Q4 2025 Hilton Worldwide Holdings Inc Earnings Call

February 11, 2026

Operator: Good morning and welcome to the Hilton Q4 2024 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please press star, then zero. After today's prepared remarks, there will be a question-and-answer session. To ask a question, you may press star, then one on your touch-tone phone, and to withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Mr. Charlie Ruehr, Vice President, Corporate Finance and Investor Relations. You may begin.

Speaker #1: Good and welcome to the Hilton . Fourth quarter 2024 Earnings Conference Call . All participants will be in a listen only mode . Should you need assistance , please press star then zero .

Speaker #1: After today's prepared remarks , there will be a question and answer session . To ask a question , you may press star , then one on your touch tone phone .

Speaker #1: And to withdraw your question , please press star . Then two . Please note this event is being recorded . I would now like to turn the conference over to Mr. Charlie Ruehr , Vice President , Corporate Finance and Investor Relations .

Charlie Ruehr: Thank you, Chuck. Welcome to Hilton's Q4 and Full-Year 2025 Earnings Call. Before we begin, we would like to remind you that our discussions this morning will include forward-looking statements. Actual results could differ materially from those indicated in the forward-looking statements, and forward-looking statements made today speak only to our expectations as of today. We undertake no obligation to update or revise these statements. For a discussion of some of the factors that could cause actual results to differ, please see the risk factors section of our most recently filed Form 10-K. In addition, we will refer to certain non-GAAP financial measures on this call. You can find reconciliations of non-GAAP to GAAP financial measures discussed in today's call in our earnings press release and on our website at ir.hilton.com.

Speaker #1: You may begin .

Speaker #2: Thank you . Chuck . Welcome to Hilton's fourth quarter and full year 2025 earnings call . Before we begin , we would like to remind you that our discussions this morning will include forward looking statements .

Speaker #2: Actual results could differ materially from those indicated in forward looking the statements and forward looking statements made today . Speak only to our expectations .

Speaker #2: As of today . We undertake no obligation to update or these revise statements . For a discussion of some of the factors that could cause actual results to differ , please see the risk Factors section of our most recently filed form 10-K .

Speaker #2: In addition, we will refer to certain non-GAAP financial measures on this call. You can find reconciliations of non-GAAP to GAAP financial measures discussed in today's call in our earnings press release and on our website at IR.

Charlie Ruehr: You can find reconciliations of non-GAAP to GAAP financial measures discussed in today's call in our earnings press release and on our website at ir.hilton.com. This morning, Chris Nassetta, our President and Chief Executive Officer, will provide an overview of the current operating environment and the company's outlook. Kevin Jacobs, our Executive Vice President and Chief Financial Officer, will then review our Q4 and full-year results and discuss our expectations for the year. Following the remarks, we'll be happy to take your questions. With that, I'm pleased to turn the call over to Chris.

Charlie Ruehr: This morning, Chris Nassetta, our President and Chief Executive Officer, will provide an overview of the current operating environment and the company's outlook. Kevin Jacobs, our Executive Vice President and Chief Financial Officer, will then review our Q4 and full-year results and discuss our expectations for the year. Following the remarks, we'll be happy to take your questions. With that, I'm pleased to turn the call over to Chris.

Speaker #2: Com . This morning . Christopher Nassetta . Our President and Executive Officer , will provide Chief an overview of the current operating environment and the company's outlook .

Speaker #2: Kevin Jacobs . Our Executive Vice President and Chief Financial Officer will then review our fourth quarter and full year results and discuss our expectations for the year .

Speaker #2: Following the remarks , we'll be happy to take your questions . With that , to turn I'm pleased the call over to Chris .

Christopher Nassetta: Thank you, Charlie, and good morning, everyone. We appreciate you joining us today. We're pleased to report a solid end to what was another strong year for Hilton. In 2025, we expanded our portfolio brands, grew our pipeline to a new record, and strengthened our nearly quarter-billion member loyalty system with new partnerships and loyalty tiers, all of which we believe sets us up for continued growth in 2026 and beyond. Together with our team members and owners, we've delivered a solid year on both top-line and bottom-line performance. For the full year, system-wide RevPAR growth was up 40 basis points year over year, driven by strong performance in EMEA and growth in group, and leisure transient. Industry-leading net unit growth, outperformance in non-RevPAR business lines, and cost discipline drove record adjusted EBITDA of $3.7 billion, up 9% year over year.

Chris Nassetta: Thank you, Charlie, and good morning, everyone. We appreciate you joining us today. We're pleased to report a solid end to what was another strong year for Hilton. In 2025, we expanded our portfolio brands, grew our pipeline to a new record, and strengthened our nearly quarter-billion member loyalty system with new partnerships and loyalty tiers, all of which we believe sets us up for continued growth in 2026 and beyond. Together with our team members and owners, we've delivered a solid year on both top-line and bottom-line performance. For the full year, system-wide RevPAR growth was up 40 basis points year over year, driven by strong performance in EMEA and growth in group, and leisure transient. Industry-leading net unit growth, outperformance in non-RevPAR business lines, and cost discipline drove record adjusted EBITDA of $3.7 billion, up 9% year over year.

Speaker #3: Thank you , Charlie , and good morning , everyone . We appreciate you joining us today . We're pleased to report a solid end to what was another strong year for Hilton in 2025 .

Speaker #3: We expanded our portfolio of brands , grew our pipeline to a new record , and strengthened our nearly quarter billion member loyalty system with new partnerships and loyalty tiers .

Speaker #3: All of which we believe sets us up for continued growth in 2026 and beyond . Together with our team members and we've owners , delivered a solid year on both top line and bottom line performance for the full year .

Speaker #3: System wide repair growth was up points year 40 basis over year , driven by strong performance in EMEA and growth in group and leisure .

Speaker #3: Transient industry leading net unit growth , outperformance in Non-red PA business lines and cost discipline drove record adjusted EBITDA of $3.7 billion , up 9% year over year in 2025 .

Christopher Nassetta: In 2025, we returned $3.3 billion to our shareholders, the highest total capital return in our history, even with the softer-than-originally-anticipated RevPAR, demonstrating the power of our Capital-Light business model. Turning to results for the Q4, System-Wide RevPAR increased 50 basis points year over year, as strong international performance and solid group demand were offset by softer U.S. government demand and weaker international inbound into the U.S. In the Q4, leisure transient RevPAR was up 2.3%, driven by international strength, especially in EMEA. Business transient RevPAR was down 2.1%, driven primarily by headwinds from the U.S. government shutdown. Group RevPAR was up 2.6%, driven by strong international group growth and company meeting demand. System-Wide RevPAR for the Q4 was strongest in December, up 1.7%, with strength in leisure, group, and a meaningful pickup in business transient.

Chris Nassetta: In 2025, we returned $3.3 billion to our shareholders, the highest total capital return in our history, even with the softer-than-originally-anticipated RevPAR, demonstrating the power of our Capital-Light business model. Turning to results for the Q4, System-Wide RevPAR increased 50 basis points year over year, as strong international performance and solid group demand were offset by softer U.S. government demand and weaker international inbound into the U.S. In the Q4, leisure transient RevPAR was up 2.3%, driven by international strength, especially in EMEA. Business transient RevPAR was down 2.1%, driven primarily by headwinds from the U.S. government shutdown. Group RevPAR was up 2.6%, driven by strong international group growth and company meeting demand. System-Wide RevPAR for the Q4 was strongest in December, up 1.7%, with strength in leisure, group, and a meaningful pickup in business transient.

Speaker #3: We returned $3.3 billion to our shareholders . The highest total capital return in our history . Even with the softer than originally anticipated Repar demonstrating the power of our capital light business model .

Speaker #3: Turning to results for the fourth quarter , system wide Repar increased 50 basis points year over year as strong international performance and solid group demand were offset by softer U.S.

Speaker #3: government demand and weaker international inbound into the US in the quarter , leisure transient was up 2.3% , driven by international strength , especially in EMEA business .

Speaker #3: Transient Repar was down 2.1% , driven primarily by headwinds from the US government shutdown . Group Repar was up 2.6% , driven by strong international group growth and company meeting demand system wide .

Speaker #3: Rev par for the quarter was strongest in December , up 1.7% with strength in leisure and group and a meaningful pickup in business .

Christopher Nassetta: Positive trends continued into early 2026, with group leading, including strong in-month group bookings, solid leisure demand, and continued business transient improvement. For the Q1, we expect RevPAR growth of between 1% and 2% year over year, including the impact from the recent storms in the US. As we look to the year ahead, we feel optimistic that 2026 will be stronger than 2025. We believe this will be driven by continued strength in EMEA, improvement in APAC, and an improvement in the US driven by stronger economic conditions, major events, easier comps, and continued limited supply. For the full year, we expect system-wide top-line growth of 1% to 2%, with international performance stronger than in the US. Turning to development, during the Q4, we opened nearly 200 hotels, totaling nearly 26,000 rooms.

Chris Nassetta: Positive trends continued into early 2026, with group leading, including strong in-month group bookings, solid leisure demand, and continued business transient improvement. For the Q1, we expect RevPAR growth of between 1% and 2% year over year, including the impact from the recent storms in the US. As we look to the year ahead, we feel optimistic that 2026 will be stronger than 2025. We believe this will be driven by continued strength in EMEA, improvement in APAC, and an improvement in the US driven by stronger economic conditions, major events, easier comps, and continued limited supply. For the full year, we expect system-wide top-line growth of 1% to 2%, with international performance stronger than in the US. Turning to development, during the Q4, we opened nearly 200 hotels, totaling nearly 26,000 rooms.

Speaker #3: Transient positive trends continued into early 2026 , with group leading including strong in month group bookings , solid leisure demand and continued business transient improvement .

Speaker #3: For the first quarter , we expect repar growth of between 1 and 2% year over year , including the impact from the recent storms in the US .

Speaker #3: As look to the year ahead , we feel optimistic that 2026 will be stronger than 2025 . We believe this will be driven by continued strength in EMEA , improvement in APAC and an improvement in the US , driven by stronger economic conditions , major events , easier comps and continued limited supply .

Speaker #3: For the full year, we expect system-wide top-line growth of 1% to 2%, with international performance stronger than in the U.S.

Speaker #3: Turning to development , during the fourth quarter , we opened nearly 200 hotels , totaling nearly 26,000 rooms . For the full year , we added nearly 100,000 new rooms to our global portfolio , representing full year net unit growth of 6.7% and our biggest year of organic openings .

Christopher Nassetta: For the full year, we added nearly 100,000 new rooms to our global portfolio, representing full-year net unit growth of 6.7% and our biggest year of organic openings. We achieved several milestones in the year, including reaching 9,000 hotels globally, celebrating 44 brand country debuts, opening our first property in four new markets, including Tanzania, Rwanda, Pakistan, and the US Virgin Islands, and opening our 1,000th luxury and lifestyle hotel globally. Our luxury and lifestyle brands continue to expand around the world, comprising nearly 30% of our total openings in the Q4. Lifestyle had a strong year, with all eight brands reaching record room counts and nearly all expanding their presence into new markets. Within our collection brands, for the full year, we opened over 11,000 rooms across 18 countries, including nine country debuts.

Chris Nassetta: For the full year, we added nearly 100,000 new rooms to our global portfolio, representing full-year net unit growth of 6.7% and our biggest year of organic openings. We achieved several milestones in the year, including reaching 9,000 hotels globally, celebrating 44 brand country debuts, opening our first property in four new markets, including Tanzania, Rwanda, Pakistan, and the US Virgin Islands, and opening our 1,000th luxury and lifestyle hotel globally. Our luxury and lifestyle brands continue to expand around the world, comprising nearly 30% of our total openings in the Q4. Lifestyle had a strong year, with all eight brands reaching record room counts and nearly all expanding their presence into new markets. Within our collection brands, for the full year, we opened over 11,000 rooms across 18 countries, including nine country debuts.

Speaker #3: We achieved several milestones in the year , including reaching 9000 hotels globally , celebrating 44 brand country debuts . Opening our first property in four new markets including Tanzania , Rwanda , Pakistan and the US .

Speaker #3: Virgin Islands and opening our 1,000th luxury and lifestyle hotel globally . Our luxury and lifestyle brands continued to expand around the world , comprising nearly 30% of our total openings in the quarter .

Speaker #3: Lifestyle had a strong year, with all eight brands reaching record room counts, and nearly all expanding their presence into new markets. Within our Collection brands for the full year, we opened over 11,000 rooms across 18 countries, including nine country debuts.

Christopher Nassetta: It was a record year for Tapestry growth, opening over 40 properties in the year, including most recently the debut of Tapestry in Japan. Within luxury, we continued to build strong momentum after the Waldorf Astoria New York opening, and in Q4, we opened our second Waldorf Astoria in Shanghai and celebrated the brand's debut in Helsinki. Strong interest in Waldorf Astoria continued into Q4 as we announced agreements to expand Waldorf Astoria into several iconic cities across Greece, Spain, Oman, and Malaysia. In 2025, we also expanded our LXR footprint with new openings in France and Greece and announced plans to debut the LXR in the Turks and Caicos in the next few years. Conversions remained integral to our growth and accounted for roughly 40% of room openings in 2025, demonstrating the strong value proposition our system continues to deliver for owners.

Chris Nassetta: It was a record year for Tapestry growth, opening over 40 properties in the year, including most recently the debut of Tapestry in Japan. Within luxury, we continued to build strong momentum after the Waldorf Astoria New York opening, and in Q4, we opened our second Waldorf Astoria in Shanghai and celebrated the brand's debut in Helsinki. Strong interest in Waldorf Astoria continued into Q4 as we announced agreements to expand Waldorf Astoria into several iconic cities across Greece, Spain, Oman, and Malaysia. In 2025, we also expanded our LXR footprint with new openings in France and Greece and announced plans to debut the LXR in the Turks and Caicos in the next few years. Conversions remained integral to our growth and accounted for roughly 40% of room openings in 2025, demonstrating the strong value proposition our system continues to deliver for owners.

Speaker #3: It was a record year for Tapestry growth, opening over 40 properties in the year, including, most recently, the debut of Tapestry in Japan.

Speaker #3: Within luxury , we continued to build strong momentum after the Waldorf New York Astoria opening and in the fourth quarter we second Waldorf opened Astoria in Shanghai and celebrated the brand's debut in Helsinki .

Speaker #3: Strong interest in Waldorf Astoria continued into the fourth quarter as we announced agreements to expand Waldorf Astoria into several iconic cities across Greece , Spain , Oman and Malaysia in 2025 .

Speaker #3: We also expanded our Lxr footprint with new openings in France and Greece , and announced plans to debut the elixir in the Turks and Caicos in the next few years .

Speaker #3: Conversions remain integral to our growth and accounted for roughly 40% of room openings in 2025, demonstrating the strong value proposition our system continues to deliver for owners.

Christopher Nassetta: Against this backdrop of continued owner demand for conversion-friendly brands, we have been evolving our brand portfolio and creating opportunities to build the next chapter in Hilton's growth. We recently launched Apartment Collection by Hilton, which marks Hilton's entry into the fast-growing apartment-style lodging segment that represents a clear white space in the market. As a collection brand, it provides owners with flexibility to preserve a property's unique character while benefiting from Hilton's powerful commercial engine, global distribution, and award-winning Hilton Honors loyalty program. Apartment Collection by Hilton, alongside our other newly minted brand Outset Collection, will be incremental drivers of our conversion momentum in the years to come, as will new brands, several of which we expect to launch later this year.

