HLT - Earnings call transcript Q1 2022 | Hilton Worldwide Holdings Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the Hilton's First Quarter 2022 Earnings Conference Call. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Jill Slattery, Senior Vice President, Investor Relations and Corporate Development.

You may begin.

Jill Slattery

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

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

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

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

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

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

Christopher Nassetta

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

begin, sadness like to Ukraine. in we events a continuing unfold express take at minute Before I'd to our to tragic the

to Ukrainian humanitarian room across to efforts. partnered work donate our we've and community with and million take promise live to our also our Our American hotels nights communities and up and we've seriously. have communities places members support ownership always relief been the a steps to refugees guests, to taken part we Express the we make of to the Along Europe fabric serve, of and protect team better X with those very

and Additionally, further Hope to with Global aid. has Kitchen Central Project Foundation contributed assist the the World humanitarian to Hilton

and thoughts peaceful and to this by events hope everyone our We these crisis. resolution family impacted horrific a for are keeping Hilton in our

culture purpose-led as uncertainty well have led us and as Hilton recovery. Our values through

over around X Hilton hard and world a members challenges as the last have future. navigate the for positioned team worked years, the have Our the even stronger to effectively result,

way. to with business we recovery, to and the demand premiums that will optimistic capital-light coupled share to significant drive flow, in model, disciplined and beginning us With our $XXX approximately RevPAR year meaningful earlier of look March. completed buybacks. recent Program we to had fee-based million further strong exceeding which anticipated, we resumed capital were expectation, to in our As continue are cash our repurchases Capital Through we return shareholders free performance have will enable ahead, pleased Return performance industry-leading a than April,

declared share strength we the dividend, $X.XX confidence of in further recovery Additionally, quarterly per continued our have and the model. highlighting a

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

U.S. in approximately RevPAR Turning Despite related business XX-point increased from sequentially performance improving year and was continued the rates In rates Strong XX XXXX XX% up points RevPAR compared of XX%. of XX% X% up prior EBITDA XXXX, choppy March, weekend continued acceleration the transient in transient were only segments. versus to up down below approximately XXXX improvement to percentage and strength the shy down XXXX. fourth Overall large X% midweek. quarter, accounts all drove group at from picked mix system-wide RevPAR levels. exceeding levels transient SMEs from XXXX comprises X% of demand to XXX%. business acceleration RevPAR given XXXX in more revenue the approximately XX% trends system-wide by March, levels March, quarter, with quarter prepandemic business January XXXX. increased month-over-month now across versus leisure compared In to from trends meaningfully declines trends just accounts, meaningful to driven just to adjusted EBITDA RevPAR X% results trends than with to pressures, adjusted Omicron large year-over-year, up with start a driving results. levels. was boost only versus Improving total along with with peaks, transient March segment XX%

largely up For U.S. Weekday up up overall all and future periods rate transient was booked and revenue for X% April, by booked revenue revenue with weekend XX% room XXXX versus gains. nights XX%, was to rates XXXX levels, up compared was X%. XX% up driven strong booked

total more improving throughout approximately group March, demand and side, recovery, of company versus XX events smaller quarter. RevPAR conventions to social the while the XX% meaningfully was points January. than continue lead On and improved group In for levels, meetings XXXX

than Additionally, group revenue is up down XX%. just significantly quarter levels, X% periods tentative all total for first future revenue was Compared was our up booked lead XXXX to volume up to rate X.X%. booking meetings more all future periods for relative for XXXX, company in gains and the with

strong, Additionally, in-year in the versus are XXXX. bookings for digits up rates single group new arrivals on high

As with tracking second the levels. RevPAR we into at remain balance optimistic. quarter April has the momentum XX% year, roughly to look continued we the of XXXX Positive of

forecast risks growth remain macro exists, for While healthy. economic uncertainty and

likelihood ability our to system-wide RevPAR the think that during third we'll is We creates Additionally, a there rooms inflation a reprice natural time levels reach real in hedge. quarter. good XXXX

given market year, leisure job full strong peak XXXX RevPAR demand. savings, pent-up exceed levels and consumer a expect we excess For to the

We loosening roughly from by with profits, supported expect to demand corporate levels business rebounding year-end, restrictions. and expectations back businesses, rising be transient big travel to by XXXX

