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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.
Harry C. Curtis Nomura Instinet
Joseph R. Greff JPMorgan Securities LLC
Carlo Santarelli Deutsche Bank Securities, Inc.
Stephen Grambling Goldman Sachs & Co. LLC
Shaun C. Kelley Bank of America Merrill Lynch
Felicia Hendrix Barclays Capital, Inc.
Thomas G. Allen Morgan Stanley & Co. LLC
Robin M. Farley UBS Securities LLC
Bill A. Crow Raymond James & Associates, Inc.
Jeffrey J. Donnelly Wells Fargo Securities LLC
Patrick Scholes SunTrust Robinson Humphrey, Inc.
Smedes Rose Citigroup Global Markets, Inc.
Call transcript
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Operator

Good morning, ladies and gentlemen. Welcome to the Hilton Second 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. would Vice turn Investor President I to conference Relations. time, Slattery, Jill and this like the to over At Head of Please, go ahead.

Jill Slattery

call. Welcome quarter Denise. Hilton's earnings you, Thank to XXXX second

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

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

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

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

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

Christopher J. Nassetta

guidance strong our Jill, and of growth RevPAR quarter. of ahead another which be to high of X% line report end growth you, Thank at expectations. to good morning, pleased drove everyone. able our was the bottom We're range,

transient outpaced digits increasing international results. RevPAR areas U.S. deliver quarter, X% regions, and the of the business. Leisure each markets year-over-year expectations, all meaningfully in roughly to and quarter. group major the contributed to single continued grew and great high in across and corporate We Both segments,

capital our to benefits and both us nearly we've strategy. significant The stream Blackstone's in $X.X X.X% roughly on positions simplified fully cash to of the high cap. allocation which our market flow geographic changed includes as and offerings, and is a their Year-to-date, as exited participation performance enables result free billion fee Hilton. that skill disciplined in of during demonstrate generates diversification. model secondary well HNA to a returned continues This Our recent shareholders, quality or both execute

For of $X.X to a share the we year, full the return in of now form dividends. total and billion to expect buybacks $X.X shareholders billion to

with up double Turning the pace and to year In Positive support position booking our digits. up outlook, continue and into all for in economic U.S., group quarter mid-single the industry in macro in the low remains world modestly in are expectations. XXXX, to the periods favorable was up major versus for prior digits future full fundamentals the indicators trends through the of XXXX. growth forecasts every economic calling region for

corporate trends Given prior for full system-wide growth synchronized and in of expect and year ahead global growth to X% good RevPAR spending, we bottom the particularly results of modestly line expectations. XXXX, X%

brands in industry deliver our right the strategy. We're time. the ability putting to right at of Our committed locations is development right disciplined broader the ahead the to growth of the result

global disproportionate existing illustrate our this pipeline Our of the the approach. success share continues relative of size to to

versus our to are year across year-over-year. more a the long-term by Europe, Middle are XXXX track In part our to in on increase Africa, East, tremendous total expectations, growth. base pace signings and on rooms, XXX,XXX continued levels full This prior for for growth XX% hit fact, signings where surpassing solid providing than up boosted and record the is

another iconic Astoria portfolio, the important this Additionally, adding early entry Due meaning conversion including brand's September, properties our more marks are be signings Waldorf year, the in market. to more than XX% we'll Vegas. into up versus Las last open and even dynamic to

the a Year-to-date, pipeline, growth driving nearly notable opened for of to Beachfront end and is room XXX,XXX the record and growth full industry-leading fantastic are remain unit We an to approximately and year. Resort. stunning our Barbara properties versus space, of Beach feet restaurants Hilton base. X% representing resort totaled portfolio. XX% this Pebble year-over-year existing openings the net at roughly square track of and signature in we've Golden Resort which several deliver up Santa on each over Hilton X.X% the had of year, including prior quarter, rooms XX,XXX quarter, the these All rooms, meeting the Dalian additions With the boasting XX,XXX X% net

than program to more member strong we members summer. anniversary million members. bringing to added XX With million Honors in Hilton loyalty well-positioned growth, the target the are quarter, On XXX we XXX-year approximately next our X million by hit new total front, over our consistently

play million Additionally, the offers, personalize innovation. SHOWTIME tools more want doors step like control data at from keys share Honors to in an active points more Room properties. and to partnership our first on journey important enhancements To we digital quarter basis drive occupancy coupled important continuous members choice analytics, industry every using guest and and are focused win loyalty. engaged customers experience, and more XX the they we're role over with the ever our date than on before. to their unlocked on nearly Connected travel incredibly than Technology, XXX Honors and increased customer XX%, and leveraging to have with of launches, our ability customer experiences. X,XXX of From give members to are to truly Hilton

strategy. XXXX to cut half and we our business. with also initiative, to April, areas Purpose announced corporate in for investment we committed social our ways We Through our environmental our in look other part innovate this responsibility Travel impact across new double impact. of goals as of In

to operating in The about continues we sustainability macro happy very performance feel quarter the already efficiencies Our our continue to strategy all little of development I'll for the $X strong industry-leading guest unique drive experiences, on give rest a provide an our of over year. call dynamics turn Kevin returns. to to the in since industry the on which the year. and Overall, have Kevin? very delivering environment and XXXX. for billion rest while efforts with saved more and the outlook we're good the continue setup of the should to favorable results execute details now bit shareholder

