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HLT Hilton Worldwide

Participants
Jill Slattery Vice President and Head of Investor Relations
Chris Nassetta President and Chief Executive Officer
Kevin Jacobs Executive Vice President and Chief Financial Officer
Carlo Santarelli Deutsche Bank
Joe Greff JPMorgan
Harry Curtis Nomura Instinet
Stephen Grambling Goldman Sachs
Shaun Kelley Bank of America Merrill Lynch
Jeff Donnelly Wells Fargo
Thomas Allen Morgan Stanley
Smedes Rose Citi
Anthony Powell Barclays
David Katz Jefferies
Gregory Miller SunTrust Robinson Humphrey
Robin Farley UBS
Call transcript
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Operator

Good morning, ladies and gentlemen, and welcome to the Hilton First Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that 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. ma'am. ahead, go Please

Jill Slattery

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

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

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

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

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

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

Chris Nassetta

morning, you, for Thank Good everyone, joining Jill. thanks and us today.

with to success. believe But by ultimately our excited million confident XX next a years, where the will more over XXX outperformance. net economic we allows greater growth. in continued combined century and through month, celebrate premium we're our free be and from will that drives X of the accomplishments the century, We of impact. ability fee-based higher last attract guests, business, capital That proud and members which driven performance industry-leading XXXth This, our market nature drive premiums strength we're employed greater unit the trillion this hotel parts all turn, return over we capital anniversary owners, cycle. to just contributed and we our capital-light as success business and of be grow driven the of hosted which, drive to As to this share by flow of all look outperformance and us amounts resiliency over should of continue $X team of billion over and cash model, that time in even over more drive

Turning of EPS system-wide strong seen index range. System-wide and several international up driven of midpoint quarter. steady premiums our year somewhat and with and and demand to the outperforming U.S. and by leisure data we've U.S. major March system-wide We're market strong Transient RevPAR X.X%. the RevPAR regions. quarters increased as business than tempered performance. basis XXX softer Overall, weaker to U.S. near group in brands grew the EBITDA grew somewhat growth remained by a across the Both to points. corporate share guidance more pleased RevPAR our for due X% demand approximately good all RevPAR ahead scale-weighted to report adjusted start gains expectations with RevPAR industry changed X.X%,

solid outlook growth economies. global for the with The U.S. as support line and outlook continued the remains For gains. year, our macro pricing growth continue indicators full prior largely GDP suggest across our demand steady to for expectations in should

group forward for bookings solid. both Additionally, corporate our negotiated XXXX remained business and

boosted our and markets. by and U.S. the we pipeline starts more start a front, across In to net unit to and opened approvals. expectation rooms, growth increased year. quarter, XXX,XXX growth strong had exceeded On we XX,XXX We international construction for achieved X% the our growth development than the rooms

our pipeline. see under increased than construction rooms across to XX% as positive represent We more trends also projects of continue to existing

remain deliver on We For the approximately growth. to net unit X.X% full year, track we momentum to continue. expect this

our each We following to right the around Additionally, and APAC locations for demand the we in unit This our both to remain EMEA expansion, U.S. and in serve the double-digit world. right opportunity and years. guests several continued signings regions. We steady increases the the another next across solid year lead expect and market approach to maximize in best trends growth to of with pipeline to deliberate returns. disciplined products trends record growth the on should evaluate

own of projects value any capital are allows pipeline owner higher This us net does per years. complete. our use not has for capital. minimal remained proposition our grow consistent contribution us, room XX% attractive to Our recent with over trend supports fees that of have Over those a once

that vast margin our and the with virtually system of reason, XXX% units yield. infinite enter at majority an For new

growth results, and yielded strategy brands countries. fantastic organic spanning Our has multiple

last space hospitality retail meeting Just Conrad feet space, nation's in Sakura square property personalized Club, to the the our XX,XXX luxury feet celebrated and which the access of XXX-room opening hotel of we D.C. features and hotel This provides elevated month, experience. square XX,XXX exclusive grand luxury first of Washington, marks the The an capital.

a term, quarter, China the also innovation reflects modern ranging stylists a rooms we brand's to Inn property China's while portfolio. luxury X,XXX Conrad carry Astoria. to that to our the commitment dynamic also demonstrating and totaling Hangzhou, flags from the over in our presence we with The opened contribute Garden project be XX-story hotel Waldorf hub. hotel new will will mixed-use growth The In We spectacular the Riyadh. a longer that expanding X in hotels spirit part signed across several and Hilton including expect growing well-rounded to technology agreements of

to openings in new Hilton, XXX with of industry. years. set recently debut room will Orlando, of events properties X newest our XX further and at The drive property in brand X space and rooms, meetings launched event a feature France feet an To of new Each an least technology. Additionally, square Atlanta brand, we and minimum guest growth, next hotels will that product per the state-of-the-art Signia the Indianapolis. we standard will add within for signed innovative agreement a

On we per X.X the the are average, quarter occupancy our an demonstrating year-over-year, half with that XX% team of quarter, think Honors the month, over Honors of In approximately to that effort. part over percentage to only engaged basis XXX staying on XX% was more and us We're heavily total year-over-year. members we points important loyalty front, are On more story. striving than deliver they're Honors often. XX active. extremely membership million enrolling members, and evolving of members creating Guest workplace innovation with reached up up culture is ended experiences, incredible nearly before needs ever was and better satisfaction meet that are a and our products also guests' and with passion to great relies talent the exceptional always and million

the we're the company the XXXX momentum be that and year. #X balance we're in best history on first X first Fortune's in to non-tech this reason, of the thrilled Overall, company For U.S., ranked feel becoming for quarter since and results hospitality companies the achieve for very to pleased to work with the first list our good rating. number about

is simple. story Our

market strategy and strong significant capital-light growing generation cash model, returns. business development to resilient shareholder lead flow should Our share, free

yet. that, quarter more and of details are give for rest confident As year the XXXth this over our for the to turn dynamic to the Kevin going truly on results our I'm you anniversary, outlook our we call we With will the most year. be celebrate to