On RevPAR half back meetings demand side, expect the business year. convention of group we be into accelerates the year-end, as company of at to by approximately and XX% the XXXX for levels

to unit index more leading performance. added powerful drive achieved RevPAR out quarter, the premiums X% we On front, commercial In our XX,XXX and development growth. engines and rooms the than continued net

of flagship fantastic stronger even Building usher with brand Boston portfolio expanding With to Asia We U.S., across and We Pacific innovative milestones openings Orleans. dining Homewood and geographies. Asia our lifestyle Asia the region Garden strategic travel. and and the discipline Hilton the Inn continue XXX,XXX in last also in to our extensive meeting commitment our the Downtown of X,XXX quarter. pipeline representation our us than XXXth Hilton and a rooms celebrating in growth, our deliver a Pacific more fourth in and in the space, our to segments with a the quarter's on puts opened continued an hotel important the XXth Singapore openings, design, position the the grew Canopy of on strong largest momentum, new versus our we Canopy in with era debuted up property is of contemporary opening experiences year-over-year and Orchard. New to Even we room

and We luxury We new Suites lifestyle signings the brands demonstrated to upscale in destinations Cannes competitor Netherlands. Maui the and Canopy to lead Nashville. industry sought-after further with and way like Sebastian across signed destinations. of lead the destinations and with globally. Downtown Conversion signings in to Spain, We European bring continue DoubleTree most France, new the San the were Residences, delivering world's and growth Properties overall HomeX to we Islands, exciting in Waldorf brands, exciting expand our forward signing nearly world-class other and conversion-friendly the County, our development Tapestry properties recent of Astoria these surpassing has with quarter months, the Curio commitment portfolios the Sonoma and XX% for the Galapagos and our In California. all in year-over-year in conversion to up signings. unforgettable service & to continued agreements Germany Hotel Sydney, Austin look Conrad XX% represented experiences

occupancy, our quarter track to are costs on rate X% shifted are we and Digital to continue year channels construction our to more of roughly few to and customer years. by to ability leverage pre-pandemic total demand heart in the continued a bookings decline quarter, per our for led as up them continued growth Reliable And and membership of personalized grow. guests growth OTA to to XX% group deliver members. Honors XX% than were more confident engagement quarter million experiences. Honors in and to are XX% the next we versus year-over-year to starts, in In as to mix. grow nights business first represent XXXX. increases mix members pressuring our of approaching X% over in rising is our that flat levels for remain Hilton friendly continued service grew Direct. average transient offer member the return the accounted While XXX unit net at XX% Direct X% even to growth of and promise the the direct bookings

as our of them we of team our of as day be back recovering and impacts we am we more guests hospitality, because a by recognized culture Great the the hotels. every that welcome To inspired from to continue It's the pandemic, As Place continue dedication members of Work. our to I

for something I'm best Fortune details was the the and proud Work, for work Hilton our named recently ahead. to call and more on Kevin by fact, in States expectations the the #X In over to results I'll to Great our United now for quarter Place company in turn And the of. truly year Kevin?

Kevin Jacobs

everyone. morning, good and Chris, Thanks,

system-wide XX.X% to System-wide year Omicron prior XX% During by grew a XXXX, on variant. the the RevPAR compared impacted basis. down was quarter, the RevPAR comparable versus currency-neutral and

continued was recovery million up both leisure restrictions. Following corporate $XXX quarter. and in March, year, first in grew slow segments Honors demand by demand. franchise in Management in fees. start loosening was a across seasonally and license continued the EBITDA fees Performance demand Adjusted strong all picked growth. travel meaningful rate driven reflect strength to regions by the the driven and XX%, occupancy travel Results and RevPAR improvement by and driven

cost results. control benefited Continued further

some loss Japan, results. operating leased particularly year to a start due posted and at is the portfolio where at for rent the in the also Fixed our quarter challenging of pressured payments the concentrated. portfolio ownership Our properties the more environment, of Europe

forward. strengthening However, performance March. quarter, with by fundamentals, should driven performance coupled discipline to Europe significant throughout operating in continue demand the growth across cost Rebounding going improved in drive

For earnings adjusted for $X.XX. per the special diluted share items was quarter,

performance. regional our to Turning

First U.S. down grew quarter and versus comparable was XX% XXXX. XX% RevPAR year-over-year

the arrival first Europe, more grew demand, March U.S., modest with the solid versus the travel travel weighed and and to down restrictions group segment and was Middle restrictions XX% but Americas year-over-year suppressed and the XXXX. demand restrictions and in performance countries across Europe as resort East than season. the improved improvement in quarter reimposed and exceeding and the first properties XX% easing down down lockdown loosened. The down business continued by outbreak and Omicron particularly the X% up Omicron RevPAR was region percentage XXX% points the China In spring variant travel in versus to less Omicron X% RevPAR in RevPAR RevPAR led was also of to following January outside Asia strong region, year-over-year XXX% beginning In with increased levels XX and in rebounded to cross-border transient quarter. domestic XXXX. RevPAR recovery region, travel RevPAR XX% strong XX% increase grew XX% of on lead the year-over-year Pacific the accelerated quarter, travel, marks of and The which Upticks March. over year, In border in saw benefited demand. XXXX. to leisure as RevPAR at demand demand and the XX% down variant While the inbound down from Travel the continued was loosen an Asia in international year-over-year XXXX. benefit the break compared at XXX% Africa to the from versus as Performance March greater XXXX. RevPAR Leisure demand was particularly of The in recovery quarter. rest versus suppressed in demand for region contributed March, course increased controls Pacific XXXX. travel XXXX compared February, In quarter during leisure travel. XXXX,

Turning to development.

