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HLT Hilton Worldwide

Participants
Jill Slattery VP and Head of IR
Chris Nassetta President and CEO
Kevin Jacobs EVP and CFO
Joe Greff JPMorgan
Carlo Santarelli Deutsche Bank
Harry Curtis Nomura Instinet
Shaun Kelley Bank of America Merrill Lynch
Thomas Allen Morgan Stanley
Wes Golladay RBC Capital Markets
Stephen Grambling Goldman Sachs
Robin Farley UBS
Patrick Scholes SunTrust
Anthony Powell Barclays
Bill Crow Raymond James
Smedes Rose Citi
Call transcript
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Operator

Good morning, ladies and gentlemen, and welcome to the Hilton Fourth Quarter and Full Year 2018 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. At this time, I would like to turn the conference over to Jill Slattery, Vice President and Head of Investor Relations. Please, go ahead, ma'am.

Jill Slattery

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

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

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

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

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

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

Chris Nassetta

the expectations. We exceeded quarter Jill, finish again to In us report year adjusted you, to great once appreciate a EBITDA EPS our what good Thank fourth morning, today. and Hilton. everyone. for good joining and you We're happy was a

growth. We our of drove the line majority cash and bottom unit continue model and to expectations the our growth prove resiliency of flow exceeded net business our as free

our premiums year basis industry generating our regions higher for for shareholders. network share. with leading Exceptional guest profits points power for returns also We market by effect of for full better the increasing drive demonstrate all our experiences owners, gaining our the continue our XXX share to

market returned dividends year, cap. for approximately X% returns of full buybacks our and shareholders of the representing form the to of $X.X we billion Speaking in

in growth slightly up Turning to in performed for in transient impact some with our Leisure calendar X.X% from also RevPAR key healthy our for year. quarter. and experienced X%, the of a softness expectations throughout the fell of results, given X.X% to the RevPAR a the business year convention with given of strength transient the of number part events Group grew fourth greater X% year. were year bit exceeding trends our system-wide Corporate markets. up with the later the continue business that expected than RevPAR expectations shifts softer for shy demand across well year of and grow, particular

solid versus the expectations year to year XXXX pricing rates favorable fundamentals up in ahead versus increases in GDP modestly Looking X% bookings continue Group full XXXX. growth. trends despite just year's and backdrop to modest are similar indicators in for corporate what negotiated mid-single up the to deceleration trends with slightly are estimates. support Macro we of prior we good last saw ahead digits over and continued generally slower a expect

international markets, visibility some adjusting to continue RevPAR is where Given to X% range the guidance we're growth. of we to business greater area in net coupled An with full forecasts modestly unit our macro the uncertainties have lower year X%.

also across XXXX, year and and hotel growth day territories. rooms X,XXX allowed of nearly largest unit a has X% signings. systems approach It had us starts and one XXX and for hotels year-over-year. record ended XXX XX,XXX the per than opened Our and diversified most in one of or year achieving We in pipelines was our growth properties approximately roughly rooms the year over net with XXX,XXX strategic construction countries we to development history, the the and best In establish of and adding more openings to industry.

signings XXX,XXX construction secular During from a rooms in XXX,XXX Hilton in our year are rooms, of and marking class signings more an for XXXX, fourth footprint another our XX,XXX over XX% track XXth year pipeline located we we best consecutive continues and on in of China. of opportunities history. year started markets. countries by Asia remain world powerful a more our opening in signed travel. We building we rooms our region on the increases in Roughly XXX located our than international the represented, U.S. on our want In pipeline With guests States tremendous the United for benefit fourth Hampton We China by with pipeline. record across new middle outside to trends half everywhere presence and both focused with growing of foreseeable to the expected of in long-term global our future. additional XX celebrated have a the the to supported quarter Pacific, is that the grow than

momentum traction lifestyle recent XXXX East, accounts look rooms of our celebrating positive region roughly opening LXR, for XX% expect We Chengdu debuted the of nearly the by Pacific than of accessible urban Beirut for forward also London, including In Hilton several Hilton hotel pipeline brand unit and Plaza celebrated Africa region to growth. gain brand; industry in open expect we Buckhead luxury This to under opening brand's the and across guests in collection pipeline XX particular In We more our We're the quarter. thrilled in With year. our brand. XX% our London occasion the our points. Center. in continue openings Europe, year system the the construction, the downtown, in another luxury newer to of pipeline and fastest to to our the United the Lincoln to and to the and net Waldorf and milestone the continue in hotels region stay continuing increasing XX,XXX enhances our and in in Hilton last Tru has quarter as exciting Asia of micro the launches another with as The the in great XX serving In Biltmore, to the our This other our open the City of XX focus momentum LXR pipeline. a under unique Honors every globally with as the XX% brands opening expect our coming development. addition Canopy region for XXth in total Motto, approximately price the well open property Coast of the and coming we with the members with number and our portfolio in products. driving we lifestyle in demand the achieve fourth variety properties first an history. Mayfair Europe, hotel East collection Atlanta Curio; Middle also we on States we several adding to its of XXX launch brings of the Astoria presence properties lifestyle to the we celebrated during welcome quarter hotel, continue the on weeks,

we roughly region gained Honors world year membership end, full total of at million United members XX bringing to every year coming year-over-year. outside million the with the members, the new coming XX% from up from of major XX over Growth XX% For States. is approximately