Chris Nassetta: Against this backdrop of continued owner demand for conversion-friendly brands, we have been evolving our brand portfolio and creating opportunities to build the next chapter in Hilton's growth. We recently launched Apartment Collection by Hilton, which marks Hilton's entry into the fast-growing apartment-style lodging segment that represents a clear white space in the market. As a collection brand, it provides owners with flexibility to preserve a property's unique character while benefiting from Hilton's powerful commercial engine, global distribution, and award-winning Hilton Honors loyalty program. Apartment Collection by Hilton, alongside our other newly minted brand Outset Collection, will be incremental drivers of our conversion momentum in the years to come, as will new brands, several of which we expect to launch later this year.

Speaker #3: Against this backdrop of continued owner demand for conversion friendly brands , we have been evolving our brand portfolio and creating opportunities to build the next chapter in Hilton's growth .

Speaker #3: We recently launched a collection by Hilton, which marks Hilton's entry into the fast-growing apartment-style lodging segment that represents a clear white space in the market.

Speaker #3: As a collection brand , it owners provides with flexibility to preserve a property's unique character while benefiting from Hilton's powerful commercial engine . Global distribution and award winning Hilton honors loyalty program Apartment by Apartment Collection by Hilton , alongside our newly other minted brand outset collection will be incremental drivers of our conversion momentum in the years to come .

Speaker #3: As will new brands , several of which we expect to launch later this year . Even with robust openings in the fourth quarter , our pipeline reached the highest level in our history , surpassing 520,000 rooms , reflecting both year over year and sequential growth driven by expansion across strategic markets and brand categories .

Christopher Nassetta: Even with robust openings in the Q4, our pipeline reached the highest level in our history, surpassing 520,000 rooms, reflecting both year-over-year and sequential growth driven by expansion across strategic markets and brand categories. New development construction starts in the US were up over 25% in 2025, a trend that we expect to accelerate even further into 2026. Globally, for 2026, we expect new development construction starts to be up over 20%, bringing us back close to 2019 levels, signaling healthy developer appetite. As we look ahead, we expect that our robust global pipeline, strength in conversions, construction start momentum, and industry-leading brand premiums will support sustained net unit growth of between 6% to 7% for 2026 and beyond. We also remain focused on initiatives to drive increased loyalty, engagement, and guest satisfaction.

Chris Nassetta: Even with robust openings in the Q4, our pipeline reached the highest level in our history, surpassing 520,000 rooms, reflecting both year-over-year and sequential growth driven by expansion across strategic markets and brand categories. New development construction starts in the US were up over 25% in 2025, a trend that we expect to accelerate even further into 2026. Globally, for 2026, we expect new development construction starts to be up over 20%, bringing us back close to 2019 levels, signaling healthy developer appetite. As we look ahead, we expect that our robust global pipeline, strength in conversions, construction start momentum, and industry-leading brand premiums will support sustained net unit growth of between 6% to 7% for 2026 and beyond. We also remain focused on initiatives to drive increased loyalty, engagement, and guest satisfaction.

Speaker #3: New development , construction starts in the US were up over 25% in 2025 , a trend that we expect to even accelerate further into 2026 globally for 2026 , we expect new development .

Speaker #3: Construction starts to be up over 20% , bringing us back close to 2019 levels , signaling healthy developer appetite . As we look ahead , we expect that our robust global pipeline strength in conversions , construction start momentum and industry leading brand premiums will support sustained net unit growth of between 6 to 7% for 2026 and beyond .

Speaker #3: We also remain focused on initiatives to drive increased loyalty , engagement and guest satisfaction . In 2025 , we strengthened our Hilton Honors program by making loyalty both more accessible and more rewarding .

Christopher Nassetta: In 2025, we strengthened our Hilton Honors program by making loyalty both more accessible and more rewarding by introducing a faster path to elite status and a new premium tier in our program. We also launched Hilton Honors Adventures, an extension of Hilton Honors that invites travelers to immerse themselves in bucket-list-worthy travel, elevating loyalty benefits across land and at sea. Hilton Honors Adventures partnerships now include Explora Journeys and AutoCamp, and we expect more to come as we continue to prioritize ways Honors members can earn and redeem points. Overall, we continue to see extraordinary performance of Hilton Honors in 2025, with the program now approaching 250 million members. During the Q4, Hilton was again named the number one World's Best Workplace by Fortune and Great Place to Work for 2025, becoming the first and only hospitality company to top both the global and the US list twice.

Chris Nassetta: In 2025, we strengthened our Hilton Honors program by making loyalty both more accessible and more rewarding by introducing a faster path to elite status and a new premium tier in our program. We also launched Hilton Honors Adventures, an extension of Hilton Honors that invites travelers to immerse themselves in bucket-list-worthy travel, elevating loyalty benefits across land and at sea. Hilton Honors Adventures partnerships now include Explora Journeys and AutoCamp, and we expect more to come as we continue to prioritize ways Honors members can earn and redeem points. Overall, we continue to see extraordinary performance of Hilton Honors in 2025, with the program now approaching 250 million members. During the Q4, Hilton was again named the number one World's Best Workplace by Fortune and Great Place to Work for 2025, becoming the first and only hospitality company to top both the global and the US list twice.

Speaker #3: By introducing a faster path to elite status and a new premium tier in our program . We also launched Hilton Honors Adventures and extension of Hilton Honors that invites travelers to immerse themselves in bucket list worthy travel , elevating loyalty benefits land across and at sea .

Speaker #3: Hilton Honors Adventures partnerships now include Explora Journeys and AutoCamp, and we expect more to come as we continue to prioritize ways. Honors members can earn and redeem points.

Speaker #3: Overall , we continue to see extraordinary performance of Hilton honors in 2025 with the program now approaching a quarter billion members . During the quarter , Hilton was again named the number Best one world's workplace by Fortune and Great Place to Work for 2025 , becoming the first and only hospitality company to top both the global and the US list .

Christopher Nassetta: Our brands continue to receive recognition as well, and in 2025, Entrepreneur Franchise 500 extended our 17th consecutive year run, with Hampton by Hilton ranking number one hotel franchise in the lodging category. In total, 12 brands were recognized in the 2025 rankings for their performance and franchise value. Overall, we're proud of our performance in 2025 and believe our results continue to reinforce the power of our business model. Our brand-led, network-driven, and platform-enabled strategy will continue to help us achieve our robust growth trajectory and meet the evolving needs of travelers around the world while delivering great returns to owners and shareholders. We're confident that we're well-positioned to continue driving strong performance in 2026 and beyond. Now, I'm going to turn the call over to Kevin. He'll give you a few more details on the Q4 and expectations for the full year.

Chris Nassetta: Our brands continue to receive recognition as well, and in 2025, Entrepreneur Franchise 500 extended our 17th consecutive year run, with Hampton by Hilton ranking number one hotel franchise in the lodging category. In total, 12 brands were recognized in the 2025 rankings for their performance and franchise value. Overall, we're proud of our performance in 2025 and believe our results continue to reinforce the power of our business model. Our brand-led, network-driven, and platform-enabled strategy will continue to help us achieve our robust growth trajectory and meet the evolving needs of travelers around the world while delivering great returns to owners and shareholders. We're confident that we're well-positioned to continue driving strong performance in 2026 and beyond. Now, I'm going to turn the call over to Kevin. He'll give you a few more details on the Q4 and expectations for the full year.

Speaker #3: Twice . Our brands continue to receive recognition as well , and in 2025 , entrepreneurs franchise 500 extended our 17 consecutive year run with Hampton by Hilton ranking number one hotel franchise in the lodging category .

Speaker #3: total , In 12 brands were recognized in the 2025 rankings for their performance and franchise value . Overall , we're proud of our performance in 2025 and believe our results continue to reinforce the power of our business model , our brand led , network driven and platform enabled strategy will continue to achieve help us our robust growth meet the and needs evolving of travelers around the While world .

Speaker #3: delivering great returns to owners and shareholders . We're confident that we're well positioned to continue driving strong performance in 2026 and beyond . Now I'm going to turn the call over to Kevin , who will give you a few more details on the quarter and expectations for the full year

Kevin Jacobs: Thanks, Chris, and good morning, everyone. During the Q4, system-wide RevPAR increased 50 basis points versus the prior year on a comparable and currency-neutral basis. Growth was driven by strong international performance and solid group demand. Adjusted EBITDA was $946 billion in the Q4, up 10% year over year and exceeding the high end of our guidance range. Our performance was predominantly driven by strong performance in EMEA, non-RevPAR-driven fees, and continued discipline cost control. Management and franchise fees grew 7.4% year over year. For the Q4, diluted earnings per share adjusted for special items was $2.08. Turning to our regional performance, Q4 comparable U.S. RevPAR decreased 1.6%, largely driven by pressure across business transient and group, which underperformed expectations due to the prolonged government shutdown. For full year 2026, we expect U.S. RevPAR growth towards the low end of our 2026 system-wide guidance.

Speaker #3: . Thanks ,

Speaker #4: Chris , and good morning , everyone . During the quarter , system wide Repar increased 50 basis points versus the prior year on a comparable and currency neutral basis .

Speaker #4: driven by Growth was strong international performance and solid group demand . Adjusted EBITDA was $946 million in the fourth quarter , up 10% year over year and exceeding the high end of our guidance range .

Speaker #4: Our performance was predominantly driven by strong performance in EMEA driven non-red fees and continued disciplined cost control management and franchise fees grew 7.4% year over year for the quarter .

Speaker #4: Diluted earnings per adjusted for share , special items , was $2.08 . Turning to our regional performance , fourth quarter comparable US repar decreased largely driven by 1.6% , pressure across business transient and group , which underperformed expectations due to the prolonged government shutdown .

Speaker #4: For full year 2026 , we expect US repar growth towards the low end of our 2026 system wide guidance in the Americas . Outside the US .

Kevin Jacobs: In the Americas outside the U.S., Q4 RevPAR increased 3.8% year over year, driven by strong demand in both leisure and group segments. For full year 2026, we expect RevPAR growth to be in the low single digits. In Europe, RevPAR grew 5.3% year over year, led by strong leisure activity in continental Europe due to events and holiday-driven demand. For full year 2026, we expect low single-digit RevPAR growth in the region. In the Middle East and Africa region, RevPAR increased 15.9% year over year, driven by strength in leisure and group demand due to major events. For full year 2026, we expect RevPAR growth in the mid-single-digit range. In the Asia-Pacific region, Q4 RevPAR was up 9.2% in APAC ex-China, led by growth in Australasia for major events, and strength in Japan and South Korea.

Speaker #4: Fourth quarter Repar increased 3.8% year over year , driven by strong demand in both leisure and group segments . For full year 2026 , we expect growth to be in the low single digits in Europe , Repar grew year , 5.3% year over led by Strong leisure activity in continental Europe due to events and holiday driven demand for full year 2026 , we expect low single digit growth in the region in the Middle East and Africa region , Repar increased 15.9% year over year , driven by strength in leisure and group demand due to major events full year For .

Speaker #4: In 2026, we expect growth in the mid-single digit range in the Asia Pacific region. Fourth quarter RevPAR was up 9.2% in APAC.

Speaker #4: Ex-china , led by growth in Australasia for major events and strength in Japan and South Korea , Repar in China declined 1.4% in the quarter , and improvement to prior quarters .

Kevin Jacobs: RevPAR in China declined 1.4% in the Q4, an improvement to prior Q4s, but remained constrained by weaker group demand due to the government travel policy. For full year 2026, we expect RevPAR growth in Asia-Pacific to be in the low single digits, with RevPAR roughly flat in China. Turning to development, as Chris mentioned, for the Q4 we grew net units 6.7% and now have more than 520,000 rooms in our pipeline. We continue to have more rooms under construction than any other hotel company, with approximately one in every five hotel rooms under construction globally slated to join the Hilton portfolio. We expect to deliver 6% to 7% net unit growth for the full year. Moving to guidance, for the Q1 we expect system-wide RevPAR growth to be between 1% and 2%.

Speaker #4: But remained constrained by weaker group demand due to the government travel policy for full year 2026 , we expect RevPAR growth in Asia-Pacific to be in the low single digits , with Repar roughly flat in China .

Speaker #4: Turning to development, as Chris mentioned, for the quarter we grew net units 6.7% and now have more than 520,000 rooms in our pipeline.

Speaker #4: We continue to have more rooms under construction than any other hotel company with approximately one in every five hotel rooms under construction globally .

Speaker #4: Slated to join the Hilton portfolio . We expect to deliver 6 to 7% net unit growth for the full year . Moving to guidance for the first quarter , we expect system wide growth to repar be between 1 and 2% .

Kevin Jacobs: We expect adjusted EBITDA to be between $875 million and $895 million, and diluted EPS adjusted for special items to be between $1.91 and $1.97. For the full year, we expect RevPAR growth of 1% to 2%, adjusted EBITDA of between $4 billion and $4.04 billion, and a diluted EPS adjusted for special items of between $8.65 and $8.77. Please note that our guidance ranges do not incorporate future share repurchases. Moving on to capital return, we paid a cash dividend of $0.15 per share during the Q4, bringing dividends to a total of $143 million for 2025. Our board also authorized a quarterly dividend of $0.15 per share. For 2026, we expect to return approximately $3.5 billion to shareholders in the form of buybacks and dividends. Further details on our Q4 and full year results can be found in the earnings release we issued earlier this morning.

Speaker #4: We expect adjusted EBITDA to be between 875 million and $895 million , and diluted EPs , adjusted for special items to be between $1.91 and $1.97 for the full year .

Speaker #4: We expect RevPAR growth of 1 to 2%, adjusted EBITDA of between $4 billion and $4.04 billion, and a diluted EPS, adjusted for special items, of between $8.65 and $8.77.

Speaker #4: Please note that our guidance ranges do not incorporate future share repurchases . Moving on to capital return , we paid a cash dividend of $0.15 per share during the fourth quarter , bringing dividends to a total of $143 million for 2025 .

Speaker #4: Our Board also authorized a quarterly dividend of $0.15 per share for 2026. We expect to return approximately $3.5 billion to shareholders in the form of buybacks and dividends.

Speaker #4: fourth quarter and full details on our Further year results can be found in the earnings release we issued earlier this morning . This completes our prepared remarks .

Kevin Jacobs: This completes our prepared remarks. We would now like to open the line for any questions you may have. We would like to speak with as many of you as possible, so we ask that you limit yourself to one question. Chuck, can we have our first question, please?

Speaker #4: We would now like to open the line for any questions you may have. We would like to speak with as many of you as possible.

Speaker #4: So we ask that you limit yourself to one question . Chuck , can we have our first question , please ?

Operator: Thank you. The first question will come from Sean Kelly with Bank of America. Please go ahead.

Speaker #1: Thank you. The first question will come from Sean Kelly with Bank of America. Please go ahead.

