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HLT Hilton Worldwide

Participants
Jill Slattery Hilton Worldwide Holdings, Inc.
Christopher J. Nassetta Hilton Worldwide Holdings, Inc.
Kevin J. Jacobs Hilton Worldwide Holdings, Inc.
Bill A. Crow Raymond James & Associates, Inc.
Harry C. Curtis Nomura Instinet
Stephen Grambling Goldman Sachs & Co. LLC
Joseph R. Greff JPMorgan Securities LLC
Anthony F. Powell Barclays Capital, Inc.
Robin M. Farley UBS Securities LLC
Patrick Scholes SunTrust Robinson Humphrey, Inc.
Shaun C. Kelley Bank of America Merrill Lynch
Thomas G. Allen Morgan Stanley & Co. LLC
Smedes Rose Citigroup Global Markets, Inc.
Wes Golladay RBC Capital Markets LLC
Michael J. Bellisario Robert W. Baird & Co., Inc.
Call transcript
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Operator

Good day and welcome to the Hilton First Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Jill Slattery, Vice President of Investor Relations. ahead. go Please

Jill Slattery

Welcome Nicole. first XXXX quarter Thank to call. earnings you, Hilton's

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

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

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

and ir.hilton.com. You Chief GAAP provide of on our ahead. will This Financial financial company's the Nassetta, can outlook. operating Kevin our review call Chief Executive to and then an current an our results and overview our and in of earnings today's the find non-GAAP measures Officer press year Officer, discussed Vice expectations at on quarter will for morning, provide President the reconciliations Chris President and in environment Executive release Jacobs, our website first our update

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

Christopher J. Nassetta

and contributed and fee-based to us high all the and Out-performance demonstrate the year. great EBITDA happy segments start simplified of all with exceeding quarter geographies strength our business to guidance. and end Jill, Results expected this of to results were the our strong major everyone Thanks, model. our continued across EPS for to thanks adjusted joining RevPAR, the We're morning. report a better than

we to we our their $X.X returned allowing billion Year-to-date, to requires range strong to with HNA return top-line billion, low and buybacks continued month, guidance strategy. solid to repurchased in performance raised now on market model dividends. exited to With free their the and we shareholders XX.X cap. million This capital over $X.X cash levels have from of have billion connection Group this offering, return year we of execute investment shares this offering. morning, through that X% $X.X in Hilton. capital fully secondary grow, Earlier With flow, they full our capital us generate our approximately or to a

U.S., quarter. XXXX continuing given growth in expectations international growth quarter results, the remains X% position quarter, for accelerated corporate to is demand In first new for versus all to revenue versus increased improved roughly bookings grew RevPAR estimates, which a Trends international beverage spend. year the continue X.X%, momentum growth prior the into driven conversions which first Recent by and XXX the forward-looking guidance. increasing periods. provide mid-single generally all food fixed last RevPAR was windows group and fundamentals. was visibility provide the to suggest Turning group in non-residential points economic and and transient, for nearly into up travel accelerated the midpoint and and driving should quarter, exceeded in better forecasts positive outpaced trends, have last which year. with XX% X% of increase the favorable business transient, and and above in investment Booking GDP further the lengthen up fourth digits quarter also markets, U.S. future from boosted growth inbound by the system-wide quarter, leisure group. across improving Group major with bookings, Upside segments: and some three of U.S. out-performance basis of

to with the X% in likely we're points X% this our to set Given a up, more the full year to X% range. RevPAR basis raising guidance XXX result X%,

percentage XX% of in positive first the with our $XXX the largest quarter the with XXX,XXX completed, more of generate our pipeline, ended existing continued adjusted than stabilized, rooms seeing in annual When momentum million pipeline also EBITDA. industry. We we representing estimate are base, We will development. our

and to India. in growing located few offers majority Bengaluru spaces under On than to sign the is pipeline we stands country. China our The of totaling days, our quarter, Hampton supply region, years. to In expanded already In we of openings large critical our the all continue by the market every the markets, in Africa the important growth the three pipeline the we this approximately in year, Elsewhere East more For pipeline, of in where city. in and full teens. approximately also more our the driver we developers. X.X%. next existing in with market our in continues success dining and in we With region, unit district the XX% continue located the leading room nearly increase largest double in Middle XXX-room China Conrad Asia rooms. the our hospitality supply, an local but expect and international hotels, brands new grow construction. region pipeline, business will options meeting we our international over has than average, In partnerships a international hotel India, with led which be we event The our central hotel net a the opened estimate presence growth fastest to expect and approximately conveniently XX% Pacific luxury in XX% year-end, XX,XXX at of the represents by X% across estimated world-class region. XXX the of portfolio high

milestone forward to celebrating in our the goal Middle next we the tripling We to years. the East the additional first Hilton Arabia over and converted work openings the Cairo Middle our Hilton our year, to Heliopolis to including as welcoming openings of raised Astoria. the to notable important flag tower the During hotel's luxury Africa's look first Egypt throughout Waldorf the quarter, we Sub-Saharan East, Africa Saudi celebrated we where an several in Hampton towards from footprint

hotels marking our composes both first and Our our across continue the to the iconic pipeline the to in and Como, Lake first we opened opportunities demonstrating identify resort we destination. and expanding rooms, property XXX XX,XXX commitment in quarter, Hilton area exciting new and and an In brands. existing Europe nearly