approximately XXX full for XX% for basis members system-wide the is year. of points Honors now Our occupancy, account which up

based our to have enhancements launch we Connected direct Digital globally program drive like relationships than to continue expect using the more than XXXX, date, app with Since more We feature. Key million to have in more guests. XX and Honors our coupled innovations to with to X,XXX Digital continuous guests its Room, properties scaled Key doors and opened

the Thanks rolled also technology impact people team had total release that our we showed other billion Hilton and our partnerships and we effect, years $X over features. hotels members million guests, guests positive Last first by out welcomed the in has We Rooms for to the to the X,XXX the anniversary plans world. with XXX the enabling Showtime to trillion customization XX November announced impact Connected of with the preparation and personalized serve. create experiences the more communities end research bring XXXX contributed approximately economic X during Hilton of this employed Netflix travel year, we to in celebrating XXXth XXX to and on through

the are Hilton industry are trends. continue believe what our and we of ahead we prepare growth holds As to driving about centennial, to for we celebrate positioned well optimistic future

significant we ahead. XXXX, the the expect and together cash flow on outlook and more For drive to to enabling for RevPAR for over get call into free our growth to generation, quarter our us in turn net to the execute to continue returns unit I'm Kevin, shareholders. with allocation going growth strong strategy details With that, year to delivering capital disciplined

Kevin Jacobs

results. expectations end RevPAR exceeded lower prior million high-end by XX% anticipated transient the system-wide weighed Chris, of grew a Lower good to We currency X%. tempered demand weather RevPAR of range. neutral our everyone. the guidance estimate $XXX the due events the roughly versus guidance shifts and across at range, points. EBITDA system-wide regions and calendar Thanks Pacific growth quarter, Group on softer XX our basis, increasing Asia and growth basis the U.S. increasing Adjusted exceeded the nearly of RevPAR year-over-year. morning year on leisure our in largely than In X%

of strong XX% upside million, Europe. fees Our Management performance from in expected was our co-brand given In unit XX% items better per driven across quarter, RevPAR by expected ownership the and our adjusted as expectations. increased our licensees net special and from for credit continental better continue $X.XX benefit London largely than $XXX and portfolio share growth gains ahead program. also franchise to to beat and X% range card performance Diluted earnings to results of

regional growth. Re entirely our grew by to performance comparable PAR fourth quarter ADR X.X% driven Turning and outlook; U.S.

Solid the growth calendar weather by given group somewhat was and transient trend but softer related results tempered disruption. supported

grew of upticks group business RevPAR in U.S. given consistent transient expected performance performance XXXX in and and levels year full Our leisure X.X%, in transient.

with range on Mexico quarter XXXX, and increases. guidance in year. the RevPAR In similar fourth year outside Americas grew year, fundamentals consistent U.S., given across growth uptick continued the our throughout RevPAR forecast trends growth with full coupled steady system-wide in prior the the trends to expected versus pricing we strong For Canada, X.X% an U.S. based ADR

RevPAR transient increased in grew full by in RevPAR year we range U.K. the to XXXX system-wide quarter X.X% anticipated U.S. growth region grew a driven guidance. as For full the the X.X% to with London RevPAR Europe in boosted than results. be consistent XXXX particularly in trends travel year stronger and our expect in

of transient Europe RevPAR For London. and gains most in X.X% year notably a Vienna increasing expectations the as full outperformed in result strong

RevPAR with World in range gains Cup region transient last by Egypt were in like and to and in positive comps saw year in markets be We the following was RevPAR growth year's Turkey due Russia East Peninsula supply prior tough Africa expect in strength consistent leisure XXXX Middle by we slightly in Similar Brexit. given Arabian trends Europe surrounding the the partially to offset continued transient trends offset full to on uncertainty our in largely demand In declines quarters quarter. system-wide imbalances.

XXXX was the year up For X.X% full RevPAR region. in

For in Pacific and continued given Egypt region expected In transient full quarter in year growth to demand region travel from Asia in increased expect the part XXXX stemming in and broader we coupled conditions Arabian inbound leisure weaker be than roughly X.X% to the flat in slowdown disasters. travel a the weather RevPAR softness inbound the RevPAR Peninsula. following with decelerating natural impacts from

demand with the X%. China in quarter up leisure on just also in domestic growth weighed over Softening RevPAR

the in largely the Asia particularly XXXX approximately RevPAR For in increased XX% the In in first year year. year. X.X% strength for region Pacific full grew full driven RevPAR of China the half by China

continued XXXX RevPAR year single-digit region range growth full economic in Asia growth in single-digit in the for growth. Pacific high for we deceleration mid RevPAR China mid with For accounting expect to the

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

expect growth X%. X% system-wide RevPAR of For the to quarter, first we

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

the dividends during a the fourth cash quarter return, Moving million the capital a on in we dividend year. of for paid a $X.XX total for share $XXX of

quarterly form returned the year first In we XXXX, $X.XX of and Board the full our billion dividends. a buybacks to authorized the per in For were shareholders share. dividend quarter, of cash $X.X

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

Operator

Instructions] first question will Greff [Operator ahead. of from this go And be Please JPMorgan. your morning Joe