Kevin Jacobs

XX% million market and increased X% holiday to share currency-neutral partially Chris, prior items due grew million, exceeded to expectations. Adjusted morning, items. the earnings to $XXX offset quarter, share X% guidance of license shifts, the particularly and good timing our to a $XX strong In our the increased also ahead of Thanks, everyone. the year-over-year RevPAR management million end as X.X% Results outperformed benefited and year franchise grew system-wide segment range, given from In XX% versus adjusted high softer-than-anticipated Diluted exceeding special increasing on for our growth. fees per $X.XX, of business, better-than-expected guidance by fees $XXX international expectations. fee of basis. roughly group XX% quarter, range EBITDA

regional outlook. to performance Turning our and

primarily by with RevPAR X.X% group increasing U.S. share grew market First quarter strong and outperformance comparable business. driven

Embassy also Our U.S. renovations Suites completed Hampton portfolio from across our and benefited portfolios. recently

our growth based by RevPAR the In grew of the transient steady with Rico strength results X.X% forecast on fundamentals. Latin quarter first year gains RevPAR strong the particularly led double-digit versus in year U.S., Caribbean guidance solid Puerto XXXX, outside the line America. with full we range For U.S. Americas given rate trends. the in and system-wide prior saw

at boosted growth RevPAR strong benefited grew For in quarter the full system-wide be international results good Barcelona. higher our business we in in group Europe expect guidance. end to from and as London RevPAR our the X.X% of the in travel, XXXX, inbound region year

tempered growth. UK softening in transient demand broader the However,

of We RevPAR given modestly in at the higher uncertainty expect the our offset full range UK. Europe, In continued in supply new pressure and year to Continental and to strong in XXXX Turkey trends Europe system-wide trends by the in growth United region, the growth be ADR. in to in in of been X.X% Middle the the RevPAR Emirates quarter. levels we've East Similar quarters, Arab fell prior continued significant Africa seeing end

the international in For Chinese period be travel, Saudi especially X% as to down as Arabia. UAE intra-China across softness Pacific the digits the RevPAR given Year expect increased in region In XXXX, of leisure low full the the China. largely well we to leisure the outbound travel to in quarter continued RevPAR due some region, Asia growth slowdowns year the and in over single New

range year quarter in the Japan we event-driven region the in by X% good to and in for performance group driven XXXX, business accounting For an an the expected pickup Pacific Asia X% overall and for softer reacceleration growth full throughout in China. the year and expect RevPAR

the, moving guidance. to to Moving

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

headwind second shifts. the to modest X% we RevPAR including system-wide quarter, For X%, a growth calendar expect from of

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

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

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

billion $X.X buybacks continue of and $X.X to to to dividends. shareholders between For XXXX, we billion and form the in return expect

questions, Before model question resiliency want certain in business we open call of to scenarios. recently about getting for downsized we've the a answer we our the been

of sensitivity Fees our environment generate earnings Our fee estate changes more than those with of nature spins to been has remaining materially business. and our the is the more given real top the of and XX% for accounting of our line-driven timeshare fees. XX% it businesses historically in macro than lower than fees

fees, expenses. total behind growth roughly of less XX% just for do them volatile net of by supported disciplined account which not and priority are any stand approach further continued fees, to return. management corporate incentive owner's our our unit Additionally, XX% is Resiliency and strong

As year see our can RevPAR good we you and declines. our from the outlook forecasting are not for guidance, about feel

we be slightly RevPAR flow were responsive these cash of in and questions our an in to growth decline to in EBITDA growth the resiliency illustrate X% and adjusted However, to where free flat positive expect to to model, positive X%. would environment

As think all for the like latest our we our driving This please? cycle. to earlier we this ranges and on found be [Operator through results now the to first questions would parts issued shareholder are you can well result, question, any prepared a our continue completes first may we Denise, in remarks. line have Further morning. release earnings open we have. quarter can the our Instructions] returns guidance details positioned of We

Operator

from Santarelli [Operator Instructions] first Carlo be Deutsche Bank. And our today of will question

Carlo Santarelli

you outlook? of point respect we confident have from, guys been since kind was last most spoke or, less Kevin, call. with wasn't view. environment Chris, What just to the it's domestically there of seen you that more I your obviously, March since I'm out data the great months demand think, more with wondering last people's makes the less X.X or And that and/or

Chris Nassetta

for full tell although more, thanks the I we remarks, you Great little on bit Maybe and talk about then in the everybody's prepared Carlo, so for some the a question. comments it. asking quarter year. I'll gave about mind, suspect, expectations

then say little I international U.S. would and the maybe it felt way, when this about comparing the doing how the separately that. this different, in we But I and sat at we than quarter. table it's okay? sort full a lot segments down of overarching bit think, breaking give it more an last it you I'll between and quarter not a thinking and by down breaking year

and about quarter line quarter, was much in the not quarter lower, at in was in look I'll talk forecasted look you U.S. first we the we surprisingly. at the thought. had bit if a minute. a for think I International with what what pretty we little segments the

So overall that thought quarter drove in a little but bit not we than material. first lower the result