million than We continue this open This development the hotels we Zagreb, quarter, year. points quarter on new story, North In room now will from hotels eight in drive third states, properties the their tremendous than positive Canopy more the guests properties continues Canopy a brings who with Bethesda closer double quarter, in customer new a its Tru Scaling Croatia's footprint trading XX continental in Honors global expected ways our quarter. XX% new also March members, open openings program year-over-year. In development. for in scheduled always that The years. and occupancy, U.S. the little and to XXX up local first in development XXX community the are more through XXX exceptionally to Key welcomed the total our in U.S., home. in first now of feedback of is technology a Washington, Digital We're addition basis our its system-wide dozen added this added to year. which support in XXX,XXX members our total guests Canopy broadly, lead allow XX% accounting just stages more part capital, expanded various newest an than to be smartphones. than to portfolio Europe, few to a X to system, enhanced technology and later began and and million size guests. enabled using our In experiences. its effort. of XX% with X,XXX next opened serve recently the pipeline the that D.C. our rooms, nearly HomeX and doors to We our or to More to HomeX approximately Brand, properties Tru from exploring new important of for of their open of include to a six up more more to

Our using Key. X.X guests unlocked doors have million Digital

available structure anticipate to the will provides continue the customer-centric of at start globally the the later and growth, rooms on will operational U.S., flexibility available. of combined year brands, We for strong new and and guest cost shareholder driving rolled all Customer-centric those returns. don't. be model in model new properties last summer. pricing this and this want should the set-up strong capital-light with pleased added going Overall, reduce industry-leading maximize performance for who pricing with savings number those the number who that robust cancellations very solid pipeline, optimistic also economic out we're development minute We it pricing and recently a our as forward, pricing

continued of all Kevin details we've one to first outlook a our to included the the one XXX and hard to the marking Ethisphere were to I Kevin, making to over Most the Work team bit call the Ethical in give the I'll call turn our for over third of members with Companies Companies World's been their want of We year. of in on thank rest named commitment Institute, our I year consecutive leading the also highlighting list. for turn by now dedication our the us to quarter Best the Fortune's little more integrity. results For, and on Before work

Kevin J. Jacobs

of currency will international from exceeded the X.X% versus exceeding year-over-year. XX-basis-point the increasing range. guidance RevPAR Easter our of with of balance that our that drag neutral of estimate the primarily the also later from our RevPAR Both particularly on and We driven items Thanks, drove million related benefits offset our came everyone. estimate end reverse by grew calendar versus and in morning, outperformance. We year end partially good Adjusted of range, one-third roughly occupancy In midpoint Chris, guidance the timing performance the hotels. quarter, year, at shift. high high beat demand EBITDA system-wide $XXX the a strong prior guidance with weather X% basis, an rate the the

diluted management gains range. our of earnings license RevPAR drove fee than As also $XXX for $X.XX and quarter, adjusted the outperforming grew X% XX% In XX% per to largely expectations. a results. fees expected to better and growth result, franchise special exceeded our million, share items guidance

in and softness Our leased portfolio line of the strength performed properties in Japan. benefits owned muted expectations, as certain at with European

Growth also and regional solid RevPAR our quarter corporate comparable benefited X.X%, hurricane-related from transient business. and grew performance demand. to primarily first boosted prolonged by Turning leisure U.S. outlook,

For full U.S., grew the RevPAR lower Americas across leisure we the system-wide our trends growth X.X% first solid strong exceeding year Canada. In in versus forecast prior given half X% U.S. year, to of a range. X% expectations outside XXXX, the quarter RevPAR the

aided hurricane-related Continued Rico. Puerto performance business also in

in in the quarter, in region London. X.X% basis group Europe our XXXX, business full the we by Turkey, higher grew in but mid-single-digit range. weak expect recovery in strength expectations, continued roughly leisure For by year than tempered the demand in and and to RevPAR driven RevPAR largely XXX broad in grow points corporate

In full Egypt Kuwait. expect to year the business rebounding digits. and growth XXXX RevPAR We demand in region, Europe RevPAR the Africa East Middle was grow in up in oil-related X.X%, given better and in mid-single

in key in For region boosted estimate and the near to our XXXX, expect and well to guidance In transient The in the contributed to end Tokyo, also in results. earlier shift ramping growth the basis full the Year high across driven we Asia increased New Hong growth Chinese nearly cities the like Beijing, particularly of in XXX region, hotels, RevPAR a be XX% range. strong Kong as year group RevPAR as performance, quarter we points which region. quarter, the by Pacific

region the XX% For RevPAR grow high-single-digit RevPAR growth expect range in full year Pacific XX%. the to for of with Asia to XXXX, China we in

to and billion year RevPAR adjusted we midpoint. Moving full adjusted expect representing special to at the diluted to EPS billion, forecast EBITDA increase for $X.XX a of to XXXX, items $X.XX X%, of year-over-year growth of X% for guidance, We $X.X X% of $X.XX.

we second the X%, an of system-wide basis to point X% expect growth calendar XX For Easter from benefit RevPAR quarter, shift. the including

share repurchases. $X.XX. for items guidance EBITDA that not adjusted and expect do Please special of our $X.XX diluted of $XXX to incorporate million We EPS adjusted ranges note million, to incremental $XXX

a Moving year-to-date. and a of for dividend capital first return per the cash more capital we return, quarter, share during to of on paid million in than $X.XX $XX in billion $X.X total dividends total

As nearly our billion Chris repurchase from this $X.X share mentioned, includes HNA.