Kevin J. Jacobs

was everyone. of Chris, RevPAR end good from the grew and Thanks, quarter, guidance on versus both driven gains of year the and prior the range. benefited system-wide by morning, achieving In Easter. a timing occupancy basis, the and high currency-neutral rate our Growth X%

our million due exceeded RevPAR of expect in of to across better-than-expected quarter, by earnings all was reverse Diluted and X% XX% our we increasing per year. mentioned, guidance end franchise performance major business we was $XXX geographies year-over-year. Outperformance ahead driven expectations, fee to later XX% growth, to guidance growth. and management range solid million all In fee to As well as adjusted gains, Chris that better-than-expected largely high saw increased items, Adjusted segments. items EBITDA fees $XXX range. of for the license the as achieving special share, timing X% some $X.XX, the

China, and by quarter, helped due largely international in quarter outlook, company performance grew meetings Europe, convention better-than-expected our growing regional from also from and business, to comparable over results led inbound increases Revenue X.X%, and RevPAR our resorts. Canada. group particularly at luxury strong in travel U.S. the results, second demand, to and Turning X%

strong of the market RevPAR strength of the we given corporate given X.X%, full mix broader In and outside year, a grew America. the corporate demand and forecast across For group U.S. transient and the versus XXXX, to second quarter business year transient growth prior convention South trends RevPAR X.X% Canada Caribbean trends. better-than-expected across Americas, U.S., X.X% and

related For the XXXX, quarter, ahead Europe RevPAR grow to of helped roughly region drive results. X.X% expectations. strength to the Cup increased in World in demand Turkey year the we the mid-single-digit coupled XXX in basis full range. grew our Broader expect RevPAR with in in in points Russia

the offset was continue by Europe East RevPAR mid-single-digit as region, are trends demand the tempered and year, to For leisure flat Egypt. expect as U.A.E. improving In trends in in UK. performance strong Africa in across range and in the somewhat transient to softer in RevPAR roughly Continental Europe group the Middle full grow the softening we

expect our region in quarter, occupancy region, partially increased resort In guidance properties. driven XXXX, than system-wide grew the quarter range. in demand by China strong the RevPAR with Pacific full XX% the For RevPAR within we in X%. the growth be Greater year X.X% more increasing across to Asia RevPAR leisure over in

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

second the for factoring guidance, billion, higher items, adjusted forecast billion FX offset for our modestly consistent with adjusted EBITDA is expect Guidance beat midpoint. to representing X% EPS, X% growth XXXX, to the timing. $X.XX RevPAR at and we year some and last X% $X.X to call, $X.XX We year-over-year our a of of of increase with of full Moving to $X.XX. diluted quarter special from for

third the quarter, to to range X July and of our RevPAR lower slightly X%, holiday expect growth Jewish due we For X.X% system-wide full year than shifts.

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

approximately dividend $XX on second the paid $X.X have returned capital million, per bringing to to Moving year-to-date. of year-to-date and a $X.XX of cash dividends total return, we during quarter, share billion a

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

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

Operator

Certainly, Mr. Jacobs.

first question-and-answer session. begin from will We Curtis now morning come of go And Harry this Nomura ahead. Please, will question your the Instinet.

Harry C. Curtis

everyone. Hi. Good morning,

Christopher J. Nassetta

Harry. morning, Good

Harry C. Curtis

to Hello, and first outlook. by possibly related degree to the holiday or quarter are third you entirely what of lower shifts RevPAR the the sequentially weakness war? some potential question because is just caused that trade to being To relates cautious degree

Christopher J. Nassetta

a on former, little commentary to up. It more give of a is which bit come color latter, not continue will perspective to bit but of I fundamentals, to the suspect worthy maybe little the

you the large, reasons really world. driven the a about pace and of I'd bunch what demand. good is at setup that by exactly it's supply Demand fundamentals, is growing say, whole So, and and for around by of feel would basic expect, and we a decent the

profitability corporate world benefiting system, companies Reform occurring, the a is a in more is lot into more are and back from Here of growing, the where U.S., money. spending think cash post-Tax investment lot I still going is

so Supply, of I is And look all think, growing. if has diminishing. hit a where at sort you demand data the it's point

be that So, peak I in the supply expectation every think down. X% that to in the year go U.S. it's will going this

and is growing benefiting laws the we're so benefiting from better we're than of of demand So, the the when statement economics obvious, supply.

a feel confident going about We I going to How about think feel know, we certainly year. And that's confident for the period setup don't long? next of we this year. into but time. continue honestly,

call, basis strong those last I the what couple when we guess, the of beginning X% the to do which trends big probably of continue. X% good on look guidance written were that was news I overlay, is in our and optimistic we'd we the business, years, would and of at we in in of provided decent side, to and three likely importantly the that okay? the segments to nicely. they were in of has The call, leisure been last bunch an transient was like to we group have, that some form. areas On So, business a we X%, hopeful see continues seeing there of and the technically hang X%, business, on of starting that it the and were transient I over more gave But felt the

this it a transient, of lot because speaks it and trend to continuation it business And for continue strong. seeing in rest of we very of that was, year, clearly somewhat year. many broader think argue, prepared But to up. we're trend environment. started at see basically the to now, in I seeing our the I've second is an look the last the at QX weak I would We, economic year, pick you side. comments. uncertainty improving in throughout If times, we of said it group group very In and expect itself quarter, beginning the saw of the a we're

I rest good So, next optimism. feel very I the I think, there about good setup very and are lots the good frankly, year. going for about to year, of the feel of reasons

and of where why reports X.X%. focused the second guided We So, I've then of QX, year-to-date why X%. bunch which half the a QX and X% everybody's the that read on? analyst year, seems We're to

lower the implies cover some fourth the expectation the half and year. that level So, of for I'll third both, the second quarter. of

is but Third this quarter, you this asked, to know be than more I Harry, needed said. all

the nobody this in was, guess Third call quarter the week, this on. nobody nobody States is week I Earth July on room it really anyway seems, is worst a in was. on well, week the day traveling fell nobody My of on shift. and apart. When whole that was falls the business Xth it United for it blows mean of fall Wednesday, it the holiday can on