units first the As net in Chris grew X%. mentioned, quarter, we

the pipeline sequentially, quarter, of under XXX,XXX the at over grew and construction. rooms pipeline totaling with rooms Our located XX% of the U.S. end outside half roughly

developer Hilton-branded our confidence robust and brands. strong commercial industry-leading We for in engines demand continue demonstrating properties, owner see and to

in increase X%. approximately year-over-year, mid- expect For growth the of to and high-single-digit to range net unit the year, we full expect signings we

guidance. to Moving

second For the quarter system-wide RevPAR down and second quarter, growth X% or to we compared to be XXXX. to XX% XX% year-over-year expect between XX%

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

X% of forecast to more our to between at the Relative of XXXX, share RevPAR to special forecast billion, growth do EBITDA. repurchases. and RevPAR than to between note adjusted $X.XX XXXX adjusted that guidance billion We we full items, incorporate future adjusted for XX% we XXXX, growth and midpoint, not essentially representing $X.XX ranges and For and down We $X.XX expect XX% a between diluted of expect Please the year-over-year recovered EPS, peak XX%. be increase $X.XX. year X%. EBITDA

repurchase had in per As approximately and authorized we which a quarterly Chris in the share cash quarter. April, the also March, through during program $X.XX mentioned, reinstated Year-to-date we buybacks our been $XXX pandemic. our completed suspended second million dividend in share of Board

the and For continue free After possibility delivering future. our evaluate of details meaningful that our be target billion in to completes our any line Further first can have. pandemic we $X.X modestly substantial results the returns proud form to the expect flow X.Xx. morning. cash earlier we Chad, a We and in this all pandemic, in the prepared range our ask with please? like we may We of buybacks confident navigated ability and found billion this X like shareholders to through business we earnings and the our Overall, question. strength leverage return you resiliency based would to how This would adjusted the release our generating demonstrating morning, issued and so full and in range first end for we during of buybacks remarks. you the to can quarter questions dividends. remain the speak are question, between on EBITDA the high assuming to yourself model we higher of our shareholder have X open limit of now of you the leverage continue on and of year, forecast $X.X to dividends, to target we

Operator

And will Instructions]. [Operator be the JPMorgan. Greff from first from question Joe

Joseph Greff

year half? growth group rate of relatively transient comparisons the versus blend volumes, the ADR Chris, RevPAR given growth growth volumes, in how business full ADR much is does guidance of higher How occupancy-driven moderating in tough second your driven? and second just quarter and in leisure impact and the

Christopher Nassetta

picked strength able commentary prepared we because in wonderful, in as continue has minute that. that, And to on I you a gave the of we much as we of every demand we're I to comments, can up, every the seeing. that lot mean, had day. expect do been we as have do will to we're I giving Yes. my rate visibility mean, as of hedge and inflation to we able that reprice sense said represent we certainly be growth

largest net-net, the We growth think part expect on, rate. goes I as to well. come year will rate by I expect RevPAR of the as from we growth think be majority obviously growth. it driven occupancy to see But

In remains trillion I accumulated they terms have in now, the mean, number still leisure, excess their consumers pockets. broadly quite of of $X.X the right I the is that savings during strong. pandemic segments, think

have out lot and experiences. people that to still really more While haven't been there's traveling people year have a maybe than and want of had out get that they people lot a a of ago, lot a

that People I now world bank in a not broadly, but employment. of think here world people lot feel going their we the quite world. place, Western U.S., accounts. in so And the Obviously, in And safe the certainly a have is safe out. have money in feel everywhere full big the pretty

summer, in There's planning months, more we've stronger seen of And group side going is did last lags more of ever we to which year probably return notably, leisure well, the seeing, I that, uptick ever over something office, know. last had, even group nice think business to side. back the as seen, And surpass mean the so transient, we stronger. little and biggest bit articulated we've the to people then fall go get pick into only of, breakdown in couple and we large leisure we'll we'll certainly summer We a this leisure was but now second we where involved And seeing as have was March on are on the seeing business get biggest And and continue. all what summer. only to assume I even as the The up. half we see I to I as even which prepared April. the to we have transient you very we're better. back, was in better expect start in and remarks, XX% April, commented very can my the and summer to a corporates the was And had we've down. we're see seen we don't data in in think strong think as see business April, but and are return broadly, the certainly Kevin more on expect come prior -- the transient

businesses very, very, strong. very lot strong. Balance pent-up of have very Liquidity are for strong. a travel. So very sheets demand, are is Profits needs

of all on and of And the much second where half group I in the that, start consumer, I think of there's but which so demand, pent-up side, with icing the demand, new cake of then here this going what's just so will think year combination with into the the year. converge on then next is and the to sort

return the I forward-looking are, us that which Group both the us ability to obviously capital our to out. so to where in a but the that drive both judgments stats optimism and we good side, of place gives on like term, lot I the our seeing but on particularly the feel booking power gave, about reason only giving are like. but a the led makes also industries -- has was rate we again, to But side. pricing really on program the guidance, certainly trends the far short demand I the puts And think and intermediate on is did side, about transient really the us side,