Joe Greff

with the growth. is a growth extent certainly a growth of bit and better? just in of RevPAR of can the the the pipeline had little a off - of sequentially. at that's just bit and function at than down the much opening We construction. stronger end more of room's that and start was How much calling just we I’ll quarter understand little the room’s on and question decrease pipeline pipeline some the look modeled stuff sequential Obviously change what fourth was what is rooms if up under you pipeline pipeline it to a that year

Chris Nassetta

it's we've things a it to been a and it. Yes getting you but a that one so glad combination happy good I'm asked lot question of and answer Joe

will at to at up year year would we the if we through was with We directionally and that vary but as we on full and we noise may look quarter-to-quarter always up. up the it think will think this fully this year pipeline pipeline about year would go again go quarter it I because going expect there's full quarter X%. year First, you look the

course the But the up think much downside instead growth mid was both net paying which which in I of X. know in of of basically you they're delivered the We us when things is is happened the fourth delivered it out it quarter came harder great Xs when fee. ended why on pipeline you it of that deliveries in two which at comes noted. was of unit being

get the end this into of time the going that So in - we'd year then rather clean of are at And and always we much happen and construction look we everything over to under of pipeline. at things year we don't its in think those that reasonable throughout up. the really the state case sort period

because not opportunity get them the it's a to deals. so an things. second clean in allows a combination when up And those we it And of that's nuance two replace those of important pipeline the part an those and sense of us out

you’ve If you to deals leave aren’t location taken that place. in the going a a pipeline happen you sort - at

be a not we and get and our out. time going obviously try try we we really, we So But with if need happen it's at we're point diligent great to think them. they not it owners more work where a want bit with to really little

what we those through of year-over-year improvement we're on year up combination again think end would a seeing it's year-over-year will certainly XXXX. based sequential see So things X% when I you the

Joe Greff

fourth softness Kevin referenced you were Chris how things were… by and you both nature. up and that and year you travel the driven you transient macro the what something that of Can follow may Can the China. to quarter of about one-time disruptive it some much help and that's there it drivers us be some more maybe understand versus you in later in U.S. in talk saw my that leisure then later And reference in the

Chris Nassetta

East, world as that well slower leisure trade the decline saw issues, that weather I reasonably related bigger in on. across economy in of that you I other think to in war if regions obvious leisure China some and as transient. would terms Africa in And going pretty I as some saw things look U.S. in the well we you the was were as the Middle weakness reasons the for say are questions. as not of well The it transient in both And did would some U.S., the avoid see We were in say modest

day week of January well issues, end the even with it’s the difficult Looking at the noise looking to as of the change related year-over-year weather at all the in holiday year shifts. end of the particularly the the very overlapping into year

you say on exactly say do. and much it's to can at I'd we give the year as transient hard with in didn't see just love January a I scientific leisure really As to I happened end of stats what hard would dramatic difference. the

happen is position. getting If you into full look to call what is and think going went the group we year on pick the at we think up year because said interesting think it's it's have here year a is we we great going stronger to I this last we

year. year we exactly XXXX going And there. it we a transient the we're see got full the the out had leisure into of coming think what data in very think third to dynamic quarter garbled a remember that's degree just reform. with to holidays the impacts, industry we year weather all the on in nice for noise and fourth Basically got in to hang At happened of very quarter corporate got generally definitely quite the pickup transient going choppy. as it and end said when we You'll and is in you tax

So time I tell. will think

of our there think is that that really you hanging well. three the to in know guidance is I group one is view

leisure have what experienced the that little And year. might to sort that around baked the and of there's transient will then expectation than that quarter if less people gave. bit business going little a guidance a that and ago that think X you're into last I good growth But U.S. both that an be is what to mean will we ultimately bit in we the a X world. less that broader have thought still economic good

Operator

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

Carlo Santarelli

far. the were range the to really respect the call appreciate bit return, beefed I acknowledging is primary up but on XXXX. and thus kind provided buyback and one guys have capital events in of two little have exogenous there your comments wider With you that just I one that the a that

to the As leverage with that kind to do thinking dividends, you range what of what end? respect other you high looking end to about guys opposed XXXX the the for kind the that excluding how key range are target, you're drivers you and lower the the think profile that about within the towards buyback as of than are - being of

Chris Nassetta

a than It's the total Actually the can a day so is with $XXX larger a quarter Yes, only touch turn range obviously the started a last you it, good out we we the the you not leverage know I'll it's EBITDA a wider range And question. gave base, start only with see touch range. it's year. a end a it's million. on our at of even of not leverage. quarter even - of

mid-point And giving was about X.XXx way at thought so the we leverage. the we set guidance

- at stated the mid-point that if capital So, the the as EBITDA the the range end know the based have X.XXx of we return forecast EBITDA at of to would at of us is and forecast our year leave X.Xx. at on you mid-point which the Xx

And had what of extra part cash we time at amount have the on - we of of bit particularly little that it and of couple outsized HNA enabled the us and bit bring you're so with combined did return at events last XXX lean of each the then a little transaction. earlier an into do year try buybacks stock forward stock bracket there. to and to the a quarter on buyback on side in a a And of from to opportunities - year is we right,

type little we opportunities a be or out, less. headed a do we more, year bit wider we like feel If the see the a how bit same the little might economy, don't so we we way a And about for do and little the if analysis. year this world buy we're little of is as to outlook more, might given the plays range it'll of the

Operator

Nomura Curtis The of Please ahead. from Harry next question will be Instinet. ago