So, the start you have a quarter. to very weak

quarter are within in way month, up the the in holidays of look day when that's a we that's and math, moving happening. a Jewish the to impactful moving sense at end time, that the all week both weak that You and more

we fine. sort along are can those as best If things, of for things you just cleanse moving

an optimism segments is of hurricane half driven into a is the had weather in conservatism did the the results go we that second create year. the quarter in harder, just earlier true the of fourth that of a are those and comps Fourth in we quarter. various fact touch commentary as the my of are honestly All updraft about the that matter activity maybe All honestly, on based – comps. the the partly holds by

passage gave of and clarity Tax boost. tax You get the also early bit of were the which starting a from States, of to around Reform in the benefits policy some a United

Xth I be is to pin that's July, easy quarter will we because the are is bit say, reasonably, Fourth forecast. things at think upon to more we've experienced difficult that, of I look quarter us I so, and think to it's And as first third already Those harder. reasonably little down.

and there not we wars transient, to business So, are I we so said, would here We remainder things team, somehow be any this, seeing the anything are sabre-rattling pretty because morning, either the leave in with the markets? being in impression feel of darn the darn preparing good I business. the stop particular? into our pretty we reasons next else. with I've not been do is this, leisure, bookings, in and And any about as as anybody measure. with described impact Are the I of what's side, progressing or we built development on, asked have patterns of I'll anything going the we any China actually that we about for the seeing think our any seeing for about answer wars trade good Are seeing underlying on touch conservatism feel Monday good business feel sat on want and of And side? are for as But our and impact the things on are of we a think group we operating year. on that or setup, could year. all things that. every the weakening on that's And going I can they equal, of I the far trade

Harry C. Curtis

is much more us lift probably requires for the that and a G&A? of good guess little in but one bit Can sequential Very detail. just you quick Kevin. My walk non-cash, that is through

Kevin J. Jacobs

Harry. sure, Yeah,

and is As you point non-cash EBITDA. largely below it largely out,

standard little and the from of new FX moves some accounting benefit implementation it's The a really out below accounting of the or three to item. stock another and in pension that's there it. some G&A the into effect So, related of and comp, things. line bit There's then

Harry C. Curtis

for very it That's Okay. Thanks me. much.

Operator

ahead. will The question JPMorgan. Greff of Please, be go next from Joe

Joseph R. Greff

guys. morning, Good

Christopher J. Nassetta

morning. Good

Joseph R. Greff

to answers Chris. for the Thank you exhaustive first the question,

Christopher J. Nassetta

that. that, I ask answered Joe. to everybody Sorry that wanted about now

have I everybody's now, answered question. So

Joseph R. Greff

as do of when other see on group, the relative major you your the add given outperformance group in XQ? the slightly, you relative and outperformers to think corporate and So three which transient the versus the that second leisure about half, buckets, in two

Christopher J. Nassetta

second probably the will year, ultimately It group, see you and leisure transient, for group segments. the half the think full go outperform all I of year transient. for will business

So group will first outperformer. in the the be It year. half the has been of

I second year. think the of the it will be in half

it'd pretty bit covered The I year-to-date, transient though, forecast, I by expect that material there for be a business a about has Last point important a uptick close, year can we leisure like where better it in the if it than were. darn will strong. best transient This but from were soliloquy full minutes think ago, think and I transient, X%, in were talking is a been. to much few and bit. lucky. think X%, Leisure that I X.X% be year, leisure eclipse business is most year, will that been you my it we you we more so

is couple leisure been about years, then and to realistically going the going where it's last be group to So, be X%-plus. is likely

bit be a be group So, a will the in figure little maybe, bit transient end. will X%-plus little and X%-plus

Joseph R. Greff

Kevin, the the at count absolute the the diluted of what Great. share quick not quarter, follow-up; end diluted And average? then, was the share a count,

Kevin J. Jacobs

XXX give Yeah, on hold just I don't you second, the Joe. one want number; wrong million. to

Joseph R. Greff

or the the share the absolute That's at count end? average quarter

Kevin J. Jacobs

you Oh, That's want absolute? weighted the average.

Joseph R. Greff

what it Yeah, June at was XX.

Kevin J. Jacobs

of front get Joe. me, sorry. I'm We'll in that you. have don't I it to

Joseph R. Greff

Yeah.

you. you, both Okay. Thank of

Christopher J. Nassetta

got it? is What it. on. Hold We

Kevin J. Jacobs

million. XXX

Christopher J. Nassetta

XXX million.

Joseph R. Greff

you. Thank

Operator

be Bank. ahead. Carlo will Please, go of Deutsche question next Santarelli The from

Carlo Santarelli

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

Christopher J. Nassetta

Morning.

Carlo Santarelli

color If the believe bit a the the down outlook in helpful the some in the spoke signings pipeline. and, build year I from XXX,XXX you on earlier number recall maybe little was You the last year. was I provided around guys year, Chris, in

With there you're you exception else time you've in has and your is some less that Europe, we strength more trajectory strength that the of encouraged of last anything in signings of seeing development that the activity in or overall you the maybe and seen referenced, than conversion the spoke?

