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HLT Hilton Worldwide

Participants
Jill Slattery VP, IR
Christopher Nassetta President and CEO
Kevin Jacobs EVP and CFO
Shaun Kelley Bank of America
Stephen Grambling Goldman Sachs
Carlo Santarelli Deutsche Bank
Harry Curtis Instinet
Joe Greff JPMorgan
Smedes Rose Citi
Robin Farley UBS
Patrick Scholes SunTrust
Bill Crow Raymond James
Thomas Allen Morgan Stanley
Jared Shojaian Wolfe Research
Call transcript
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Operator

Good morning and welcome to the Hilton Fourth Quarter and Full Year 2019 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Jill Slattery, Vice President Investor Relations. Please go ahead.

Jill Slattery

Thank you, Chad. quarter year fourth earnings Hilton’s to and XXXX full call. Welcome

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

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

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

at You today’s can our and earnings to GAAP reconciliations website non-GAAP release call financial ir.hilton.com. measures in of discussed press in our find on

President Chief Executive an Chief then Chris Officer, This for update outlook. Officer, operating and on our the and morning, our of expectations review overview fourth results Jacobs, and ahead. the Nassetta, President Financial an provide Kevin Vice environment full provide company’s current year year the quarter and will our Executive will our and

we’ll remarks, your questions. happy their Following to be take

With that, to call the to I’m turn Chris. over pleased

Christopher Nassetta

Jill, Thanks today. everyone. Thank good for us joining and you, morning,

yet. hospitality innovations, serve We're all was growth record in that we communities the the having year the further our our positive strongest around happy strengthening to industry-leading XXXth We while one report of delivered of and impact world. we're

adjusted XX% our RevPAR For with the XX%, full largely growth for the X% and ahead guidance. EPS nearly year of recent we EBITDA adjusted expectations. grew grew both our System-wide year, consistent

environment weighed we've seen achieving the a on well our market in more continue gains Despite line. to share brands perform Our top a decade. that challenging strongest

our by disciplined business buybacks cap the dividends. power of and market or returning of to demonstrated X% allocation strategy also our model in shareholders form than $X.X billion the more We and of capital

RevPAR declined the business offset in range as quarter range X% grew expectations. weaker-than-expected for gains. the EBITDA in and transient quarter. – results exceeding to single-digit high our the Turning Adjusted performance adjusted EPS leisure

pressured in U.S. results on trends, Hong tensions Softer Pacific. growth Kong in business and slowing economic Asia and across trade the performance investment ongoing protest weighed in China,

of As ahead, I'll XXXX. non-residential but expect we to similar growth than a macro to which potential strong, in discuss investment XXXX positive, impact look GDP the to we coronavirus, and modestly minute, continue top excluding remains the decelerating but growth. the Consumer year line to forecasts call for be sentiment fixed softer

that and up outperform low-single-digits with Forward With group in we expect group commentary. to bookings the leisure continue growth consistent remain backdrop, prior to quarter's our transient. business

supply side the and limit for the in below rate forecast On modestly X% is year, pressure growth the to of occupancy the exceed slightly demand expected the growth. long-term could average and growth is which U.S.,

expect trends of before macro year. these would Given we the to the X% coronavirus, for flat RevPAR growth impact full the

and and relates and monitor our it the carefully as We're the to our governments continue we areas. health with working without remain our it coronavirus, in our guests goes that a priority authorities to to situation. support members and well-being impacted as globally communities best the Now paramount of local operations team saying safety

drawing potential and we've While other estimate similar SARS industry's to tried with are the early on still business. the these on experience days situations, our impact

recovery non-comp. up with comp hotels, would to impact the being XXX basis to estimate to ultimately period, we an the potential additional six months RevPAR growth, a Assuming last year, around outbreak month wind full three assuming for three system-wide six close point

approximately full $XX $XX hotels of roughly totaling EBITDA. impact XXX impact a range, million We would point, expect, X.X our roughly a rooms year guidance net in growth, a million closed. are within which unit in would largely At our point China, adjusted be to this and XX,XXX

our on starts deliver to fifth continued growth. we openings. approvals, consecutive and record capital commitment construction marked development, like year to to our of XXXX Turning

also than years growing XXX of and year day, net growth XXX unit and hotel five our marking totaling XXX,XXX We For more consecutive rooms more X,XXX a opened rooms, achieved of properties the a of across portfolio XX,XXX net we than approximately properties territories. full X.X% to approximately unit X.X%. countries and growth

with more Even roughly our approvals than to our than increase openings, rooms strong XXX,XXX record year-over-year base, we pipeline rooms. or by of XXX,XXX existing of more driven X% XX%

our of starts As a nearly further of construction rooms. high to record the testament XX,XXX pipeline, had quality we

starts net deliver half confident to in In increased growth record our remained feel growth and development least opportunities under We the our decade. XX% several over ability year-over-year years. to with the last future for goals, good achieve U.S. track We X% the strong unit at construction. ability about our our of given global next pipeline our

than Since three in our rooms times. U.S. internationally with go have the of doubled more the size private we've portfolio roughly transaction, size system our increased our we up XX%,

are XX% construction Additionally, in than located under current rooms markets. our of more international