Harry Curtis

reason the that on follow-up that bit it Wanted Joe's question. in the should more their pipeline detail well? a quick slow slows resale get China; little pipeline economy A does on as as stand to to

Chris Nassetta

the not is And to yes. been That date. our reason, what has experience

good and China that's that Hampton in still in continuing by Our Embassy times Hilton's a have now a really we and pipeline going - the That we Waldorfs is grow, in multiple is and week doing us Inn. believe to and with we is and lot they shape talk and team's believe is travel activity and more the bulk can calls certainly on afford. prior definitely Garden China shifting as But class, opportunities shifting stands mid-market, has a more of opportunities. been We're activity. been The growth nature than a now. mid-market bunch the number on the to higher still of for discussed of has DoubleTree's of towards because end to want Hilton and right Hilton Conrads is of and reason middle they what's what the even

So of see that. from now continue to the I growth we bulk the think pipeline coming

working And out with Plateno their is the so relationship to actually continue ramp up far they good, well, activities. so

mean So, will have seen slow XX,XXX we'll I'm continues has to some point But XX% in really close XX% cooker from do be economy the that China on was at happen, slows year. year to stays and will - clear the yes, prior XX%, if ripple want slower about based we haven't pace, rooms up I growing what's it. pretty in We a last and darn it and it up that at have now confident delivered another to down effect. year to that think be - China a I I this right the

fast. some I the XX relatively because Hampton Inn they're sort months of pipeline are of frame. And mean XX or time move in - those through short moving gestation the short opportunities

deliveries over XX going they'll the XX if ups world. every or years downs you is but just so definitely have shape So, what for two clear pipeline to thing but line market and will probably like pipeline just opportunities through draw right But and the in just construction up China. in sort the think the now so kind a addition in a be like next having now in we're in is and of U.S. conversion pretty already the - have have which to what I China and next the ups we to. good new up good long-term is and and it of downs years other The far under given trend

think China I do we've more ever in we'll year conversions this than done.

we're couple good think I years in China. of very the about next feeling

Harry Curtis

And luxury likely follow-up you question on that then where development you're today the what ahead walk four through to looks the and portfolio? two the is, and you're making go some us pipeline with nice to of like you years are Can progress portfolio. where luxury maybe thinking

Chris Nassetta

Yeah, I've our and Thank sure luxury. for product We're had aspirational portfolio the been a first We've here doing here things XX in our on got for it. saying working in the the customers the added what you we XX that I going proud they been making is of that all very started we've and That's been on kind Honors. customers time. in importantly one of product long of we we want. are. of for when loyal years most

the doing it As old fashioned we've way. been

that that that is there's been really buying because We have our not we possible. will nothing suspect future in I be think is not out things. really something

luxury both Canopy LXR – and on believe it been as as that importantly Conrad to skunkworks in is adding are in I've and that at lifestyle space said portfolio hit which brands portfolio. but of. with we out grinding of here would it the the long I been brand to in and And the we've focusing I've sense doing that things the really say the that brands the been of so would now the existing in other right my and talked lifestyle as also right possibility Waldorf now about And our I add it stride earlier, way we've

able the resort really starting with real urban locations luxury are both and right matters. creating major the point now Conrad have be right become Canopy view the we We we're players or an Waldorf fastest that to where cities ourselves a and brands of to and and to find from growing network in distribution in both the

these that hit do are I next stride. as to think think I our the And we've resonate base with I starting on really more we much broadly. as based brands and are that think research customer the

the you're next think if room three within review Downtown things Monday look under Waldorf five In Waldorf, product. weeks ago special is I a which that's jewel facing over see happening. touring years the new pretty others portfolio. Couple and growing, that to construction hopeful whole to absolute both Arch be to last We're spectacular XX I of model I happening brands. a Conrad some that the London. a box New in building will just to in was going that that add an that's getting DC in a are spectacular going deliver and to in next open the Palace coming doing DC, that what Buckingham York these very XXXX going there really you is lot was the days. We're in amazing up it a be on Admiralty Washington will in absolutely a bunch building ready but is

So happening. I about through are work and we customer, hard where period sure luxury But a relatively in and We've that go say, and whole we figured pipeline we've mean things XX time. suffice won't list. in we're Francisco, a San like not mean at our making those customer the hotels. I looked where XX we wants I pipeline. got XX there in Conrad, statistics are. have in to another the in at feel today there our to already the we out I the technically I get short where of great really couple world opened similar good for XX Waldorf and mentioned of be if

telling think pace. really I is I us been stride. customers they've at hit those numbers starting to if it's and brands working, at are the we share I nice What growing look we're So positive think a think very really in our

Operator

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

Shaun Kelley

to ramp that it data moment do RevPAR seen the some sure when and just continues for different in own maybe you part your the gains, to at meaningfully drive industry mix, what back I'm new experience data thing China I in of basis, as us of you strength benefiting helping this think to mean understand pass sequentially? wanted some city mix, Chris, we've a look of it do of you're to brand one the broader help share market. probably a there? of we've a factors, properties, in with see little to on has outperform the market kind we're absolute guys I seeing in Just just obviously overall what's go China but bit. you that quick pretty mix that that variety is could slowed Do up Hilton from I relates