Shaun Kelley: Hi, good morning, everyone. Thanks for taking my question. Chris, would love to start with you. Both in the prepared remarks and overall, sound a bit more optimistic, so we always value your kind of overview of where we kind of sit with the broader economy and the lodging industry. If you could just kind of give us your kind of latest thinking there, and maybe specifically a few thoughts around the business transient environment, particularly large versus small corporate, I think on the smaller medium size we've seen some weakness. Wondering what you think about that as we kind of turn the page into 2026. Thanks.

Speaker #5: Hi . Good morning Thanks for everyone . taking my question . Chris . Would love to start with . You know , you both in the prepared remarks and overall sound a bit more optimistic .

Speaker #5: So , you know , we always value your your kind of overview of where we kind of sit with the broader economy and the lodging industry .

Speaker #5: If you could just kind of give us your kind of latest thinking there and maybe specifically a few thoughts around the business transient environment , particularly large versus small corporate , I think on the small or medium size , we've seen some weakness .

Speaker #5: what you think Wondering about that as we kind of turn the page into 2026 . Thanks .

Christopher Nassetta: Yep, great question, and obviously probably what's the number 1 thing on everybody's mind. So a lot of this I covered on our last call, and as I've talked to individual investors, have shared these thoughts. But if you think back about what I said on the Q3 call, I was reasonably optimistic about 2025 being a decent year, but 2026 and frankly beyond, at least for the next couple of years, being better. And my underpinning of that, which I still believe, is that you have some macro forces and some micro forces that are converging in a really positive way. Number 1 being inflation does structurally continue to come down.

Chris Nassetta: Yep, great question, and obviously probably what's the number 1 thing on everybody's mind. So a lot of this I covered on our last call, and as I've talked to individual investors, have shared these thoughts. But if you think back about what I said on the Q3 call, I was reasonably optimistic about 2025 being a decent year, but 2026 and frankly beyond, at least for the next couple of years, being better. And my underpinning of that, which I still believe, is that you have some macro forces and some micro forces that are converging in a really positive way. Number 1 being inflation does structurally continue to come down.

Speaker #3: Great question . And Yeah , obviously probably the what's number one thing on everybody's mind . So a lot of this I covered on our last call .

Speaker #3: And as I've talked to individual investors , you know , shared have these thoughts . But you know , if you think back about what I said , you know , on the third quarter call , I was reasonably optimistic about 25 , you know , you know , being a decent year .

Speaker #3: But 26 and frankly , beyond , you know , at least for the next couple of years , being better . And my underpinning of that , which , you know , I , I still believe is that you have some macro forces and some micro forces that , you know , that are converging in a really positive way .

Speaker #3: Number one being , you , inflation does structurally continue to come down . You know , if you really factored for the lag effect of the housing input , which is over 30% of the contribution to the numbers , and inflation you factor what it is real time .

Christopher Nassetta: If you really factored for the lag effect of the housing input, which is over 30% of the contribution to the inflation numbers, and you factor for what it is real-time, I would argue it's actually lower than is being reported. So that's a good trend. What does that mean? That means expectation, which I believe that rates will continue to come down, which will be stimulative and positive in a bunch of ways. You see it this week, and broadly, you're in a very big deregulatory environment in the United States under this administration, which is obviously, I think, a real positive in a bunch of different ways, whether that's financial services, energy, AI, the basic infrastructure, reshoring. There is a massive amount that is going on.

Chris Nassetta: If you really factored for the lag effect of the housing input, which is over 30% of the contribution to the inflation numbers, and you factor for what it is real-time, I would argue it's actually lower than is being reported. So that's a good trend. What does that mean? That means expectation, which I believe that rates will continue to come down, which will be stimulative and positive in a bunch of ways. You see it this week, and broadly, you're in a very big deregulatory environment in the United States under this administration, which is obviously, I think, a real positive in a bunch of different ways, whether that's financial services, energy, AI, the basic infrastructure, reshoring. There is a massive amount that is going on.

Speaker #3: I would argue it's actually lower than , you know , than is that is being reported . So that's a good trend . What does that mean .

Speaker #3: That means expectation , which I believe that rates will continue to come down , which , you know , will be stimulative and positive .

Speaker #3: And a bunch of ways you're you see it this week and broadly , you know , you're in , you know , a very big deregulatory environment under you know , in the United States under this administration , which is obviously , I think a real positive and a bunch of different ways , whether that's financial services , energy , AI , you know , the , you know , basic infrastructure reshoring , you know , there is a massive amount of that is going on .

Christopher Nassetta: You have fixed tax policy that got done last year that is just, that is super business favorable and investment favorable, and you expect to see that start to benefit. And then a massive investment cycle, the obvious being the AI complex. I mean, just the major tech companies in the last 2 weeks alone, I think, when I finished adding it up, they are going to spend this year $700 billion. So let's just say there's going to be a lot more than $1 trillion spent on that by that complex. All of the energy that goes along with it, everything around the AI complex, I think, is huge. But then the other things going on more quietly are reshoring, whether that's in rare earth minerals, pharma, and chips. All of that stuff is going on.

Chris Nassetta: You have fixed tax policy that got done last year that is just, that is super business favorable and investment favorable, and you expect to see that start to benefit. And then a massive investment cycle, the obvious being the AI complex. I mean, just the major tech companies in the last 2 weeks alone, I think, when I finished adding it up, they are going to spend this year $700 billion. So let's just say there's going to be a lot more than $1 trillion spent on that by that complex. All of the energy that goes along with it, everything around the AI complex, I think, is huge. But then the other things going on more quietly are reshoring, whether that's in rare earth minerals, pharma, and chips. All of that stuff is going on.

Speaker #3: You have fixed tax policy that got done last year. That is just, you know, that is super business favorable and investment favorable.

Speaker #3: And , you know , you're , you you know , expect to that start to benefit . And then , you know , a massive investment cycle .

Speaker #3: The obvious , you know , being like the AI complex , I mean just the major tech companies in the last two weeks alone , I think when I finished adding it up , they they are going to spend this year $700 billion .

Speaker #3: You know , so let's just say there's going to be a lot more than $1 trillion spent on that , you know , by that complex , all of the energy that goes along with it all , you know , everything around the AI complex .

Speaker #3: I think is huge . But then the other things going on more quietly are reshoring , whether that's , you know , in rare earth minerals and pharma , you know , chips , you know , all of that stuff , you know , is going on .

Christopher Nassetta: I mean, the CHIPS Act that got passed during the Biden administration, very little of that money has been spent. Then you have core infrastructure where we approved Congress approved $1.6 trillion when you add up all the pieces. Again, a very small part of which has been invested at this point. So when I talked in the Q3, I said, intellectually, it's really hard for me not to be when I lift up above the noise of day-to-day politics, to not feel like those things are going to be really good for the economy. It's undeniable. But at the same time, I said, I don't know exactly when it's going to come. At that point, we were not seeing a whole lot of evidence that that was sort of seeping into the economy, although I was very confident, as you remember, that it would.

Chris Nassetta: I mean, the CHIPS Act that got passed during the Biden administration, very little of that money has been spent. Then you have core infrastructure where we approved Congress approved $1.6 trillion when you add up all the pieces. Again, a very small part of which has been invested at this point. So when I talked in the Q3, I said, intellectually, it's really hard for me not to be when I lift up above the noise of day-to-day politics, to not feel like those things are going to be really good for the economy. It's undeniable. But at the same time, I said, I don't know exactly when it's going to come. At that point, we were not seeing a whole lot of evidence that that was sort of seeping into the economy, although I was very confident, as you remember, that it would.

Speaker #3: the I mean , chips act that got passed during the Biden administration , very little of that money has been spent . And then you have core infrastructure where we where we approve , you know , Congress approved 1.6 trillion .

Speaker #3: When you add up all the a pieces , again , very small part of which has been that has has been invested at this point .

Speaker #3: And so , like when I talked in the third quarter , I said , like , intellectually , it's really hard for me not to , you know , when I lift up above the noise of day to day politics , to not feel like those things to be are going really good for the economy .

Speaker #3: it's And undeniable . But at the same time , I said , you know , I don't know exactly when it's going to come .

Speaker #3: And at that point , we were not seeing a whole lot of evidence . You know , that , you know , that that you know , that that was sort of seeping into the economy .

Christopher Nassetta: By the way, the other thing going on is we're at the beginning of one of the greatest productivity booms in American history with the whole AI complex. Once those investments get done and over the next several years of adoption, you have massive opportunities on productivity. My belief then and now was that we will have economic growth picking up, and most importantly, because it impacts our business, that it would be broader-based economic growth. It would not be as much this K economy where the very high-end, the very wealthy keep doing well, and the middle class and below continue to struggle to pay for groceries, gas, and their utilities.

Chris Nassetta: By the way, the other thing going on is we're at the beginning of one of the greatest productivity booms in American history with the whole AI complex. Once those investments get done and over the next several years of adoption, you have massive opportunities on productivity. My belief then and now was that we will have economic growth picking up, and most importantly, because it impacts our business, that it would be broader-based economic growth. It would not be as much this K economy where the very high-end, the very wealthy keep doing well, and the middle class and below continue to struggle to pay for groceries, gas, and their utilities.

Speaker #3: Although I was very confident , as you remember , that , that it would , by the way , the other thing going on is we're at the beginning of like one of the greatest productivity booms in American history with the , you know , the whole AI complex .

Speaker #3: Once those investments get done and over the next several years of adoption , you know , you have massive on on opportunities productivity .

Speaker #3: My belief then and now was that we will have economic growth picking up . And most importantly , because it impacts our business , that it would be broader based economic growth .

Speaker #3: It would not be as much this economy where the very high end , the very wealthy keep doing well and the middle class and below , you know , continue to struggle to pay for groceries and gas .

Christopher Nassetta: But that you would start to ultimately, because the middle class has to be involved to make all this happen, particularly the investment side, that you would start to enter a world where you would see middle-class real wage growth. By the way, I think right now you're starting to see the first prints of middle-class real wage growth. That means people have more disposable income, and they will be spending more money, including on our products. And when you really get down to it, the bulk of our system, I think everybody's system, is more concentrated because the middle class is the biggest percentage of the population in the mid-market. And so that's what I thought last quarter. That's what I think now. The only difference, I would say, is that we're starting to see it.

Chris Nassetta: But that you would start to ultimately, because the middle class has to be involved to make all this happen, particularly the investment side, that you would start to enter a world where you would see middle-class real wage growth. By the way, I think right now you're starting to see the first prints of middle-class real wage growth. That means people have more disposable income, and they will be spending more money, including on our products. And when you really get down to it, the bulk of our system, I think everybody's system, is more concentrated because the middle class is the biggest percentage of the population in the mid-market. And so that's what I thought last quarter. That's what I think now. The only difference, I would say, is that we're starting to see it.

Speaker #3: And , you know , and their utilities . But that you would start to ultimately because the middle class has to be involved to make all this happen , particularly the investment side that you would start to enter a world where you would see middle class real wage growth .

Speaker #3: By the way , I think right now you're starting to see the first prints of middle class real wage growth . That means people have more disposable income and they will be spending more money , including , you know , on products .

Speaker #3: And our when you really get down to it , the bulk of our system , I think everybody's system is , is is more concentrated because the middle class is the biggest percentage of the population in the mid-market .

Speaker #3: And so that's what I thought last quarter . That's what I think . Now , the only difference I would say is that we're starting to see it now .

Christopher Nassetta: Now, I'm going to be really honest, and it's obvious, so I should be honest, which is the data sets that I'm looking at are not months and months, quarters and quarters. What I'm really looking at, as I said a little bit when we talked about December, is the end of the year got a lot better than we thought. And even with the storms, the beginning of this year has been better. And it's been better in the ways we'd want to see it. So what does that mean? That means mid-scale, upper mid-scale. It means midweek. It means business transient. To your question, Sean, we're seeing a meaningful change from what we were seeing earlier in the Q4 and certainly in the Q3. Whether that's sustainable or not, I don't know.

Chris Nassetta: Now, I'm going to be really honest, and it's obvious, so I should be honest, which is the data sets that I'm looking at are not months and months, quarters and quarters. What I'm really looking at, as I said a little bit when we talked about December, is the end of the year got a lot better than we thought. And even with the storms, the beginning of this year has been better. And it's been better in the ways we'd want to see it. So what does that mean? That means mid-scale, upper mid-scale. It means midweek. It means business transient. To your question, Sean, we're seeing a meaningful change from what we were seeing earlier in the Q4 and certainly in the Q3. Whether that's sustainable or not, I don't know.

Speaker #3: be I'm going to really honest that and it's obvious . So , you know , I should be honest , which is , you know , the data sets that I'm looking at are not , you know , months and months , quarters and quarters .

Speaker #3: What I'm really looking at , as I said a little bit , you know , we talked about December is the end of the year .

Speaker #3: You know , got , you know , got a lot better than we thought . And even with the storms , the beginning of this year has been better .

Speaker #3: been better And it's in the ways we'd want to see it . So what does that mean . That means mid scale upper midscale , you know , it means midweek .

Speaker #3: It means it means business transient to your question , Sean , we're seeing a meaningful change from what we were seeing earlier in the fourth quarter .

Speaker #3: And certainly in the third quarter , whether that's sustainable or not , I don't know . But it seems it feels me , if all of the other macro conditions that I that I was talking about , if those continue to develop , it's sort of has to be the beginning of a trend .

Christopher Nassetta: But it feels to me, if all of the other macro conditions that I was talking about, if those continue to develop, it sort of has to be the beginning of a trend. By the way, the other thing, it's not macro, it's micro. But I said micro is we have a bunch of benefits this year, which you guys are aware of. Number one, the comps, as I said, are easier because, I mean, you could have other things happen, but Liberation Day was a pretty big deal, and the biggest government shutdown in American history was a pretty big deal. You hopefully don't repeat those at that scale. And we have a bunch of unique events, which you're well aware of, with the World Cup, America's 250, that are really stimulative to travel at the same time all these other things are going on.

Chris Nassetta: But it feels to me, if all of the other macro conditions that I was talking about, if those continue to develop, it sort of has to be the beginning of a trend. By the way, the other thing, it's not macro, it's micro. But I said micro is we have a bunch of benefits this year, which you guys are aware of. Number one, the comps, as I said, are easier because, I mean, you could have other things happen, but Liberation Day was a pretty big deal, and the biggest government shutdown in American history was a pretty big deal. You hopefully don't repeat those at that scale. And we have a bunch of unique events, which you're well aware of, with the World Cup, America's 250, that are really stimulative to travel at the same time all these other things are going on.

Speaker #3: By the way , the other thing , it's not macro , it's micro . But I said micro is we have a bunch of like benefits this year , which you guys are aware of .

Speaker #3: Number one , the comps , as I said , are easier because I mean , you could have other things happen , but Liberation Day was a pretty big deal .

Speaker #3: And the biggest government shutdown in American history was a pretty big deal . You hopefully don't repeat those that that , you know , at that scale .

Speaker #3: And we have a bunch of unique events which you're well aware of with the World Cup , America's 250 that are really stimulative to travel at the same time , all these other things are going on .

