. that Chris, led of and curious

at? year? this the look best it just lag as why is So not Is correlated that wondering to metric there a think or maybe I’m wasn’t you

Chris Nassetta

on in is low and lag it’s we It’s studied that. environment environment, still for while. in And been the best and that a good longer been in a up the question, likely but is – and we’ve a that’s a have very, I’ve we with very inflationary our the strong come analysis that be correlation really teams pushing will we’ve can

So longer I it through. a do low and mean inflationary Correlation think probably in correlation environment lower lag. flow will will a a

growth nonresidential flowing investment, see So benefit if through the you’re going some in you to fixed demand. seeing eventually hotel keep

Felicia Hendrix

combined and good a like Looks basis, GDP that’s… then with

Chris Nassetta

can how too our those the and guys it, best about mean, RF at look best math the not you still – I that’s still it. squares, at the still – ways It’s It’s to look be do we It’s find. but are nerdy when the

years a bit the – it if it starts teams. the right, lags. you do to as And XX a at Kevin best can XX you – tell, of You’re when and was it analysis, we or has over inflationary pushing that’s lot greater where really and apart against creating so it environments, look were different break in terms I at do detached least I has to

Felicia Hendrix

Okay, helpful. you. Thank


come Nomura ahead, will Instinet. question question from next of Brian come Dobson Please The from go will

Brian Dobson

Hi, good morning.

Chris Nassetta

Good morning.

Brian Dobson

that is there growth, might slowing are driving you’re pricing the looking when high in supply brands your that, sign at over of And been any out new urban markets next terms growth which be and your So brands? been that two your developers how where growth? own in has And then supply weak? of has years, received

Kevin Jacobs

Yes, thanks Brian.

had you a difficult So finance to a environments indications the you seeing projects signed of a in think first problem. has bit more where urban one market become supply are certainly, new and s are little well, that, is I bunch getting up

else So developers are obviously, where. looking

oil of the right? in New those Chicago, still of delivering York, You’re that. seeing markets, you’re patch, still some deliveries some

you’re little So off. I lag, you actual supply see at the Urban, level bit, on if a think forecasters outside forecast but starting starting to projections the to more a are of you’re or broadly look continue deliveries, to still see going

consultants I bit, on see that the – then sort would the be is XXXX that So forward. And what meaning same of probably to and personally probably a the you’ll under XXXX collective, about peak and year. going is be think I’d think will going industry little be them we XXXX take the I predict peak

pipeline same. Hilton are of core new brands, The will of our largest continue the part terms and Hampton the this be quickly trends But deliveries. we are the supply have brands, some with deliveries our be of so our the still you’ll in brand that see that you continue. in the our more and have us, and I course, Tru and HomeX For think ramping of work of largest conversion to brands will growth

Brian Dobson

great. All very much. Thanks right,


will ahead. from next of Goldman Please The Grambling come question Sachs. Stephen go

Stephen Grambling

thanks, morning. Hey, good

Chris Nassetta

Good morning.

Stephen Grambling

the and CapEx the this about provide or the somewhat year could you of details of forward? on that, but is room spend? all technology do markets connected benchmarking This And back right even ball picture any how the bigger how given think major efforts question, a general is amount and going additional of and kind

Chris Nassetta

talked our it but differentiate in or more technology But technology continue sure use to not in evolve, have combined more fun, also, experience have high never a That want them, able engage ways either comments that how and about interacting unique and talk want. in loyalty and consistent their very mean, before And to making the recognizing our with talk they’re needs. different our ways is efficient. in component to that to existing last customers of in and I products not only we frequent as service launching least, that obviously customers differentiator, huge using more They more and a we exactly Sure. much technology way we ways basis. to in what And more – we’re offers obviously, today our makes quality we I deeper, think us as becomes the physical to adapting make up technology to it’s a a we prepared relevant. I physicals you mean, ourselves better, way. opportunities can before, on Honors very differentiated we broadly. to a with but a after them on-property are more of increasingly with were to been combination, to seamless, frequent us customers

into of to to Obviously, more capital being profitability able in with for attracting we’re all and doing, continue share, So an more of drive system more growth. our our accelerate market mind. objective so owners front

large fees, million there bulk much more million that something that. the $XX to global sorts. see of of I’m on cetera, technology all dollars you by CapEx we are basis million numbers that that going coming million. $XX from as the the The systems, a our investments. pure owners and to to all looking in programs HR, you’re make technology. number come So amount are us $XXX made about the CapEx like of in talk you’re in of our of technology than to out seeing probably continue see et is that that what systems investments really very of all our at terms CapEx corporate And you funds in Kevin, contributions financial that’s when our $XXX Hilton are really investments see as those and not really

continue The level of what honestly areXX or number in that times to think terms innovation making there. times continue which I you’ll investments, we’re big of that investment see of more XX happening to think that and the technology with is funded of you’re resources to to huge I business. in have we the hotels – doing in And side the play a amount of we’re to the going with.