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

results to please? shareholders release have. may expect one to you on to For $X.X form buybacks as this have yourself you ask Nicole, would your and first our return that dividends. with can related We the found in the quarter question earnings to like earlier question, questions to ranges morning. all and first guidance any this Further of now XXXX, and be billion we follow-up for so we remarks. between would completes details limit We prepared line issued $X.X well open This billion in our our as question. the like you morning, one we to of our we can latest speak

Operator

Thank you.

now session. will begin question-and-answer the We

comes go Please question from first ahead. Bill Our of James. Crow Raymond

Bill A. Crow

a Hey. guidance, follow if through that driven business transient improve. to have Good going saw saw we seems and XXXX just back from And morning, in I'm this you this is Chris, in quarter, was some was confidence? that both – or commentary something and activity, just really your when fourth tangible your your that to folks. better to group seems there wondering it certainly has confidence

Christopher J. Nassetta

question. Bill, Yeah, good

to different Yeah, last get reasonably during fact picking there, optimistic both it you we'll were the back trends remain I if on I had was call, think were was I starting we the to think that's based that go Probably the strong. seen transient and see our fourth up, quarter, that leisure $XX,XXX multiple trends you question. ways. that –

optimism, While trends signs transient our business showing increasing I'd quarter to was we trends choppy, saw before year the I think quarter, position it to group up. for strengthened. the is reading based say started were in and life that on you're fourth pace would the pick my I the see that continued in say it starting first we of right, the into and fact which

leisure into three down transient major business to continue strong. be components, the the breaking So,

of it the saw incredibly pick to it strong. Some Business like, frankly was transient, a higher stabilize and it Easter the and shift but we due up at level.

choppy, fourth better. quarter, So, seeing, the And while strong. was more it in to in less be position it was continued and choppy pace group we're both, consistently what

lot to were quarter, reasons we would did what to we there first And there a think of and I fourth I behind see think it. solidify see. hoped So, starting from are

key we about broader now, the talked what and think we're seeing macro I reason then, think is is I what strength.

data consumer at increasing of have In the levels. reform you pockets. If confidence all confidence a at high pockets, out you consumer's and very post-tax been lot in Business is at money look reasonably business's there, levels. more a world, high has more money in is

people uncertainty, tax And, a little regulatory hire a and have is environment regulatory little policy a our consumers have spend more You on as part, say you're result, a in both that driving confidence. and demand more a more in on driving bit business. what's I'd that's, the more, stable. which visibility, areas, less and seeing both leisure businesses basis a in basis, is business bit more,

long it's is, in question takes, what the it for early trajectory So, how the year. and

a said to is our X%, is you So, if my in which increase improvement. showing pretty optimism good guidance our really, obviously, listen but carefully, in at X% I to comments to up X%, X%

see time. trends unanticipated, that's So, continue period a of optimistic I of for And these short pretty there. we will that think it's up we're that showing significant something

Bill A. Crow

follow-up Chris. was think the the is weaker And question, one, is performance economy your in luxury it... issue wrong, And between Correct probably I does than first hopefully it's if a but weighting my quarter That's a that it quick and overall U.S. helpful, within your I'm portfolio. me results.

Christopher J. Nassetta

I will Yes. correct.

you're wrong. think I

Bill A. Crow

resort the urgency in and there? you way the change it about presence your maybe presence space? luxury space the increase to more there think your Does Is

Christopher J. Nassetta

– second. always we've first and Well, the let the answer me

I weighting. assumption is right. think your is It

luxury resorts, on We do have we basis, and not presence basis The If our question lower. on we an course increasing points. beat the think, for our to weighted you by, do. actually of were in I we urgency higher weighted on a answer portfolio, XX

aspirational that for of that had But effort the segments, and and tremendous it, come. we're resorts years really from it's think having luxury on. portfolio. part many, is representing last over a in few almost But I the better by every in and the working a We're between last for standpoint luxury year, focus reason that the major in and we destination decade in urban made, progress not. end have way, we've both I of driving heavy very our and and longer think bunch the a now. of urgency sometimes just We the that in We beneficial. are that's those open have we we is areas want have Waldorf has Honors that making will system of is have members. good think, to But been products sometimes the continue it that progress resort be and We're in. to pipeline the many years. Recognizing between an tremendous quarter on to There term, year resort to all we in for Conrad, high place XXX quarter properties data-shifts and the our gaps

Bill A. Crow

Thanks. I time. appreciate the

Christopher J. Nassetta

Yep.

Operator

Brian comes question Please from go next of Our ahead. Dobson Nomura.

Harry C. Curtis

morning. good Harry It's Curtis. Hey,

Some here. technical issues

Christopher J. Nassetta

Hey, Brian.

Harry C. Curtis

Brian. hey you more Bill's a color question. Chris, little Yeah, of on bit maybe could

CEOs they've talk – are of And cycles. seen you how you their you've to they several have your customers, and saying – budgets? seen what the about As they travel loosened

So, the that this seen versus ones last how years? does over you've differ XX

Christopher J. Nassetta

the going a tax, customers they years. largest sort we've serious lack clarity like and bunch have and of some is in I had of to of – prior were described say, are more the they're They been order. I customer they're they there, it of last important I ultimately customers events, and where think bunch more their hiring optimistic. very talking were share they're view areas different that overarching more their I've better. regulatory our just because our in a would there take I'll been overarching with feeling some lot Definitely, that views. spending feel a quite ultimately lately, their small, have of and most important of those willing and that that large more, think I answer, And things on out over hanging was in it visibility

So, I both teams context, a group they numbers It's an prepared and one CEOs have beverage I big start comments that's are It's letting of that somewhere. loosening to in because a the and reflective traveling gave clearly to our the talked and in companies food – feeling the that the only the of as purse I important customers I think and definitely bunch and trends they're note. are translating good spending more But and them up transient that I the confidence a it obviously talked run think is more. ours, quarter, they're in think to strings. I is on at sort of of

that If have the good out, think again, I of it's into the might spending community, are business in beginning more are coffee they're what people you events, of in lots the is breaks cut coming But, events, through, individual translating groups on big trend doing the it's folks individual but doing the the to of higher the they confidence talk just more examples. quarter, spend. they're as hotels a

the in many comments. I as of And is One mentioned at, the it about non-residential talked fixed that times, I look things I've investment.