Christopher Nassetta: And so yes, we're at the beginning, I think, of a trend. We have to get more data and see it really sort of continue. But I like what I'm seeing right now. And as a result, you saw in our guidance that we think that 2026, as I had thought last quarter, will be a lot better than 2025. And I think we have very solid underpinnings to back that up. And in the first quarter, by the way, in the guidance we're giving, super solid. I mean, at this point, we're halfway through the quarter. We have very good sightlines into the rest of February and even into March. And it feels good in all the ways I just described.

Chris Nassetta: And so yes, we're at the beginning, I think, of a trend. We have to get more data and see it really sort of continue. But I like what I'm seeing right now. And as a result, you saw in our guidance that we think that 2026, as I had thought last quarter, will be a lot better than 2025. And I think we have very solid underpinnings to back that up. And in the first quarter, by the way, in the guidance we're giving, super solid. I mean, at this point, we're halfway through the quarter. We have very good sightlines into the rest of February and even into March. And it feels good in all the ways I just described.

Speaker #3: And so , you know , I , you know , yes , I , you know , we're at the beginning , I think , of a trend get more have to data , you know , and like see , it really sort of continue .

Speaker #3: But I , I like what I'm seeing right now . And as a result , you saw in our guidance that , you know , we think that 26 as I had thought last quarter , will be a lot better than , than 25 .

Speaker #3: And I think we have very solid underpinnings to back that up. And in the first quarter, by the way, in the guidance we’re giving, super solid at this point.

Speaker #3: We're halfway through the quarter . We have very , very good sight lines into of February . And even March . And it into feels it feels good in all the ways I just described .

Christopher Nassetta: So yeah, that's the reason for my increased optimism: data that I'm actually able to see, data that says what I hoped and thought would happen is starting to happen, and hopefully is sustainable.

Chris Nassetta: So yeah, that's the reason for my increased optimism: data that I'm actually able to see, data that says what I hoped and thought would happen is starting to happen, and hopefully is sustainable.

Speaker #3: So yeah , that's the reason for my increased optimism is data that I'm actually able see . to Data that says what I hoped and thought would happen is starting to happen , and hopefully , is sustainable .

Operator: The next question will come from Dan Politzer with JPMorgan. Please go ahead.

Speaker #3: .

Speaker #1: Okay , next question will come from Dan Pulitzer JP Morgan . Please go ahead .

Daniel Politzer: Hey, good morning, everyone. Thanks for taking my question. You touched on this a bit, but maybe in a different lens. The AI and technology front, I mean, this continues to obviously evolve at a very rapid pace. So I guess the question is, how close are you to maybe announcing some partnerships there if that's on the horizon? And then how do you think about the opportunity set here, both from the OpEx side internally and then externally from the revenue side in terms of distribution?

Speaker #6: good morning Hey , everyone . Thanks for taking my question . You touched on this a bit , but maybe in a different lens .

Speaker #6: The AI and technology front , I mean , this continues to obviously evolve at a very rapid pace . So I guess the question is how close are you to maybe announcing some partnerships there , if that's on the horizon ?

Speaker #6: And then how do you think about the opportunity set here , both from the opex side internally and externally , from a revenue side in terms of distribution ?

Christopher Nassetta: Yeah. I mean, we talked a lot about this, I think, on the last call too. And I suspect we'll be talking about this on every single call because obviously it's important. And as you can imagine, we're spending a huge amount of time on AI throughout our whole organization. And one of the things that I believe gives us a meaningful competitive advantage is that we have a modern tech stack. And relative to our competitive environment, I don't think anybody can claim what we can claim. And what does that? Well, it's not me just patting my chest. It just affords us much greater flexibility and agility to adopt AI in a bunch of really interesting ways. And so you can imagine we're exploring all those. As I said last time, there's sort of three big buckets of things. The first is just creating efficiencies in the system.

Chris Nassetta: Yeah. I mean, we talked a lot about this, I think, on the last call too. And I suspect we'll be talking about this on every single call because obviously it's important. And as you can imagine, we're spending a huge amount of time on AI throughout our whole organization. And one of the things that I believe gives us a meaningful competitive advantage is that we have a modern tech stack. And relative to our competitive environment, I don't think anybody can claim what we can claim. And what does that? Well, it's not me just patting my chest. It just affords us much greater flexibility and agility to adopt AI in a bunch of really interesting ways. And so you can imagine we're exploring all those. As I said last time, there's sort of three big buckets of things. The first is just creating efficiencies in the system.

Speaker #3: mean , Yeah , I I talked we talked a lot about this . I think on the last call , too , and I suspect we'll be talking about this on every single call , because obviously it's important .

Speaker #3: And as you can imagine , we're spending a huge amount of time on AI throughout our whole organization . And one of the things that I believe gives us a meaningful , competitive advantage that , you is know , we have a modern tech stack .

Speaker #3: relative to our And competitive environment , I don't think anybody can claim what we can . And what does that well , you know , patting my just just chest .

Speaker #3: affords us much greater It's flexibility and agility to adopt AI bunch of in a really interesting ways . And so you can imagine we're exploring all those .

Speaker #3: As I said last time , there's sort of three big , three big buckets of things . The first is just like creating efficiencies in the in the , in the system .

Christopher Nassetta: Some of that could benefit G&A. By the way, you've seen some of the benefits. I mean, our G&A is lower than it was 6, 7 years ago. And that's not all AI. But part of it is process reimagination, making ourselves better, applying the use of technology in ways we've been doing that forever. And AI is just another amazing tool that allows us to speed some of that up. And so we're looking at tons of things. Hotel openings is one that our teams are deep in the middle of. So many people touch the process of opening a hotel, dozens and dozens, creating massive efficiency around connecting all those dots. And we have dozens of other use cases in that area. And then there's the whole distribution space, which is sort of the crux of your question.

Chris Nassetta: Some of that could benefit G&A. By the way, you've seen some of the benefits. I mean, our G&A is lower than it was 6, 7 years ago. And that's not all AI. But part of it is process reimagination, making ourselves better, applying the use of technology in ways we've been doing that forever. And AI is just another amazing tool that allows us to speed some of that up. And so we're looking at tons of things. Hotel openings is one that our teams are deep in the middle of. So many people touch the process of opening a hotel, dozens and dozens, creating massive efficiency around connecting all those dots. And we have dozens of other use cases in that area. And then there's the whole distribution space, which is sort of the crux of your question.

Speaker #3: Some of that could benefit G&A . By the way , you've seen some of the benefits . I mean , our G&A is lower than it was 6 or 7 years ago .

Speaker #3: And that's not all AI , but part of it is , you know , process , making reimagination ourselves better , applying the use of technology in ways we've been doing that forever .

Speaker #3: And AI is just another amazing tool that allows us to speed speed . Some of that up . And so we're looking at tons of things like , you know , hotel openings is the one that our teams are deep in the middle of , like , you know , so many people touch , you know , the process of opening a hotel dozens dozens and like , you know , creating , you massive know , efficiency around connecting all those dots .

Speaker #3: And we have , you know , dozens of other use cases in that , in that area . And then there's the whole distribution space , which is sort of crux of your the question .

Christopher Nassetta: We tend not to make big announcements until we've done things. And so we're working with many of all the big players out there, OpenAI, Google. We're working with all of them. We're part, not the big ones that are big in the travel or trying to either are or trying to be. We're involved in all of their tests. And we're developing the connectivity with those platforms. And I'm super optimistic about that. We're also, because we have a very modern tech stack, doing some really interesting things in sort of natural search connected to booking and the experience within our own platforms, some of which you'll start to see probably at some point in Q2, which I think are really cool. My own view on the distribution space is quite, I probably said this last time, is simple.

Chris Nassetta: We tend not to make big announcements until we've done things. And so we're working with many of all the big players out there, OpenAI, Google. We're working with all of them. We're part, not the big ones that are big in the travel or trying to either are or trying to be. We're involved in all of their tests. And we're developing the connectivity with those platforms. And I'm super optimistic about that. We're also, because we have a very modern tech stack, doing some really interesting things in sort of natural search connected to booking and the experience within our own platforms, some of which you'll start to see probably at some point in Q2, which I think are really cool. My own view on the distribution space is quite, I probably said this last time, is simple.

Speaker #3: We tend not to make big until announcements we've done things . And you . So we're working with many of all the , you know , of the big players out there , the open AI , the , you know , Google .

Speaker #3: We're working with all of them . We're part , you know , not not the big ones that are big in the travel or trying either are to or trying to be .

Speaker #3: We're involved in all of their tests . And , you know , we're we're developing the connectivity with those platforms . And I'm super optimistic about that .

Speaker #3: We're also because we have a very modern tech stack doing some really interesting things in sort of natural search connected to booking . And the experience within our own platforms , some of you'll start to see , you know , probably at some point in the in the second quarter , which I think are really cool .

Speaker #3: My own view on the distribution space is quite , I said , probably said this last time is simple . Like we believe we have the best products , deliver the best service with the best culture .

Christopher Nassetta: We believe we have the best products, deliver the best service with the best culture, our loyalty that continues to be super relevant, and that customers want what we do because we're good at it. We do a good job. If you look at the hard data, market share, review site index, we perform really well. Customers want to find us. We believe that what's going on with AI is spectacular. There's always risks, by the way. I don't have my head in the sand, nor does anybody here. But I think in our space, which is very hard to disintermediate because it's a physical business, the opportunities are far greater, both in distribution and otherwise, than the risks are. And why?

Chris Nassetta: We believe we have the best products, deliver the best service with the best culture, our loyalty that continues to be super relevant, and that customers want what we do because we're good at it. We do a good job. If you look at the hard data, market share, review site index, we perform really well. Customers want to find us. We believe that what's going on with AI is spectacular. There's always risks, by the way. I don't have my head in the sand, nor does anybody here. But I think in our space, which is very hard to disintermediate because it's a physical business, the opportunities are far greater, both in distribution and otherwise, than the risks are. And why?

Speaker #3: You know , our loyalty that continues to be super relevant and that customers want what we do because we're good at it . We we , we do a good job .

Speaker #3: you look at Like if the hard data market share , , review you know site index , we perform really well . Customers want to find us .

Speaker #3: We believe that what's going on with AI is spectacular . There's always risks . By the way . You know , like I'm not I don't have my head in the sand , nor does anybody here .

Speaker #3: But I think in our space , which is very hard to disintermediate because it's a it's a physical business . The opportunities are far greater , you know , both in distribution and otherwise than the risks are .

Christopher Nassetta: Because if we keep doing a really good job the way we do it and customers want our stuff, they're going to be able to find our stuff in what will be, frankly, a more competitive environment than we've seen heretofore. They'll be able to find it in a way that's easier, with less friction, and that's more efficient. So my belief is this is a pathway to lower distribution costs broadly for our owner community if we're smart, never forgetting that the one thing at our scale, I mean, look at the US alone, we're 13%+ of the market. If you look at the quality market, no offense to the whole market, we're probably well over 20% of the market. We have complete control over rate, inventory, pricing, availability. And if we don't want to share it, nobody can get it.

Chris Nassetta: Because if we keep doing a really good job the way we do it and customers want our stuff, they're going to be able to find our stuff in what will be, frankly, a more competitive environment than we've seen heretofore. They'll be able to find it in a way that's easier, with less friction, and that's more efficient. So my belief is this is a pathway to lower distribution costs broadly for our owner community if we're smart, never forgetting that the one thing at our scale, I mean, look at the US alone, we're 13%+ of the market. If you look at the quality market, no offense to the whole market, we're probably well over 20% of the market. We have complete control over rate, inventory, pricing, availability. And if we don't want to share it, nobody can get it.

Speaker #3: And why ? Because if we keep doing a really our , and customers want going to be able to find our stuff in what will what will be be , frankly , a more competitive environment than we've seen heretofore .

Speaker #3: And they'll be able to find it in a way that's easier with less friction , and that's more efficient . And so my belief is this is a pathway to lower distribution costs broadly for our owner community .

Speaker #3: If we're smart , never forgetting that the one thing that our scale , I mean , look at the US alone , we're 13 plus percent of the market .

Speaker #3: If the you look at quality market , no offense to the whole market , we're probably we're well over market 20% of the .

Speaker #3: have We complete control over rate inventory , pricing , availability . And if we don't want to share it , nobody can get it .

Christopher Nassetta: And we have products that people want. I view that as super valuable. So as we think about how we engage with everybody in this space, and we are, as I said, already engaged in all the ways you would think with the big players. I think it's a very symbiotic relationship. I think customers, for them to have platforms that are in travel, they sort of need our products. And for us to show up, we want to work with them. I think it's quite a balanced equation, as I said. I think the net result is generally good on distribution costs. The last bucket I talked about, which is super exciting, and we're doing a bunch of stuff, is just the whole customer experience.

Chris Nassetta: And we have products that people want. I view that as super valuable. So as we think about how we engage with everybody in this space, and we are, as I said, already engaged in all the ways you would think with the big players. I think it's a very symbiotic relationship. I think customers, for them to have platforms that are in travel, they sort of need our products. And for us to show up, we want to work with them. I think it's quite a balanced equation, as I said. I think the net result is generally good on distribution costs. The last bucket I talked about, which is super exciting, and we're doing a bunch of stuff, is just the whole customer experience.

Speaker #3: And we have products that people want . I view that as super valuable . So as we think about how we engage with everybody in this space and we are , as I said , already engaged in all the ways you would think with with players the big .

Speaker #3: I think it's a very symbiotic relationship . I think customers , for them to have platforms that are in travel , they sort of need our products .

Speaker #3: And for show us to up , you know , we want to work with them . I think it's quite a balanced equation .

Speaker #3: As I said , I think the net result is generally good on distribution costs . The last bucket I talked about , which you know , is super exciting and we're doing a bunch of stuff , is just the whole customer experience .

Christopher Nassetta: I mean, so I talked a little bit about the dreaming function in our own systems of being able to not just dream and sort of natural search and AI-enabled, but then have it be seamless to booking, have it then be seamless to pre-arrival and planning your stay on property experience, problem resolution, post-stay. You think about, with the use of AI, the data, the tools that we already have and that we're building out in a much more fulsome way with a fully modern tech stack that we can put so much where we have an experience with our customers that is digital with AI and with our platform; we can really revolutionize how customers interact with us. And then we're at the physical side of it.

Chris Nassetta: I mean, so I talked a little bit about the dreaming function in our own systems of being able to not just dream and sort of natural search and AI-enabled, but then have it be seamless to booking, have it then be seamless to pre-arrival and planning your stay on property experience, problem resolution, post-stay. You think about, with the use of AI, the data, the tools that we already have and that we're building out in a much more fulsome way with a fully modern tech stack that we can put so much where we have an experience with our customers that is digital with AI and with our platform; we can really revolutionize how customers interact with us. And then we're at the physical side of it.

Speaker #3: mean , so I I talked a little bit about like , you know , the dreaming function , you know , in our own systems of being able to not just dream and , you know , sort of natural search and AI enabled , but then , you know , have it be seamless to booking , have it , then be seamless to pre-arrival and planning your stay on property experience problem resolution post a you think about with the use of AI , the data , the tools that we already have and that we're building out in a much fulsome more way with a fully modern tech stack that we can put so much where we have an experience with with our customers , that is digital , with with our AI , and platform , we can really revolutionize how customers interact with us .