If the we little transient last overall pretty first was and bit seen than of little really transient, was half exactly I thought, you the last it of didn't lower bit thought. and It wasn't on segments talked driven better embedded as we a exactly was a stable. sort Business you weaker March. but little little in result hung look say, a transient certainly a drag bit apart a expected we than group the we a at leisure But in by we than bit worse though, question, and thought, for was net lot, there call. had the what that's lot. your The year, in whole what was if than about break answer down average we

and as throughout Our Easter it spread hard view result was of Easter although and really about much the as spring on spring you what the that, internally as month. think whole of much on to is studied about moved be being got out that it, view our break, perfectly late benefit month break as out from data scientific so get that as happened you'll that, all we've a when honestly a talked the real of it's would

look you we was the as the what of was it, business patterns material of with a tell travel we year. that business let full overlaid break bulk the think period. March. impact On related travel when in it And it that, season the the sort at me and had driving And transient during so about that weakness spring on

little it's year, So U.S. again, consistent down, were. was. it where same. much there you as our it we pretty is get reasonably full international and breaking answer about bit versus the in it's obviously, when we it consistent are in China. to feel we gave think think where better. with the reasonably because Asia we you going reasonably Kevin's print notwithstanding we Pacific remarks, issues And in X% seeing We, X%, is going guidance, International, thinking and we're How about what the in different. some confident of be will U.S. with is a already were get to today we said and view a he reacceleration the with to event-driven Japan

in Pacific X% And thought. is of first core bit quarter, be better Europe, to little print be a thought. Americas, think a going than lower to the better we we But at bit is time, the same Given going be the will non-U. Asia we Europe we than S. thought. than

very this thought to in in our out, way, a consistent quarter of So to much we the out net lay all pretty a and least international are what ago. all going forecasting, of honestly, result we that that play when is, U.S. at

at the is lead again would year the similar look you group and level of this charge going say highest segments, growth. I to The have If answer. the

think up end I will sort the the it at to our guidance. of of midpoint high end

I think this fully that that. feel about group pretty is, the by book, at so on position good we supported point,

and sort sort that not. Obviously, transient, midpoint healthy We expectations, in March, leisure in that the been be of in least continuing zone. say and was will will to on going business of at both the side, our is would think On leisure transient of a demand I way be in had guidance that deliver the zone. Business grow to transient. towards

But carefully. April effect past look Easter So we're back watching goes of more getting May still we as trends sort the the at business while very it's to like pattern. transient June, normal look into and a early, obviously does of it it

as time. early the range outcomes around it. our of with. guidance, And pick we're X%., we create I've sort midpoint the for and not a is point, look in X% you pretty And calls. most still should a we're trying here, of we midpoint X% we're mean, a that's, for where a that quarter point you sort comfortable much and will, if to surprisingly our the of guidance at many sat that when comfortable. do year, generally underpinnings I maintained, point And had the is strong here we when so frankly, given were guidance that's times we I to of X.XX Kevin on of the how many, to of thinking if what the, most But at that's sat said ago, what that's feel indicator these our I as within

Operator

The of Joe JPMorgan. next Greff will question be from

Joe Greff

strongly in Obviously, and the stock to your today's is comments, reacting very Kevin. reports Chris

are stock the with how to sensitive So specifically buybacks my price? to capital returns related question price is stock to higher you a

Chris Nassetta

Joe, of the intend be to for and range the a that you reality is we X.X%, X.X% we range. gave to

probably that quarter, think of be think, if I we on And which of I'd in in it higher at our bought, should obviously, leverage, of first up. sort which more $XX. you've range, be to look we're low the really the that X.XX, would you mid- of the end probability midpoint high the say, to average the I end we seen the the where gets you if

out stop strength at, premium So trying the is the weighted our at and we scenario time, us significant in average our that given and cost like every $XX, it of We look like model, it market. $XX, there like beyond sense we buying think stock that to a think we the that still In isn't a and no the of of it future that achieving us of We the guidance. we from get, that is well same we we're looking performing is to would I spend little the obviously that's to stock at our strong. price buy, in is as can going capital. quite resiliency like we grid at at, $XX. And grid in We'll we're take the at because like it the stock. $XXX terms the

Joe Greff

should then, levers benchmark system-wide your can terms And businesses for maybe look program? to grow about loyalty you other talk lodging, Honors. do of occupancy, within in dependency Great. the And Hilton to Chris, me. before to membership where think the related Can doing you And you of mentioned you occupancy that go that's that you're about all outside where you what all be?

Chris Nassetta

Yes. on we I you we give numbers. maybe The little of questions up million. give on more a XX broader sort I'll Obviously, mean, bit XX% gave the you membership a a to know response. get because Honors Honors of I it, lot so was

did, XXX years our we've I of gone the was Some did of talk gave that XXX ago, last basis over Honors go them up on By members X points. about We way, XX%, I What didn't bps. to years, say as, number you, was XX% it's over engaged. up don't back, is you probably over and know, occupancy that we how having XX%. we X the if

We much have a number. smaller

I Honors be proposition, of have a compared create so the strategy I the if to essentially, ago. we underpinnings you probably think member the Xx one, our of you members the that as best Honors. in value that do to X So engaged of sure basic math, years X make we are, have to to think number And

means pricing. That crazy to not You're be.