are which investments great medium, is correlation technology, our large, that demand on it's those to is rooms. are corporate equipment, – with a plant, for look growth in you of be businesses, because and those fact the what's America growth like, hotel for business, very X%. that at pretty all reflective more high close Again, small, the making numbers year-over-year to rate estimated to for materially, If of up going numbers, and

too mean, they vis-à-vis, a want it jumping mean, they customers to clearly confident a buildings, conversation. say, different fairly contrast as ago, talking I'd not very was weren't I versus out a were ago. it are as stark mean, conversations much of but but a these today they were year I if today. So, in I was a I year I of don't be to Pollyanna,

a pretty chronicled, sure worries what's longer, lot cycle, cycle, well cycle of longer mean, which that the know this has everybody. I'm necessarily. much terms I mean there differences. a lower it cycle. I this think all it's is In mean, but growth some been not are of been I I happened sort but obviously been I should has a

sort one years If one argue had, you've particularly dips greatest and of the in the annual look growth business, of at biggest our that of the growth. history biggest the of after even in dip best history you and would the of we've out coming or anemic was RevPAR in the recessions, the it

lower longer, was it but So growth.

modest I think was driven, chronicled, by more has well been growth. that macro just as

had years of great big growth GDP the out recession. never coming You

the historically economy in The juiced. really So so. the overly financial recession, markets incredibly never got great were disrupted

for coming new So into a of they growth capital did provide units. the lot not recovery of

So see low can I to history. macro going of peak ours I the supply even at with XXXX levels tepid that year agree year the full would most I XXXX, peak below for for the this, lower though the is my average. are long-term And look to that you've is the long-term is any remember and suggest think actually U.S. supply back going in will XXXX at supply, historically forecasts you've go you're had like now, you down when numbers in reasonably peak which than argue, growth, had which average,

been that's think I So helpful.

three how had depending on look re-accelerations, You've two you or it. multiple at

seeing that right end, when underlying had believe bit at I've little that slowdowns In macro is and the this in but growth periods. And has I that lower prior on nature what think moving just a sustainable the acceleration based is in Again, the you're things that I recovery think demand RevPAR the terms of in levels of created higher now economy, different. are an I bit re-acceleration do cycles, and and supply laws of reasonably it's periods beta slower growth. covered sort of well. trends and indicators goes on on feels are experience a long ball. and of say. we're issue don't hard anemic it alive acceleration me But that have in meaning like will foundation I is to the feels picking for reasonably but period Macro picking reasonable a crystal supply we of of I different a said, up, time in the business. of decent already a follow. around will world, like for growth call. have the have up, do both it a and sustained And like which economic and support not rocket sustainable, not of growth, you ship is U.S. how as a the it RevPAR We've ways sort little and created which the around couple feels demand

So good have at results. of least period I of couple of think could a you a same-store years

I don't think It's It's that to we hard out. I know. that, that far beyond not couldn't. prognosticate just

Harry C. Curtis

it does for That thanks. me. Chris,

Christopher J. Nassetta

Yeah.

Operator

of Our question from Stephen ahead. go Sachs. Grambling next comes Goldman Please

Stephen Grambling

good where how looks a that have might the feel how buyback? million an of question, backdrop left market ratio? little as strengthen I extension, your thinking the think does up does guess, about a if last leverage year. a like total you deploying the morning. guess of buyback about change get like the that And you you $XXX Thanks. outstanding million near-term in on Hey, to you about either of I target answer over $XXX the deployment remaining you in are or further, follow-up, the following that to remainder distribution

Kevin J. Jacobs

I'll take Yeah, one. Stephen, this Kevin. it's

right billion the far. it about thinking you're yeah, say, of so We've done buybacks $X.X I'd way. So,

gets that go to to billion So million you billion you billion. $XXX $X.X billion, if less $X.X $X.X $X.X dividend, to the

pretty year. left look, for million to on would that be HNA the would we year. could $XXX vary of folks to bit be expect the speaking, the based deploy always, that we of And, in a the to even conditions, the of to rest million expect a And market told So we to right. around we the talk but the generally lot I over little say, that balance kind as offering, market of $XXX

the And way on capital think leverage to the capital going answer on return leverage. range think way so, it that question, more The about the to by given of X.XX would we we've about the asked of given is X part we'll we At to the us to I over of the change buybacks second of spot range, little your consistent, range a And, happens past return bit guidance range the end the range opportunistically X.X at of end X.XX be is the leverage, you. nothing given year. that's by have of we've is today, in think you within broadly. the about in and that comfortably and we're times. the times, the year, But,

Stephen Grambling

queue. jump Thanks. in Helpful. I'll back the

Kevin J. Jacobs

Sure.

Operator

next Our Joe Please JPMorgan. comes question Greff go of ahead. from

Joseph R. Greff

and business everybody. the the leisure specifically it, within growth Good would morning, everybody. this question mentioned X% to for way see transient transient? think asking answered don't I the hopefully. you U.S. relative to Good quarter. RevPAR X% before, I'm you full morning, year. growth you Kevin, group of Good you band, But, expect And that how do

Kevin J. Jacobs

Yeah.