Christopher Nassetta: We have the ability to create tools, and we are doing it that enable our teams to have so much more information for people to plan their stay on property, problem resolution, etc., that I think it's really, really game-changing. And we've been, I'm not going to get into everything we're doing. Obviously, it's competitively sensitive. But we're doing a whole bunch of stuff. We have, I don't know, 40 use cases plus and growing in all of those buckets around AI, working with a bunch of great partners, many of the names that you read about in the news every single day, and have super close engagement. And I feel really, listen, they were in the early days of AI, for sure. But I feel like we're in a really good position based on the platform, the efforts we're making, and progress we're making as this evolves.

Chris Nassetta: We have the ability to create tools, and we are doing it that enable our teams to have so much more information for people to plan their stay on property, problem resolution, etc., that I think it's really, really game-changing. And we've been, I'm not going to get into everything we're doing. Obviously, it's competitively sensitive. But we're doing a whole bunch of stuff. We have, I don't know, 40 use cases plus and growing in all of those buckets around AI, working with a bunch of great partners, many of the names that you read about in the news every single day, and have super close engagement. And I feel really, listen, they were in the early days of AI, for sure. But I feel like we're in a really good position based on the platform, the efforts we're making, and progress we're making as this evolves.

Speaker #3: And then we're we're at the physical side of it . We have the ability to create tools , and we are doing it .

Speaker #3: That enable our teams to have so much more information for people to plan their stay on property problem resolution , etc. that it's I think really , really game changing .

Speaker #3: And we've been we've been , you know , I'm not going to get into everything we're doing . Obviously , it's competitively sensitive , but we're doing a whole stuff .

Speaker #3: We have , I don't know , 40 use cases plus and growing in all of those buckets around AI , working with a bunch of great partners .

Speaker #3: Many of the names that you read about in the in the news , every single day , and have , you know , super close engagement .

Speaker #3: And I feel really in the that we're early listen days of AI like , you know for sure , but I feel like we're in a really good position based on the platform , the efforts we're making .

Speaker #3: Yeah . And progress . We're making as as this evolves .

Operator: The next question will come from David Katz with Jefferies. Please go ahead.

Speaker #1: The next question will come from David Katz with Jefferies . Please go ahead .

David Katz: Hi, good morning, everyone. Thanks for taking my question. Noting in the press release and what you've talked about with the outsized amount of investments going toward lifestyle and luxury, and some of the commentary this morning, I'm wondering whether both the duration and the economic intensity of those contracts continues to grow over time and whether there is kind of an acceleration in trajectory as more and more of those rooms come online. We're obviously looking at fees and cash flow, etc., the output of the NUG. I'd love some further insight there. Thanks.

Speaker #7: Hi . Good morning , everyone , and thanks for taking my question . You know , noting in the press release , in what you've talked about with , you know , the outsized amount of investments going toward lifestyle and luxury and some of the commentary this morning , I'm wondering whether , you know , the the both the duration and the economic intensity , you know , of those contracts continues to grow over time .

Speaker #7: And , you know , whether , you know , there is kind of an acceleration in trajectory as more and more of those rooms come online , at we're looking , you know , fees and cash flow , etc.

Speaker #7: , you know , the output of the NUG . But I'd love some further insight there . Thanks .

Christopher Nassetta: Yeah, I think I understand the question. I'm not 100% sure I do. But I think if the basic question is, as you now have 1,000 hotels and it's becoming a real business and each of the individual brands within the category, which is eight brands, start to get scale and momentum, they sort of feed on themselves in the sense of delivering as they build out a network, they build market share even higher. As they build market share even higher, they get adopted by more and more owners. And ultimately, the economic model starts, the flywheel starts spinning. I think that you're right. Yes. So many of these brands, while we have 1,000 hotels and luxury and lifestyle, it's a lot of hotels, I mean, but still, we have 9,400 or 9,400 and change. We're open two or three a day. So I always lose track.

Chris Nassetta: Yeah, I think I understand the question. I'm not 100% sure I do. But I think if the basic question is, as you now have 1,000 hotels and it's becoming a real business and each of the individual brands within the category, which is eight brands, start to get scale and momentum, they sort of feed on themselves in the sense of delivering as they build out a network, they build market share even higher. As they build market share even higher, they get adopted by more and more owners. And ultimately, the economic model starts, the flywheel starts spinning. I think that you're right. Yes. So many of these brands, while we have 1,000 hotels and luxury and lifestyle, it's a lot of hotels, I mean, but still, we have 9,400 or 9,400 and change. We're open two or three a day. So I always lose track.

Speaker #3: Yeah , I think I understand the question . I'm not but 100% sure I do , I think if the basic question is , as you now have 1000 hotels and it's becoming a real business and each of the individual brands within the category which which is eight brands start to get scale and momentum , they sort of feed on themselves , you know , in the sense of delivering , you know , they build out a network , they build market share , even higher as they build market share even higher , they get adopted by more more and owners .

Speaker #3: And , you know , ultimately , the economic model , you know , starts the flywheel starts spinning . I think you're right .

Speaker #3: Yes . So many of these brands , while we have 1000 hotels and luxury and lifestyle , it's a lot of hotels . I mean , but still , you know , we have 9400 , 9400 and change .

Speaker #3: We're open 2 or 3 a day . So I always lose track . You know , it's still a relatively smaller percentage . And many of the brands , you know , I , you know , you can think of like tempo and motto and even canopy that are doing really well , you know , they're very they're still graduate for that matter .

Christopher Nassetta: It's still a relatively smaller percentage. Many of the brands, you can think of Tempo and Motto and even Canopy that are doing really well, they're still Graduate for that matter. They're still relatively small brands, even though they're performing well. So yeah, I do believe, like we've seen in every other brand, and it won't be different, particularly in lifestyle. Luxury is a little bit different game. But in the lifestyle categories, as you start to build these out and create real network effect, you hear me say network effect a lot in a broader context, but in a more micro context within individual brands that customers ascribe meaning to, if you don't have enough locations, it's hard to sort of serve their needs. And the more you build that network effect, it does have sort of an effect of creating or spinning the flywheel faster.

Chris Nassetta: It's still a relatively smaller percentage. Many of the brands, you can think of Tempo and Motto and even Canopy that are doing really well, they're still Graduate for that matter. They're still relatively small brands, even though they're performing well. So yeah, I do believe, like we've seen in every other brand, and it won't be different, particularly in lifestyle. Luxury is a little bit different game. But in the lifestyle categories, as you start to build these out and create real network effect, you hear me say network effect a lot in a broader context, but in a more micro context within individual brands that customers ascribe meaning to, if you don't have enough locations, it's hard to sort of serve their needs. And the more you build that network effect, it does have sort of an effect of creating or spinning the flywheel faster.

Speaker #3: They're still relatively , you know , small brands , even though they're performing well . And so , yeah , I do believe like we've seen in every other brand and it won't be different , particularly in lifestyle luxury .

Speaker #3: Luxury is a little bit different game . But in the lifestyle categories , as you start to build these out and create real network effect , you hear me say network effect a lot in a broader context , but in a more micro context within individual brands that customers ascribe meaning to .

Speaker #3: You know , if you don't have enough locations , it's hard to sort of serve their needs . And the more you build that network effect , it does have sort of a effect of creating , you know , a spinning the flywheel faster .

Christopher Nassetta: So I think a bunch of those brands are early days in getting ready to really explode. Certainly, some of the ones that have larger footprint potential, like Tempo and Motto. And that's why we're looking in that space at a brand between, which I've talked about, in between Motto and Canopy because we think it has a TAM that is very large. Luxury, listen, we're doing. I mean, we've got, in terms of dots on the map at this point, we've got like 600 dots on the map, 650, I think, close to that as of today. We've got another 100-plus in the pipeline. I mean, the Waldorf Astoria New York opening was magical. I know some of you were there, and hopefully you enjoyed it. And that's the grand dame that started the whole brand. And so while it's one hotel, it makes a big difference.

Chris Nassetta: So I think a bunch of those brands are early days in getting ready to really explode. Certainly, some of the ones that have larger footprint potential, like Tempo and Motto. And that's why we're looking in that space at a brand between, which I've talked about, in between Motto and Canopy because we think it has a TAM that is very large. Luxury, listen, we're doing. I mean, we've got, in terms of dots on the map at this point, we've got like 600 dots on the map, 650, I think, close to that as of today. We've got another 100-plus in the pipeline. I mean, the Waldorf Astoria New York opening was magical. I know some of you were there, and hopefully you enjoyed it. And that's the grand dame that started the whole brand. And so while it's one hotel, it makes a big difference.

Speaker #3: So I think a bunch of those brands are , are early days in getting ready to really explode , you know , you know , certainly some of the ones that have larger footprint potential , like tempo and and , motto .

Speaker #3: And that's why we're looking , you know , in that space at a brand between which I've talked about in between motto and Canopy , because we think it has a Tam that is , that is , that is very large luxury .

Speaker #3: Listen , we're , you know , we're doing I mean , we've got in terms of dots on the map at this point , we've got like 600 dots on the map , 650 I think close to that as of today .

Speaker #3: We've got another 100 plus in the pipeline . I mean , the Waldorf Astoria New York opening was , was magical . I know some of you were there , and hopefully you enjoyed it .

Speaker #3: You know , and that that's the grand dame that started the whole brand . And so while it's one hotel , it makes a big difference .

Christopher Nassetta: If you look at the openings, I noted a few of them that we had over the last year. If you think about the openings we're going to have this year and you look at the pipeline, like Waldorf's on the move. Waldorf, it takes time. Luxury is a hard space. It takes time. It was one of the first things I got here 18 years ago. And I remember saying to John Gray, "We got to really get luxury right." And we had basically one Waldorf Astoria. And here we are today with opened and in the pipeline, close to 100 of them. So we have good things going on with Conrad, LXR. I mentioned that in the prepared comments. So I feel super good about what's going on.

Chris Nassetta: If you look at the openings, I noted a few of them that we had over the last year. If you think about the openings we're going to have this year and you look at the pipeline, like Waldorf's on the move. Waldorf, it takes time. Luxury is a hard space. It takes time. It was one of the first things I got here 18 years ago. And I remember saying to John Gray, "We got to really get luxury right." And we had basically one Waldorf Astoria. And here we are today with opened and in the pipeline, close to 100 of them. So we have good things going on with Conrad, LXR. I mentioned that in the prepared comments. So I feel super good about what's going on.

Speaker #3: If you look at the openings , I noted a few of that we them had over the last year . you think If about the openings , we're going to have this year , and you look at the pipeline like Waldorf is on the move , like Waldorf is , it's take it takes time .

Speaker #3: Luxury is a hard space . It takes time . You know , it's one of the first things I got here 18 years ago , and I remember saying to John Gray , we got to really get luxury right ?

Speaker #3: And we had , like , basically one Waldorf Astoria , you know ? And here we are today with open and in the pipeline , you know , close , close to 100 of them .

Speaker #3: So we you know , we have good things going on with Conrad Elixir . I mentioned , I mentioned I mentioned that in the prepared comments .

Christopher Nassetta: I mean, I think from a loyalty point of view, we have as many dots on the map as anybody in the products that if I look at redemption behavior, our customers are really loving, particularly with the SLH relationship. And then I look at our core, the core three brands we have in luxury; they're performing well. Their pipeline is spectacular. Growth rate looks really, really good over the next few years. So we're getting momentum across all of them, where when you wake up in 10 years, I think it's like by volume and numbers and economics, it'll be the upper midscale, lower upscale market where you're going to have the most action just because that's where the largest segment of customers is. And in the others, we'll do great. But the volume ends up where you would think it would end up.

Chris Nassetta: I mean, I think from a loyalty point of view, we have as many dots on the map as anybody in the products that if I look at redemption behavior, our customers are really loving, particularly with the SLH relationship. And then I look at our core, the core three brands we have in luxury; they're performing well. Their pipeline is spectacular. Growth rate looks really, really good over the next few years. So we're getting momentum across all of them, where when you wake up in 10 years, I think it's like by volume and numbers and economics, it'll be the upper midscale, lower upscale market where you're going to have the most action just because that's where the largest segment of customers is. And in the others, we'll do great. But the volume ends up where you would think it would end up.

Speaker #3: I So feel super good about what's going I mean , I think from a loyalty point of view , we have as many dots on the map as anybody .

Speaker #3: And the products that if I look at redemption behavior , our are customers really loving , particularly with the slate relationship . And then I look at our core , you know , the core three brands we have in luxury , they're well .

Speaker #3: performing They're pipeline is spectacular growth , growth rate . You know , growth rate looks really , really good over the next few years .

Speaker #3: So we're getting momentum across them. All of you know where, when you wake up in ten years, you know, I think, you know, it's like, by volume and numbers and economics.

Speaker #3: It'll be , you know , the upper mid-market , you know , lower upper upscale market where you're going to have the most action just because that's where , you know , the largest segment of customers is .

Speaker #3: And and then the others , we'll , we'll do great . But , you know , the volume , the volume ends up think it where you would would end up .

Christopher Nassetta: It ends up where the population demographically is.

Chris Nassetta: It ends up where the population demographically is.

Speaker #3: It ends up where the population, you know, demographically is.

Operator: The next question will come from Stephen Grambling with Morgan Stanley. Please go ahead.

Speaker #1: The next question will come from Steven Grambling with Morgan Stanley. Please go ahead.

Stephen Grambling: Hey, thanks. Maybe another angle on NUG. You've been able to build, as you said, a best-in-class Pipeline while, just as importantly, keeping CapEx and Key Money effectively flat in the guidance. So I'd love to get your latest thoughts on how the overall development environment is changing, both in terms of competition and then also the use of Key Money as rates and liquidity are improving. And any thoughts on the balance of new development versus conversions from here?

Speaker #8: thanks . Maybe Hey , another angle on NUG . You've been able to build , as you said , a best in class pipeline .

Speaker #8: While just as importantly, keeping CapEx and key money effectively flat in the guidance. So I'd love to get your latest thoughts on how the overall development environment is changing, both in terms of competition and then also the use of key money as rates and liquidity are improving.

Speaker #8: And any thoughts on the balance of new development versus conversions from here ?

Christopher Nassetta: Yeah, I'll start. Maybe Kevin will finish whatever I miss. Listen, we have been really disciplined, I say it every time, about Key Money. I mean, if you look at the broader market, Key Money is definitely edged up. But if you look at our numbers, like rooms under construction, the percentage of deals that have Key Money is like 9%. Hasn't really changed a lot. If you look at the average, we're saying up $200 million this year. Our average over the last bunch of years, it goes up. It goes down. A couple of years ago, we were $100 million. Last year, we were a little higher. I mean, it sort of has averaged ±$200 million.

Chris Nassetta: Yeah, I'll start. Maybe Kevin will finish whatever I miss. Listen, we have been really disciplined, I say it every time, about Key Money. I mean, if you look at the broader market, Key Money is definitely edged up. But if you look at our numbers, like rooms under construction, the percentage of deals that have Key Money is like 9%. Hasn't really changed a lot. If you look at the average, we're saying up $200 million this year. Our average over the last bunch of years, it goes up. It goes down. A couple of years ago, we were $100 million. Last year, we were a little higher. I mean, it sort of has averaged ±$200 million.