get get the that a other web and other online we're draw book, better things that in those experience taking with app, friction tools only our to member, it, straight-to-room, for else enough, things That, Honors to is ultimately, doing like best Period. Honors. Room, powerful book. available app, things all online, to pricing Connected addition That, much in with particularly and the our work are an And and our a of story. presence direct to that End There making really the Key, members. dream, to shop we're our these it better Digital the digital price. you be guarantee. of of out we're price to are Honors you're those a If that nowhere

that highest-level our matching that amount their to get other ones enough in just a you do that we to creating nights. levels, what years mind, ability people of we us elite rollover the make elite gift members At able partner. compelling generous, doing we've to There X and are, on more At highest-level things, on that and that the because blue largest members already the love our focusing to time Xx the our double numbers doing earnings we've those thing other the bigger much about a, all for been And of us. some bunch some members, of The the are of level, been much, those are X the because and want or to that continue don't and our both status percentage our things love, engaged first is members level been the we're milestone things it members members travel the few a the bonuses travel lowest-level give things. of reason highest unlimited everyone X to bonuses, last wallet elite a spending but nights, of lot that engaged. both. we've the come more is are we've to get lowest dollar price, been shop share stay our Or where to with XX But points just redeem which stay with and only value do points slider, for really trade points course. charge, members what points members for get they them, Those points. with you don't the points Prime, points. you are they want. number few. I more get any we and of to because of so that any we're travel between But anything industry, engaged into too, examples buy price, and do lowest-level potentially to we're are them only in points can pooling How deal they're a them? without do the use where to the low-level our we use there things or you doing Amazon Amazon believe be they're those love and So you where you with with they But can, they pool Or maybe with additional one Honors them. us. you a can Again, if create money that value? members that about your collect generally. are, it's best want the can best many don't of nights, certain use them beyond And going much our

is thing source of of cards, we other couple AMEX, well been and value been, driving received We've real ago in lot of have a it. The cards incredibly how and the time out into get strong a But more spent the array the it's proposition. co-brand card. effort figuring that and can to years with

into X at look the stay cards, base go would member. times higher-level up activity. the as they And you you it's an find have our cardholders, active average If the time X activity you in that stay

those ideas ways proposition where really for members to will give cool and value own. things that otherwise and on their helping make, redeem to are you whole and can't And they things come And that share. at that are that's whole your X Honors that more in side Formula that the are cards Honors that on we're a and loyalty so looking Live Nation, of other of those drive things bunch whether bunch things drive on experiential then points get a a

at these which I think a didn't what your, it, the a level obviously, our tell is join, of all occupancy. But and and If I terms don't can XX%. deal Because I'm team, over it of you of things, people question, a my crazy asked occupancy forget best it's in bit dream. it's of of course, I that's it why. that why but isn't looking them well Honors? pipe be XXX% So

customers and others that member ultimately, you and might being our experiences years, make club XX% joining you value we and be X story whole create enough, to broadly, that understand the goal being, and range that us of compelling that would a sure gives is my in that otherwise. think, XX% consider of over a that get elite the I things bunch next that because is our, Honors we an that a can't is we're

Operator

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

Harry Curtis

RevPAR Chris, some you And success XXX talk U.S. that degree performance was stronger Smith Travel your that and periods. the occupancy data. increasing last you're success quarter, what the commented basis your that interesting versus during that Can finding brands points what's generating? to shoulder is about that seen driving in is than you that your about strategy they're you've the premiums the

Chris Nassetta

on and and couple to a flexed pricing mean, about right buying people And which think fully model semi are discount XXX for Cancellations it's are product where the reasonable a in That giving all our question at and premium any Unfortunately, It's is a not Yes. fully my a clearly us up we're certainly, in consuming a our some behavior we're testing flex. smarter And of our a a and of driving I over down the cancellations. better with we classically really good won't being numbers, share deserves market commercial customer-centric basis get got it flex off our answered. we is the one the it maybe as where flex side in I you I quarter, it's because of semi and do satisfied be XX%. And U.S., lowering for with years driving slight the terms by is so fully the really thing. strong more points. we, bar boost. pricing, in the stated set, discount, that are comments, the premium it's little and taking bit of where and of flexed level. last prepared

say a direct the off customers a been there's otherwise point where that find which and with book is Anna that. price, XX% pushing marketing out value better bit value that, little Kendrick the guarantee and We've trying guarantee new very on are to proposition you So focused campaigns we of obviously if that that a a all can for and things. because might better bunch guarantee of they're they bombarded to And But going a less been that with it's working. that think the it. you, deal other whole part the other be else somewhere that's satisfying media digital of otherwise forms we're get will

what X because being having job going they're and with think our our I what a better to means feeling and service talk doing to with they're means, with And we're business. strategy, wanted inspired product to Place doing what good motivated do and our team do about Work, doing great to we're team strategy, about in congratulate I Great we're service number our with things customers. us

So it's go other in It's of conversion. a it's great because I back in our the question, a with a web about things. that bunch increasing lot which loyalty, length. at doing and a I presence about things technology But It's bunch lot we're service. it of Joe's answered into won't

are whole them our And long-winded do. saying that different that's So of are that from of is X which we of love keep pan. It's different flash in trick, and job it, thing X about sort places, not way not a is what which working, it's converging bunch to I coming working. of course, which the lot it's is a it's of strategies to intend

Harry Curtis

follow-up quick Asia, I you seeing a just correctly China? And some you that in hear to reacceleration Did Asia. are going good. Very back specifically

Chris Nassetta

we Post starting Year, are. we are Yes, all stop. see pickup some Chinese New to

are which, then then bottom remember, the bit view, easier. also to of Japan is expect for business boost comps a sort bag, Japan, big bunch back of of There Asia. see in event-driven the line second definitely help still, in honest, be a in more, would in market us biggest point APAC. a half from gets to to the and in And year Japan, which are the they of and half that help going they the is the We things happening meaning year of happening, are in the the money

Operator

The next from Goldman Sachs. Grambling question will be of Stephen

Stephen Grambling

opening model. case from your Chris, effects emphasized of network remarks bull the business the the

other at increased the As if of as we that few benefits in are should look the out markets over expansion think China I scale particular, investors developing some thinking years be added we international road the and of a next about from in look what through guess, the map? markets