have brands We to brands. doubling portfolio system, nine our of our new added

our discipline network unmatched Our better we stay for us Last our reach guests leverage global effect. and for more more guests month our ability value to the anticipate our needs newest latest and launched allowed owners. customers of Hilton, strategy Tempo development power to by example brand and occasions has deliver the of our

that by market is growth designed personal well empowers Tempo service lifestyle brand efficient and a an prioritize to model. being all guests mid traveling, while thoughtfully powered

at our of customers on organically of As feedback deals created various literally members. we this to from brands, of We're Tempo thousands developed point. XX and based team excited have owners stages all development with in

like experiences. guest basis to of points offering, our are world, year-over-year we quarter, than fourth more in accounted occupancy industry-leading now our XX% program XXX members. Key in connected million the deliver with majority and around using more for than of members live the with quarter features properties million in friendly of XXX year the Digital room the reliable nearly Honors our technology and reached memorable XXX members ended the In loyalty winning award

from money recently the We the hear which system We even on expanded feedback enhance to experiences. music members, world's our our also members leading great partnership of buy. partnerships, Honors guests continue live utility entertainment and Live live access points, greater with Nation can't their our Hilton experiences to company offer strengthen offer tickets and to that

can our and Additionally, members ride points. leading a now redeem kind a rideshare with honors our loyalty of earn through first When lift company. they partnership with

serve that and loyalty to commitment quarter, hire and spouses military goal Looking also XX,XXX by leading additional the XX,XXX our beyond to we to and to operation proud industry we're an our brands we corporate lead opportunity communities responsibility. the veterans, hire fourth industry In our contribute achieved and XXXX. expanded and caregivers system,

measuring During advancing industry named the corporate the Dow practices. leader year, Jones ESG the were the we Index, standard XXXX for Sustainability global global and on

the place member any number States, our one for were was row. on company year also United news a deliver only remarkable great record Honors Change the work have. and Overall, hit they the for We any second Fortune's in development the XXXX in a on We travel to for named in million milestone the the commitment continue growth, to XXXX World achieved hospitality List guests serve year world were us. anywhere to a XXX

As stakeholders. for continue our we of our ability to delivering ahead, all confident to Hilton look we're the in year

details With future. outlook over for results that, call more the I'll the on a our our to and turn Kevin for few

Kevin Jacobs

good and morning Chris, everyone. Thanks

on soft tempered prior estimate versus as events RevPAR In than transients the a leisure shifts demand and currency-neutral quarter, X% by points. system-wide one-time comparable We the decline XX system-wide offset calendar calendar year and expected the weaker moderate basis business a and group growth roughly RevPAR growth. basis

exceeded the million increasing of EBITDA year-over-year. X% high-end $XXX range guidance Adjusted of our

Our offset of and the by better-than-expected as impact performance items was that fees largely control and well greater of lower-than-expected driven as $XX roughly unique license million timing cost RevPAR.

management as and expectations. high-end increased our million franchise program quarter, for to of X% also and performance the earnings performance. beat special co-brand share growth our achieving $XXX offset strong Diluted In softer from $X range line net of items adjusted expected better top fees per the unit

U.S. regional business transient. our points spending quarter Fourth and as performance corporate pressured to fell XX Turning outlook. softer basis comparable RevPAR

U.S. in XXXX, latter of market gains by the XX full tempered For as year. grew points good and basis were the year somewhat weak half RevPAR trends transient group performance share solid business

U.S. XXXX, with expectation RevPAR given macro growth for trends. full forecast consistent the our relatively we system-wide guidance steady For year

largely the the U.S., outside by Mexico. Americas business year, quarter and weakness Canada In driven transient fourth across prior RevPAR X.X% versus the fell

across and year full in trends For XXXX, Republic. RevPAR X%, by South driven solid tourism America strong the Dominican grew and Jamaica

in demand strength low the the to but in continued XXXX, region RevPAR the driven transient in largely quarter, moderated mid U.K. solid softer Continental increase with economic RevPAR Europe For growth the X.X% in by growth by full Europe single-digit across Canada. somewhat to trends grew in better-than-expected Mexico range, by in particular and we in led year in expect Turkey,

largely the group in full X%, good in Europe grew transient RevPAR driven London. increasing and For year, to by Continental international expectations with Europe across solid and gains inbound line leisure our

full steady uncertainty of Continental lingering We phase with offset surrounding trends single-digit across partially XXXX Europe to next expect the RevPAR low range growth be in year Brexit. by in Europe, the

as In the in supply Middle East pressure to Lebanon political down growth the was and in RevPAR tensions in rate. the continued X.X% UAE region, quarter and Africa