Speaker #3: Yeah , I'll start . Maybe Kevin will finish . Whatever I miss , you know , listen , we have been really disciplined .

Speaker #3: I say it every time about key money. I mean, if you look at the broader market, key money has definitely edged up.

Speaker #3: But if you look at , you know , if you look at our numbers like rooms under construction , the the percentage of deals that have key money is like 9% hasn't really changed a lot .

Speaker #3: If you look at the average , we're saying a couple hundred million this year , our average over the last bunch of years , it goes up .

Speaker #3: It goes down a couple of years ago , we were 100 . Last year we were a little high . I mean , you know , it sort of has averaged plus or minus a couple hundred million .

Christopher Nassetta: If you look at the types of deals that we're doing, last I looked at the data, I think it's 85% or 90% are in the upper upscale or above in terms of where we utilize key money. So we are, and that's where it's sort of always been, the more complicated, bigger, full-service convention and luxury. That's where historically, there's been more demand for key money to get deals done. It's much more competitive. And that's still where we see it. I mean, has it crept in a little bit? Yeah. But listen, when it comes down to it, we think our brands perform better. And a little bit of key money versus a lot of market share, we think, is a bad trade for most owners. And we do. Our teams are well-equipped to sort of discuss that trade-off.

Chris Nassetta: If you look at the types of deals that we're doing, last I looked at the data, I think it's 85% or 90% are in the upper upscale or above in terms of where we utilize key money. So we are, and that's where it's sort of always been, the more complicated, bigger, full-service convention and luxury. That's where historically, there's been more demand for key money to get deals done. It's much more competitive. And that's still where we see it. I mean, has it crept in a little bit? Yeah. But listen, when it comes down to it, we think our brands perform better. And a little bit of key money versus a lot of market share, we think, is a bad trade for most owners. And we do. Our teams are well-equipped to sort of discuss that trade-off.

Speaker #3: And if you look at the types of deals that we're doing , like last , I look at the data , I think it's 85 or 90% are in the upper upscale or above in terms of where we utilize key money .

Speaker #3: So , you know , we are , you know , and that's where it's sort of always been . The more complicated , bigger full service convention .

Speaker #3: And luxury . That's where , you know , historically there's been more demand for key money to get deals done . It's much more competitive .

Speaker #3: And that's still where we see it . I mean , is there a , you know , has it creeped in a little bit ?

Speaker #3: Yeah . But listen , when it comes down to it , we think our like brands perform better and we , you know , a little bit of key money versus a lot of market share we think is a bad trade for most owners .

Speaker #3: And we do we you know , our teams are well equipped to sort of , you know , discuss that , discuss that trade off .

Christopher Nassetta: But in the end, owners, as you are, as buyers of the stock, are trying to make money. And they're ultimately going to, I think, evaluate. Most owners are going to evaluate that trade-off in a rational way. So we feel good about our ability to keep doing what we're doing. It's not without some pressures and market dynamics. But if we keep delivering profitability the way we are, I feel good about it. In terms of conversions, I think maybe the only thing I miss, obviously, last year was a big number, 40%. We tend to see in more challenging environments, those numbers go up. That's sort of a standard thing, which wouldn't be surprising. Now, at the same time, we have a lot more shots on goal. We've been adding brands. I talked about a couple with Apartment and Outset.

Chris Nassetta: But in the end, owners, as you are, as buyers of the stock, are trying to make money. And they're ultimately going to, I think, evaluate. Most owners are going to evaluate that trade-off in a rational way. So we feel good about our ability to keep doing what we're doing. It's not without some pressures and market dynamics. But if we keep delivering profitability the way we are, I feel good about it. In terms of conversions, I think maybe the only thing I miss, obviously, last year was a big number, 40%. We tend to see in more challenging environments, those numbers go up. That's sort of a standard thing, which wouldn't be surprising. Now, at the same time, we have a lot more shots on goal. We've been adding brands. I talked about a couple with Apartment and Outset.

Speaker #3: And in the end , owners , as you are as , as buyers of the stock are trying to make money and they're ultimately going to I think , evaluate most going to owners are evaluate that trade off in a rational way .

Speaker #3: So know , , you we we we feel good about our ability to keep doing what we're doing . It's not without some pressures .

Speaker #3: And , you know , market dynamics . But if we keep delivering , you know , profitability the way we are , I feel I feel good about it in terms of conversions .

Speaker #3: I think maybe the only thing I missed , you know , obviously last year , you know , was a big number , 40% .

Speaker #3: You know , we tend to see in , you know , more challenging environments . Those numbers go , the numbers go up .

Speaker #3: That's sort of a standard thing , which wouldn't be Now . At the surprising . same time , we have a lot more goal .

Speaker #3: We've been shots on adding brands . I talked couple of departments in outset , so we do think , you know , conversions are going to be a our bigger part of future than they been .

Christopher Nassetta: So we do think conversions are going to be a bigger part of our future than they might have been on average over the last 10 years. I do not believe they will stabilize at 40%. I think they will be in the range of 30 to 40%. And it'll depend on sort of what's going on in the world. But I don't think anytime soon we'll go back down into the 20s. If you look back, on average, over an extended period of time, it's been more in the mid- to upper 20s. I do think we're sort of more permanently above that, both because the performance of the brands, just more shots on goal with very conversion-friendly brands. So what did I miss, Kevin?

Chris Nassetta: So we do think conversions are going to be a bigger part of our future than they might have been on average over the last 10 years. I do not believe they will stabilize at 40%. I think they will be in the range of 30 to 40%. And it'll depend on sort of what's going on in the world. But I don't think anytime soon we'll go back down into the 20s. If you look back, on average, over an extended period of time, it's been more in the mid- to upper 20s. I do think we're sort of more permanently above that, both because the performance of the brands, just more shots on goal with very conversion-friendly brands. So what did I miss, Kevin?

Speaker #3: On might have average over the last ten years . I do not believe they will stabilize at 40% . You know , I think they will be in the range of 30 to 40% , and it will depend on , you know , sort in the going on of what's world .

Speaker #3: But I don't think anytime soon we'll go back down into the 20s . If you look back , you know , on average over , you over , you know , an know , extended period of time , it's been more in the mid to upper 20s .

Speaker #3: I do think we're sort of more permanently above that . Both because the performance of the brands just more shots on goal with very conversion friendly brands .

Stephen Grambling: On the financing environment, I'd just add, I think it's good and getting better. I think that supports conversions because the cash flow-producing asset's easier to finance than ground up. Although we referenced the ground up improvement stats in our prepared remarks for a reason, that our brands, the other thing, in addition to conversions with them being cash flow-producing assets, our brands are more financiable, right? So just in the same way that owners think they're going to make more money with us and they do, lenders have more confidence that they're going to get repaid if our brand's associated with it. And so it becomes that much easier to finance. That's the only thing I'd add.

Speaker #3: So what did I miss ? Kevin ?

Speaker #4: I just on the financing environment , I just add , I think it's good in getting better . And I think convert that that supports conversions because the cash flow producing assets easier to finance than , than ground up .

Speaker #4: Although we did you know we we referenced the ground up improvement stats in our prepared remarks for a reason that , you know , our brands .

Speaker #4: The other thing , in addition to conversions with with them being cash flow , producing assets , our brands are more financeable . Right ?

Speaker #4: So just in the same way that owners think they're going to make more money with us than they do, lenders have more confidence that they're going to get repaid.

Speaker #4: If our brands are associated with it, it's just with it. And so it becomes that much easier to do the only finance. That's the added thing, I'd say.

Christopher Nassetta: Thank you. Good add.

Chris Nassetta: Thank you. Good add.

Operator: The next question will come from Steve Pizzella with Deutsche Bank. Please go ahead.

Speaker #3: Thank you. Good. Add.

Speaker #1: The next will come from Steve Pezzella with Deutsche Bank . Please go ahead .

Steven Pizzella: Hey, good morning, everyone. Thank you for taking our question. Just thinking about the 1% to 2% RevPAR guide for the full year in Q1, can you talk about how you expect RevPAR to play out from a quarterly cadence perspective throughout the year? Knowing the costs do get easier, you get the World Cup in the middle of the year. Then it sounds like increased optimism in select-service RevPAR accelerating. Could the RevPAR outlook be conservative?

Speaker #9: Hey, good morning everyone, and thank you for taking our question. Just thinking about the 1% to 2% RevPAR guide for the full year in the first quarter.

Speaker #9: Can you talk about how you expect rev par to play out from a quarterly cadence perspective throughout the year ? Knowing the cops do get easier ?

Speaker #9: You get the World Cup in the middle year, and then it sounds like increased select optimism in service. RevPAR accelerating.

Speaker #9: Could the RevPAR outlook be conservative?

Christopher Nassetta: I would give Kevin the first part, and I'll take the second.

Chris Nassetta: I would give Kevin the first part, and I'll take the second.

Stephen Grambling: Yeah. I mean, I'd say it always can be, right? I mean, I think Chris talked a lot about the underpinnings that we see in the economy. And we're halfway through Q1, right? So there's a lot of year left. But I think I would say they always can be if the things that we're seeing in the data persist, of course, it could be better. And then in terms of the quarter, there's a lot. This is we've been doing this a long time. I think this is probably the year with the most complicated puts and takes on calendar that I can remember in a while. But yeah, the World Cup is Q2, going into Q3. The government shutdown was Q4. So I think it's pretty well balanced over the course of the year in terms of the way it's going to play out.

Speaker #3: I'll give Kevin the first part. I'll take the second.

Speaker #4: I mean, if I say it, it always can be right? I mean, I think we—you know, Chris talked a lot about the underpinnings that we see in the economy.

Speaker #4: And look it's we're halfway through the first quarter , right ? So there's a lot of year left . But I think I would say they always can be up if the things that we're seeing in the data persist , you know , of course it can be better .

Speaker #4: In terms of the quarter, and then, you know, there's a lot, you know, we've—this has been, we've been doing this a long time.

Speaker #4: This is, I think, probably the year with the most complicated puts and takes on calendar that I can remember in a while.

Speaker #4: But , you know , yeah , the World Cup is second going into third . The government shutdown was fourth . So I think it's pretty well balanced over the course of the year .

Stephen Grambling: You could always surprise to the upside. I mean, the World Cup's a good example, right? Depends on who makes it through into the final rounds and which countries are those. It'll generate more demand. It can always vary. But I think it's pretty well balanced in terms of the course of the year.

Speaker #4: In terms of the way it's going to play out . And , you know , you could always surprise to the upside . I mean , the World Cup is a good example right ?

Speaker #4: who Depends on who makes it through into the final rounds and which countries are those . And it'll generate more demand . It can it can always vary .

Christopher Nassetta: That's well said. I mean, when you look at everything I covered, answering Sean's question about the macro, and I applied and Kevin just reiterated some of the micro things, and then you apply the comp issues that you had last year and again, that's not to say we won't have other new things this year. It's hard not to feel pretty good about that range of guidance. I mean, I'm not going to go so far as to say I'd take the over versus the under, but I probably would.

Chris Nassetta: That's well said. I mean, when you look at everything I covered, answering Sean's question about the macro, and I applied and Kevin just reiterated some of the micro things, and then you apply the comp issues that you had last year and again, that's not to say we won't have other new things this year. It's hard not to feel pretty good about that range of guidance. I mean, I'm not going to go so far as to say I'd take the over versus the under, but I probably would.

Speaker #4: But I think it's pretty well balanced in terms of the .

Speaker #3: Course of the year . That's well said . I mean , I you know , when you look at everything I covered , you know , answering Sean's question about the macro and I applied and Kevin just reiterated some of the micro things , and then you apply , you know , the comp issues that you had last year .

Speaker #3: Again, that's not to say we won't have other new things this year. It's hard not to feel pretty good about that range of guidance.

Speaker #3: I mean , you know , I'm not going to over go so versus take the far as to say I the under , but I probably would .

Operator: The next question will come from Robin Farley with UBS. Please go ahead.

Speaker #1: The next question will come from Robin Farley with UBS. Please go ahead.

Robin Farley: Great. Thank you. I have a small question for Kevin and maybe a medium-sized question for Chris if that kind of adds up to one question. Kevin, the EPS.

Speaker #10: Great . Thank you . I have a small question for Kevin and maybe a medium sized question for Chris . If that kind of adds up to one question , given the EPs .

Christopher Nassetta: It sounds like two, but give it a shot.

Chris Nassetta: It sounds like two, but give it a shot.

Robin Farley: Yeah. Your EPS guide, typically, your EPS grows at a higher rate than your EBITDA growth. And just kind of wondering what it is. It's not obvious. Your share count's down. It looks like your tax rate's going to be down. So what's the EPS growth rate sort of not being higher than EBITDA growth? Is there just something obvious that I'm not seeing? And then the medium-sized question for Chris. Chris, you mentioned in your remarks that you'll have more brands later this year. And I know last year, you talked about some things that you were going to launch that you have. And it sounded like maybe that would sort of have filled out your portfolio. So just wondering, what is it? Is it white space, things like Apartment by Hilton?

Speaker #3: But give it a shot.

Speaker #10: Yeah . Your EPs guide EPs , typically your grows at a than your higher rate EBITDA growth . And just kind of wondering what it's not obvious .

Speaker #10: Like your share counts down . It looks like your tax rate is going to be down . So what's the EPs growth rate .

Speaker #10: Sort of not not being higher than EBITDA growth . Is there just something obvious that I'm not seeing . And then the the medium sized question for Chris Christie , you mentioned in your remarks that you'll have more brands later this year .

Speaker #10: And I know last year you talked about some things that you were going to launch that you have , and it sounded like maybe that would sort of have filled out your portfolio .

Speaker #10: just So wondering , what is it that is it like white space , Apartment Hilton or like things like by because it had seemed like maybe your portfolio would be pretty filled out with the brand launches you had talked about for , for last year .

Robin Farley: Because it had seemed like maybe your portfolio would be pretty filled out with the brand launches you had talked about for last year. So just kind of your thoughts on that. Thank you.

Christopher Nassetta: All right. Kevin, I'll answer the first part of your first part of your one question.

Chris Nassetta: All right. Kevin, I'll answer the first part of your first part of your one question.

Speaker #10: So just , just kind your thoughts on that . Thank you .

Speaker #3: will answer the first Kevin part of your first part of your one question .

Stephen Grambling: Yeah. Robin, I don't know if it's a small question because EPS growth is pretty important to us and to investors. But it's a relatively small answer. It's easy. I mean, you mentioned share count. We don't guide the share count. And then you got a couple of one-time items primarily related to interest expense associated with not just re-leveraging as EBITDA grows, but also implied in our guidance is moving closer to or actually at the midpoint of our range of our guided range for leverage, is close to 3.25. So it's just those two factors. And that's all there is to it. If you adjusted for those two things, EPS growth is in the low double digits.

Speaker #4: Yeah . Robin , I don't know if it's a small question because EPs growth is pretty important to us and to investors , but it's a it's a it's a small you mentioned easy .

Speaker #4: relatively answer . It's don't we don't guide to share count . We share count . And then you I mean , got a couple of one time items primarily related to interest expense associated with not just releveraging as EBITDA grows , but also implied in our guidance is moving closer to or actually at the midpoint of our range of our our guided range for leverage as close to three and a quarter .