Christopher J. Nassetta

I mean, were in a Yeah, East environment. are you big lending focus very think ones. I helpful. tightening the and obviously big Europe Conversions covered a the Middle

very with at thing particularly we're environment I'd an other going costs that. rate. outstripped high say in expectations, the been a So, that where construction pleased have has up

that the team I I X%, last number X% that's costs XX% from think last construction increase gone of year. up or have and that our year-to-date was is got week off a

you so, And have not lending tightened, keep have and going growing enough growing, up is cost environment where in to an with that. up it's while standards RevPAR

And seen, in going decline in a so, obviously, on you've what's U.S. the

started said, get We market of feeling share more whole would deals. year, we going at we sign going brands the signings fair whole terms fewer going go point the based looks the the that but than market's to the brands, was is In U.S. U.S. that in all this our given being the what to of of on the in the happen down. reality, would share so our So, strength to be and the down we're go flat market like forecasting going to in like is relatively

not much. down we're how So, probably a doing be we'll little that's as bit, better is but

than Middle Europe, fine, but Asia thought. we maybe have and East Pacific very down the less modestly, So, U.S. up, doing would down,

Carlo Santarelli

just helpful. same then could And you. on That's I follow-up topic. thank if one Great, the

for of the at out you under XXXX the pipeline to kind then of and you're to your net there an your acceleration extrapolate the kind unit see look guiding construction of X.X% XXXX, As you is XXXX? now, growth potential you in and somewhat relative to right in look to at

Christopher J. Nassetta

We lot. that No. a question get

going since I've have look we're what's ago, our that Investor changed gave all a that I over X% Day of range consistently, of factors. years think at dynamics of at on we we range said comfortable couple we There U.S. really sort said as terms in last the the to in X% in pretty couple and the when years, are certainly

That's Pacific, Asia that at up the we're and said in But what's zone where going it this of As not clear the comfortable I want in at guide we what's overall, to we same on not a and what's to think that's is we Having saying be of year, would I it's in we bigger at building under X% put conversion year that deliver it and the above. goes of look in up everything described would just going in in dynamic under people look because up I is we construction, guide range look next a that the but that's can I year And in in we're to it's of by, sort next lining want we sort We're think I off activity to base for impossible, range. middle that not think getting in conversion range world. going situation. gets look years, higher going on what Europe, few and when the we to when that we're that with. terms us construction you. every to opportunities think at we drum harder. or it, what the end

will range. hopefully, be we So, to the I range. to it within of the that to point be think that always mid But high obviously, want

Carlo Santarelli

Chris. you, Thank Great.

Christopher J. Nassetta

Yeah.

Operator

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

Stephen Grambling

that questioning. Thanks. follow-up I line to This a is of guess

has mentioned pipeline you transaction heating a same is that moving hotels little we kind your construction it rising for driving you going are your for of ramifications that? down put the kind seems brand of you do cost, what valuation up tightening as on bit markets. higher. and What At and think been forward dichotomy like environment the the existing that time, perhaps financing So, hearing keep

Christopher J. Nassetta

assets those it is driving which for right markets now. incredibly one are think that combined that I are other, with debt things fluid it's existing the

build construction So, has rate. debt Cost more limited. high are new to for much up gone a markets at

a and lower going potentially a to cost that cost financeable. could build, do? people be transactionally. They're want build They do cost up it's to than very looking be what to at to and So, buy active

all not of going been you it's My of So, at We're controls. this you're this years. pipeline Implications you can expectation more couple are, of continue change more to in transaction over seeing that. would the for that see to our surprising see, environment more happening as activity. see has is last

our the the pipeline. that world world continue hard going X% around fact it, to in to deliver to expectations notwithstanding the fight big that continue around under I the be to trend. of grow resources would need to of point pressure as about more being We and and the we're the and down Middle pipeline down. a order much in how X% I parts think other grow in here, East, slowing growth, to continue Europe, are rhythms of think things clearly be things U.S. broadly net the world. in we and the tremendous than the Asia our the that whole to I say that's And world, will And fair sense in slowing as we'll it strategic to of It's activity move deploy get different there's development the though Africa opportunity us even still will notably share unit Pacific. in for

up, this And very and in taking think think by And I of U.S. goes be time to and stats, be our think Things then in making up the dynamic that's at down. effectively XX we've U.S. we demonstrated have is looking goes my try on This third be I I've seen up so, that opportunities I we've years this seen successful been will elsewhere. this cycle, strategic ability coming the here environment down. now where cycle. that an advantage we're sure come to

to the see numbers, up are to we to going going is But And you're and be set and and to the that a grow next in and to all news well for our down couple of lodging be the feet numbers that Smith look we've we're everybody's Travel very they're big on metrics I show sure continue ourselves about. great make kind the I numbers of able talked reasons at world's right quick think think years. supply all all good that place So, pace. at a U.S., the they continuing

Stephen Grambling

seeing That's launched, an I you a helpful bit over I following the credit introduction? terms new a I and think signups follow-up, usage in been as with of the unrelated from it's maybe guess And the consumer color. little what quarter we in card guess two programs are

Kevin J. Jacobs

far signup drive, so overall It's use received once cards they but days, being are system Stephen. spend well do the hotel it's Yeah, by so again, and good, in our more and still, more early card. well, for the still consumers people

all So, good there. so far

Stephen Grambling

Great. Thanks so much.

Operator

The next Kelley question Merrill America Shaun go will of Please, Bank be Lynch. of from ahead.

Shaun C. Kelley

good Hey, morning.