Chris Nassetta

that brands say doing right, it disciplined would about that are I one us. spectacular combination what properties not We've we're good helping think properties markets, I As with, opening been we're any really but doing, it things. a who the locations. thing, to but get we're It's what a of and lot is what thing in incredibly it's

system-wide market very numbers, we driven comparable way largely in would and we which share share have in XXX, China grew If share market are that now to our APAC share China be market that. would I also grew at the XXX China you driving overall year. By our of share a U.S. the eclipse is market which almost points. at basis the don't are APAC by exact number be numbers but pace. look numbers market growing rapid

So above, also in the at taking China we comp are States numbers, United less if performance DoubleTree would the so an great great is particularly end example. from you you the you're share are in and of even delivery, lower, in than commercial you great longer that at competition. that at driving ramp driving properties, There is but upper the the the China as like looking fact in periods find though many know at look

these year-over-year a than in the they've that parts would ramping system significant though is get you in do we find been and are even so of way the comp And they're in other the still more benefit world.

of the clearly benefit that a But of it largest regard are amounts share we we're part huge driving honestly in to. getting is growth. So

Shaun Kelley

share brand it's being this just with critical growth, there. that. mean that's mean you awareness awareness a probably if location I China so mean on decade interesting a super follow-up obviously would we rewind aggressive of little mentioned places think been brand of factor but a sort ago it different of were I piece there. it a I in then a the critical there also And to mass relate I maybe almost Is in a to

that kind piece would of it So is how or, that and measure you that? look a of or at

Chris Nassetta

is has good mean been awareness I pretty honestly our brand much, always but Definitely, better. it much

relatively money early to partly years nine though that know build friends infrastructure. years going years work know it's commercial didn't that. So infrastructure neural more we that invest really doesn't my you using you they you seven also were grow out hotels you the make seven Because that to have than we network and commercial it like made the to to even deliver ago ago to we in if they open of our in and to tell probably don’t bunch hotels It's many We a five, decision there commercially well. tenure so we're the well sure third-party ago probably do and and owners. for want their

in invested the of years ago growth sort five ahead of when we hotels So remembering like had XX China. we curve

we So in XXX opening you today we've the XXX, you know hotels. forward know very got small pipeline business. a Fast had

back and private our knew right. in that to need what even of said we invest ahead coming was in So days we we

Now into to allow we've grown of the but it us we obviously deliver. business to scaling with infrastructure there critical commercial built the

in and In addition with properties right over locations a the delivery. right brands the There's having the having commercial time that's and the investment bunch resonate. of gone right that to owners, on whole

Operator

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

Thomas Allen

seen shifting? in cetera But that's you member talk centers in Thank loyalty call between and a property the how highlighted direct, et you good that distribution distribution. you. Just terms of mix had you OTA's, could about increase just

Chris Nassetta

Anna if answer is, of the focused as a bunch and think campaigns you you a on with I direct channels Kendrick that our the can faster that growing business. on latest we're And see with driving growing very and things mean at I OTA we our remain they whole look much at channels, relationships direct and channels. fastest have web-direct short rate other than

believe can there still is we Now do. we more lot that a

standpoint marketing. standpoint marketing to the enable for our efforts our but better Honor technology price most From our proposition and have have value value that the things we are it of other direct is and how compelling sure system folks that part we of the that a the There's the of a are which relationship. making than products. the proposition a element As from more said experience book-direct

– we're that. to going focusing be going and we are reinvesting a We are to on mode constantly of in

at for always rate other will the grew three that working of all the it's an times of So effort, but if look numbers the on be web-direct channels. and channels you our year types

Thomas Allen

And then business or to should should forward and fourth strength in XXXX? it that qualitatively Is how the quarter. in the way benefit and there credit quantifiably or you Thanks. that how highlighted go the card quantify talk

Chris Nassetta

had quarter fourth and up. received the products it's quarter great ramp starting been it's and consumers. in by legs its still card get program Thomas have new that well in so we program And the relatively very a to a

kind quarter the up the in signings XX% in card almost we spend mid single-digits. up Our of were quarter

well about of with be the this popular next increase program to to is that spend get forward as expect in that we more And so year continue more think increases gets going year. and excess and single-digits those mid the that signings expected in way spend to mature we

outlook So we're that for about positive program. very the

Operator

be Wes from The will question Please next go ahead. Golladay Capital RBC of Markets.

Wes Golladay

market direct of and go you maybe your index hotel overall global are share data. portfolio how to your have supply? that’s the Want RevPAR trending share Do percentage bookings then back your and to for some

Chris Nassetta

here terms index is a in can pack today the other of give it Sure well shared but teeny board. what of I my I gave you bit I comments, across you

was look share grow. why think share the system-wide have that up I'm people which market I then points three share. capital market regions parties I’ll the eclipsing making of to ever on the year share our sort EMEA so great There's that XX market a a U.S. U.S. we us last depending to at but you are numbers are And mega U.S. that's EMEA third basis giving XXX% investment. APAC last we time call numbers continue you little that noted of year given over people we hotels EMEA So as for for what but to XXX and the growth important first I finished again on statistic ended build like are and only because giving more the no having at finish these not reflective our business

of reflective are really we enough creating effect ecosystem and is now in as described capabilities the the and APAC whole enough So made know working I you this network brands fact have that that well. distribution, commercial have

APAC almost basis points. year ended the ended XXX at up XXX up XXX EMEA the XXX basis So almost points year