So good question.

and half, we right, in to business transient it And you're little than to been we bit lower a X%, say, had better right. I implies continue. as said this in think would that quarter which quarters, expect X% I was prior

positioned the in mid-single in Chris group see that heard say digits. remarks You we prepared his

middle end So the upper day of at range. or the the realizes the end that to probably of

continued. be middle of expect We sort the or to end upper leisure of range

So the of our the it would And of the that, of does in or more results U.S. range, would mathematically, with the guidance. sort overall that half U.S. suggest a business drive consistent lower transient in half be kind of

So already... that

Christopher J. Nassetta

upside that X% X%. path potential continue current Recognizing on and for the if is things there in

X.X of XXXX cleanse hurricanes to and all of really and noise flat last much like, point. the the business the If you year holidays pretty up transient was

transient better business materially in been So what than we've pretty experiencing.

Joseph R. Greff

growth guidance basis three the business is ago, across the it or points RevPAR of it transient? and then months XXX And even Great. group so versus versus leisure more change is segments three

Christopher J. Nassetta

even. it's think I

a on I at to beat think expectation the in look hotel think thought the world I quarter Maybe is board. forecast, our were which do good. at we going bit. the pretty group, new it's was forecasting, than our Business a better thought. if going pretty optimistic in the We be than think aggregate ago. to position the on we to group we Maybe if quarter, little across numbers is transient because it leisure around by look to better the we you we honestly, first hotel darn all be

a in still were Probably because feel transient. definitely were and there bit we for the upside from business less better upside leisure factoring little already even that, transient we we group. in about So is where but good,

Joseph R. Greff

Great. Thank guys. you,

Christopher J. Nassetta

Sure.

Operator

Barclays. question of Anthony next Our Powell Please ahead. go comes from

Anthony F. Powell

been market and I the cards growth know seen everyone. do may they by than Have be get forecasted? you been those cards it's you cards? you travel but on able the Hi. well from for originally Good spending have fee morning, a have to received in And early, community. think you higher new few your more credit the months

Kevin J. Jacobs

Kevin is a getting Anthony, But cards customer it's your cards. have the look, media Yeah, received, again. traction early is it's early feedback the otherwise of about assessment fact accurate. great both, it days, little of I been been and the mean, social right. terms in well Yeah, that we've that and on

say higher it's the successful we expect trajectory and in the fees of hotels share, what in thought customer we've license to to market whether but So too be be performance and engagement drive bit what we little those early a to will cards and on ultimately said past. the than better

Anthony F. Powell

How think could past with ADR Got you it. what the discounts, into from growth? member detail have go the in tried some things the customer-centric and you cancellation that do more impact differs longer and your And of fees that you about pricing? on could Thanks.

Christopher J. Nassetta

calls summer Yeah. out. behind now, the out, I rolled be will and it globally talked about on it mean a bunch rolling the we've – of by it idea we're

better. idea, for we it, of choice. lot is incentive us And need bit unlike it in a not the a customers give other if let an you bit want of regard, don't a but this decent industries, that as to little much, of the industry, to to think that manage we'll being option. airline you're I you pay you give be so know, And little have a of can including inventory a be give stick, customers a we'll model flexibility, that carrot instead you which more more going our having more if don't, it

we Rate, than fully used flexible what So, got by rid to created and that's be of BAR way, percentage points. the essentially, a is was, in what few old Best rate a Available we simplified BAR, grossly took higher we did a we that,

we you can And then So these. semi-flex generally, where of three still, different that and gives in created tweak days lots two we product to continue we a these tweak things one will to have notice a get cancellation we cancellation to beyond or for get And that policy. a three you little our better information. two us allowing circa maybe days incremental on bit to discount new ways

will of We hotels, not get it ahead I that want don't testing of the it that a of on expect will based ADR, in we few the will little us. a that hundreds it behavior here higher tested the and boost. bit gobs we will think bit this that hotels, reduce little and there, at to cancellations, you of we materially, RevPAR and but us saw that test give give a do

reason our of further we'll ADR happens. we've the to it RevPAR to get rolled reduce that choice it how done inventory out. cancellations modest, typical beyond will it say us see and it. We've would let's not better it's as to and but give done more we believe give manage do us and it But policies. able a extending underlying Let customers be out cancellation I But it and a goes report bit boost.

Anthony F. Powell

you. Thank it. Got

Christopher J. Nassetta

Yeah.

Operator

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

Robin M. Farley

Great.

in to the one-offs things bit is rate QX comping benefit lower that's last if also you're year. some just wanted that you're of RevPAR in then to a Easter holiday a One two versus growth guiding rate timing similar and from QX, of And ask shift. know the although full year, guidance. fee the have the QX in theory I you'd don't that Just to is about the growth in

to also leaving of that maybe be in Thanks. similar rate demand to So if that hurricane your perhaps you're less there's offsetting just sort and going for benefit being wondering that Easter of growth you're that the QX. QX Is conservative. But reason? thinking

Kevin J. Jacobs

Yeah, sure, Robin.

the year timing when growth, of you mean fronts. last of a it's one thought. timing. signed the is different we couple On But the headwind Amex It's the quarter, retroactive year-over-year because was bit pricing credit to I card last the drivers year, signed of we the catch-up big deal little on a there. on was second a in remuneration and a so the fee – as full it's there year just

definition to So is which official in basically, range. RevPAR, our On gave higher X% than to we of I our X% nothing X% guidance, mean, there. on much by the going else X% yeah, guidance

guiding full right. probably that range, a responding of the you're fact take the the bit to, if over to the think top which you is I on us the that to suggests had little you end Chris year

X% down gave over, speaking, guidance. So hurricane-related bit little does as dissipates. flip much But helping is balance quarter probably Group different. a slow there But generally stated it's Easter as from which in the well. to said, a we've as the we as business generally that And no why the X% second the is the bit of stronger benefit different versus is of little is quarter, trends there's year. not which the speaking,

Robin M. Farley

Okay. Great. Thank you.