Christopher J. Nassetta

morning. Good

Shaun C. Kelley

on around with you stick of going pipeline, to Maybe what's conversion mentioned kind and the discussion there, the activity.

proposition pipeline? of independents' these then, kind sort and just of the economics decision now, value just much are I like out what's a break are think the of you to there? little affiliate how help end? you of of said, more kind Could what's in bit right their on the like numbers quite shorter And quarter. strong the sort the us typically driving in So, the

Kevin J. Jacobs

on shorter for for pipeline end Yeah, hotel around to convergence better activity from the months, transaction that's say, off Well, built. conversions. six in question obvious the have drive to average, one, before delivery to – with around Kevin. being reasons start Shaun, driving overall easy tends I'd get doesn't it's for because environment the the what's time, so up much and a

available sale, different than to more might have a often just that on want become they a contracts You a perspective owner new not, or more brand have affiliate. on which

around branded transaction environment the the drive share. you're effect will an – yes, independent fees, higher on, drive fees. then if can And affiliate – been the network on. to continue we our go tends can that my environment incremental that's drive to transaction on But at to market drive net net least, and to tends it But more then find opinion to activity. of active owners to drive power a we So, is adding in ability going the to conversion. tend And And of conversion and trade revenue healthier us. more want with just

Christopher J. Nassetta

Yeah, to and value systems see right. hotels I I in ultimately in the that I drive think most kind market of that increases volume, very proposition are we'll rarely and independent think that's our XXX%, share. our mean average continue market with share is

ability have we revenues. drive so, And to an

these on They notwithstanding back in pay it impact rate of most, a share We also, very business, we positive being a the but the all, even their and cost though very, fact pay of independent do. structures, almost it get all because than them, on of franchise, OTA to but in cost get not have hotel all got lot us. becomes them, up heavily we bulk end higher they very reliant back they distribution and exchange not they efficiencies, the traditional

into less not much a of pay the the of all the they benefit So, only to they for OTAs for get they on for come the we direct lot it. the system lower customers, but the relationships of depend do have and with get business, percentage

lot more greater So, cost, afford us a to pay higher you in distribution market share, can money. get line, efficiency much and top make and they

Shaun C. Kelley

and of the the discussion experience up come XX a signups owners large relevant, focused five, How conversation? just your in of just the becoming the around of sticking more I And conversions conversion topic's it I of kind economics as was a yourself and point Does doing three, clear these really obviously ever just think out think here. costs distribution years are job discussion, distribution because like ago helping breaking themselves, think are a bigger like and the as piece an more this better follow-up this potential than equation? on as brands are about kind

Christopher J. Nassetta

it. seven because do that the systems it did. By it a every way significant where positive through certainly we or not five delivering the our are of is come a years on way so intermediaries. almost us, in same of in have are as didn't And say for wouldn't on deal we the we independents and much in I way, centrally a really good revenue up sense part our the or the now scale, discussion It we of ago. depend But others in case the dependent

part of starts it. this with say so, I'd talked a that point share. Kevin's And market is say, it's is generally I the the equation. in It I'd about clearly right. order

line, trying is a close generally foremost is quite distribution top very are drive their to Obviously, and the cost and to existing setup. First second discussion. then people we compare favorably

Shaun C. Kelley

you very much. Thank

Christopher J. Nassetta

Yeah.

Operator

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

Felicia Hendrix

Hi, and good thank morning, you.

Christopher J. Nassetta

morning. Good

Felicia Hendrix

Hi.

just had on questions couple So, your international a related I business. of

saw in and STR on lot Spain the in quarter, in outperformed industry of the slowdown guys us focused and were you First, in Italy we data Europe, data. just the pretty the a

if wondering the going you just help talk there I'm could So, your market. about us in outperformance what's on understand and

Christopher J. Nassetta

we because the are kidding. we're course Well, better, Yeah, of mean I outperformance hope better. we

We are driving...

Felicia Hendrix

(XX:XX).

Christopher J. Nassetta

had kidding quarter gains is Frankly, had in the outperformance, reality share the region had we gains. was that across massive our board massive aside, in world. that The gains. every the we share of We share major

EMEA APAC were and in Our outstanding. share gains

the the versus brands, commercial strength share, outperformance of market is market strategy. our because of and And so, our

a So, are strategies. all our teams to drive thanks helping these that of big

about there's we're asking discussion it's it, look been know a of really I've down, that I If had of slowing you not international what people seeing. sort lot at me

it, be year. last exactly a whenever look is – at a up ended up within made when we just by international will be a affect whole But of of where there's we point of the bit U.S. all, up to like sort They differently, if year geography, sort tenth everything going which the not you almost geography you little but business at cleanses moving things it stuff, always be that of but us, the for ended full most around where things. outside you for the will year. quarter-to-quarter, look If last year, region,

the for over U.S. what you look our getting basically so, that's market these And I but few It's in if take years Kevin identically the I our you in international better, call. saying last be we EMEA, the last was may, thing last what APAC doing I look almost that's year, don't what's we're over last what's good, But simple midpoint and think the are which would of and mean head, that and the the of to quarters is have story I years, said guidance, our to really X.X%. at performing at quite on we've market shares. last course X.X%, the really of time business if our of midpoint ever, year, ended have been few we're and it see be. the couple of last pleased data happening going going the my U.S. we guidance our on. points first we exact eclipsed at up to I the Hopefully share numbers better. do need at

being and so, And working. the out of built is States a testimonial the that this outside the really it's fact network of effect is United

share market is industry-leading U.S. on average. Our

happening those it's a are crushing the great EMEA. numbers are attracting is our bandwagon, about with because the XX% and when market wonderful jump numbers. we're more attracting owners The you signings more good this are it's growing doing. share the want testimonial wanting in But But really invest us capital to it. owner, more to talk more and seeing to to virtue that reason a in on of they're work share because teams the the and is crazy and EMEA, invest to system up XX% So, invest numbers APAC leading in And by indicator money. make they are – like

believe of as big in stage. to really, years, in international But forward go we gain the to few was good then share over had second sense reason the outperformance we've certainly, have we'll continue really and quarter gaining So, share expectation, last an the share. I