Chris Nassetta

fun and at in I Yes. for make growth for driving you XXX% all I for it be those doing starts doing if it, and we're returns margin, a I starts are for job looking continue model with the all last all infinite call, we and it capital-light talked Thank and great is Well, to to owners What also share. I things Stephen. owners like, and organic work for our what, that think, but great job mean, the yields mean, us to owners. a question. about customers

happening last we sort curve, we've think loyalty building I the nearly starting last mega last, quite United we've so is increasingly the really and honestly, calls, in infrastructure States and on not X our investing are pay dirt. talked distributed have out regions world. had last of couple and the things to other network around we there, and over I other even over the over years as that the XX our but it been effect the hit for the the or And of ahead as what's And and commercial it's time been in been some about the X,

last to there. which do. the to hard market including share effect So year But world, in starting regions first the is share, think, eclipse to for in that everywhere the the time to is the history the market grew time, actually other were I network fact is, it the we frankly testimonial was But U.S. work first our eager

longer with deals, attracts really leading We'll We've know XXXX, around about capital. it's indicator Owners carry be having to the in a years. or effect thing is be is in when in small share, we same that going that all all the a first market to I And cases, regions end, the which job, was been will network of That's them see quarter up the the on equal you'll that. that another international year, XXX regions around. so be think our greater the network in of should and of folks. to fabulous if suspect And show more this years. will signing the I be, what so many that. do confidence will in around because a And you're growth. happen to XXX It's they're

be to and So you're in that performance to mortar. not going they're able drive to billions going the of and because bricks dollars you're disappear, premium investing

as think market that, think I so for trajectory our I good. about we on good think obsession have the share, with really feel us we And and which reason it makes

given I about several under in NUG. next world years component said and good in the think continue through my what's a production, just in quite it's construction of ability NUG why I the to around comments, you construction see feel, conversions. to the do pipeline going growing, as our what's rooms prepared I our under

Stephen Grambling

you perhaps think should direct as More opportunities rates gain scale? partnership we quickly. royalty in follow-up, those and markets How about

Chris Nassetta

as we not get going are a we I and there that much to as perform U.S. build a space build opportunities of already scale and co-brand think but to we're network. are unlike that opportunities our opportunities pursuing shift anytime gain that the our share, as increase there you're rates. greater deal we are because other wouldn't to to would I and continue say scale that, royalty seismic doing we I soon the opportunities. certainly, to in rather there market as And think with ahead loyalty we that think drive partnership I platforms Amex, see

the kind pieces built. it the would the powerful at And is, I it's really investor of we've is thing this an as spin, So we we the it and said have of that make platform at say, said we it it IPO, work. to a all nice

work. broad It's scale. We lot got it a okay? the We've the hard we've But geographic make of got have diversity. to work,

in got we will grinding and up. continue the owners for better deliver making returns by for and but grow market work got really obviously We continuing magic. to it only doing But spaces. virtuous And fill diversity. to it what we've some have pick the not make scale chain hopefully the, to We're now need adding better the we've things brands about cycle customers, and is share,

Operator

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

Shaun Kelley

some think, in that of making. and just yes, on to sum investments of Chris, market the happened here maybe lot up and systems you're of has and Honors gains on, the I a share discussion sort

investments maybe view where largest to terms at a bit are So sort you you give in of working of you refine It the all on as us just these from like start of programs? some little making future time seems they're extraordinarily maybe the could of both dollars here, to moment. well a the and management

the where kind where you biggest And some forward? of of, see going you you kind some of putting opportunities? these do effects are where to are of money So your drive network

Chris Nassetta

market Honors repeat most probably would I the loyalty in but we always obviously, for important have, say X I engine for myself: is and primary that areas, share. won't broadly

a gauge things occupancy not our vast So a probably it. said, will done. of a on list in gave going be lots There's not we of is that we of of what could occupancy you're being do. think you objective The amongst, better. are I to it. whole to want in be I not just the great doing. into And be not can Honors because be to at But to a things of what Honors the I have so place in think member. of the if some it's I side ultimately, is get doing. experiential that value with things do the majority I'd the we I additional of proposition industry because not the do a in we of time, percentage list a we limits member other lot rather highest occupancy good the the But what we're not, Honors crazy It's And you're we're, my crazy others think moment.

out brought where of that we how more area incremental talent customer whether experience, and last add Key, app bunch do room of whole The the the in more over other area Room, this Connected take experience and to the which is related couple figure of friction a out with to in years the obviously selection. to delight Honors Digital is to technology is

to of system and investment. payments a out on, but neat bunch list the You're going efforts, really area, investment, whole huge things those of see a of coming amount goes

this that the because on those be off, system know comes of or model for careful of statement that don't balance that way the comes our works, the not well, because way works. income out of record our me Let sheet our the not as for investment

we not way place been trying a doing it drive only but, a not We and which And but have spending these trying it. to more ago. in more than driving have more And investment in system profitable, is just the degree very spend even lots to in things but to most of do it a few is funds significant a invest continue direct to years away opportunities obviously different with to investing, business. share we're world get taking in there. market we're marketing, premiums, was which but then that how we And means money, marketing,

to, have market, we And our how sort important. how message what so be to our I is is, able to of really voice frequently go rise think, above,

bunch be P&L probably the I'd again, where the investments, just dollars to in these clearly, probably not of whole all others. continuing tip investment. to these, think drive the of Hilton of are areas you are the system that's bulk investing that there's X. when Those are say are system those So clear, off the us the from. our are about are There X of spear ultimately share. a come Those for But

Operator

from next will Wells Donnelly The be question Fargo. of Jeff

Jeff Donnelly

or maybe from I that in QX? guess, account might sustained the how of to going Suites the have through How And attributable quarter saw can share do measurably, were they integration, first challenges and gains Embassy Hampton first, I And follow up, to guess, Just in measurably, that's I be on think to you much much faced the XXXX? for Marriott-Starwood you came the want Harry's maybe market renovations? that you question. was