Speaker #4: So it's just that those two factors and that's all there is to it . If you adjusted for those two things , EPs growth is in the low , is in the low .

Christopher Nassetta: Yeah. And the first is always going to happen just because we're always going to be buying back shares. And the second, at some point, we're not going to keep increasing leverage. So that's having the impact. So it's.

Chris Nassetta: Yeah. And the first is always going to happen just because we're always going to be buying back shares. And the second, at some point, we're not going to keep increasing leverage. So that's having the impact. So it's.

Speaker #3: Double digits . The first is always going to happen just because we're always going to be buying back shares . And the second at some point we're not going to keep increasing leverage so that having an that's impact .

Stephen Grambling: Those two things, and that's it.

Christopher Nassetta: Just transitional. Second, I mentioned one. I mean, we have we're always in the skunkworks looking at lots of things. The things that I think are most imminent are another lifestyle brand in between Motto and Canopy. So sort of say upper mid-scale, lower upper upscale segment. We think there's a huge TAM for that as we've been thinking about both Motto and Canopy, which are doing great. We just think there's a big white space as we talk to customers and do the research. And as we talk to owners around the world, we think there's a lot of demand. And we think, as I said before, there's a big TAM. Undergraduate, which I have, I guess, been written about because I have talked about it. I think I talked about it on the last call. We're really excited about that. That's imminent in the next 60 days.

Chris Nassetta: Just transitional. Second, I mentioned one. I mean, we have we're always in the skunkworks looking at lots of things. The things that I think are most imminent are another lifestyle brand in between Motto and Canopy. So sort of say upper mid-scale, lower upper upscale segment. We think there's a huge TAM for that as we've been thinking about both Motto and Canopy, which are doing great. We just think there's a big white space as we talk to customers and do the research. And as we talk to owners around the world, we think there's a lot of demand. And we think, as I said before, there's a big TAM. Undergraduate, which I have, I guess, been written about because I have talked about it. I think I talked about it on the last call. We're really excited about that. That's imminent in the next 60 days.

Speaker #3: it's So .

Speaker #4: Those two things and that's .

Speaker #3: Just It . transitional . And second , I mentioned one I mean we we have you know , we're always in the skunkworks looking at lots of things , the things that I think are most imminent are another lifestyle brand in between motto and canopy .

Speaker #3: So , you know , sort of say upper mid scale lower upper upscale segment . We think there's a huge Tam for that as we've been thinking about , you know , both motto and Canopy , which are doing great .

Speaker #3: You know , we just think there's a big white space as we , you know , talk to customers and do the research .

Speaker #3: And as we talk to owners around the world , we think there's a lot of demand . And we think , as I said before , there's a big Tam undergraduate , which I , you know , has I guess , about been written talked about it .

Speaker #3: I think I talked about it call last on the . We're really excited about that . That's imminent . You know , in the next 60 days , again , you know , graduates fabulous performing super well pipelines building really well .

Christopher Nassetta: Again, Graduate, fabulous, performing super well, pipelines building really well. But there are a whole bunch of markets, hundreds and hundreds just in the US alone, probably 400, that really can't afford to build the full Graduate, which is an upper upscale brand, and need something more in the mid-scale space. But they like the theme and the idea of what Graduate, the ethos of the brand. And so we want to give all those college towns the same opportunity to have a really great Graduate approach. And Undergraduate, we think, is a fabulous way to do that. We have a couple other things we're working on that will be. We'll talk more about as we get a little further along. Student housing associated with Graduate, something we're working on. I wouldn't say it's imminent, but we think the TAM is reasonable and worth doing.

Chris Nassetta: Again, Graduate, fabulous, performing super well, pipelines building really well. But there are a whole bunch of markets, hundreds and hundreds just in the US alone, probably 400, that really can't afford to build the full Graduate, which is an upper upscale brand, and need something more in the mid-scale space. But they like the theme and the idea of what Graduate, the ethos of the brand. And so we want to give all those college towns the same opportunity to have a really great Graduate approach. And Undergraduate, we think, is a fabulous way to do that. We have a couple other things we're working on that will be. We'll talk more about as we get a little further along. Student housing associated with Graduate, something we're working on. I wouldn't say it's imminent, but we think the TAM is reasonable and worth doing.

Speaker #3: But there you know , but there are a whole bunch of markets , hundreds and hundreds just in the US alone , probably 400 .

Speaker #3: That really , you know , can't afford to build a full graduate , which is an upper upscale brand and need something more in the mid scale space .

Speaker #3: But they like the theme and the idea of what Graduate—the ethos of the brand. And so we're going to, we want to give all those college towns the same opportunity to have a really great Graduate approach.

Speaker #3: And undergraduate , we think is a fabulous way to do that . We have a couple other things we're working on . We , you know , that are , it will be a , you know , we'll talk more about as as we get a little further along , you know , student housing associated with graduate something .

Speaker #3: We're working on . I imminent , wouldn't say it's but we think the Tam is reasonable . And , you know , and worth And so we're doing .

Christopher Nassetta: So we're doing the work. A couple of other ideas. But I'll leave it. The two that are coming soon are the lifestyle and, well, they're both in lifestyle category, lifestyle upper mid-scale, and Undergraduate.

Chris Nassetta: So we're doing the work. A couple of other ideas. But I'll leave it. The two that are coming soon are the lifestyle and, well, they're both in lifestyle category, lifestyle upper mid-scale, and Undergraduate.

Speaker #3: doing the work and , you know , a couple of other ideas , but I'll leave it . The two that are coming soon , you know , are the lifestyle and well , they're both in lifestyle category , lifestyle , upper mid scale and undergraduate .

Operator: The next question will come from Lizzie Dove with Goldman Sachs. Please go ahead.

Speaker #1: The next question will come from Lizzy Dove with Goldman Sachs . Please go ahead .

Lizzie Dove: Hi, there. Good morning. Thanks for taking my question. I wanted to touch on the non-RevPAR fee side of things. I think back at your Investor Day a few years ago now, you'd called out the Algo in the kind of low double-digit range back then. You mentioned this morning it was kind of an outperformer last year. Anything you'd share on how this evolves and the outlook for that over time, I guess, especially on the credit card side of things?

Speaker #11: Hi there . Good morning . Thanks for taking my question . I wanted to touch on the non rev par fees side of things .

Speaker #11: You know, I think back at your Investor Day a few years ago now, you'd called out the algo in the kind of low double-digit range back then.

Speaker #11: You mentioned this morning it was kind of an outperformer last year. Anything you'd share on how this evolves and the outlook for that over time?

Speaker #11: I guess , especially on the credit card side of things .

Stephen Grambling: Yeah, Lizzie. I think we probably will stick to, generally, you referenced the Investor Day, generally what we've said. And what we've said has sort of played out that we think that our non-RevPAR-driven fees will continue to grow at above algorithm. Some of that's the credit card. Some of that's timeshare. Some of that's our purchasing business. We've got some other ideas that we're working on in terms of commercializing our customer base to continue to grow the business. I think we've done a pretty good job of that over time. And then our credit card program, I'm sure Chris may want to add something to this. Look, we have a fantastic credit card program that continues to be among the best and most popular cards in our industry and with Amex. Drives a lot of customer engagement. Drives great economics, both for our system and for us.

Speaker #4: Yeah , Lizzy , I think we'd probably will stick to generally , you referenced the Investor Day generally . What we've said and what we've said has sort of played out that we think that our non rev par driven fees will continue to grow at above algorithm .

Speaker #4: You know some of that's a credit card . Some of that's timeshare . Some of that's our our purchasing business . We've got some other ideas .

Speaker #4: That we’re working, you know, on in terms of, you know, commercializing our customer base to continue to grow the business. I think we’ve done a pretty good job of that over time.

Speaker #4: You know , and then our credit program card , I'm sure Chris may want to add something to this . Look , we we have an fantastic credit card program that continues to be among the best and most popular cards .

Speaker #4: You know , in in our industry . And with Amex drives , a lot of customer engagement drives great economics , both for our system and for us .

Stephen Grambling: Beyond that, we tend to not talk all that much about it in terms of some of the details are competitively sensitive. We think that that will continue to grow above Algorithm as well for a long time.

Speaker #4: And , you know , don't we beyond that , we tend to not talk all that much about it in terms of , you know , some some of the details or competitively sensitive , but we think that that will continue to grow above algorithm as well .

Speaker #4: For a long time .

Operator: The next question will come from Brandt Montour with Barclays. Please go ahead.

Speaker #1: The next question will come from Brant Montour with Barclays. Please go ahead.

Brandt Montour: Hey, good morning, everybody. Thanks for taking my question. I wanted to ask about group business. I don't think you guys gave a pace number, but a pace for 2026 would be helpful. And then the real question, though, is really about how we came into last year, right, with really good group pace. And then, of course, group in the US specifically did not; it wasn't realized to that level obviously because of tariffs. Would you say, sitting here today, knowing what you know about how that business works, we would need a shock to the demand side, kind of like something we saw last March, for group not to be an acceleration this year versus last year?

Speaker #12: Hey , good morning everybody . Thanks for taking my question . to ask I wanted about about group business . I don't think you guys gave a pace number , but but a pace for 26 would be would be helpful .

Speaker #12: And then, the real question, though, is really about how we came into last year, right? With really good group pace.

Speaker #12: And then, of course, group in the US specifically did not, you know, it wasn't at that level realized, obviously because of tariffs.

Speaker #12: Would you say , you know , sitting here today knowing what you know about how that business works ? We would need a shock to the demand side , kind of like something we saw last March for group not to be an acceleration this year versus last year .

Christopher Nassetta: Yes, you would. I mean, right now, we feel really good. I'd say coming into the year, relative to our expectation for the year, we feel great. We're sort of mid-single digits, system-wide Group position up for the year. And that's against, obviously, with a 1% to 2% RevPAR guidance, something, an expectation that when we finish the year, it would be somewhat lower than that. We'll see. But yeah, we feel like we've got the solid base on the books. We think Group will be the outperformer this year. We would have thought that last year. But for the reasons you described, it didn't end up being the case.

Chris Nassetta: Yes, you would. I mean, right now, we feel really good. I'd say coming into the year, relative to our expectation for the year, we feel great. We're sort of mid-single digits, system-wide Group position up for the year. And that's against, obviously, with a 1% to 2% RevPAR guidance, something, an expectation that when we finish the year, it would be somewhat lower than that. We'll see. But yeah, we feel like we've got the solid base on the books. We think Group will be the outperformer this year. We would have thought that last year. But for the reasons you described, it didn't end up being the case.

Speaker #3: Yes , you would . I mean , right now we feel really good . I'd say coming into the year relative to our expectation for the year .

Speaker #3: We feel great . We're sort of like mid-single digits system wide group position up for the year . You know , and that's against obviously with a 1 to 2% repar guidance .

Speaker #3: You know , something , you know , an expectation that when we finish the year it would be somewhat lower than that . We'll see .

Speaker #3: But we feel yeah , we feel we feel like we got the solid base on the books . We think group will be the Outperformer this year .

Speaker #3: We would have thought that last year , but for the reasons you described , it didn't end up being the case . But if you look at the categories , I would say we believe all three of the major categories group , leisure and and business transient are going to grow for the reasons I've spent too much time talking about driven by , you , the macro tailwinds , we do think it will be in that order .

Christopher Nassetta: But if you look at the categories, I would say we believe all three other major categories, Group, Leisure, and Business Transient, are going to grow for the reasons I've spent too much time talking about, driven by the macro tailwinds. We do think it will be in that order. We do think it will be Group at the top, short of any sort of unforeseen events, Leisure, and then Business Transient. But we think we'll see healthy growth across all segments with Group leading the way.

Chris Nassetta: But if you look at the categories, I would say we believe all three other major categories, Group, Leisure, and Business Transient, are going to grow for the reasons I've spent too much time talking about, driven by the macro tailwinds. We do think it will be in that order. We do think it will be Group at the top, short of any sort of unforeseen events, Leisure, and then Business Transient. But we think we'll see healthy growth across all segments with Group leading the way.

Speaker #3: You know , we do think it will be group at the top short any sort of unforeseen events leisure and then and then transient .

Speaker #3: business But we think we'll see healthy growth , healthy across all segments with group , group leading the way .

Operator: The next question will come from Michael Bellisario with Baird. Please go ahead.

Speaker #1: The next question will come from Michael Bellisario with Baird. Please go ahead.

Michael Bellisario: Thanks. Good morning, everyone. Just sort of along those same lines, just in terms of the booking window, maybe what changes have you seen recently? How has that evolved or improved? And then any more confidence from meeting planners? Maybe what are you hearing from them recently? Thanks.

Speaker #13: Thanks . Good morning everyone . Just sort of along those same lines , just in terms of the booking window , maybe what changes have you seen recently ?

Speaker #13: How has that evolved or improved? And then, any more confidence from meeting planners, maybe? What are you hearing from them recently?

Christopher Nassetta: Yeah. The booking window has been stable. It actually extended technically by one day since last quarter. It went from 26 days to 27 days. So I mean, I would say that's relatively stable. And what we're hearing from, frankly, across the board, what we're hearing from all in all segments feels pretty good. If you think about the business transient, we're talking to those customers all the time. I think the general theme is they all believe they're going to travel more this year for all the reasons. Everybody's got to get out in what they think is going to be a little bit stronger economy. And they know they're going to have to pay a little bit more because that's life in the environment we're in. And I'd say same on the group side. I'm talking to our head of sales all the time.

Chris Nassetta: Yeah. The booking window has been stable. It actually extended technically by one day since last quarter. It went from 26 days to 27 days. So I mean, I would say that's relatively stable. And what we're hearing from, frankly, across the board, what we're hearing from all in all segments feels pretty good. If you think about the business transient, we're talking to those customers all the time. I think the general theme is they all believe they're going to travel more this year for all the reasons. Everybody's got to get out in what they think is going to be a little bit stronger economy. And they know they're going to have to pay a little bit more because that's life in the environment we're in. And I'd say same on the group side. I'm talking to our head of sales all the time.

Speaker #13: Thanks .

Speaker #3: Yeah . booking window The is a has been stable . It actually extended technically by one day since last quarter . So not you know , it went from 26 days to 27 days .

Speaker #3: So I mean not I would say that's relatively but stable , but and what we're hearing from frankly across the board , what we're hearing from all , you know , all in all segments feels pretty good .

Speaker #3: If you if you think about the business transient , we're talking to those customers all the time . I think the general theme is they all believe they're going to travel more this year for all the reasons , everybody's got to get out you know , and what they think is going to be a little bit , you know , stronger economy and they know they're going to have to pay a little bit more because that's life .

Speaker #3: And the environment we're in. And I'd say the same on the group side. You know, we talk—I'm talking to our head of sales all the time.

Christopher Nassetta: I think his view is the trajectory, again, short, unforeseen circumstances that rattle people in terms of broader macro stuff. The sentiment is quite good. People have a healthy attitude about continuing to book business. It all feels pretty good.

Chris Nassetta: I think his view is the trajectory, again, short, unforeseen circumstances that rattle people in terms of broader macro stuff. The sentiment is quite good. People have a healthy attitude about continuing to book business. It all feels pretty good.