Felicia Hendrix

Italy the said helpful. year? terms we and of markets, the should But on anything you there aside, those data of the quarter, more in That's Spain, in saw it holistically outperformance just two like just your going or at in terms in look is we

Christopher J. Nassetta

we across was pointed that there I I'll last week, itself or the for studied met Spain year. markets teams, of the quarter. of in won't was anomalous nothing and the our happened that be was sort haven't When with clear did I end that globe up that the Italy those stick which by honest. out whatever me to

Felicia Hendrix

Okay, just then follow-up. my thanks. And

of kind went just you you're outperforming. why So, through

little maybe adjusted single be growth RevPAR do long how greedy, think And you in may digits how the in bit generate markets? Asia? high and and of a you the you those of getting to wondering terms pricing can from inflation as in Europe far some Just mid prior peaks

Christopher J. Nassetta

That's I of crystal course hard. don't have ball. that really

different than debate for because of future, in on. particular, can Europe of Southeast a they big Turkey the markets around been across in coming UK lots a that the that and the one of being going think Pacific Asian the comps of U.S. have like for little off is is is that maybe bit a growing and issues the will of The continue those easy a weaker, our in have take think and but the is case in Asia, growing the those Asia China be the be you world. though is of going My economies even could better, them steady than rest has at a we I better is clearly, getting other economies other are I to little debate. there started of place, though the bit, consequence foreseeable time. a board, economy to things parts even slower can stabilize. issues as let's we those Japan than The here, faster world Germany most to just bit at reality compensated I than drive dynamic strength slower faster things pace sort being – steady little with as but that Brexit that ability there performance situation, the than drive and both is to expectation to going a in honestly performance drive reasonably we're commercial Europe, reasonably think

I So, really market performance continuing there. that we're see outperform to to drive job, our incremental we an to we're And think deliver do strategies by to if good continue going ability to share. going have

couple good of for think I the feel reasonably So, barring unforeseen circumstances. next I years,

Felicia Hendrix

Thanks much. Great. so

Kevin J. Jacobs

not Felicia, it's peak anywhere is probably the Asia way just we're see outside of that and Asia, in Yeah, it. cases, an and, in it's lot not of or prior add, markets market think you still to slowdown a a – I'd In mature right story... about emerging Japan, can't like but

Christopher J. Nassetta

mature markets. In

Kevin J. Jacobs

the ...and think way economic prior right continue the we're to in rates the these to not market, will business especially But to I'm mature context markets, and grow, albeit cycles. continue establishing is about of the middle Asia. where will in within sure it peak

Felicia Hendrix

Thanks. Yeah, that's fair.

Christopher J. Nassetta

Sure.

Operator

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

Thomas G. Allen

good Hey, morning.

the comments it you group talk how XXXX? makes made your You group base, quarter. XXXX production in some about and positive just about feel Can Thanks. around you

Christopher J. Nassetta

good. XXXX pretty feels

and quarter, the digits think up were we comment single I on double digits, all the XXXX. in for the bookings forward all in So, group high we periods made, low side, forward into the

don't So, I numbers me, but digits sitting this of mid-single think the year. I have – in we're front

better, even next year. digits, little mid-single a we're think for maybe bit I

of feels the And it's in XXXX, go look XXXX, But pretty or occur all bookings in et out, at the of percentage to the diminishing cetera. we good. in look getting year better. any look three two So, if that the you pretty as numbers terms and and frankly, group obviously, good, they overall will years a bookings, forward you ultimately next

Thomas G. Allen

All right. Thank you.

Operator

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

Robin M. Farley

Great, question just had XXXX your thanks. a I guidance. on

With like the RevPAR increase? growth increase go higher know rate I And the up. for a seem year maybe your EBITDA full midpoint, would didn't the it fee

where a thought be said I what on But year else the have little you meant just EBITDA more were maybe a the SG&A a in your up would went maybe increase wouldn't. think I have you full maybe know an line, even would RevPAR at raise? They might basis we EBITDA happening of about can talk that little factors some but quarters. a from were timing QX of higher, were bit little there borrowing that sort future

Kevin J. Jacobs

Yeah, sure, Kevin. It's Robin.

the all, like is, non-EBITDA. G&A of First increase largely I said,

having So, not an really impact. that's

We've the beat, simple it pretty a back third it's from a got the was of Of of FX. year roundly, so So, million $XX the a about or about story. lesser tailwind timing. $XX in million half a of

of part the back the back kind the by midpoint. that to And $X year same gets increased of we So, million. you

the really that's So, story.

Robin M. Farley

you. Thank great. Okay,

Kevin J. Jacobs

Sure.

Operator

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

Bill A. Crow

questions Good here just a small couple (XX:XX). left morning. Chris. I'm with of

Christopher J. Nassetta

Yeah.