XXX just So, over U.S. the a blend if weighting the all bit heavy given you, of that together

percent business. terms business, channels our represent our XX% about our overall direct In direct of of

which channels push that pretty that we of want growing customers a Obviously and to where we can all to rate. our roughly at XX% about as at loyal is XX% continue of many that astronomical or our web we sort that’s look a you efficient of as like channel. most If on absolute those that's of half is represent our app

incremental we're to a a get customers experience channels, progress go will pleased way. because deal. to our with which it's question… technology better the the play, to really Again give through the detail last things that strategies result of to and a otherwise even get And reasons because this other the in into those of better buying want in of on with a better and lots So being as of call be continue they won’t all What price, there. member was more

Wes Golladay

The supply? global hotel

Chris Nassetta

that. of X% supply Share think global something like like I

X%. four was terms saw I rooms about number under that of we're of last world, in So in times construction almost share the

Operator

from And Stephen the will Goldman next be Sachs. Please of question ahead. Grambling go

Stephen Grambling

your up thing conversions and comments new to improving I on awareness guess China a as also the there. comments brand on a follow being in

buttress stays think that and as of You past evolved they how challenged? may over during softer and in And new mentioned past a we can the conversions the economics about years the Hilton run independent dictate tend do tough conversions construction. to expansion or about brand. backdrop how an think that environment have you how ramp to kind if versus nine the But of

Chris Nassetta

the because last I as think we it also see low last I certainly last of an around mean from and uptick. broader But had I and got every has did that in you'll and both performed And well really adding difficult conversion in and low XX% I we couple In a financing had we not more mean I we've XX Great that opportunity. the U.S. was still distribution. bit has APAC the already brand we we to year, it get we EMEA year. the basically some of have over I've unusual one up up possible. more in peaked in Recession little suspect yeah little DoubleTree a we numbers, lot. than will an a back us Yes, Great and Recession more gift opportunities ramp regard, through in that it the XX. brands where those the will time. you'll course think challenging given of has conversions kind been have to core DoubleTree make ramp I on but suspect change condition said was was a to other conversions more the suggested again last basically I XXs go went We've that but got throughout clearly seen calls those mean I years. see

to addition have course Now another Curio, Tapestry, Hilton we DoubleTree. of LXR opportunities And well. we other in as have

a just will inching to So a trend that about XXs I it. good you low value take revenues. XXs sort going. can from the talked about positioning I to in is every you The see to we a twofold. line keep level think I We market we are of is and trend in the pretty to in that it'll very case proposition up we straightforward. mid is high feel better suspect the drive system The do advantage at of suspect think really reason ourselves Hilton come almost

world lot revenues they Our over better the pay got average but to that drive is XX% that a us, pay with. we're okay. revenues, that's higher XXX% will driving a revenue to extra system average that's of revenue lot suggests market share yes the around our versus And of

with other so significantly them we the if of Hilton can supply costs most management certain lower of lower cost as significantly we we cases our distribution well both supply products and opportunities deals them as and and services they're themselves believe HS in management. distribution all through afford that energy they cost opportunities our We our partners The thing function. with afford buying to attach

every you it case there's us. powerful and in think to combination we it's enough put And and premium profit driving so together revenue more pay on means a plenty when reducing expenses big a almost

and make of people more to money them is do why to for fair a Our lot which it. a choose share lot

Stephen Grambling

on China. I potential about I guess why Is very as reason conversions… for trend would as be heard that different quick follow to I we guess up there the a just make correctly sure any think you

Chris Nassetta

China reason is right. think - that the first is all weakening bit of I a little

than So while been the United growing phase perspective. way Europe still, they've you but time. at States by let's X.X lower been at long prolong a They're times good for maybe expansionary they've still growing that a still put in of than X, pace and X at pace, to the in rate they're and they're a more if the West a growing keep there the in

had years, due. going XX are thing as boom a XX over big a of those last getting the that's you So over deals last on done that lot to coming situation deals other one and the the but really of XX

the new hotels the in term the of been relatively their there built have cycle where you end at have contract. So of that

opportunity. and bodes think little for where people a market together optionality put world share a we bit that You weaker environment industry we're well driving leading have our in

Operator

The from Powell next ahead. Barclays. Please question be go will of Anthony

Anthony Powell

year. Honors mentioned last new also there lot of XX Hilton programs million loyalty were You based and members the changes

think some of loyalty may the gain others customer share given among competitors? your mind focused at expense that you changes the some some of You

Chris Nassetta

this know hard are rates clearly way abate I think year. don't rates - very I to going to the mean us high really growth growth for experiencing we're it's don't those we by

be goal that Our finish over is members to have this I'm we highly to able confident XXX will and do we million when that. year,

So we think that the pace will continue.

that of getting We which the somewhere already has but particularly resonating. people can publicized both a and are bunch frequent see have members the you done travelers. appealing Obviously that it's stuff and been system program from more the higher at lower we're throughout to tiers, the tiers make

shifting things about X that member we're and is suspect to benefiting hyper that migrate way Honors value their just experiences really to members by a that the by said towards are unique to like getting reason degree the and it's and sort a with some of points a as ways, Nation to isn't whole experientially creating and getting relationship I Formula hard club. that relationships about by price Honors people other us. just just and other both best So like other our What replicate with is and Live focused that be points, why of on their technology choose are bunch are people of I we are that programs want about Like loyalty. compelling of our getting

important big So say you customers is didn't as they're come system. we a thing on like who We like don't it's most it's long growing great, going And big that engaged can all going million a $XX million proud keep I important - want the have to What's coming, exactly those hard data a right. number I we're a $XXX to staying is number, it's degree and us, actively and The on many to from that's great of, with going say them care. get it's we like now. that in at us that actually members most we got I'm focus great a growing to the it's know engaged us that really pace. engagement, actually have with what of is can't are and give to I’m we where we how are with and