X% full down the growth. region, supply in largely was outsized For to year, the due RevPAR

increase in range. RevPAR region single-digit XXXX, year to expect full For we in the the low

declining China fell due the Kong. quarter RevPAR the X.X% in In travel continued the X.X% Asia leisure to protest region, and RevPAR in Pacific slowdown with in Hong ongoing in

and in X.X% region was year economic trends for tensions trade driven year protests. China by the XXXX. Asia in in For fell XXXX, RevPAR RevPAR China, Hong Kong full softening Pacific X.X%, the down full

year region in from the continued by system-wide for our Pacific Tokyo, with offsetting would Summer RevPAR coronavirus, in Olympics For benefit in guidance XXXX, our the expectations line full be unaffected weakness the China. with growth the Asia

continues on on you performance. situation of we'll we laid you out, now, details to stick giving its earlier. specific to try preliminary give enterprise-wide the effect based for coronavirus assumptions thoughts the out But more our As to will Chris play that regional

on EBITDA adjusted for X% billion. RevPAR for We of guidance X% $X.XX Moving growth $X.XX special items to of of billion $X.XX. $X.XX adjusted to XXXX diluted to basis, an we to unaffected expect EPS year forecast full and

on expect the growth be flat. quarter first we an For unaffected roughly system-wide to basis, RevPAR

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

again, to quarter potential a RevPAR be ultimately incorporate on roughly first non-comp impact in basis assuming the of drag system-wide quarter. is growth that coronavirus there to our of our and view preliminary guidance not the the could million to point that are $XX share Our XXX do hotels $XX future closed point a the XXX impact repurchases. million adjusted EBITDA ranges in basis note Please

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

shareholders to buybacks billion the $X.X over returned form dividends. we of XXXX, in year full the For and

the share. quarterly quarter, cash our a Board first $X.XX dividend In of authorized per

For $X earnings XXXX this we in issued the expect dividends. and shareholders our ranges details and release Further to of quarter be guidance the earlier can billion return to results billion our on full and year fourth buybacks $X.X latest we morning. between and found form in

completes any We line This would have to the can Chad, you question have. we open our questions like prepared our now first may for remarks. please?

Operator

come Bank first ahead. Shaun [Operator will Please of go America. Instructions] question our with And Kelley from

Shaun Kelley

sort just So the We you of the and early could on maybe unpack. understand thank there. of very But us it’s for very, sort your all expectation. color help Coronavirus,

as some it. received we've think questions about I

think each of maybe relates the looking just the ground maybe are some But color what very the on sort clear help you're you're people for delays? on us to development you of just understand think of I I RevPAR. seeing it on components could as the

the on talk to it - within about bit sounds little X% a including of you you possibly delays, think guidance some NUG that bit you like maybe more? little just do those assumption X% can And but even a stay

Christopher Nassetta

be of - Yes, would of last half a it part is the point think what question half we my first. what net your take - the our we've said that we about which unit sort if was But way this I in a I in half days. think China. of to maybe mean deliveries mean I Yes in last said prepared roughly obviously impact terms comments. growth the early

perspective in If a you put point. would took of XXX% be it the deliveries out it

the will do We deliveries. China delivered are this that think China are opened not in of There already We as usual yesterday. terms business that year. still We've in rooms parts X,XXX-plus of hotel happen.

a within point maybe half largely So, we the do that think the of reasonable conservative to is bounds X% our to is and X%.

a, preliminary broader this is of sort this the of can't terms assumptions, In evolving enough situation. I again, stress is that that - really

know at we the thing the thought perspective this have to we relative the - But only where data of look bunch at not going. have. thing to responsible reporting and where we We're sort time that that a best give - and to around a science but everybody do was that we much sense historical is use

So in to months a comments sort briefly from in range what six months the as of we we of outcomes and is said the escalation at three outbreak. looked the of impact

turn these around typically things don't And then overnight.

those a of you view to three today essentially a history time. out we those But if see and recovery Another on impact, may prior in of look and numbers. reasonable those. how that look And know. holistic for X-month develop is things, you at it so XX-month be months that's to this seem if we we don't other six SARS months sort when you and play guardrails we again, the gave to how industry and at entirely differently And period

It ripple through involves from would impact NUG. that the

in of involves there'll I've as EBITDA be mind of I'm I overall it both about, it leaving - other It outbound other as for China, questions that the of then China we incorporates China X.X% the scientifically into it closures in couple lesser As a in can the represents I'll keeping and talked park mean, that, business. again of China us company. the business impact all outputs. sure for stats involves and and China and

U.S. the system-wide system-wide If States, to about system-wide it give represents of of perspective. China, revenues revenues. at just you X.X% look In and about revenues, represents X.X% it outside context of United

Operator

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

Stephen Grambling

you're out Maybe changing bit thought a the color partnerships bit more the of your something or et some data from long-term have And in you provide gears think little marketing, to program, personalization, you customer Can the also build the how talk leveraging more program. loyalty as you a about on cetera? strategic. you process as about that currently perhaps,

Christopher Nassetta

too are about, of we - that diving what talked get of engagement only without not of it much highest a engaged, think, look trying would I do we but build getting I want to a engagement. it, things level members at course, say, Yes super can the we is get entire a where higher but competitive. I've level not and about membership And program that up, deeply high level we're as of just into this keep engagement it's look I our and at tier at which throughout ecosystem. to

across the it's ultimately ecosystem Because, direct because in end, what we're and trying owners, entire lowers do for the know that our our cost. better for it a experience because to is customers distribution it's we relationships, better build our

at different value. a done the of And if are years few and - the part it. bunch so, had best of about - we've a been I started of first you was ago, These order, things. think, But, top has it the creating this partnerships

the member, members real at best price. Whether get about member you and So sure as have value. value. deal, diamond our didn't value, best have When when which or But you a they making when your obviously the meaning you're that the you a engaged lower-tier I highest gold think well that an talk points Honors get we that you're today. you're an about - levels, have Honors Amazon

earn that ticket Nation matters members things it of a suddenly and Lyft, the burn diapers it. whether be Ticketmaster it's them reminds all relationship - able and using things, with past buy being with tickets that go they're concert, clippers, relationships to on buying or the But us. or have to on engaged in have have Amazon, our nail Hilton the allow we about about you a And Live to why to you when points,