Kevin J. Jacobs

Sure.

Operator

question Patrick next from ahead. Please SunTrust. Our of go comes Scholes

Patrick Scholes

Good Hi. morning.

Christopher J. Nassetta

morning. Good

Patrick Scholes

Any to I you last growth the X%. years? were trends growth seeing how all How in X% With in change talking been few does this net on thought? about indicators, delivering at that net notes about unit think you economic think the over about both delivering my the positive about and you've you had unit RevPAR years? few next over quarter, next the And the changes

Christopher J. Nassetta

to I next very would hate the course. make still Probably that X% the comfortable two short, change? for the what change? zone. could I to years or need three mean, I the in sort to us U.S., could the picks That seeing financing turns ends happen, Pat. we're continue trickle that markets ultimately of through to up. and allowing up development, the strength overseas and which fundamentals more certainly U.S. the Of mean, to I around it re-acceleration in which open too we're up of X% think comfortable, to but

yet. We haven't seen it

in look tightening. last tightening. you lending say in been most it, there what's generally the on sort it's of the at was a I'd year, If of throughout U.S. community, going

If stay Which statistically. you in enough, a strong will is the with I at that stable. earlier comments, gestation flip this But supply when the said look U.S. there's think long for fundamentals peak it the around. the fairly in in why cycle that. it's period year, long I I Now suspect associated probably is

some we're it's long-winded, but it But in X% It those confident again, lasts. will this X%, trickle the numbers. we pretty and through, to good how time. think – So, be it re-acceleration could not depends of long sort naturally take to are too

Patrick Scholes

Okay. Thank you.

Christopher J. Nassetta

Yep.

Operator

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

Shaun C. Kelley

to follow-up Good everyone. on Chris, Hi. just point. last that morning,

seeing? China, share a think, little gave particular, part your franchising color star initiative prepared of is it's color a four your about and with being and much growth going? in since on Asia the more Any over that remarks franchised of pipeline pipeline. how there, of you managed the you're Hampton sort bit that you let's your I in us some Pacific from, coming a versus part Or specifically with could big it is how call – five of such

Christopher J. Nassetta

that in prepared It's well as as to of you there market. comments market emerge of mentioned, our the – world, pretty what in construction. classes have said, a continuing mix, is every got that is big world, of that that the a is that some XX%, Yeah. much chronicled been a you it going think, increasingly mid around I've I bulk is major part in the market. and middle afford. with just the trend other pretty the towards of pipeline mix chunk but a we've under mean, we're I I saying can they mid the

And in areas be demand to need segment. is able customers, customers. want And can wherever more that to one serve they increasingly whatever all serve want we have. seeing major are the to incrementally you of for growth we that obviously so be, they And where

in consistently and in we Pacific, industry. been upper But think So at ago, above look upscale ahead We of years I probably China on and five years particularly curve, you went fairly honestly, five China. from, it I market the XX% the Asia and the ago. if doing mid were think with we've

If XX%/XX%, you probably like and above. it look mid-scale meaning XX% upscale something would at is today, say I it versus upper that.

economics you back ten was, the in market I think reflective in like everywhere what China, that ago getting if reverting is on and to – the five And developed lot going infrastructure Where it. was spend, part really getting is what developed makes demand. absolutely in economic years that what's where an sense support a of of else, of effect, what with of the is in go the mean didn't is sense.

Hampton done ways with to in massive properties. where properties, of in China. and out product to helping of got us different of saw alone XXX of growing in our the luxury So, But create relationship. delivering particularly done, the the in we're and that board. over We've when opening well – terms wonderful deals which, we've come of in We're a is, them that. it, I Plateno growing brands got have brands across where ten Embassy you having. five effect. of talking doing, service Plateno. that supports China, lots we good coming. news recommend in But in been and DoubleTrees, if Inn, think ultimately master tons with expanding our will in international and build Hampton on other we're the you sort to China, wake network More years, I've of focused the and fantastic sort We're the relationship of be given the pipeline course, what They're network is of is able they're job Garden the service, with great fastest stuff Hiltons, up doing terms about we've I that success our think the and franchise And went I

we have success. great had So,

Plateno optimistic – where about going we're are very with Jiang. really have things and Jin We

Shaun C. Kelley

more from lot stay That's other activity in out a I They same that it build – – China things sort follow-up, built? But working as just these of they quickly? of to deals, these that purpose the estate. deals. doing, stuff are Is that Is three-star terms cycle I do conversion those lease to or types right? is more it great. with you're And you're through tend pipeline kind in four-star way be mean, guess, conversions, know the down, of the – a it is are its to of of real hotel maybe structured able theme. is we

Christopher J. Nassetta

a know XXX But XX%/XX% I'll plus It's I done I ones Shaun, we've I'd to of But if deals at at it's reuse. – big the reuse. I've say bunch follow-up, maybe don't we'll adaptive least had mix. it's a the – I seen percentage significant guess adaptive stats, a are follow-up to honest. be have it, I in the and directly. a But can

that they're really there got into Now, turned where typically, never gutted got ground hotels are a few were a off the and Hampton. and they cases

things other built uses, and effectively built like But got bulk that the not really we're a have no because follow standards. was used, Hampton office of and as So letting demand. like been never and other there essentially purpose they literally them not the those built were buildings

they've done or adaptive went reuse a built – office – they I saw you which again good exact are standards I building, they're existing terrific. these when gutted And very I of with mean, really hotels of the their our Hampton. And product. it, an But so job and very, for product, to change and are the changing is use. have they're if