Bill A. Crow

And And currently? negotiations Any from have the the on in Waldorf? you is timing update on then commentary and union are you question the collecting are York for the second you collecting that on contracts. any fees New any whether

Christopher J. Nassetta

New Anbang all, Waldorf fees. fees, ahead. of first collecting we not to But, move In zero any York, the continues are

all the complete with they So, the on the be to they intend have a done. that they're work renovation. when of execute plan moving to needs contract for us working away at, They the Waldorf the forward demolition upside are they which said things, only They when those all documents that are moving and with forward reopens. to renovation, for

think late likely I the next expectation probably possibly year, I is that's early year. this more likely think

publicly reported was it lately. think I

That's the with whole So, to their That's what was a looking they've bunch intention Waldorf. assets, including, directly. of sell it's what's was told Strategic they've consistent been but sell other not are reported, reported. to to said which U.S.-based Hotels, us They us. the what

contracts the good come So, at markets No when where constant times up very and is it's they're what different work productive up. moving maintain think relationship a a really union different unions, just discussion ahead. in are with on a on different real things, them hard bunch to basically whole with and we negotiations. not comment We of

incremental So, relative report really to that. to nothing

Bill A. Crow

I they or there Waldorf, process four-year the Is if get do build-out I a follow three any could that's once to... on up started. Chris, just assume thought

Christopher J. Nassetta

they think a building's of could, started, get I once be because three. but there's Yeah, the four. lot it done, guess work to it be there. it's don't should I but

got exterior, You the there. touch the improve and up you can't building base – is clean to the but

the or now because years I that. right three of the like out schedule But take of do less. looks some you think So, timeline

Bill A. Crow

just to have there to another Waldorf thought opening presence? on different of part maybe part that in New a Is York, any York, your New

Christopher J. Nassetta

York, going another we're opening future. here not Obviously, distant be the too time. Midtown to this in at Conrad Not New in in

or So, in New New York. the Astoria Astoria I If Waldorf clear the and is about in to should not idea then this the – moving but if the we'll be is have York expect the consider. is New intelligent not be – in be New Anbang York. some to Waldorf would that's extended something that But point, be do it's we York, I have timeframe, going that be at two forward significantly Conrads should point in a Waldorf think case, only some to it at

Bill A. Crow

Okay. Thank you.

Christopher J. Nassetta

Yeah.

Operator

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

Jeffrey J. Donnelly

conversions Chris, net the a the growth? Good in quite just foreshadow unit your your morning, about curious it tell Does guys. you from does growth or components net bit I'm and future RevPAR thoughts shift what the towards of in on unit growth mind? away about a your specifically cycle, maybe shift little development of

Christopher J. Nassetta

complexion think of the I with on so, think sort don't if And lot. I net the XX our I consistent. it been what's the pipeline, Jeff. has I pipeline growth the mean look a here years going and at the again, that patterns time. I've – relatively changed have cycle been of throughout the grown in the But even has unit has of changed obviously

anything. much it And so of I don't foreshadows think really

as profitability be us to it. to us for are able our said. we more drive lots there think I back ways all for and world opportunities and it's great what of because grow in and for It's a to big customers great to do them are with stay more shareholders of ways I giving that our we

western are And so, largely one It is conversions do we experience. a that. way

more built like just in to the some world we occur an really where system work I some there's argue Europe, a environment and it you The the more the in environment and – as incentive independent to drive us will bulk we've parts Western what's the States consequence going will be to of do and I East to natural of U.S. getting Although, have – getting with and it's where focus other in of of able this somebody natural conversions. the examples discussed, United think hotels there in in that and broader profitability. on see trying greater on the just in us to less think stuff I Middle are as a Asia, would

particularly if bunch, go up our lower you end back in of winded range. where no, NUG. think you the Conversions NUG find out over long saying about coming Great the we're I towards and XX% seeing of percentage there's still an it our So, XXXX, way unique anything conversions. are a pick XXXX Recession, of was in it's of as actually what rambling don't the I mean overall of conversions a

it You was roughly look at it last XX%. year,

quite, it finish probably will XX%. we when but think this be I year, around not even mid-XX%s, year somewhere maybe the

not still near it. relative to So, not seen where in watermarks. sense anywhere it's compared a still the It's I've high

feel very conversions always because times distribution when efficient When if we people because and business when you're I look well because guess works mean happens, even think people tougher, would anytime market share think really cycle it's see although in more I it incremental much when it. get when happening certainly works for you And and that's can better more high see on when focused soon. costs, the and that even shelter. down an are drive fact a have you now turn, that's like doesn't I when, I cycles activity eventually that surge – in

Kevin J. Jacobs

mature we more of development of strategy conversions terms I because the Yeah, back... into back of a will much did percentage we said, all for hard think us that of than sort mid-XX%s it be to get in just today have

Christopher J. Nassetta

in much that's it think NUG, this But We that. can for XX%. two, much heck go think of That add-on go different XX%. and because a lot would a get mean a just strategy. good I that's I number number, I was think have a they cycle, higher I down a doubt number easily whole ever than yeah, I development to mature we clearly up Yeah, to a less Yes, company, era one, we a fair. to a in much imply we'll mean get would. I didn't don't lower there. lower

Jeffrey J. Donnelly

an and is the And the on year? stomach about and a XX, to and if to do bit occupancy response for this ingredients rate demand response and curious Just from any certain the XX-year delayed markets. the we what of a think hold useful. or was either price peak I corporate seeing year you that around maybe seeing never growth wondering I particularly driven pricing what response paying or in feels That's been little there know RevPAR kind mean has the can in increases. maybe anecdotes rate accelerating But customers now customers that outsized incremental growth just that? U.S. a I there's second group right just you we're things are power. it a of certainly question just relish near customers experience are more. you're increases like feedback next together, you how see your expecting or think have