And and we business. know repeat loyalty that it drives more

can't Nation The think that connected technology. we trying things digital in Live then bunch that a and whole about particularly - room doing and things the buy. check-in, we're is, other on and we're And other things just our innovation when digital technology, once loyal with for of room money to side experiences, that key, a selection, others lifetime they most do members,

best the getting members want a It's about are in to how not to in we are question answer just their that sure personalize that with preferences in element best interact every stay they the we're and the then what but best using room building, them the getting price, they value want. Honors Where of customize to giving beverage. what their they the data in experience. using types we're food And and we're be your them making all only that our of want,

outside the environment hotel with with and the the hotel. interact of they inside - interact the they outside environment of environment How how, the

So, all will continue to to the of we're broadly scale we ultimately starting to build that personalize really loyalty. at data experiences think harness mass

is So on five years is last been the focused across we've thing - that the again ecosystem. in this engagement really crazy whole the particular, really over

so, are XXX-plus members, members over half engaged. you And million and look growing those of at when our

So that lower-tier that are of we high engaged us keep costs thus by whole from us. bunch are distribution definition, efficient with buy that, means And time as it's they of they and help Honors an they us rooms directly member through meaning possible. the become buying us that a have percent know XXs we as members when

Stephen Grambling

leads on growth. follow-up think in up been pipeline, has to where of development software unit the consistent point conversations the there a concerns softening is As an unrelated investor and comes I one that RevPAR

estate? real financials have forms relative stability and and of other both their history perhaps of you strength also conversations do the your financial and assess to returns underlying you to of see As how Honors,

Christopher Nassetta

that's share. thing. having We good best a feel the business pretty talk market developers share, when new property, industry. is by a drives in because stretch highest brands we matters market the most here's have matter. of a where about lot in share anybody and mean for revenues what market absolute they the to about them long I the What is it the This build I average

it like are of happening when what's in the disproportionate amount difficult an development environment a is even So, we getting is U.S.

up Where tepid going mean of signings build, to been had doing continued go are well. our XXXX gone since down, costs ultimately - in RevPARs our that that starts are fact flipped starts have about around were well in is cost U.S., pretty in still enough up, U.S. have We brands to example. cost a are think actually while which getting and I disproportionate. we as the starts testament where XX% using the down an performing a I we're the to financing,

Even we're getting pool. though smaller a pool of it's a bigger a smaller piece

the over we that sort thing a fact and things the a done give notice, five gave a what went reason XX mean to stats say timeframe. other really sorts the little that - years is Great - that I The we've through for Recession. we've over world We've important and had bad over during place. context on the of years is I'd all that's the big good we timeframe done happening what of

overall our But always have grow to available we to that capital been to our build in to customers. is that to strengthen the able where demand a Yet, continuing way and ecosystem we're for pockets so and owners our sort are and grow continuing effect our network profiting. of also, of we're pivot find continue

place. intend been continue of We've world slowing suspect suspect and it U.S. fine, is share big a has job disproportionate continue that the we'll to. been in The low to do doing to a development. it been it we environment will mode but slowing. get so, I in our has I And in happen. we growth a if a

are big pivot we who we're around be point that we have around start global the every and big deep But the to the ultimately - brands strategic more ability we're being and we deals, deals about world why performing more going place very continue a out and more year. and growing business sign deals, and where that we're world well deliver world and we've are That's is with with. an a relationships because equally

Operator

Greff Joe hear end. Our next still your perhaps with question is comes you. Go Mr. your ahead line muted Greff, on unable to JPMorgan. We're from

We'll Deutsche question from that's move Santarelli go on Please with to Bank. and ahead. Carlo our next

Carlo Santarelli

XXXX you'd Kevin about be maybe little driving out a kind that that? XXXX you talk for what's bit Could the I was of as bit. discuss able flattish lower line. G&A If we to little a recall expectations on look to

Kevin Jacobs

Yes.

midpoint think midpoint about relative I - if Carlo it guidance you at of I mean I look of of think prior sort as future. to

do business think at good year is So, just all, better I disciplined We cost first its about control. next versus costs. of And year of better being this about in job control. pretty a the it's cost core,

couple guidance next that which few not high pushed our than more And of XXXX not end of have and non-cash - items of to those to a It's some we unique so year range. - did non-recurring, the - previously And much gives they're repeat bit more complicated headwind. a going up that are a a that. reported us

Carlo Santarelli

of the the then growth unit provide relative XXXX. guys - in both primarily net on split able on kind units U.S. Are to color just any kind U.S.? new other conversions or in between the of to one pipeline the or in you And the

Christopher Nassetta

of is conversions few XX/XX all, U.S. versus years. what not last the was look I for way it's the in And it which conversions, at is roughly but the the been occur most new it would units And most.