see and right is the money I to We how somewhat. the prioritize appropriate we for properly. you’re deliver – increased continue to of right and really prioritize spend is experiences going But got to make we’re to things great it spending just done sure how in is sure and bucket It customers. on to think, what making focus really is just done do we dollars plenty get trying that we’re allocating us what there things. that it we on for


Thomas The from Stanley. Morgan Please next Allen ahead. question go will of come

Thomas Allen

and Hi strong on quarter. congrats good another morning

So more two So two XXXX. more questions on

Can potential and and had about potential capital XXXX the and new side. can for your expectations talk just brands? returns And you takes capital size driving new talked of recently you just the you XXXX, all Chris, launches. you return gives tell some us the of for First, about conference brand

Chris Nassetta

talk maybe second. the first, ask take about to the I’ll Kevin

about brands. calls. new what from New Nothing we talked prior in

ideas about new the Plus four those. development. We did of urban different micro heavy under and sort was path what our luxury first – I ideas. have and the talked lifestyle, the of of of being are I’d of three working about development think of get, three I we’re We’re – lifestyle. on I lifestyle. in sorry, works an affectionately the sort lots Plus that always I’d luxury those, luxury skunk three the Hilton call luxury say the I that’s four say down all we brand fourth, or talked four, We way the luxury collection Hilton saying. brand brand, brand, have lifestyle

we probably four sort rushing opening during and just XXXX. it’s as launch launched or other of I those would on of of on opening. put it had busy. the going we at It’s are commitment and Tru not much a things a two hard And we a We’re launched expect have that because really high mean first to keeping different us number expect not I our and of want first three going are we – hard I three that a it couple because but don’t depends. of to Tapestry this launched I date this year the just it year ago, and years would

year. and incredibly still new effectively which over well. cranking time, period this up Curio brands We’ve HomeX, relatively a to five is with doing had of even short We’re

make all these but sure, to the bit development They’re we room, a birth. others. finish them we to doing little want a give we them say So well, I pretty want proper consistently, that on give more

get at next we highly of give point So I specificity I four, as year. into three around of we’ll I year, that. would say two you And next the beginning think think, some or little bit likely are a the more

Kevin Jacobs

And Thomas, Yes. budgeting return, capital Chris as on earlier, mentioned our haven’t process. then finished we

if little year, will thus, grow based next flow free not will those safe to outlook So premature I certainly next cash what it’s saying at combined our But guidance. for year bit grow. that it’s and say EBITDA we’re RevPAR a on think and growth you I we’re think look about giving and

some reason on capital with think comparable year. We probably the thing year had the cash comparable the that with is part spend And year from capital at this it year. will beginning to is return excess expect this I return number be and next that that the we of to directionally directionally even our about a over be our this for of growth left

Thomas Allen

you. thank Helpful,

Chris Nassetta

Thanks, Thomas.


The next will Please Citi. Rose come question go of Smedes from ahead.

Smedes Rose

and programs around from, you OTAs wondering loyalty the move? can, And Are direct say, if you a earlier. through seeing or and to if the other the more customers efforts channels? made the you touched you’ve all you quantify us on bookings your away technology Hi, you apps given thanks. could the and channels, update can I on that was just movement booking

Chris Nassetta

Yes. I directionally, would the really our direct campaign. of But book me. in with are all front data going don’t have well things say I recent most

We million X continue to Honors, new We’ve started. see get is more to through tremendous members way a growth month. doing the than coming been which in