Chris Nassetta

Yes. will same. the The be answer

and nice it's idea accurate is that It's as about we The no us. Travel have that. on really wonderful Smith data get. data We to thing it relates good

We clue we as it data get have else. no to no because relates anybody

had to know. in gains didn't lot big comes we from. it's places. the But a don't it hard competitors. we know some And believe of don't quarter, we first coming the it's it So with from from Arguably, come where

level of to from basis came share than We that, XXX not scientific, that objective, first of going We we ultimately we that it wouldn't started share. certainly would we thought We gains. been on of I didn't. hard would In as say little that. of the year. share maintain gains than Hampton, I'm do, have very say whole to an amount thought. we've in always of we'd points small quarter, gain were We that a we They what planning I terms were, heavier Embassy quarter we we think share. when in on share. were the the expect a for working get

said, I X As we point gained last globally year.

market I last gained and moving years. think When hard. industry-leading you're XXX is really, is have everyone points the at XX share, share, already in share plus we've really hard. XXX

that expect for have So full we that expect I would I will gains. the would certainly but not year, share

Kevin Jacobs

of in is but share if scale, renovation mentioned aren't totals cases, large in cases, that add even renovations. the And prepared in Jeff, from of yes, Hampton I'd just Not in a of, in I the numbers. benefiting those remarks, all coming out are my terms in it Embassy lot

share the been set. are store the on same numbers same quoting So we've comp

across share So gain brands. the did really what's it's really we not, all that's and not in driving. board And

I'd And it's that still in isolated then those we brands of and of renovations. the other those a it's to have those couple say bunch under not are really hotels So others, pretty, still is renovation. thing a

have that portfolio in that to still under but some still XX% we are out, renovation. the ones have, So the are we of cases, up in coming U.S.

benefit sales, same-store RevPAR should that's So same-store again, index gains. driving really that But not what's continue.

Jeff Donnelly

quarter. certainly this growth maybe or for continue growth cash enjoy cost flow yield been guys is But to outstripping just you And the EBITDA U.S. particularly last of signings, one construction follow-up quarters, in the hefty several particularly owners. Okay. has

so allows the unappealing to would So becoming what effectively quarters, to developer are economics moving? to think just when more you a in marginally the continue the view given to of remain way it's X your things build new last X growth robust in

Chris Nassetta

I but say, to fair that's right. then think think I that is exactly

availability to rate, pretty that that's going going in other on, have has at a that high been addition thing in declining. cost the is The been been debt market increases

it couple had relatively a us, but years you of been, lot seen available less ago. than been it's stable a declined for Now debt

you obviously, put well. think money an has higher then as cost build with I it the less together So impact because economics to don't work

you you're if to market stuff actually, are I think going and look at data, We the so less seeing construction. generally

think we construction for compared percentage-wise at amount as data more you quarter to the in pretty under what will the put for our look decent If last. we and full we a the first year, U.S. think this year

your back are our question driving it the why, some higher it are brands that's what share. I core outperforming. is, to call so just market our And because question, are, They're stuff and always think to brands there done, that's going get

businesses. properties. the have developing is people business Part So of

even you share get market yield. a high a environment can your high-cost expensive, very have you more where still little is in If money

premium build the but you're yield, premium to share, the where get get to where going you it, that's and You're going and market we it share. you have the do to going market can be

with for us under year, rooms at construction will that's digits I, up and be the forecasting suggests, quarter the low consistent this government be, was that. So think in we'll double least we our first what

Operator

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

Thomas Allen

net on up question. following that Just unit growth

up the went since X.X%. in highest I growth If think first right, your my unit that's you So model public. is net growth was quarter

that for X.X%. pipeline on there's was growth, it up the that. on So pressure the some your on congrats year? then X.X% upward suggest Does And guidance

of slightly So to Or do that would growth. do How expect the to translate kind you year? kind decelerate you expect we that your over? than NUG lower of And that it's as through go accelerate? you

Chris Nassetta

and the too because give because much But we the things many on And et basis. in true. we of All these in mean, are quarter-by-quarter cadence it's cetera. data not good and questions. into any I workdays metrics a yes, would just you quarter, holidays a quarterly read I of quarterly depends it how on report

in I middle to deliver We're think to our X% of range. expectation X% is what going we the said. the

we year, surge deliver year the last we actually, a year. at thought on the things this beginning the think I end of that of would at did have

So at I X% think last record. up year ended we for the

Kevin Jacobs

months XX Trailing at QX [roundabout]. same QX, about for the and

Chris Nassetta

happened that later. doesn't think quarter where sooner done we fall or stuff mean get that like I can't, last and little had the into a little something year a

the I think we're comfortable with X.X%.

Thomas Allen

think then that the pipeline something slower just the than And growth, in about? is on coming slightly NUG to growth

Chris Nassetta

signings signings our think I this will year, again, record quarter-to-quarter, this set year. Again, No. a forecasted

Operator

from be will question next of Rose Citi. The Smedes

Smedes Rose

yesterday. now see that are business. you your ask Or to that that made on the some its there's into point? wanted moving entering couple that Obviously, of large something a just are Marriott what companies home-sharing announcement you Is Hilton that? at I overall thoughts could

Chris Nassetta

question, actually. that something kidding, get I of we'd have, asked. That I'm shocked I asked is figured got not course. we

of that's So lot of a prior quarterly on certainly a at something about talked calls about bunch it, time we've and thinking spent understanding here Hilton.