Shaun C. Kelley

Thank much. you very

Operator

Allen next Our of comes Morgan Thomas from ahead. go question Stanley. Please

Thomas G. Allen

morning. Good Hey.

outlook So, suburbs. the the top historically. first beat an quarter in when it, properties, actually suggested data it different of the thinking XX saw markets of in variance of you more and noticed growth your regions, cities terms low thinking the of between end kind the that I'm you then that how and rest was the terms high U.S. end country, maybe the and RevPAR are for in where the versus about definitely acceleration STR in under-performer, I

are Thanks. how So thinking you that? about

Kevin J. Jacobs

in say that Yeah, much has versus not I our luxury overall. been of experience the in segment bottom U.S. I'd sure, end, different terms top than end mean, Thomas. performance,

Chris chain basis, on the out, pointed adjusted as quarter. in first we scale a Although, outperformed

hurricane-affected most to a that. And bit only their share. market the know, of and took the they're to we that. quite markets well. are things over you're – New coming little are starting Florida starting supply and absorb absorbing In hurricane In lapping York, overall, the Moscone getting better. absorb not U.S., the like renovations through sure doing Zika obviously are Francisco, because supply. So you're really demand, like and And San doing is do as I'm things some you well cities Center in but

first I'd under-performance So, What performing say same generally we're you terms in of versus quarter simply our is in the weighting. in the way. the overall broader see STR result

terms no I'd anomalies nothing, than we in versus we're way of in U.S. say So the the overall, share took performing the other quarter. some in first

Thomas G. Allen

up that just are prepared outlook. was about out cities that U.S. to in drive in Kevin. that was remarks you more thinking strength U.S. scales to thing how way? guess versus the – And chain are I my mean that's I do on me your I the think thinking was mean, inbound the question in X% one Thanks, you travel stood going you suburbs? quarter. in same

Kevin J. Jacobs

outlook, we on than the the the don't quarter. be Yeah, any have to believe different I'd sorry, answer reason say it'll first –

XX%. point it's So, in out, cities, apologies in for the you inbound focusing clearly X% mind on But to And that the is of keep our first International going quarter. help. overall as business. is

first was to the up it's clearly quarter revenue years. York, I So the think, help in inbound for international time two going first in New

cities. So, and will other helping the with some the York that's of clearly New recovery

Christopher J. Nassetta

Thomas, and gas. suburban a markets is that's bunch thing, helping of oil other The in

and see a out. knows of of picking we're gas amounts investments been through energy now Oil going energy, starting steam. the coming in. to lot out coming capital up and flow to Huge the that's has gas Lots into So finally ground business everybody of business. starting of

to broader starting markets outperforming now markets. So gas and oil are we're the see

So, in good you international. things have some going with I cities, on think

suburban outer going markets are things of good energy in related. – some suburban the some that have You on

I of the think. So fairly board, news good sort across

Thomas G. Allen

you. Thank Helpful.

Christopher J. Nassetta

Yep.

Operator

next go ahead. Our Citi. question comes of from Please Smedes Rose

Smedes Rose

I you And own around guess, confident the a that a signal through about Is does like reduced more? just, piece overall direct talk could if on intermediaries. I commissions looks in that bookings strategy group bookings was your you're relatively third-party It sales thanks. your it small through wondering force? that group more of And Hi, you just little bookings?

Christopher J. Nassetta

not It's of part our insignificant group overall an bookings.

it's that relationship with you distribution maintain that with. intermediaries I owner think, our great community it to have Thomas driving (sic) well might strategies [Smedes], delicate – of are with But driving as of drive results, and we – balance maintain share in want business cost-efficient. performance, a imagine, doing a but serve good relationships to the terms to trying

great and community our to yes, to to in of there's continue And have that over to to a them. whole the And percentage We the so in But an business. have deliver We responsible also distribution need to relationship I intermediaries. have this you've think owner with efficiencies group has efficiencies in that the seen drive ability want we with group great relationships obviously to huge – is order confidence a we be we to our intermediary owners, able need for costs. system, drive continue being that drive that to and realize, we increases means a part, representing continue profitability in continue last to to to decade. that, business and

Smedes Rose

moment, OTA OTAs up with of just – bookings or – terms contracts through and was for OTAs... us sticking Okay. you're you for when the just seeing could your a And in maybe next remind come speaking overall what then I commissions wondering,

Christopher J. Nassetta

say, actually of in think middle the have disclose year. things. But we any those are We now. not don't I we don't will this right I one,

maybe year. So, assume next

remains is and strategy negotiate that healthy a a there our have same, sometimes we think, OTAs. get deals, two the focus are our have of we they is dicey. the a business. with largest with with, we the about bunch But which a obviously, OTAs work When driving healthy little generally I the all we them the relationship relationship, incremental

on add Not they incrementality in on typically to focus broadly. can on with broadly Every every a with them, distribution hotel, really them to really is is mostly. leisure so, tried them And where with region reasonably infrequent be parts structuring focusing deals intelligent partnering travelers different, and cost-efficient but to always, the but our that way. with business the in And we've weekends. in fairly

And where we're the drive bifurcate outcome we doing distribution again, and Obviously, so But pieces. to all how represent do. the to plenty our the owner of intermediaries and and try we that things are system. what can, can try community cost into there opportunities structure is incremental business that's want best of we can to of with the OTAs profitable where and work other and business, we drive

had as continuing more to investment have direct only effort, area with a to huge you and in and – know, relationships more see build of customers. activity our the We going you're building

means that they many heavily that through proposition. you'll experience directly those drive in value That the in of being member ultimately, and as that of all a price. things as see people and, can value our driving with And like, consequence getting continue that see a hard very they better market best to means to a a and Honors, sure proposition know the channels to continue by dealing is get our that And us that Honors, customers trying direct app. can we things get us. we people push experience You on they best terms our of to and at making value other particularly, by members get a the better they of Hilton the are being the as so

have have And the the direct want And in it's not so, we times, to for incrementality relationships don't everywhere focused to relationships those many else. want with want I've relationships we many, said areas we us. do. We of OTAs, that

from now both the and an proposition And so, ends of building direct value the customers. we're cows see that in you to marketing relationships the have until intense going with will come focus home the

Smedes Rose

Okay. Thank you.