We’re numbers. up million XX to about

value talked understand to they that XX% room sure growth in of and they making We’re think it’s different discounts advantages very people onto Honors. all that think we are going get selection, digital the gives engage which the really almost key well. with get to digital offered about I with a them in those things that to an we the best points, year-to-date with terms talk in of check-in, us to XX, way, including and technological them And up opportunity XX% are, Honors obviously, them I with system, members. all it’s as that And we

that If to we’re basis our in think a you couple of direct the on year-to-date continues over be to if years, do I the it seeing we’ll continues And continue see job. pay at to look highest channels. that channel shift our last growth we the

talk surge. have more But until of years with couple to This to over the It’s going As I’ve delivering can, to a distribution to last engaging That a have at and about We it. about to way we it’s be never happy said is and this appropriate as and question think we lots about value frequent It don’t experience. get onetime wasn’t not do. very the customers direct we’re answer making talking that’s – want partners. mean years, best our the as for We end. deeper, of said, we’re relationships as years them that with we’ll come. of important. sort to in relationship. And much I different sure doesn’t a the this offering always times quarter-to-quarter be best will

do as a segment it’s hundreds around the relationships That’s to cost long we distribution. as is world the helpful very the there and with we to of reasonable We But can an economic them that good and obviously experience. can have experience it, but those have of have and continue the more customers we just element add much of with of better, that to over where not terms relationships, them, direct because literally certain have our more the we’ll just of us for them we business work our so. control

you’re them connecting – you’re the see of us from with doing on today. talked So with going what some We Things us you’re Amazon campaigns doing marketing to the digital going to lots about our we’re see building. new coming side, of and things technology. and Honors like that overall points

will with drive it is cost. want distribution our more have ultimately will is, with because equation reasons to and All the all it of of these that direct engage things a ultimately more part often, drive customers also think clear, deeply And it will to it or more down of driving relationship to to reason giving drive us of up but more to are us. Down have really cost distribution be and we loyalty. share

Smedes Rose

you. Thank Okay.


go The come Please Fargo. will of Wells from next question Donnelly Jeff ahead.

Jeff Donnelly

in curious are there could to maybe programs XXXX? guess, system-wide Hilton, Good point I’ve beneficial of other do that Hilton room cancellation out it most to few heard and just favorable the a and revamping morning, think you policies, little I’m programs expect to the have adopted as make progress like which them I And rates you I orders. redemption guys. other actually call guess, revamping ultimately some it brands you initiatives do be in certainly rewards for more such And, will these nonrefundable or RevPAR? at be you reservations. folks

Kevin Jacobs

instituted did Jeff, I’ll take policy this the cancellation year. policy a first. We new cancellation

combination a helping are XX returns XX depending on and in And hours market. quarter earlier, days, the early are those the short-term cancellation. actually of working, those really the We’re we’re tide it’s stem are early the that at where third but now of

So as get you’re that. into seeing sort of one-day out cancellations we down a few points

testing, I flexibility. different markets to for less to recent has elaborate But to or a referring this think then where they’re on or changes – levels We’re owners not to the sure occupancy bit little side, more on spoken in or high the a you’re we’re Chris make fair it made on paying whether a customer’s Honors advance working in we years calls you but on and little working new in that. more to otherwise. want also formula And way don’t on bit the more know price if testing, I’m of what hearing, on redemption exactly I before about you’re maybe all

Chris Nassetta

major point. I think to any in side about don’t Honors redemption speak at at this there’s No, changes of the

get covered Is at? think Jeff, others. I trying Kevin to that anything there you else, were

Jeff Donnelly

window? about No, large know how of I it’s I it. been successful it was has a but early, do curious, booking policy of I’m cancellation meaning with that’s think goal? guys desired and I part the lengthening kind a mean, I of you kind think

Chris Nassetta

throughout months help beyond benefit the XX working. our price early going definitely year, days deal or of said and all – taking days us semi-flexible I to with to accelerate it seven help a and days, but from seven that, is I Kevin really And of It’s then next and think as approach, how flexible product or hours with pricing sort rolling products, XX in okay, we’re we different meaning But it’s an them make out higher sort in. in in changes net-net, growth. concert, as think, just as customers like doing by pockets we’re I think at it we incrementally behavior way to issue meaningful portfolio, growth better ultimately, of we more fairly drive customers that happier and we what a of large are giving because testing we think this has it I as And RevPAR it, the way. scale a choice at the see. drives look And opportunity in a

describe we’re if far yet, going more details, we’ll out or it I’m well, going greater it detail, it’s complete next me into say XX but going Now to year. next to we’ll and rolling give we’re goes because because deep and think XX be days you’re I in say something all the I’m not to testing, the

Jeff Donnelly

question. third Thanks my for guys. answering Thanks


The next question of Farley Please from will come go Robin UBS. ahead.