Operator

from from Santarelli will Carlo And the Bank. question next Deutsche be

Carlo Santarelli

Chris, kind probably transient a of bit you that business believe, couple talked hundred back little obviously, versus, is And Group at closer normal a to of XX% probably about prepandemic. mix. its was XX% I below

stuff comes in do back kind occupancy $XXX, with believe occupancy kind general, you which that power think are $XXX-ish? were and you full maybe that As XXXX XXXX I think have a what and kind of pricing of commensurate levels, year about of at levels you

Christopher Nassetta

-- the stating Yes. commented Well, I of prepared bit let probably in because worth terms my first, mix, a teeny me in it's comments.

mix XX the pre-COVID sort minus transient XX transit and business leisure right, of was transient, group. or plus XX You're business

I look driven sort the pandemic, call, of the of at, and sort what to the of went If XX would group. business bottom it leisure you XX recession by transient, XX

it's for Now when much XX I've that maybe XX thought beginning, this and up business this saying and we transient, X XX the sort been was leisure And years. crazy, In of wake pretty lot so get but group. people fully system going we other side that we're the And through it, awful business like look on way our did is the flushes on to and it an that. to think I pre-COVID. mix of it

I so it -- I in I not transient certainly more 'XX leisure did think will it But look it think , regressing 'XX. will think elevated And the like probably like is maybe it a while. look for looked, has it mean, than and remain and when -- will in we to

be group and think not increasing supply demand which as have of next year, next enough the have they're and is we is, not demand not we'll getting demand, segments lot half there's supply midweek is of economics, you meaningful pressures, what's sort it's terms and being -- the power more in the only and going comes pricing not all and of decent think laws broader in the with well. our and that it, a and a second of but of that's demand, to just if starting added, because that's on then increase going in base laws so suggest to which product lot we And there's sort high case of supply year, pedantic year a terms and a the in I of pricing about I of all compound with and alive In the should. increasingly back, that

Operator

The question America. comes of from Kelley Bank from next Shaun

Shaun Kelley

probably the end think already That's quarter. but you only running mentioned obviously about kind down dig provided at to of you overly the comments, Not I Chris, of top into second April X%. for the this, in prepared guidance the that was

pretty a of So of that? the kind optimistic. I could takes help the us what you've bit all -- just just think we little get you some take more that for what than better things And But be would it conservative? in and/or you maybe factors out have to laid sounds maybe guidance around might to reconcile puts background and be the little led a better than bit what

Christopher Nassetta

guidance Well, we the we Yes. gave. mean, the gave guidance I is

mean a I -- all are there of Shaun, question. it's First I think, -- good

comp this certain issues to to -- in demand But see business that leisure in I believe year. an strong going base listen of think we're few through just and you Carlo's group year said a you and transient we there are next to if quarters what increasingly the -- leisure question, months. strong honestly, into some very base and response I replay next if we march continue as

something think So we're we trying strengthening. view. guidance on in weakening our to there's think things point of going signal are a We from not that

Shaun Kelley

reevaluate possibly a that to the but in and does still, go that about of return leave is as holding quick in bit about super that $X.X it? even past times a hairs a what you target But maybe the billion just leverage you Or of a -- billion couple should that little mentioned capital have of getting encouraging. you there. would split could we're Kevin. follow-up, be, you've obviously, you a specific sort room for just Does revisiting probably the bit to implied And to little Sorry talk what higher $X.X guidance here, target?

Kevin Jacobs

high this prepared have garbled, in little may that been end my remarks Shaun. it implies a implies X.Xx. the it of Yes, but that mentioned I range,

lot sheet potentially the think We and the can that shown higher increasing over leverage said And still time. we that can given we've said in through. and my yes, uncertainty to that, handle a level the prepared leverage what is a leverage about a balance went in think higher level of of just embedded world. continue there's remarks in I but it business So handle modestly we of -- it

at starting effectively high And with range, at the midpoint there. take so end X.XXx the we're we'll it and the saying of increase we're by from

Operator

And the Thomas is Stanley. next question from Morgan Allen from

Thomas Allen

Just or growth. of in on level updated the this follow-up confidence gain year? timing X% to are going? thoughts X% a how couple What's questions back on developments of your Any in guide to X%? just And China

Kevin Jacobs

No we're sure. giving you problem. we Look, guidance. the Yes, --

were mean to they So we Obviously, in achieve getting the lot this to remarks, and year we're we highly back the over in can to that. to back getting his mean start next need where handle a is X% starts Chris said of confident and I years, going before. deliver that that back it. on good construction a that's going where pretty I to stuff have few it that's were. X% progress, mean to getting is we prepared to going on

I think on And our starts we deliveries year, been going mean, think, be then -- to this X%. about conversions. to think That We're first prepared construction to sometime rate going some remarks. we back X% that in that's in. that we of will maybe in We we then of think up, be run consistent pretty going mentioned is back rate higher flat XX% are up We be saying. good that the XX% which the were XX,XXX so help we'll year, of year, we'll with this rooms of run to And up by in about some basis, conversions. run will and that they're XXXX. will a to rate be filled to a up in year-over-year. in rate still the down. a Conversions, down which slightly think basis what we start quarter to -- we've be or be get XX% Now this still around on we fill international, our think, is going for in U.S., think to