Operator

of ahead. question Please next comes Our RBC. from go Golladay Wes

Wes Golladay

everyone. Hi,

the OTAs, just curious, to Just more RevPAR there there for while. of been a and up less to signing is I'm going do it of strong to how the corporates much the China, a brand, has building is runway due quite up-mixing? lot and using back

Christopher J. Nassetta

China GDP I to business than activity has to of think, both now bulk inbound traveling in decade different be see very strong. China, RevPAR good a to good. is performance within been continues be China. is travelers They're economy China up they ago, make is in want strong. very – strong in is our their which business business. Travel Chinese on because country. China very And China's Economic to and growth the continues

look the at our it So, up, that we to overall, But stay to All big and hotels adding ramping hotels strong now. that are new suggest strong. leads going a world. feels We in performance ramping those good it. that portfolio indications, out, China even it's clearly is if business, take as have you RevPAR of up

So, are there. things very strong

in equal share with of sort quarter, is most market U.S., very the are market force but the China, have importantly, been sales direct first Our terrific the we curve of a share look the with China, never share in ahead the the see having we across world there, size regions at the of result has our index relationships in to strong. our board if our of in relationship a what case. Frankly, our our you market of built intermediaries, out as major the which

are well. the performing brands world really around So, the

in the comparable will now elsewhere build world, talk that's the in which been market market owners major regions at market hotels. parts simple growth. simple share exceptionally for of that world, we had of money. all Because, of And are teams reason, we for continue effect metric people we've going that very share to obviously you to of end, well. in look performing to U.S. very is it wonderful the if indicative to to indicative sign building that our up on all but here in in share, investing the But what's and strength, Our the a the make come us long more build. higher commercial about to The so the a of see, our in also are network the are have we've system

help stimulate So, to the efforts the more we're to in world. years to of and going commercial excited and in brands around performance the the very NUG come. China, see They're

Wes Golladay

from then of Is members. And Honors the a a North America that stat? coming Okay. that on occupancy the quick follow-up a or XX% Hilton stat is global

Christopher J. Nassetta

Global stat.

Wes Golladay

Thank you. Okay.

Christopher J. Nassetta

You bet.

Operator

question Bellisario Please from of go ahead. Michael Baird. comes Our next

Michael J. Bellisario

everyone. morning, Good

Christopher J. Nassetta

Good morning.

Michael J. Bellisario

or you. for then, their question experiences. reach yet? travel hotel platforms why the other level, for of Maybe hasn't bottom kind broadened to Some to evolving Hilton high two, peers kind today? of how to two-part gone One, travelers offerings think route have about business, do that more top you And

Christopher J. Nassetta

I'm the is that guessing sharing? interpret that question way home the real I that? Is should

Michael J. Bellisario

That's of one components. the

after platforms, in increased just the more travel-related of and share of of of customer loyalty everyone's a and greater wallet. kind going context the Just brands

Christopher J. Nassetta

Yeah. obviously, this I topical mean, good question, week.

new can to so. You that as our it. space, a competitive next you'd the a many new in of we of huge it. brands want standpoint obviously, this the looking home-sharing come and we this at at customers. over at got whether do We space we if to looking looking from judge least offer spent we've into done can launched is areas have will we point, it obviously, something, do. we've something the time we've few it had travel other that point brands of space, year in amount know always the the over looking from imagine last years, are we terms at at view, And should four at That's five options the in looked years, what why or And of in out

outside as high in on. the the the not that at the believe of we past, say to need not have it. with but moment, place, delivery, deliver focus Again, on I'm moment, we – other At saying is try give is them, market high quality of sort We're the them ideas. for. that be something of something way come customers have and that they they looking that within at our heard in other it. it the we change to Airbnb more very about, chosen That premium not believe, doing pursuing. share them. controls decided that consistently we business we we any of what are Where will terms That's have point, we're the core the and to quality, the Again, about it demands believe, the we amenities, it. something we to for And enough other anybody should lodging at not very that thought obviously thoughtful consider we're is they that on pay we've always something do in the in guys moment, but at different will best look segments at be know. some something the point. consistent And space, to delivering traditional some space. we at do that it customers' at a us be brands, product, a service consistent, way with my a of delivery, We it, other frankly, you considered, yet. depending in if future is the with of not description to the and wouldn't have product, moment, the That's that to things highest in those at the that service want, experience associated amenities how It's follow first differentiated for. average path And that is we're to you've why wouldn't not we do, we able to of in or considering options, the least

Michael J. Bellisario

for Thanks that. Understood.

Operator

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

Christopher J. Nassetta

I guys, time day. busy the it a you, know reporting. thank today. was just Lots for I'd people of

with you done. Particularly you already we talking of a quarter is second Look us. little Have few spending pre-announced. to after care. the forward tidbits day. hopefully out this. to of appreciate information So incremental time had a given a got But we great you Take

Operator

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

lines. your disconnect now may You