Robin Farley

much may little Great. Two from you how I just group its be the things. a wondering quarter. the better, bit know One, said wanted understand benefiting just that during holiday than I’m versus XXXX what up QX pace the last year year? about during shift in the quarter bookings you makes that for talk for year. forward QX in to came QX Can that last better

Chris Nassetta

XXXX periods breakdown don’t in I so booking – think it up in and is right quarter end the of the then as – low Robin, digits, how was up Yes, on to position is exact and have front all than actually, single this for quarter me, is but of better more is up now, so future going XXXX up the but we pace far position the is looking XXXX sort year. both as fourth up to it’s into end going whole,

Robin Farley

range rate about guidance upside your of that upside today? the your in – Or that since in Okay, as recurring? sort your to is RevPAR related And that’s of great. sort so Is should guidance benefit to lastly, changed non-RevPAR think that fees. we much just onetime

Chris Nassetta

timing. bit of driven and fees to quarter bit largely benefit license including FX in bunch think of there of bit fees of non-RevPAR we a – were my remarks, were little there overall items, The license a in you fees. as a I reference a the driven the particularly bit said unique saw largely little fees prepared the a non-RevPAR have then and franchise from driven. little performance of little I And sales and But

Robin Farley

Thank great. you. Okay,


from question Please Wolfe will of go next come Jared ahead. Shojaian The Research.

Jared Shojaian

and my Hey, thanks taking good everybody morning question. for

Chris Nassetta

morning. Good

Jared Shojaian

the number we rate that. and is in sort today the seen bit a So next decelerate do start how we’ve about your year-to-date of industry with should What and beyond make line year? pipeline then unit to growth trend, of this your growth think you

Chris Nassetta

I I our see we didn’t really look mean, if deceleration. at any numbers, meaningful

the a growth you were I technically rate somewhere grow maybe things just at – really that obviously on lot quarter-to-quarter you��ll going our see the – I last we decel, us continue is but do in that’s expectation going think think quarter in a but a I that will continue happening. of I My various pipeline to zone. I think, is pipeline world, that’s of to think overtime XX% on. and don’t so don’t to nuance add to with regions fifteen, that what’s pipeline see has guess that I I think the

to we In I have the year terms we’re of in comments, deliver unit to deliver or go to it net whole about construction year. of to into and everything XXXX – sightlines you as meaningful meaningful reliably. done going being because conversions. is going think the our that either about that just talked or pretty a and growth, We’ve bunch next if prepared more getting conversions We’ve stuff ready XX% been good financed we’re construction under under with XX% roughly piece doing gap four a that

brands. we’re with that collection brands Curio, luxury Tapestry, with conversion soon conversion new have working We a with

arsenal, pretty track we of the get record, to be on So the I’m sort able based weapons confident in our on conversions our based need. that will

good time our XXXX, last this looking Analyst think in So we I Day we as have I year, looking pretty said I think XXXX, think in sightlines.

I I to zone X% think few for X% achievable. being years, think the readily is in next that

Jared Shojaian

Great. very much. Thank you


next Please ahead. Scholes from will SunTrust. The go of come question Patrick

Patrick Scholes

on my of have but answered, you. I Most Thanks. one questions do been have

wonder lot a idea it don’t York and any walk New I in might you of I City, rough that Astoria idea? day, activity see any Waldorf have on by reopening, every the going when On be if I

Chris Nassetta

I planning. work late walls bunch behind in a very and a those their all hotel, open behind bit have the of what very the the of whatever be demolition They’ve is part the it they year, year what’s that of real gets sort in involved say tricky at mean XXX building on of are going of demolition to elements very and heavy beginning old, stages scenes this sort I figuring been expectation they’re what demolition buying the and deeply the programming on And of to early out in that. but of said that construction. on, is the to us of is of prepared out is next we’re which of – think done not figure going part a years obviously Yes, start to have lot I final I’d all

on that I I a underway. spent worked So I with on will tons direction glory. think us spectacular. months people next of the is, bunch three six back time on personally I’m York of mean, hopeful to to team. the to going we’re And think proud Astoria, that it that to former them I starting program New has The its our the Waldorf make we’ve it’s get have

Patrick Scholes

Well said. Thank you.


this And his for to Chris I over closing conclude session. Nassetta ladies hand gentlemen would our conference and remarks. question-and-answer like the will back to

Chris Nassetta

the for obviously everybody time our today, quarter. I’m Thanks pleased with third

the everybody of look and talking in after numbers time their about. churn you I appreciate good year, in we next and quarter. we’re us rest going to – to the think keep with out shape next into think I We’ll spending really and talked forward she as Steady as goes. our


attending gentlemen Thank and At time Ladies your presentation. concluded. for the you. lines. Thank conference disconnect this has you you today’s may