Christopher J. Nassetta

because want shoulder rate. year not this same the which we off coming to the period play I I as smarter our weaker It you're at supercharged like of about bulk think the the keep mean our of rate to how though think answer did fill of I continue I and RevPAR going do I in occupancy in is may weekends. it We're year I yeah, think think lot it's see year we're historically RevPAR getting still growth even up the form a is end as will think high think to about will be you Yeah, coming XX% times, in growth, doing. rate. There's and peak last U.S., last to you levels is this year very growth but I

able we if still and better because some we in on and capacity. to what drive be theory, shoulder do, time to periods particularly still of plenty No have weekends. at matter smarter the incremental all we smarter, get in capacity So have we going that, we're occupancy

the of So, room see you little growth trying because occupancy Rate of a it. to bulk growth bit fill every be we to always want we can. is should

money. much policy you'll this think out that. see aside, last with psychology psychology I'd more spend also tax to year, just a psychology have they at it, investing in – – environment, regulatory And goal that easier got more rigid a out economics, spend a the in it have better. trade, because more pocket confidence that also lot environment, now, in spend, people just is you is continue they better, yeah, here's year ended And just if the about, to what started people pricing you lot are to a clarity least more less they're that the their this they're more. business that they've on to have the positive sabre-rattling gives They're year dollars willing the for power started say willing I but

do will give community pricing continues into think this it I psychology business to power. the it you if been, in some the momentum So, translate the is as has incremental and good that ability

precursor holds. in about has You fact And more that right, future is some spending, to – were in and That starting sense what that pay suggest? in this services, expectation goes you're including just precursor the confidence you their in space that, to out is the does over the the uptick broader see the that in the in big could in groups, people a think I that book is I the to view the but ours. for decent business what three more quarters described think What two more products into a that positive seeing that for what suggests argue it community to the is group an with going got you uptick we And economic space in translate sense last years. growth. to the of multiple only not a moment willing or group to being moment

a demand in be of bit and going of much if this momentum, little So, a I incremental because it's much saying power. of on just build you don't pricing to myself economy it how depend want How the the think continues, how laws do and how I for will allows momentum and long. strength but much, bonanza, supply to to I it get of incrementally think, ahead

Jeffrey J. Donnelly

Thank great. Okay, you.

Christopher J. Nassetta

Yeah.

Operator

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

Patrick Scholes

morning. Hi. Good

the your brands length on you no the impact war. all over perhaps prices? leisure thoughts around at gone any the fears the summer had from gas of You seeing trade your travel? bookings recent for uptick far in in on midscale Are about impact How so

Kevin J. Jacobs

pretty really strong and still No, Pat. consumer feels that everything just is think not, fine on we're The I U.S. front.

Patrick Scholes

it. Okay. Quick Thanks. That's question.

Operator

from ahead. question Smedes Please, the go And will Citi. next be of Rose

Smedes Rose

Jamaica – particularly use of the you to you a property presumably with ask traction you as to as move hands their all-inclusive Or year. changed in just are just Thanks. a you, your Hi. I wanted an by I have seems and model. thoughts million are customers And want next talked I reaching think to space that? who And to members, expanding of all-inclusive are case? guess, thinking just you recently about about will and into XXX Honors that kind seeing more test to gaining what you going that be you are consumers make sort points space and around how

Christopher J. Nassetta

had little of bit parts but the of that Hilton Jamaica, space in the centered approach brand way sort of a including number in the Egypt in an Europe, time fairly hotels the No, parts very sense the pricing in a in it's structure, modest and it a our a on good resorts being other Middle also parts one been long DoubleTree a within world, in have notable in for in the of AI question. all-inclusive largely geography. we've of sense We the brand, East, like existing

something been We've a of across figure want I broadly place view, is out, is of – work a and And certain customers that to think we geographies, in certain is like to a in it that redeem locations, the do doing a so, an enough but not the and point in will it. world, benefit of expectation too that that it's we bunch We is want. Honors' it that do Honors' because think them something of that it. can – numbers from bunch

to So, something lot we're a on. going an time make of spend create a going It's to big not I'm AI brand announcement today. on we

to expect that us should more space. you in think I see do

us sub-brands exactly going to going we've on been we're volume, it. yet, means will it don't brands any we certainly those that with see it as And we're you I which within some a that. doing how to that we how AI. at we're customers transparent, do sort do and create answer are are focused do those going or figuring but the how that now We is we purely do, brands, reasons higher perfectly all don't, would I'm out think Exactly to to existing have being for right it described, you it of want

the see and to doing in space, next there You'll few it that more over months. more come

Smedes Rose

booking Okay. any next wanted into the through or patterns some you think just the ask given accelerated overall? bookings commissions that third-party not that Thanks. group do meaningful And Has seen is mentioned to group any way going I year. Have are you that change then you, really to you of that bookings? just change,

Christopher J. Nassetta

No, for I that's us times. I've my very hard teams track. question many mean of many, to asked very that

the to do bit we we a is just material sort there's don't change been impact guess be My scientifically, little think track discern think any and not they're more have, underlying so folks data hard from is bookings, in that and But willing there's on about better, positive being of commission sort I it's feeling naturally structure. because commission there future our should structures. more much as of fundamentals decisions the impact, that core of of make people about to the driven momentum can As to being more the best the it's by psychology, confident and far atmospherically. just because

Smedes Rose

right, very Okay. much. All you thank

Christopher J. Nassetta

Yeah.

Operator

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

Christopher J. Nassetta

Thanks, everybody, time the for today.

for third We'll your report forward the hope quarter, Pleased morning our your we year. hour feeling an rest of said, to year, as second As the and enjoy next spending the good talking always, appreciate care. Thanks. matters. the I I us. with of into And with end going the about after you setup the of everybody look you to all summer. Take quarter, on frankly

Operator

the gentlemen, attending you, today's conference has you Ladies presentation. Thank concluded. for sir. and Thank

now may lines. disconnect You your