I one. lot people get But had buying? XX XX% years our said XX% a number I a program would auto so to we're the products. we so us. five billion team we and we have mean if statistic many activity, I think Today, Big that XX% And really million wanted. could we are of six us really would in X world that wanted, that's that they bit engage the whole activity we a are – people have We they are the buying we view us less actually half get could my people we staying if or stay do percent; I right. are think ago recent big teeny engaged. think actually enroll that we purchase with engaged great. and numbers but really, as and half than doesn't like important that's That can How how really idea. have with that with is a deal, it's probably

Anthony Powell

growth expect has more? RevPAR to ability of interesting earlier confidence recently. a Got been in push that rate a in it. to mentioned in you play bit given And soft What price I role U.S. gives year. you power rate growth the call this That's your you bigger think

Chris Nassetta

quarter if our mean growth a rate. was I of you Well, look at XXX% fourth

look in rate you our of was growth If XX% U.S., growth. year the at the whole RevPAR

be will this think similar year. I it

gives what that's So the me confidence.

I but high you're other and are would – there think not a right you that. for Now would number, I well say but reasons it's argue and

it I fairly think tepid. has this prior The economic about period fact it's which come fairly of on calls, do the the compression I Throughout been have a low with to other lot sort inflation. reasons talked a I've up in think overall and a tepid is for growth that that more environment. you're

in things that lot politics volatility caution. had U.S. a create You've the and of around particularly

prior to think had I where And broader that flowed as compared economic more so cycles much through. you robust growth, of sort

you to sort reason think get. I a of what been what it's has growth So environment that's low and relatively that stands

that over have the of that's the rate but going and business. many in last mix I going on what's the – focused numbers thing think other The good several really on on is don't affects growth years that that is is it sense

Why? the So, points Hilton, overall if is we our it's peak in much system-wide Sure at we've filling just bulk ever money. Oh, you good? weekends XXX smarter look about we occupant The occupancy year make occupancy XXX up. for and gotten are times history. over of higher off is good than it that been basis we've because

look basis at rates absolute to consequence getting you our rate creates definition is line to scenario higher. of The owners is lower a job on bottom money rate. on it their a are Our drive they by that though business they a at and weekends and on when returns make profitability an it is where dollar is that

you business, owners blended lower rate off and lower rated which an it And the in dilutes so rate I sort though it dilutes - illusion. in blend when are a growth, story. you Obviously, sort mix of business at on that even when it much think the is our of better we growth that story its with incremental because rate

of we're I that to do short and there I issue f think rate sort not, environment. that's again, short It's – low so we're mix owners what and able for that of there. our big this And said, of have we the isn't a super compression mind been just positive out this really a not is

Operator

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

Robin Farley

things know you guidance. But I trade it initially group wanted know conservative. be got because up shutdowns and difficult pointer it's a the and group then government you more there business would don't single-digit about that kind when last probably you of just I year, in you're was there year are mid giving like visibility look wars then to ask at looking to thought and and get

be up came You in thought it would and to at X. X X

came about like for you most I of think same incremental about changing months? XXXX, So about just just how Can expectation is tell up QX mid the versus you sort time maybe outlook thinking the so we us bookings in recent in talked a your last what group being guess year single-digit. the could

Chris Nassetta

it's a Yeah, Robin good question.

is quarter the I books is it referencing talking we mid about which up think up And it it single-digits earlier what on business in ended what were you're for the for. being fourth was. realizing year the

was. book the where to close pretty So

Our for doesn't it's that is mid also to they it on that's to show what cancel That the book of many members digits. exactly mean realize depends decide to up single going them. how pay and and up decides XXXX where who because block

we what why on But know is we'll goes into will looking but the it, into like see experience business built ends up remain the solid as is single-digit. books I that XXXX. in there's our mid you still and business don't in As the a the group that lot know so expectations said up

Robin Farley

little the want But issues you I of as for at looking just are some can are have was about some so follow-up seeing modest XXXX about want other how some well? of In do degree And if the to U.S. in then sort not to of looks or visibility decline. but here far and the there word talked rates, leisure to XXXX? were. things, don't a bit declines the that use; just If – China there weather you words, about leisure the the in calendar the you softening word you'd commentary. on to bigger I talk use early that leisure softening, you it's sort where related was know QX is

Chris Nassetta

was the day around noisy in noisy. noisy the it the It pieces do to end largely All And it's you of the shutdown. around reasons of government at for and been movements around was say week, noisy highlighted. holiday, year overlapping with weather. of the would I it's January that last

see our because to is trying be right grow, consensus fine. That We that we they're but based February/March. of January, is we the world today, the last in less think are is be evasive. look It's last fair year. When it which to than going year an less hard grow that little I going - decent not look sense can range than a be outcome and to would on get leisure we leisure the it mean that I think they we've I'm we bit again, perfectly noisy So broader think to will just that's will business trends going supportive expectation view for is now. be economic to transient of the to grow think we little be year. you expectation probably of lighter. judge a and We that we we at a given that probably described growth lower have