Operator

The next Harry from is question Instinet. Curtis with

Harry Curtis

the development a pipeline. Just follow-up on quick domestic

and markets, that relevance on age to hotels age country pipeline of in there is What the U.S., a not competitive the returns In opportunity what being look these are to - international. given the the at begin the owners? older the is As the hotels I'm to wondering opportunity? as development it of an you the travel some focusing competitiveness your around bigger and of XX% and the of

Christopher Nassetta

and a that been I'd great question couple Yes. And other a bunch ways ways. a answer focused the missed. yes. We've primary on That's not we something is in have ancillary say of and of is it that

of market our the for they times, distribution better conversions to gets share, in bigger more and to come said can people difficult operating like. costs different and provides it and environment with a as our lots is ability I've opportunity think first strength as bigger system, higher I have drive they system because get which the The cost reduce want size, into to we because

that one So way where be is when continue grow can we even construction. new lesser to may there

that other - a other sense, new The involves some think developed, construction are in the that new the way are, we've I major that brands of category killers.

I think we Tru It being the where ship. hotels a couple ago, greatest example in over rocket the XXX we have another of a launched XXX, is that, open, XXX, of pipeline. years like

in And not comp to category the you're relevant its today's of question customers' our hotels the bulk why product, are of is all answer set, it competing because needs. respect what the to the to is older saying, with where of, that a

so, And different segments. do that to the in bunch way, to whole by of a are trying a degree, we

product something is at there look a you of is a that. to market. very is think to the degree, that if bit think that Tempo, We I So unique

I in a opportunity. certainly scale in of environment, biggest of terms this think tougher U.S. environment, context it's Tru, entry. share to disproportionate cost how competition, the which of the is And and opportunity, the provide the in the market

Harry Curtis

think, to is what A quick transient particularly back follow-up, do domestically, at this demand going your point. you holding CEOs back business

going cycle? where that is we're election, CNN concerned think early some scenario the we it's headlines? you are that the lifts Now business think least you there Is and at coronavirus innings to a from about the looking receive the of eventually, in Do trade can Fox the that this demand? of economic transient deal,

Christopher Nassetta

Yes.

a of it's think, things. bunch I

of people work budgets I'd make much much on, things and to CapEx going do. say, they're year going way those the how they're First fall all, in of how the is in to spend hiring prior

is has But that not category. not that travel line. change expense those, the in never and travel will - And it's and - it's not sort effect it's a of how that much occur. their they that biggest it is a knock-on the And

But they change them certainly very the the and early traditionally quickly, don't in typically don't it change - they that year early year. in

got think not you about things resolved, I right? think you a were So the degree, right described budgeted to when if things that

the You et uncertainty, cetera, generally, middle trade cetera. election et were global cetera, in of et war uncertainty a

it sort think uncertainties. obviously takes to the of are negatives are its through. pick time some I work not - little there There So, a to on way other

the outcomes responsible. concern And well, are our is be there's cycle. that election the China an the I being most it managed. broad. think that. belief And around of risk. It about world, a coronavirus some quite And in including will know We're And as is countries you are

combination has for take it think other if I so risks. seasons I was budget sort few growth transient And business And it the the sort but of it to a be of stabilize, where greater things of think made tepid.

sense my the I committee our the you over I want weeks over so few to said would I Now, getting it's even of here myself, even know. as last ahead the said want But, at our meeting. here's last weekly in early say, from right, year. hard few - thing to as executive update weeks, like don't the yesterday, I it's that in that, and I to be really get clear, And

They in two see now see we data. finally weeks to the And back. in business of real-time, those a have or Over life. come last come advanced which terms were have started to That's advanced growth to we of all three started are anemic. to transient back started very short-term. few booking weeks, see bookings, are But we've

but to to consequence, emphasize effect people on - be that, a that might I want starting settle lag a again don't I bit. Again down a

But a comments those said grow. we're and and the others I we have those at we're at lead rate, low still I hopeful think mean, is hopeful year, signs seeing of early the it think strength all in transient. consumer And some we Harry believe would group but - segments all as business business be the segments position think do I will are I where are for will transient above charge be that that and given segments given you sustained. we that that and when the look my the we will prepared a little

Harry Curtis

Thanks. insightful. always It’s

Operator

The back with ahead. Joe we’ll next go Greff question move to JPMorgan. Please

Joe Greff

I you going just you ask transient, was but you about corporate in but XXXX? I to view positive you post I U.S. would think that to how that expect Chris some growth did you answered hear there,

Christopher Nassetta

But And goes myself a again update modest. stages as we'll ahead get little then that on. pickup. want and yes, year obviously we're would don't bit you beginning of to the hopeful the at We more I

Joe Greff

your were when then Yes. I that. new you what hotels percentage signings And in at appreciate look last China? of year,

Christopher Nassetta

I good would say the question. would in - that's XX I a - XXs.

Kevin Jacobs

High teens.

Christopher Nassetta

Yes.