Thomas Allen

And then, just China? sorry,

Kevin Jacobs

now the a much bit yes, down what's in of in world, China, a that's and Oh sorry. culture, Look, China, little sorry, face-to-face is fact locked that that going Beijing, very Yes. the right? part Shanghai, So on other places they're we starts. we're more year in slightly we is than we going last about terms XX% we're to construction this think rooms stopping still open but in think going to signings temporarily, year. of China be did up And in

And we that pent-up what's product, get the around, going kind on back the China. as so of once start people that we'll can past once sort in business think demand and you moving plenty of on for there's usual ground, there be to of

Operator

Sachs. is The question from Goldman next Stephen Grambling from

Stephen Grambling

few a about up On it bit the years? guidance, looks next investment picked of rate the that the is contract versus And the in deals normalized level your investment future mezzanine a equity? it and straight like levels. Or we over versus just acquisition coming cost side, in a run loans pre-pandemic How form should in think interest? this is about

Kevin Jacobs

sure. Yes,

Las some little It are bit Beach and story, year There's calls, of deals. prior and elevated of ones. World a Vegas X never last this not we've that, a -- right? It's start. news it's there, -- from mezz on up almost has good is the for than XXXX. a great mean -- Monarch to -- deals was pre-pandemic lower like Resorts and or here we but support money. bit year's inclusive little levels. it Last is it's as say of credit and It's handful about into look, a money bit entirely do Loom a over key all that key that a think, that of largely little guidance loans like -- big almost I year I talked entirely implies

those are to so deals And great win.

deals, around their as think the I'd in we for overall year little about. our these last think to like sometimes Some lower to require still XX% our of than what for I they from there high will Monarch up And and year the bit acquisition them we'd as say great and deals in conversions expensive they're we've think couple our we'd deals, at like deals. whatsoever. share a And in contract continue that win support so cost competitors. only fair holds be I year, and are little a of -- more This is, capital of our to year's versus well think I Beach, guidance the end, of because get than bit pretty of years, next of think it's no still implies talked the XX% it our us closing

Operator

The Katz next Jefferies. David question is from from

David Katz

I to to the back around your to maybe starts, because and bits a on that notion chain more of you what construction guide just and et into cost and hear perspective? materials. from NUG baking elaborate pieces and you're Can your bit cetera, do of continue and availability we go just thoughts wanted supply

Kevin Jacobs

happy David. to, Yes,

think look, factors up. well I the that, are right? known, Input costs are

in tightness labor markets. the got You've

You've got of commodities. input prices in terms

You've got financing.

roughly level just wanting digits optimism easing not, in up I -- in you're be that you think our bit And down All slightly actually same for would construction the at will right? of materially. guidance, outlook, mid- to why XXXX. year. get that in this to while. actually product elevated. read, it's the the up. for what terms believe little the based And being of project demand of year. but been the or the it it's still and it's And optimism people case factors the product we a the up to where this which They're has the started, signings held is a the moment, that's be about. talking XX% into by to probably back single they baked starts Demand there's flat all were down high mean will Otherwise, for on be they That's despite

X% XXXX believe our in X%. up where is back that gives what back go are starts will to confidence us were those to they So they go factors roughly They'll to the all And time. some signings are are like time. of fact there. there think that be then the that things And will our we over for ease and our probably to NUG that will period cyclical,

Christopher Nassetta

think said is, friend and add The comments is I in it's earlier right. to thing friend. only that, Kevin owner's inflation and sort that's our his our I'd of

a all able done every single So we've if every standard same time, of we've of revenues. the it obviously, labor into which with what the and pressures, the But are hotel rate at a granular, to level. you as to created with XXX% result up. going inflationary during of have in expenses drive the lot of you obviously, brand, put costs been system COVID speak, sort driving gonkulator, look up, savings going efficiency of we've been their aren't through for the the At at so when

a increased So our costs, they've a on brands of positive got positive basis, are we leverage all very in got there. of they've are the labor sort comparable that face of Even higher. -- confident across margins

cheer great able with margins doing out, going also They're great. our on recovery, they're So think going the owner Kevin optimistic are in equation an pointed our that to are enthusiasm and be looking rightly drive to be community driving people the brands is, why, at signings where and higher other they're as we side. to but are up

little market year Now increased which XXX input in to financing NUG the we this having conversion said, a will we're time. the last world. relative And points conversions of have to delivery. success of Kevin as going to take have probably, to total basis that, all great by We're meantime, the of sort in cost, bit continue

feel about pretty we good So we are. where

David Katz

more use quickly X like looks in One, to follow gonkulator just strikes there a Are the aspect sides deal friend bit can the it The up of in positive and X a you as them ways leased may I it. future that with owned recovery has other of If challenging. and that more challenging turn Okay. model the which kind way? potential it me some is and really into your more and a in of time. this the aspects