service. functionality experiences. in high-quality, products customers that the different the these The fundamentally that's which short they we have price business. we I taking all that business in we're that commentary think at longer home-sharing exactly not various What my of consistent, providing the we're points with prior think want. a is is moment, amenities answer incredible is That think is pursuing. consistent branded answer is, is something the it at We that the want, means wrap

points. a loyalty. all by consistent because big all of it And as nature connect premium these also we get of We result, a price the high-quality

that beta to tell they higher business. view from We've us. could this can Our by they want it's and But the from places customers customers it sense, change. change, us. spent it need I a value staycation, us. will But to don't don't they and which need us a could found And home-sharing this effectively us, what proposition. customers, don't They different. moment It's that's a get premium surprising. something this. the different is at way, have from our just our the say our They customers time and experience what a just that us, talking not and a bad think of We tell belief it's is lot not our in

you the So can tell what the we, so big far, from as I'm moment, and the prepared Q&A at comments focus. in a believer

going really lot good on. things have We a of

to lot We the momentum now. opportunity that share We that where of there's leader have extend a market lead. think

on a that to great want it broader quality, we on experiences. high-quality, platform can deliver broader in to customers so and in delivering take grow continue a really and focused branded to to And be rely network us consistent, experiences way curated

We're So having we're going at keep no. the think moment, doing to doing success. what where we great we're

Smedes Rose

That's helpful. ask I just too. wanted to you,

call. talked you bit little more Signia about So this a

are owners that a Bonnet other about properties REIT, so, but the to the the kind new little ones, demand? mean, converting there? brand, Creek it's Or because we money are that's by that expand bit there to driven is well, owned I For a just putting of Or know really of rolling this is by something way the group in group that's a up? space

Chris Nassetta

of we a bunch the got and X working we're and The the the Waldorf of renovation of deals meeting expansion Bonnet other some and Creek. space bulk deals, the by of Bonnet to and the Signia, only first conversion next the upgrading Astoria on, is way, hotel with

convention X are new part other The of centers. builds

the One design it best And modern center, So built, modern, the Congress Georgia other the space, in in Atlanta convention purpose et with they meeting World are actually. the of doing there in new next not Indianapolis conversions. I brand next over a we're technology, cetera. But of there suspect going be right to conversion. sight. bulk the build. to Stadium, time It's the Mercedes And other center be spectacular potential is this to may

Operator

question Anthony from next Barclays. will be The of Powell

Anthony Powell

the like Did about group with prior talk saw was any production March? how future Or show in they for softness system trended your the in in corporate quarter? transient quarters? you Can quarters you that

Kevin Jacobs

consistent, Anthony. Generally

in a little at you was terms fourth bookings. the quarter of into I as of that's as the think which the But would and imply the pace end down that for the the normal for touch capacity you is bulk at year, was spoken our in, of for quarter, a this bit, year of than is end position get quarter. go lower it this, the

the you're to as so realize going the And get where migrate you into the position year. down tends to year, for to further

So will softer, segments be think as that it was the X of was but still expected. technically well. strongest the we to a And bit be group the

Chris Nassetta

where gains. view up we right point Yes. And a from of group now books the position RevPAR on end in supports we'll think the forecasting

Kevin Jacobs

all expectations. Yes, within

Chris Nassetta

All the lines.

Anthony Powell

question dividend. gone It's the past stock even a And and your quarters it. Got has EPS allocation $X.XX been as quarter capital focused on price up. for the few

I keeping increase think still this you've yield. talked can that your dividend case? we the And year? Is a competitive about see

Kevin Jacobs

know. the pointed as We just same, it don't out. you I kept

So higher. not drive is any We a intend more level the would the Board mean, yield we'd out attracts taking should think buying have be way we as dividend from that about Chris about that returns feedback dividend of higher returns earlier dollar increase we incremental And we investors. the important. think lot the equity investors it the by to and we the to of about think and talk getting It in We're But don't stock. to I buying back the our frankly, like session, they increases I think Q&A well. on it. the stock. having talked

Chris Nassetta

right. that's think I

we you XX long we the term, how If were the look thinking do drive next X at or over years. outperformance it about over

I strength buybacks our capital can very model. given of underlying convincing of resiliency the a allocate it's as model return to If you model the and says it, as we that think of much

I So on and doing, soon any that's anytime expect increases what wouldn't we're dividends.

Operator

question next David from The of will Katz Jefferies. be

David Katz

the ability sort argument impacting Or there in is, and are they're shared what it is you now, is boundary should And a where wanted Congrats that barrier business, your for on this, the it's in? different customers hey, it's to perhaps just there you it charge impacting way, way last a the getting our some selling of some be mean the to want under That into share just But for be back is side question a so a great like, to we that see cars, and economy and contiguous little right? room to slippery a just I Do but on one bit. that right? driving doesn't of also, Smedes' answer not quarter. go certain do, is an I something slope recognize is not, to you in changing? argument is this time circumstances those. that just forth. over doing

Chris Nassetta

my view it's economy something mean, It's we we have. response. concrete. this in tried it with in say, and of I long-winded I industry. latter. spent not time that mean, the of because and lot why the to say relates our have, that's I sharing of I is the always fast-moving I certainly think broadly start I That's on as it we it to a sort

and industry And directly other We're see competitively, time. folks just are not doing what so we VRBO we'll the or but folks or dynamic a new anybody judge other in carefully, as that it's thing it entrants over are or our else. Airbnb it watching very

I we justifies do at our answer, our that the that take that the asked, moment question are believe the well. we're I things today, focus that which it we away on As my gave from going and judge is should into got the space believe you which it working we I is not entry

Operator

The next question will from be of Miller Humphrey. Gregory Robinson SunTrust

Gregory Miller

the on Scholes. I'm Patrick for line

from of trending Looking do growth the at lot country? given is focus bit, that the Heading South GDP a Asia development international see is India How landscape? pipeline the growth current the China. today in the markets Pacific a where you in for hotels, on