Joe Greff

development with I SARS know was SARS back lag you management back some demand maybe different Or you've a maybe in side, with trends? this did company running was you was operating versus a look some and study done this lead to go more at and signs the Hilton it. one the rebound the When in case there extent - of coterminous the different from other? sort the or in of sort rebound days the is And as

Christopher Nassetta

recover reasonably all entirely the different different marketplace. time It was of sort and different same China an coincident Again rapidly. started at pretty time. recovered to consistent. world, they was But they

Operator

ahead. from Smedes go comes Please The next Citi. Rose question with

Smedes Rose

to wanted you questions. two I quick ask

the Tru and Hampton. does have how Tru The there cannibalization and when in you compression it to brands gap of the you longer term factors in ramifications much look there different…? see in Is about $XX, think but continue And is for growth are Or see? on? going do first will for at kind flattish outsized driving we that’s other Hampton you owners? between And those Hampton

Christopher Nassetta

they're competing literally sure at owner Hampton. that seeing - we're data find competing cannibalization. think look the market Tru at there's don't with say, we I'm and we're mean, that Tru aggregate every market not a between would where we you when could because big I and But so can. - I an look any we is

while but XX% the very very performing between well, happening It's a that at unbelievably It's And point high that When Tru at share. look market look about - new when the very mean, price it's growth it just it's performing Hampton at a XX% has hotels. up. XXX way you still is level. XXX. them point not And where still brand. it. you're I it The is a you what's ramping to is it's competition, is talking at is rate, outperforming you have only

what's still spread. that's spread. And will think going so be there continue good We a to There's on. a good

attracting willing being bit little little attracted sort - are are to are a a a These the - little are and bigger Hampton less, some room bit sort little back customers, pay a design smaller are and that similar more that different the of that are bulk as a and that room the bit of in a little want of those to are intended Tru. headed customers bit pay but

perform their So they lane that. we to able Tru Hampton very at have think lanes to and edges, we're swim to because And said, We be looking keeping compete, look these in and never attract are XX both to at is the it that that of a I about sort as obsessive lane a swim they brands ultimately super degree demand but they argue in swim their around mean don't carefully, important doing thing. because main and do going you're occasionally great. from all

still is the the world. brand in best Hampton hotel

if and brand do share in terms think be world. lower look owner the by satisfaction, of I units, going it well is at equivalent it's best eventually still different. satisfaction, it's in point returns strength, but in a incredibly you and think price market to growth Tru the at I its something customer

Smedes Rose

just - Okay. I Thanks. And

Kevin Jacobs

Smedes, the group in alluded sizes hotels and the sample in percentage of difference comp two of night that two sort just terms for hotels, are the number of then brands. and of add the I'd comp in those day this, hotels the each to just ramping but it's Chris of

just in look comp So growth. you when mind RevPAR at keep that

Smedes Rose

to media ask Or renegotiate? those the And would maybe of ask I entity be license that I you, guess. opportunity your to is transfer I that it parameters broadly brands wanted technicality, to willing there's sold, fee a of arrangement been just whether mean, what Vacations to? I And obviously Grand you not to of wanted If - licensing fee automatically? the sort an Hilton an you were has to does around lot sold. or are

Kevin Jacobs

not I'm - not going We're on much Yes. comment to that.

about. talk not to First, anything them should do do, related may to you anything HCV or

And As our a we things thoughtful beyond fee is spun sure we we we that which protecting the disclosure. it about think going Hilton, that I'm to we're think of about, I were relates our When not it make is company, comment. our give which we matter and brand the to things incredibly public stream. to two need care the contractual that that arrangements, all us of

Operator

with question go is Robin ahead. The UBS. next Please from Farley

Robin Farley

Two questions.

you other - index missed if on RevPAR is And if First in question but then the said your remarks, share my I I'm in just I on repo. don't opening know sorry, QX. this

Your worth of less done less remaining. based what the a than like you've last worth year like remain of authorization sort quarter's than looks quarter's a on

February, looks I And repurchase. did any related additional like things to guess the some in it but authorize the not Board dividend authorize did they share

to it running close looks like so out. you're And

Just interpret wondering how Thanks. to that.

Christopher Nassetta

Yes. I fourth don't think quarter. we've mentioned

issues we year, full the the XXX given it positioning seen might flat quarter Fourth the point the up we comparability we've year. biggest quarters to basis as expected relatively increase group the was and system For the up in year. was said for throughout various slightly increase

company. And that's XX seen there. surprises - on the no my So, full in share a year with years gain again, that best I've the going

Kevin Jacobs

this repurchase I'll take Robin And one.

reauthorization I capital on. you about correct, of live to would should think just are of be related think any into timing our we've allocation I Board articulated anything not But think you read up Directors. you and our it incremental strategy, to continuing course and while factually should as to

Christopher Nassetta

we for And gave to we're going guidance Right. do. what you

I So up will parameters. to guidance the that we assume live

Robin Farley

last then And clarification. just

your in the from of seems hurt a remarks calendar. XX boost December because recapping the by that huge points I month introductory the think to when clarify I calendar I or basis wanted just like said it got you think you were QX, that,

didn't I so And about know, if color it. that was any - just

Christopher Nassetta

December the - month otherwise the is the other greatly the small months relative benefit. a and of and holidays very outweighed to impact