Kevin Jacobs

this recovery is improving, implied particular. Well, portfolio the parts world Europe first from a It's I'll -- and in COVID in I portfolio in around. starting little concentrated been this been all, bit that turn of I out a my -- that or sure. Japan, said I performance look, perspective, start to in behind that the Central with of have is remarks that mean,

at meaningfully contribute it rate, than recovers, years higher our much the going that rate fee grow is. will next over the As is a business that to to meaning portfolio portfolio growth in couple the EBITDA of overall

positively going it's to contribute to so And our growth.

the we next the system so the over want than the of part to out X leases large So be then we finding perspective X% agreements, couldn't basis, when than X% think doing, right? the can do and we've be your from mean -- an and even of actually of at year. We the we the away contributor over fee years and time. this a business used it year, such them capital-light we We be the positive the -- think because and then then continues to quite positive, or it over is there or capital on been of EBITDA company. to question, positive the over be recovers last have or going moved going the a of business chipped expire few sub the be allowed grow. the to franchise on turn the of less lease business a And it this landlord going to them it's they positive we there, it to It's we to We've that from rate XX% will what come converted didn't slightly we time. got business, stayed part I of they think -- of and stabilized leased of management X% of terms business. with overall EBITDA year. that heavy renewing to to X to them of in when I business inherited portfolio what EBITDA the higher course X as it We shrink to we an the a at portfolio is assets

So of we'll over continue rest we to the take shrink those opportunities over the time. time. And that will business end up business as being and grow that a positive

Operator

next is Smedes from The from Citi. Rose question

Smedes Rose

year, and to you about and provide the that Europe of Kind balance are think ask that. you the it's wanted about when of is how have for great you, the I guidance over which year. to thinking your you specifically actually China visibility in the just

with how -- You that Europe, a on a bit touched guess, think with on I maybe little you more your that up? some could O&L little but shape comments, just color

Christopher Nassetta

Yes.

of you Europe, bulk Western Europe think as by Europe. as quite along. recovering the And in gave our I not think not Smedes, few that has is United the high of I way but Europe Europe a quite Europe driven motoring that. support business is is, Eastern nicely, the level, Kevin about far States, stats a along at think the been but I is

like So we Europe continue Western U.S., to to recover. expect, the -- Europe

is Europe insignificant going be very, being expectation the part portfolio complex a Eastern foreseeable very small by obviously, Our China, is to a the situation. more for challenged. But that. quite again, of future impacted And

view. a have We

give it We and have forecast, which in can guidance. build why we is

saw well we China China them, for when in of way of our minimum. China very, major China world, second a is the expectation process cities and as going of is in the China got locking But early China some business a ahead then business, the very arrivals. that to year, down does goes reopening reopen the when China rapidly. the Not the opening and through necessarily international in at pandemic our rest for quite of half stages think recover for I the can of China as of opens

start in quarter quarter. third So our will more and is into in year see half next expectation the with you the benefit China reopen really second of fourth year, to than the

Operator

from Farley question Robin The is next from UBS.

Robin Farley

you down of little the and like Can XX like pre-pandemic window? less about to bit a week, last I Just booking was had more talk been sort a some fall, it than days. quick feel ones. maybe

with Just kind are that we where of now visibility?

Christopher Nassetta

extending Booking might windows you as guess. are

within think vast booked to had I days, gotten X within of at worst was it's a be it -- the X majority days. COVID now

days, think minus, April approaching longer. XX% I XX-XX, XX% in X or within of like the plus we're business

So huge, where from improvement huge were. we

Robin Farley

then the on Great. distribution business, the And mix. OTA

back. comes business you You assume -- guess... as XX% sense mentioned includes it I which makes transient that which was Was direct, down, mentioned I

Christopher Nassetta

XX% direct. of the we're an didn't which we the wouldn't. give very we in minus. sort we're we in results low percentage, We the say typically what were is plus pre-pandemic, sort of believe teens, is OTA But there, or drive for I the for to basically be community. frontier efficient our And business the best ownership quarter, able the would to in

Robin Farley

-- lot Great. your And last guess addressed I Okay. remarks. And thing of in on you it then a kind the group. of you've opening

like And what said 'XX are levels? at say 'XX don't booked booked if know I at levels. a like back what pre-pandemic. I Fair to you think be time, room expected percent XXXX to for also, expect be you nights at 'XX then of XX% to this you to gave pacing the of that kind compared was that the end of by year of you