Chris Nassetta

there, very times weeks, just that there ago get India. it we than little I was obviously maybe I year. a a bit don't Yes. I mean, are was in know, longer few multiple a and active

there, team fabulous a have making we're We good and really progress.

relative population, I of, scale we of the are in a and sense small size the in our sort quite to have India. mean, to We

I we open. production in in think XX or that have ways. in than circa hotels various got the We've another, pipeline more

traveling a I from of the in to India China and outbound our the place transforming economy. around just think strong billion world. the the business that to loyalty they're to the but X.X you grows be, you be, of world, rest economy, really to have also coming their we is out other of going given standpoint to from the India standpoint from rate, you of go growing economy they economy got people, business the to are It's every at want If like like have both a want and them brand.

but So great We we sort ago. I are the progress in important for making, for great industry, finish you presence us India that one time, standing we because market us of a I effect. think, would say, in move It's and it's bigger the of quickly us as doing slow the process because couple from operation. economic of years and investing some bigger the iconic get few luxury to, hotels of there. products. more the and the fantastic a China, build Conrad a well, last in real to all of move anytime from the help, in Bangalore network really are they're start the going, hotel in Hilton good in markets with in other a including properties and Honors hotels really and that laborious addition in in will team it's relationships important over are soon much with and some are start But market see doing, building to market an it grinding that just years, But notwithstanding to around of with are a that to world, of in Pune opened growth. will sort there Conrad cadre not to will quickly, an as that getting It continue our the as our reforms not sort in

Gregory Miller

that revisions taken along prototype potentially the now domestic Tru. the market, to a have had ask open want progress you feedback initial follow-up And rollout. some about you're you strong back you customer I just brand expansion. versions are I prototype going know number if to a to curious continuing on made hotels of and that some and initial planned with that to or I'm

Kevin Jacobs

It in is think, going at did guessing lab as a thing us launch, Yes, are you of the Greg. well. and I added get But to just feedback desk, biggest that's we, pretty real-life creating changes we their customers. turns we're the feedback when the actually out desks. made from customers don't breakfast program, we and you hang versus gotten although as need think a that in They of to mean, when we through offering, customer good so we what creating feedback lot feedback then hotel example where typical have, they their a the as we don't the was need a people I good for brand process the like particularly got F&B their desk. as that to to and laptops, out do. use beds they And the we've of

all We think it's open great. now. over, working so got we've XX everything this year. So and We've XXX of well. over got And growing, going XX going really we'll have and well open them deals another is over

Operator

from Robin of UBS. will next The be Farley question

Robin Farley

that know I've you would up and you I fee and been think is calls, RevPAR did. this I gave hopping if don't revenue was suggest. that XX%, unit between around I than so growth maybe apologize color, but your more

then little that go higher? bit a can credit were driver. But fees is that there contract mentioned items, in fee that below that, is terms into you cancellation card of that I $XX like the a a more of is And bit year Or timing were guidance run licensing the rate? assume QX little million you why think fees I fees? detail full

Kevin Jacobs

But that's Hopefully, that's property rather a being rather in large a down, do a so is part York, now, redeveloped building large redeveloped. property for and there. would items Good we New being the payment been it did and but then. related yes, $XX one of about that haven't million Yes. other is might on in talk largely I asked actually far, prepared to really that be fee We call have been coming you question, timing it's that redevelopment. remarks, a But Robin. we'll thus of

in left segment. that year. accounted second So out. X% then, core the had the in license the coming a And driven is fee And that with to We and was the beat for same, into the beat. the timing timing of large, the and fee guidance of fees $XX into little, if RevPAR credit board, across million quarter. largely the obviously, Obviously, was at our then X% the over mostly we that about the million fees, increases so the by yes, for them, EBITDA carries $XX card largely going

our for So expectations leave little it up we question? X%. with the within your of a and bit at higher, segment to still are cover ended X% they fee And decided rounding, range. Does the but that

Robin Farley

without the No, that's nonrecurring increase was, like like in just an is just maybe rates in... higher great. so full fees year maybe to And QX credit a some card clarify, the factor

Kevin Jacobs

as the No. Chris credit And a part fees performance that in actually, and was of little it the But the increase Japan card quarter. some actually, No. Credit in card well. mentioned earlier It with London. performance was first we some think of guidance. greater outperform was core things bit operational increase that of with the we, in in in fees of partially

Robin Farley

great. And more up that, special? items, a few cents. a just think you of but a that, special guidance or quarter EPS went in a I to that's before one that that than special normally No, other cents, Because down your don't was piece that few the thing. one Okay. item guide went bit difference What and was one after small ago. expense and it was The

if... So just wondering

Kevin Jacobs

Yes. point even on post historically more recognition. so have a for revenue The, focus reasons bunch but special items is we after at would this of you what really now

so overall that management think what really and special with the through little from quarter about Post And which the I reimbursables EPS, revenues as the the guidance. talking fees programs. equalize incurred. funded various franchise then was expenses as not the So items increase and commensurate line have to light, run recognition, a revenue you're for item, increase we the EPS was other in run we the We been bit hotels able through relates is incurred. those, those, to our

harm. going going that's so some to to be quarters, benefit. And quarters, In be in it's a some

in And and is that our so neutralized the with we so in concert items, guidance. special guidance more items and in that, changes overall special that's why

Operator

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

Chris Nassetta

your with We'll make other there pleased are the going on. because I obviously time this short calls first know Appreciate quarter. We're today.

we of We into good think look a I some second had Have after talking quarter. day. great to the going the everybody rest we year. with the momentum forward complete

Operator

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