Kevin Jacobs

shifts day quarter. throughout of Yes. rest Plus of week the the

it was XX quarter. a that, impact say on basis about did the we point yes, So

Operator

Scholes question SunTrust. with is Patrick from next The

Patrick Scholes

of EBITDA question about due the China, from might talked when outside to at Asian not follow-up travelers as who this or the a what in perhaps about cancellations in Asia domestic impact the you a countries declines bound other point here potential China that correct? any And are clarification, virus are RevPAR be Pacific? thought point? mainly and Just just domestic And you is the seeing such in of possible have you

Kevin Jacobs

Patrick No, system-wide. Yes. those estimates are

on in China the overall the a - in the It's of felt ground XX an to if about the China you are the those quite And estimates. inbound system-wide on share U.S. be basis that XX basis obviously about China So Asia, lion's U.S.-China about system-wide still basis inbound small. on And and but impact will is system-wide is basis outside overall points. points. then of think

do So whole those factor estimates business. for the

Patrick Scholes

any on follow-up when add with products their open your ALAS Shifting issues you proliferation coming brands that talking dilution pushback same some Hilton concerned definitely of about to are competitive owners frustration at the are how the about owner in new the send conference existing here. branded in question gears, Certainly A market? market? you or today hotels

Christopher Nassetta

when Yeah. we briefly talked launch something community launched how brand, Tempo involved. we my I that we're have in when with Tempo issues committee can't the comments with about launch have I that that year. we're similar to perfect. owner is And - process an Like and for - I the deeply us the that, mean, say launch, the Occasionally, last going - process we're worked in we we're throughout owner we I over the part supportive. had super about of our owners prepared it's to how it. every

but to comments about But answering we Tru a edges drive and a demand without their and and - customer that earlier cannibalizing success base segment focused Tru that really Hampton, to we're that think base may can existing unique the have on question that ultimately incredibly around my trying always brands. back about compete, they brands prior develop are our the they demand

we that base that are ultimately, the broad these I owners about so obsessive development But of And we given not a us it. of we a brands, lot have at that, brands involve worried about with given of am XX. particularly in

competitors. some a fewer have We of than our lot

deeply objective not a particularly owners, pushback from concerns. discussion are I And is in so have brands. develop well, - helping I'm owner not view us these a involved had I've never has with lot of an going of so to and many that say honest had had so given them My

Operator

The from Crow next with Bill question is Raymond James.

Bill Crow

Tokyo wondering details Kevin see every on impact cancellations contribution markets or you're The a in seeing and the on New Paris in Olympics? the appreciate And material elsewhere. say first started point whether market impact of on percentage at to Coronavirus. West this related a or I'm is and the to Coast the whether any you've some question York or I U.S. different. But certainly the And bigger just

Christopher Nassetta

So any And we business to as in seeing usual. first is expect the gearing activity not we pre-Olympics bit up cancellations speak. - fact, be well No that second part we related is a as Olympics, are little easier. to

the changes that to we and that of of Of breadth terms have the things if guidance our were virus course, the bad. update that again if if - something were reach in - would things

easy. one's that So

correct. the markets second trying of size obviously have are Chinese it us point, higher We're inbound. On that for concentration you're to There a

size Chinese inbound. for it trying We're us. to

in others our to be basis, York it only up more international New overall context, a West I like and you concentrated gets inbound markets overall cities would is size X% might differently. bit give on mean an just that Coast cities. gateway in about So more and those key XX% But about to it little

And that's all not inbound just China.

cultivate that so outbound the beyond to that China one relative not change and while said. we've really what basis working hard we've So important answer an is to all a market going on impactful been it's

Bill Crow

going my of of on areas that's all inflation follow-up pipeline. major I cost trends with and thing on understand with we seeing but labor to going categorize And And the focus. hard is U.S. then similar sort on cost U.S. the and Are think globally? inflation? Are your you And inflation what's construction you that in in I the a seeing what's know

Christopher Nassetta

terms I everywhere story the sort broadly go. question right your would that is to costs is you increases a the been world. big place the U.S., biggest I and seen implied is No. mean in But that and of you're it's different around on world development for the in The say cost we've larger of our markets answer pressure have terms of no. input in

still two but Now still years, costs to was importantly, were view they're But growing. double-digit. going I going they're moderated, down - not input high single-digit, would four they're at low in up those look have our those say, last you the if

a we what bit sort of at look little above that's XX%. versus of sort see you now, X% It's right If inflation. X% to like

RevPARs going that a pace is they're that in up exists, less. but going the aren't again has implied up much. up. All the questions it's bunch been So of going at pressure which

the brand means entire the portfolio getting again what And and having are - of industry done more leading each brand has and market development - the the market what you phenomenon. most But share that share if brands will been, across that of is activity. U.S. is the by an more financeable impacted an individual this getting our markets unfair with that we is big we're

Operator

Stanley. next The Morgan of Thomas question Allen is from

Thomas Allen

earlier be like it comments seeing Or U.S. bookings there any in past color qualitatively, kind feel the maybe in Is more does quantify strengthening bookings the when way it? weeks. X% your would versus on up of to following seeing we're you're like Any RevPAR few the to X%? over about helpful. Chris, some back is