Just to it. think about

Christopher Nassetta

didn't. We

I be will group, yes. not a I the give at did 'XX question to 'XX back the do stat. first We back answer is, think for think -- will levels. at be

down articulated folks is can I sales for of moment memory 'XX. the are prepared think that our I my into in this the all the second stat of the best versus from But particularly year about keep in for as with comments, half up XX% the hardly year. at coming and leads next the 'XX

and trajectory I lot year. think down sort next year has into whole a recovery so for the we've of the given of And XX wouldn't in year for just read this the seen business. being how occurred what I

the is The that. rates the higher plenty business time at than And book 'XX. basically are digit double book have to low of low moment. double importantly, We digits

so to obviously maximize is we're rate outcome, community. ownership nicely what And our trying the of for part really do flows

inflationary to on -- too want rush know not want we highest because and we rates really be environment, don't in we business kind there, is books to the the this of possible. it put at So to we're the much going

than volumes XXXX. XXXX sort higher we're XXXX and our suspect, of time we as out. so with will And metering much said, at to rates I year, I similar when taking done we're and be next it at

Operator

is next Securities. The from Scholes Truist Patrick question from

Charles Scholes

unit For region? regions? growth growth those guidance down percentages approximately those break how -- basically, X%, global Or different what how those are by by your of do net percentages rates by do

Kevin Jacobs

to are XX% of pretty it right should similar should the U.S., have rooms plus in It the what XX% Yes. But now a me minus under outside in or I out. ought the about construction -- the it where front are sub-breakdown construction it under U.S. -- be be breaks XX% rooms deliver for about international. the to Patrick, don't

Charles Scholes

any to happen growth the you China rate? have the Do of expectation Okay. is -- the what for

Kevin Jacobs

Yes. rooms answers, be that openings XX% said in this year going for think are in earlier of think I to up year-over-year. opened my -- China I we openings, Well, X

Operator

question Bill is from And Crow the next from James. Raymond

William Crow

rates into head any to continue kind months? to I and about I and short. I'm ramping brands be time between labor with when continues this to -- the concerns the be fascinated of at summer be if but scores up, owners guest are occupancy interplay wondering Chris, continue satisfaction really you're by And busy that seeing have and just as you what we the a

Christopher Nassetta

issues the in yes, that front, we're they're manage we first community, talk are franchise what I'd say on what labor we there both seeing, our to I still -- as seeing. mean significant and We

as needed, our ability X back and the in increases profile to force last in across the the demand the into a very and seen months, in given significant get which all Over described. obviously we've labor increase are segments, hotels, labor demand I folks coming the already

want all be, points including extreme where they're issues near So we recently. we're at are not not other as the the but been as they way had pandemic, -- in anywhere the to not

that loyalty been we've the seen way, systems We've in listen, I've and of able to do back I with all the of intensely we're that have right to there out and services social, labor go of customer the some sorts what we been get suffered, and through have own And self bottomed other and industries tracking. we think, that, bring service them. satisfaction along of have In is rest back. to tracking but of all satisfaction, of ways and as sort pandemic those call come started monitoring think middle terms numbers had the the I our both

Our lead last the social in the and way. a think saw have scores, positive industry been moving up I I

have satisfied with now. we're we're right not So what we -- doing

table would We We're sitting services, labor I been say, a table back the sort back -- And lot. more community. is very the But charging of what structure cost in. need team our the to need We it. food we're sensitive obviously other this we're your beverage and good sensitive I've doing. track more owner restore We implied you as on reality trajectory. for on the demand services. to the question like in is for pounding a to we're at think get get and there, and

rate, So to we our experience. have to ultimately to we deliver impair the deliver ability basic to or don't experience if going continue drive we're the

we owner So broadly. confident community will, I'm our

it. them, seeing of talk work and of have I to a to to that talk realize lot to they They're You They're pressure the get pricing They're there. we but of understanding broadly supportive. together them. tons

continue initiatives other in place be to the long as response, friend a side the will implemented savings have what owner we're in comparable my before We are to pandemic. on for for they get better cost making come. crazy is during sure have that when work on is we really the friend, this, inflation that, and a to that we it's dividends we we this confident, that setup earlier been and -- that time And that we to our going of had -- been focused better mentioned pay and I basis, than their we on a pursued and COVID super our hard community and a

Operator

from next The Chad question Beynon Macquarie. from is

Chad Beynon

spring you through in leisure in, elevated in the the the gas Seems at increases break a prices guess, strong recently and that impact leisure about, the increases I heard any And mindset that you've customer, sound different customer I airline were lot if to pushback doesn't March upcoming rest are for about this for the the you noted during as there's like of fuel you and of been remained consumer. We've cycles it of of the know, price like I prepared operators so point. could what guess, pushing the talk months. remarks, seen your couple think But have kind 'XX? can next

Christopher Nassetta

long doing just could long long not history, a reality high if update, like I not and Yes. so you be to accurate, very time, is been of this, in time, a on over There numbers. R Squared a our and high this periods R very And got go I've correlation. we've we square. fact, technically been a the is team studying this is there back

very demand what's our a prices with there's in business. and fact, between In correlation on going fuel low