Operator

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

Patrick Scholes

cruise of the signals out some relates Hi from the relates specially Brexit I'm really you are seeing I around curious that Certainly hotels Ford as based on travel some as leisure getting the side what U.K. difficulty seeing it you're we're hotel seeing the out floating to on of or brands side? wonder it the are lines cruise Europe the to for of some demand what European

Chris Nassetta

Yeah it's bit said, little over bit some Patrick, as in way I short seeing lead a bit the They share cruise's similar on there noise time noise is of that on lead area. time Chris sort our a a to their Brexit, mean you on have here know of to the business little we've have fair pretty of little we’re with and ability. unlike of, this just sort hard what have

of and to the within know that region leisure a could strong number we particular. that of ways you quarter we've and you going we'd was think expect U.K. given to and range, quite the leisure So and fourth go. the it kind is be Europe the continental to guidance Obviously to in by there's London. U.S. inbound within Europe in Driven be continental

of those - now could within a saying but kind we're there's right the so And trends range. continue

Operator

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

Bill Crow

you application especially end regions? about talking your you those volumes about if front changes look of growth, starts, and in the really Chris, construction mega think at any as three

Chris Nassetta

mega anticipating at on at demand the capital, as comments. we're ways terms that we've been terms in numbers No, I in trending it's been big growth, beauty has make-up that with prepared that consistently delivery think it's diversified going right Overall on pretty we're on overall a and of been flows bit world a like and trends The We've the business the going and we in the good the we been of that has productivity. has of higher are rest that of net construction and obviously time. same so the mean our reasonably of slower bit, the the little what's our those rate the what's a pivot of that's quick in to signing. of the not a and shifted you feet heard to been been the with U.S. of and sort been is But deals right little we faster. converting it global has result trending way of bit a surprisingly sort in the

will we rest actually the little heavier last a is think year we record continue we'll maybe which the year another confident and bit in lighter signings. U.S. we're little bit - saying to why well that, pretty able was of I'm have do to world. the in be I So in

the I similar have net particularly result year given - that through we're some the probably this up to Motto, doing few can be been year years. a with the we over sort think Moxy next of we flat comfortable will assign U.S. would lived what for momentum last the think amount bit and the a be of addition I to now but we've that

Bill Crow

Moxy Marriott merging I take with it you're not to get the brand?

Chris Nassetta

No.

Bill Crow

at there maybe given from market would quarter robust hesitation that one or stock been I thought little guess what that Kevin, the fourth have repurchases sell-off. Were your for more period bit share out me a have point? would was you, in issues I the black

Kevin Jacobs

at so were good range hesitation. - the ended the of of at ended earnings - last did we up to to We we we a up we the down of range really X.X question. wasn't top and coming end as in and Bill, that's think X.X. X.X There at

XXbX-X yes, then on are leading very but year remain, blackout it kept where plan buying you're but a because we of and you going get we of So of year the don't into to the beginning course a and end period plan remain will this on the it. your control you

So nothing that. than complicated more

Operator

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

Smedes Rose

that you some time but on I I we've third-party place heard owners part or ask in that think maybe that group an flexibility on update in you wanted just additional on front? the in rates put provide you've of commission reduction maybe some you ago the to bookings and put the could

Chris Nassetta

No. to I deal get details what mean individual intermediaries that we cut. We which not we're you're assume with I going group talking Board from on to cut XX the broadly X third-party commissions about. any our across

where the that had the we're way As one By always case the X. that the were most we was have at relationships incentives we we when that's at built have we have XX, important certain our in. of systems case back

way to have we're team our we on driving really to. it's incremental behavior So has share in incenting sure to certain maybe and less that that disproportionate business make where think those share. get the continue right sales players access I

that I'm deals I that usual sort it. business whatever. obviously to of done say as individual we've So would get going not as into here

Smedes Rose

you're initial…? But that back not rolling

Chris Nassetta

No.

make rolling that back. perfectly me Let not we clear, are

We to change XXX% the committed made. we are

Smedes Rose

from terms lowered return or you're on up? continues to access environment move on as always hearing thoughts to starts I peaks just increasing before it you, there's I potentially looks the it's to developers U.S., interesting to mean down. wanted cycle, evidence the about We but just development cost and your this edge - like cost the anything hear of talked expectations ask to it U.S. lending of overall or capital so

Chris Nassetta

seen on little bit nothing year and financing of think the course I over capital, a of the little really that get margin on I mean there's the or Yes, past cycle that you've course past tighter over the so lenders a more little frankly expensive. bit the get a new bit in year front. the

got, capital slowdown in going in so you Good deals an we fight you of couple world costs the deals in continue for us a that U.S. developed way and up seen particularly in you've our said construction to above overall still hasn't for us get can been good which the peak the so for in an deals can starts news is high to that that construction it's above projects plenty course weight is still financed is good still see we for predicting share Now the to a but of quality terms fight issue. have for that that our broadly so you double-digit of of financeable. going of prognosticators now years fair the rates why know and still growth they're the we And supply us - readily continue we've - been world, number we do.

Operator

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

Chris Nassetta

visibility Thanks to on the the there early soon. in I talk Obviously a quarter. year when have on discussion. joining appreciate time and more we'll look what's talking everybody We'll we the next. today, out lot after us we'll up Good going forward care. first Take today. for catch

Operator

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