Christopher Nassetta

evasive, saying, Thomas, two of was of don't weeks really that into led be or weeks I a early data. to three couple I but want it's

say a showing wanting to to to you it's to to And give be gone than - flat flat negative to positive like I growth. other color no. lot whole can't of sort from So more wanting

because and you it that good like feels gauge too it, we'll we're just works be it of and we'll have is can't give travel season just quarter, whether It's in have I part a a early. The one report or every So the of the into it's to because back, we'll January. little transient data sense more news getting year - better bit business two. the first like

The is of first wants travel. wash to because part of nobody January a sort

can love you moment. just most the don't to color at give more. the I'd of I sort more. I have give So That's

Thomas Allen

just on And the two NUG then detailed questions. growth

Just how and on time construction? has any you. Thank of update attrition then or closings tracked, lines

Christopher Nassetta

some really last that, No yes. done Outside a likely we we it. few longer on little that. over I pre-coronavirus cause Attrition you terms the seen like the mean, amount years has obviously and the been few we a tracking not it the last five have it. things of it will delays have of about if look seen over take look we more of same. get to overlay at at why months construction will difference when years the delay in that And which gave of is

sort in yes. all into terms that over our technical But to. thinking I is of think our base last of and continue NUG of we've baked the years, few the guidance

there. So material trend see No goes. as Steady on we nothing that attrition. big it

Operator

be Wolfe Shojaian Please from next ahead. our Jared will And go with question Research.

Jared Shojaian

M&F else guidance. say something you fees the more license would coming unit than guidance just XXXX there RevPAR that together out? you environment or Would So is incentive fee a that's slightly for RevPAR lighter from higher and growth is maybe fees or with call

Christopher Nassetta

guidance. license included all fee fees is of the First in

that I the of Jared. nothing bit little was more talking and that a than it's again, earlier about So cost control

Jared Shojaian

idea the introduction been, Tru then anything And to below any strong I talked on do front, to has about what's opportunity that you there's Tru right guess is this announced point just even introduce further brand about how next where you've that then, think at you now talk Tempo? now? related you've can a price And

Christopher Nassetta

two all been I I'll luxury lifestyle. brands. said -- on second don't we of I've so. Tempo consistent them We're working were also different think on pre-Tempo of we upscale I one have not in saying the I've lifestyle. answer first. was lightly mean pretty first been working

to will rush not lifestyle some at luxury a launch We're a in so brand. And point, we do honestly. it

all and brands enough XX really our to year. accomplish they're launched with we effect. able make sure network three rate their We've commentary, this to want want brands working. think earlier year. launched last to to be we accomplish to is I give birth them basically one We the proper what

bit we've And get so, working take we're of working ones and well. to a and a there break out little really got going the

environment lifestyle environment And by not in be less be gargantuan - someday, it's to of in And is we'll do units. in. set a number opportunity anyway. to not environment, something today's It's and brand in luxury going any we're the the going

we I to going. get our have focused and So on want it teams launched

mean, And thinking other like operate, OpEx total that a things than the and of would of CapEx lower relates based deliver to don't would to think reason so return to launch rate better and be capital XX% the Tru, the engineering it would in I XX% on returns, but we XX% seven Hampton, a I say still part cost make which like Hampton that the that we it As you owner took where of Tru. I I'd to and because, so. the long say is cost get deliver attract on unleveraged but how to took at or it we magic. years can that's were sort build out, a was do return stabilization you XX% going to is, to we of know an would have clean lot on, figure a engineer like, trying cost a product, it a

it. And do able to lower engineer it the it's able be where way it price you can really And It's a hard. those lot The we importantly, in of a to sustainably. spent returns. gets to doing the be to harder point, time get it hard

able to build problem, to it cost. you've to be the got So the

to You've be operate got efficiently. able to

to it or go harder of the it go We took and of it renovate work a in out in the keeping these Tru, over gets of but its because can having lower the are towards keep period in it of ADR, and lot higher engineering reserve years in longer time. in you revenue And And XX to those to returns. working. over got to able absolute percentage a terms fresh deliver it percentage be you XX figured up you order that or RevPAR things

it I for believe very lower or going not that, impossible. point be would hard us to a if anybody than price

over maintain got old, XXX in not we high that the years a it's of much still these lower force a that. never, very the say sure XX XX can and working years time span And time you because brands product to are killer way investment long to a are hard these I so, never Hampton we last deliver have that we of you is category over - think on any years, to XX-plus they force time of go price point that time, relevant. returns ultimately you and like stay arc have to a that a make -- have long And but brands over that in brand enough with can in were

see not do no. doing us I So, that. long-winded it's a of way saying,

Operator

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

Christopher Nassetta

information. We for covered Obviously it you to or you particularly year got out, there's was parts coronavirus. We out a the give we will contours how today. guardrails keep up best as to do our you with more think to Thanks to some everybody it. We in territory. with there about helpful. moving of give time the APAC and and plays lot Obviously, some hope

super in Thanks with and the XXXX and off accomplished first I in for we excited comments, you to a we'll about what quarter. start talk As my said is again XXXX we're the great after time.

Operator

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

You may now disconnect.