XXX-plus hit at You periods. the there's went, can go looked to not a all like 'XX, those and high And correlation. a when back very barrel, we oil 'XX,

it out an the the has lot consumer do at having locked goes. a and a think I fears savings moment, are the up more of business lot there about as and/or they would with do been said, world businesses than liked psychology, to have of amount world as certainly get the a to. to moment, abundant experience burning But at sort the which the has and uncertainty there consumer lots I where of desire and do

we're it. seeing So really of not any

to. XX% of with the around where disproportionately, roughly phenomenon X/X in recovery, looked sort of a is during business majority prepandemic, rest were people now the it's around, business, we pandemic. to even driving. you are our were to And that That's X/X we'll shift if also there's right Now flipped but the are the at still fly drive and

So much airline as now not part up, going the maybe but as of are prices proportionately this gas is. is there's -- ticket too,

So endure drive that hey, further, might like, drive. to sort with suspect little a they'll X- there a it's is used little what people a of They X-, kind substitution have for they're I a before going is X-, a COVID on effect and limit, got X-hour right? been to of to it X-hour bit deciding now willing of or limit

historically do have seen not long-winded looking analysis of in lot Squares, do we we see very correlation. not, and And at R way not of a high saying, we of resistance so detailed it's a

Operator

question next Richard The comes Clarke from from Bernstein.

Richard Clarke

thing come the I can has find. managed down of which the X,XXX, one I drop rooms quarter-on-quarter number biggest noticed Just actually by over is is

DoubleTree, Are are franchise the quite the you managed big the recovery? is Astoria. more leaning in away case, drops you And moving more strategy? Waldorf, towards that's And maybe away franchise? brand, this fees this if some by from from Or owner-led incentive Is a an why towards shift?

Kevin Jacobs

of good Richard, Yes. Look, it's in a don't I quarter-over-quarter question. me. have shift front

it's that You're at probably looking big a right, relatively you're if shift. it,

of franchise to not XX-XX They're in XX% like Some our out. strategic. things They're system. I U.S. franchise, necessarily the construction, is outside U.S., coming -- earlier, under We it's rooms still versus staying the outside right? And converting that that's not managed the said

deliveries. new demand bit end right and So the is the reality lower the for a new the right, where demand in is we construction, go developed world, little more at now

XX-XX. fish bit, the owner world, little the takes in about we developed are, again, the so where fish demand it's developing And there. right? so There's more And in and a more And market franchising. and the customer us world, towards demand

Richard Clarke

Why And franchise. seen from just that there just managed to take you've you shift some mentioned that does place? process

Kevin Jacobs

place? take it does Where

Robin Farley

why No, does take it place?

Kevin Jacobs

Owner demand owner the -- product lower end for the for customer demand at franchising. demand and I mean

So it's...

Christopher Nassetta

of of the look franchise-oriented a the U.S. environment. has world, mean, at always And been the regions I you predominantly if sort

of years If in Today, on majority there majority it's Europe. vast -- you its look no was XX going here, at our a ago, franchise. makeup franchising they is.

of a blended like XX-XX. more sort So we It's much approach. have

years If ago, you went X years was to franchise. ago, Asia it Pacific, five X

growing, much super an customers. mid-market able there's effect to of anybody franchising us, service Now And particularly it's is, we for great I ability better franchise brands, don't faster. is to much, create be a think to and terms product a great delivering China, in network feel confident in manage opportunity particularly in and with system. to our

parts around owner driven the sort different by of it's and world the sort a business as the desires mature. of world the the of lot of evolution So

Operator

is Research. question Ciepiel Vince next from Cleveland with The

Vince Ciepiel

a describe U.S. how nights? question how this as your progress small, in is is few today I Could versus you've other cross-border. at, European booking on room North there? And international guests American recent seen performing around, behavior heading the of look that kind and it's with remind if like of had of business way for percentage can the kind arrivals business pre-COVID pretty there but you kind last a you us summer, of say, I your you've then think what when months? you much seen

Kevin Jacobs

Yes.

Christopher Nassetta

ahead. Go

Kevin Jacobs

U.S. is right? of Yes, U.S. comes about sure, the and from a on X% normalized About XX% XX:X, inside the basis customers you pre-Covid outside. the

where up. Europe region. region outside was approaching is Now in in And big to about cities opening is levels back be mix, both close up L.A., that's the of actually like the more normalized X/X, could the approaching the near during San COVID, is U.S. again, now that XX% Francisco, world plummeted York, right, pretty pre-COVID actually That cross-border. within to for obviously X and Europe. New to it X/X and as to and

Operator

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

Christopher Nassetta

and all us thank you today. for Chad, joining Thank you,

enthusiasm quite standpoint from ever the could I believe think It's but during hear position decisions I we driving the a pandemic you made, we best returning actions put updating took to excited in the super probably of in the couple year, the years, Hilton margins, of going that for been for the and it's the quarter have been the look again the in the progress. voice. to what out after in of on shareholders performance, about you our today. we'll to flow and cash free years think forward capital rest come. play second We're to is Thanks time we that the driving do

Operator

sir. you, presentation. now attending Thank conference The concluded. today's thank And has for you

You may now disconnect.

Hilton Worldwide (HLT) 3 May 222022 Q1 Earnings call transcript