Speaker #3: And I think I think , you know , his view is , you know , the trajectory . You know , again , short unforeseen circumstances that rattle that rattle people in terms of broader macro stuff .

Speaker #3: The sentiment , the sentiment is quite good . And , you know , people people have a healthy attitude about continuing to to book business .

Speaker #3: So it all feels pretty good.

Operator: The next question will come from Patrick Scholes with Truist Securities. Please go ahead.

Speaker #1: The next question will come from Patrick Scholz with Truist Securities. Please go ahead.

C. Patrick Scholes: Great. Thank you. We certainly missed your Pollyannism at the Alice Conference two weeks ago.

C Patrick Scholes: Great. Thank you. We certainly missed your Pollyannism at the Alice Conference two weeks ago.

Speaker #14: Great. Thank you. We certainly missed your Pollyanna polytheism at the Alice conference two weeks ago.

Christopher Nassetta: I don't take any offense at that. How about optimism instead of Pollyannish? My vocabulary.

Chris Nassetta: I don't take any offense at that. How about optimism instead of Pollyannish? My vocabulary.

Speaker #3: Any offense at that ? How about optimism instead of Pollyanna ish ? I , you know , my vocabulary .

C. Patrick Scholes: No, no. I mean that in a positive way. It wasn't the most upbeat conference. We certainly could have used you. I mean it. We could have used your enthusiasm there. That you spoke about.

C Patrick Scholes: No, no. I mean that in a positive way. It wasn't the most upbeat conference. We certainly could have used you. I mean it. We could have used your enthusiasm there. That you spoke about.

Speaker #14: No , no , I mean that in a positive way . It wasn't the most upbeat conference . We certainly could have used it .

Speaker #14: I mean, we could have used your enthusiasm there, the way that you spoke.

Christopher Nassetta: Well, I was otherwise occupied doing my day job.

Chris Nassetta: Well, I was otherwise occupied doing my day job.

Speaker #3: I was otherwise occupied, doing my day.

C. Patrick Scholes: Understood. Understood. Excuse me. A question on your credit card contract. Is there anything in your existing credit card contract that would allow for a step-up in the royalty rate? And if so, how likely might that be that it would get triggered? Okay.

C Patrick Scholes: Understood. Understood. Excuse me. A question on your credit card contract. Is there anything in your existing credit card contract that would allow for a step-up in the royalty rate? And if so, how likely might that be that it would get triggered? Okay.

Speaker #14: Job . Understood ? Understood . A credit . Excuse me ? A question on your credit card contract . Is there anything in your existing credit card contract that would allow for a step up in the royalty rate ?

Christopher Nassetta: After yesterday, I suspect that we might get this question. Kevin gave the answer. We're not going to get into, and can't legally get into, all the terms of our contracts. And contractually, suffice to say, we redid our deals many years ago and then redid them again a couple of years ago. We feel really good about the contractual relationship we have with all of them, Amex obviously being the most dominant. We feel really good about the growth rate that's built into the contract as well as the natural growth that's coming because the cards, acquisition of customers, and the spend on the cards, given customers love the cards, is very favorable. So I would not set an expectation that there's some big announcement coming from us. We're doing great. It's growing above algorithm.

Chris Nassetta: After yesterday, I suspect that we might get this question. Kevin gave the answer. We're not going to get into, and can't legally get into, all the terms of our contracts. And contractually, suffice to say, we redid our deals many years ago and then redid them again a couple of years ago. We feel really good about the contractual relationship we have with all of them, Amex obviously being the most dominant. We feel really good about the growth rate that's built into the contract as well as the natural growth that's coming because the cards, acquisition of customers, and the spend on the cards, given customers love the cards, is very favorable. So I would not set an expectation that there's some big announcement coming from us. We're doing great. It's growing above algorithm.

Speaker #14: Okay .

Speaker #3: Yesterday , I suspect that we might get this question . Sure . We the Kevin gave answer . We're not going to get into like and can't into legally get all the terms .

Speaker #14: Of gotcha .

Speaker #3: Contractually . redid our We suffice to say , redid we our deals and then many years ago and then redid them again . Again a years couple of ago .

Speaker #3: really good feel We about the contractual relationship we have with all of Amex , them . obviously being the most dominant about the feel really good growth , we You know , rate .

Speaker #3: that's built in , you know , to the contract as well as the natural growth that's coming because the cards and acquisition of customers and the cards the given given customers love the cards , is very favorable .

Speaker #3: So I would not set an expectation that there's some big announcement coming from us . You know , we're doing great . It's growing above algorithm and we are highly confident it will continue to grow above algorithm for many years to come .

Christopher Nassetta: We are highly confident it will continue to grow above algorithm for many years to come.

Chris Nassetta: We are highly confident it will continue to grow above algorithm for many years to come.

C. Patrick Scholes: Okay. Thank you. I'll also take the over on the RevPAR as well.

C Patrick Scholes: Okay. Thank you. I'll also take the over on the RevPAR as well.

Speaker #14: Okay . Thank you . And I'll also take the over on the rev par as well .

Christopher Nassetta: Good. I like it. Why are you being such a Pollyanna?

Chris Nassetta: Good. I like it. Why are you being such a Pollyanna?

Speaker #3: Good . I like it . Why are you being such a Pollyanna .

C. Patrick Scholes: Oh, well, no. I mean that in a positive way. No, you got the perfect storm of holiday shifts, World Cup, and EasyComs.

C Patrick Scholes: Oh, well, no. I mean that in a positive way. No, you got the perfect storm of holiday shifts, World Cup, and EasyComs.

Speaker #14: Oh well no I mean that in a positive way . No . The you got the the perfect . Perfect storm of holiday shifts and World Cup and .

Christopher Nassetta: All right. We'll see. Thank you. All right.

Chris Nassetta: All right. We'll see. Thank you. All right.

Speaker #3: Easy comps and

Speaker #3: . There it is .

Speaker #3: . There it is . All right .

Operator: The next question will come from Trey Bowers with Wells Fargo. Please go ahead.

Speaker #14: see . We'll Thank you . .

Speaker #3: All right .

Speaker #1: See you. Next question will come from Trey Bowers with Wells Fargo. Please go ahead.

Trey Bowers: Hey, guys. Thanks for the question. A lot of what I was going to ask has been asked already. But I guess it's been pretty quiet from you guys on an inorganic basis for the last year. And you haven't really needed it. Organic growth's been best in class. But just curious what you're seeing out there in terms of opportunities. Do you expect that that should pick up over time, just in anything around the M&A environment as we go forward? Thanks so much.

Speaker #10: Guys, thanks for the hey, question. A lot of what I was going to ask has been asked already, but I guess it's been pretty quiet from you guys on a pretty organic basis for the last year.

Speaker #10: And you haven't really needed it. Organic growth has been best in class, but just curious what you're seeing out there in terms of opportunities.

Speaker #10: Do you expect that that should pick up over time? Just anything around the M&A environment as we go forward? Thanks so much.

Christopher Nassetta: Yeah. I get asked a lot, obviously. If you look at the history of the time I and we have been here, 18 going on 19 years, other than two years ago with two, what I would describe, one microtransaction and one relatively small transaction, we have not done any M&A. So all of our growth, we're what? I don't know, two or three times system size in that time frame has been organic. We've gone from 8 brands to 26 brands. You heard me talk about another couple babies we're getting ready to birth. So we think that we have built a very, very good skill set, I would argue, industry-leading skill set to drive organic growth, which is not just development teams doing a great job, which, of course, they are. It's about our commercial teams doing a great job delivering performance.

Chris Nassetta: Yeah. I get asked a lot, obviously. If you look at the history of the time I and we have been here, 18 going on 19 years, other than two years ago with two, what I would describe, one microtransaction and one relatively small transaction, we have not done any M&A. So all of our growth, we're what? I don't know, two or three times system size in that time frame has been organic. We've gone from 8 brands to 26 brands. You heard me talk about another couple babies we're getting ready to birth. So we think that we have built a very, very good skill set, I would argue, industry-leading skill set to drive organic growth, which is not just development teams doing a great job, which, of course, they are. It's about our commercial teams doing a great job delivering performance.

Speaker #3: Yeah , I get asked a lot . Obviously , you know , if you look at the history of the time , I and we have been here , you know , 18 going on 19 years other than two years ago with two what I would describe one micro transaction and one , you know , relatively small transaction .

Speaker #3: We have not done any M&A . So all of our growth what , I don't , we're know , 2 or 3 times system size in that time frame has been organic .

Speaker #3: Well, you know, we've gone from eight brands to 26 brands. You heard talk about another couple babies we're getting ready to birth.

Speaker #3: So we think that we have built a very , very good skill set . I would argue industry leading skill set to drive organic growth , which is not just , you know , development teams doing , you know , a great job , which of course , they are .

Speaker #3: It's about our commercial teams, you know, doing a great job delivering performance. It's about our brand teams doing a great job delivering great products that customers want.

Christopher Nassetta: It's about our brand teams doing a great job delivering great products that customers want. We think it is our alpha. That is what we've done, I think, with all respect to a bunch of great competitors. We've done more of and better than our competition. And as you know, that is a heck of a lot better way to drive overall returns because every time we do it, the returns on that are infinite versus going out and buying things. So we found unique circumstances in the two we did a couple of years ago that were really driven by the times, like interest rates spiking, the environment slowing down, and things got a bit rattled. And we found some unique seams on things that we really liked. But that is not the core of what we do. I would say we look at everything that's out there.

Chris Nassetta: It's about our brand teams doing a great job delivering great products that customers want. We think it is our alpha. That is what we've done, I think, with all respect to a bunch of great competitors. We've done more of and better than our competition. And as you know, that is a heck of a lot better way to drive overall returns because every time we do it, the returns on that are infinite versus going out and buying things. So we found unique circumstances in the two we did a couple of years ago that were really driven by the times, like interest rates spiking, the environment slowing down, and things got a bit rattled. And we found some unique seams on things that we really liked. But that is not the core of what we do. I would say we look at everything that's out there.

Speaker #3: We think it is , you know , it is our alpha that that is what we've done . I think with all respect to a bunch of great competitors , we've done more of and better than our our competition .

Speaker #3: And as know , you that is a heck of a lot better way to . overall Drive returns , because every time we do it , the are on that returns infinite versus going out and things .

Speaker #3: So we found unique circumstances in the two . We did a couple of years ago that were really driven by the times , you know , like interest rates spiking , you know , the environment slowing down .

Speaker #3: And , you know , things got a bit rattled . And we we found some like unique schemes that on things that we really liked .

Speaker #3: But that is not the core of what we do . I would I would say we look at everything that's out there . I don't see anything .

Christopher Nassetta: I don't see anything. I would say I don't see anything on the horizon. I always have to say, because in this seat, you do never say never, but don't misinterpret that. We're not working on anything that I think is real. I think you should think about us as an organic growth story. We love what we have. We love the skill set we've built. We think it is the best way to drive the best returns. We are equally focused on capital allocation to running the business. Obviously, the more we can do this organically, the more free cash flow spits out, the more shares we buy, the more we become an even better serial compounder. That's our strategy. So I grew up long ago as a capo. It's like we got to run the business well.

Chris Nassetta: I don't see anything. I would say I don't see anything on the horizon. I always have to say, because in this seat, you do never say never, but don't misinterpret that. We're not working on anything that I think is real. I think you should think about us as an organic growth story. We love what we have. We love the skill set we've built. We think it is the best way to drive the best returns. We are equally focused on capital allocation to running the business. Obviously, the more we can do this organically, the more free cash flow spits out, the more shares we buy, the more we become an even better serial compounder. That's our strategy. So I grew up long ago as a capo. It's like we got to run the business well.

Speaker #3: I would not I would be , I would be , I would say , I don't see anything on the horizon . I always have to say , because in this seat you do never say never .

Speaker #3: But don't misinterpret that . We're not working on anything that I think is real . We're I think you should think about us as an organic growth story .

Speaker #3: We love what we have . We love , you know , the skill set . We've we've built think it . And we is the best way to drive the best returns .

Speaker #3: And we are , you know , equally focused on capital allocation to the running , the more business . obviously , the can do we , this organically , the more free cash flow spits out , the more shares we buy , the more we become an even better serial compounder .

Speaker #3: And that's our strategy . So , you know , you know , I grew up long ago as Kappa . a It's like , you know , we got to run the business .

Christopher Nassetta: We got to drive share, drive growth, have great brands, do a great job for customers, have a great culture, all that. But when it comes out, when we spit it out the other end, we got to allocate capital really intelligently. And again, we think we're pretty good at that. We think we can keep growing at this level that we're talking about, the 6 to 7 range for an extended period of time without having to buy growth. And we think that's going to drive a better outcome in terms of how we perform over the next one, 2, 3, five, 10, 15 years, as it has over the last 10 years.

Chris Nassetta: We got to drive share, drive growth, have great brands, do a great job for customers, have a great culture, all that. But when it comes out, when we spit it out the other end, we got to allocate capital really intelligently. And again, we think we're pretty good at that. We think we can keep growing at this level that we're talking about, the 6 to 7 range for an extended period of time without having to buy growth. And we think that's going to drive a better outcome in terms of how we perform over the next one, 2, 3, five, 10, 15 years, as it has over the last 10 years.

Speaker #3: Well , we got to drive , share , drive growth , have great brands , do a great job for customers , have a great culture .

Speaker #3: All that . But when it comes out , when we spit it out the other end , we got to allocate capital . Really intelligently .

Speaker #3: And , you know , again , we think we're pretty good at that . We think we can keep growing at this level that we're talking about in the 6 to 7 range for an extended period of time without having to buy growth .

Speaker #3: And we think that's going to drive a outcome in terms of how we perform over the next one , two , three , five , ten , 15 years as it as it has over the last ten years .

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

Speaker #1: Gentlemen, ladies, this concludes our question and answer session. I would like to turn the call back over to Chris for any additional or closing remarks.

Christopher Nassetta: As always, we appreciate you guys spending the time with us. It's been a dynamic environment. Obviously, over the last year, you can sense my and our optimism about seeing sort of things turning the corner. We'll look forward to hopefully describing how we continue to see things improve along the lines that I described after we finish Q1. I hope everybody has a great day and a great week. Take care. Thanks.

Chris Nassetta: As always, we appreciate you guys spending the time with us. It's been a dynamic environment. Obviously, over the last year, you can sense my and our optimism about seeing sort of things turning the corner. We'll look forward to hopefully describing how we continue to see things improve along the lines that I described after we finish Q1. I hope everybody has a great day and a great week. Take care. Thanks.

Speaker #1: Please go ahead . .

Speaker #3: As always , we appreciate you guys spending the time with us . It's been a dynamic environment . Obviously , over the last year .

Speaker #3: You could sense my and our optimism about seeing sort of , you know , things turning the corner . We'll look forward to hopefully describing how we continue to see things improve along the lines that I described after we finish the first quarter .

Speaker #3: I hope everybody has a great day and a great week. Take care. Thanks.

Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Q4 2025 Hilton Worldwide Holdings Inc Earnings Call

Request a DemoDemo

HLT

Hilton Worldwide

Earnings