Hyatt Hotels Corp

please press star followed by the number one on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the call over to Adam Roman, Senior Vice President of Investor Relations and Global FP&A. Thank you. Please go ahead.

Thank you and welcome to Hyatt's fourth quarter and full year 2024 earnings conference call. Joining me on today's call are Mark Hoplamazian, Hyatt's President and Chief Executive Officer, and Joan Botterini, Hyatt's Chief Financial Officer. Before we start, I would like to remind everyone that our comments today will include forward-looking statements under federal securities laws. These statements are subject to numerous risks and uncertainties, as described in our annual report on Form 10-K, quarterly reports on Form 10-Q, and other SEC filings. These risks could cause our actual results to be materially different from those expressed in or implied by our comments. Forward-looking statements in the earnings release that we issued today, along with the comments on this call, are made only as of today and will not be updated as actual events unfold. In addition, you can find a reconciliation of non-GAAP financial measures referred to in today's remarks on our Investor Relations website under the Financials section and in this morning's earnings release. An archive of this call will be available on our website for 90 days. Please note that unless otherwise stated, references to occupancy, average daily rate, and REVPAR reflect comparable system-wide hotels on a constant currency basis. Percentage changes disclosed during the call are on a year-over-year basis unless otherwise noted. With that, I'll now turn the call over to Mark.

Thank you, Adam. Good morning, everyone, and thank you for joining us today. Recent tragic events around the world, including the wildfires in the Los Angeles area and the plane crash in Washington, D.C., and the other in Philadelphia have affected many of our communities. Our hearts go out to those affected, and I want to thank the colleagues who have cared for those in need during these difficult times. I'd like to start today's call by touching on recent transaction activity. On Monday of this week, we announced that we entered into an agreement to acquire all outstanding shares of Playa Hotels and Resorts for $13.50 per share, or approximately $2.6 billion, including approximately $900 million of debt net of cash. Hyatt is currently the beneficial owner of approximately 9.4% of Playa's outstanding shares. The pending acquisition provides an opportunity for Hyatt to enter into long-term management agreements for our luxury, all-inclusive Hyatt Ziva and Hyatt Zalara branded properties currently owned by Playa, and to expand our distribution channels, including ALG Vacations and Unlimited Vacation Club. We're well-poised to drive value creation through complementary business segments and strengthen our existing all-inclusive infrastructure in Mexico and the Caribbean. We remain committed to our asset light business model and intend to identify third party buyers for Playa's owned properties. At closing, we expect to announce a new commitment to realize at least $2 billion of proceeds by the end of 2027. This includes existing Hyde assets and properties currently owned by Playa. We expect our asset light earnings mix to exceed 90% on a pro forma basis in 2027. At closing, we expect to fund 100% of the acquisition with new debt financing and, consistent with maintaining our investment grade profile, expect to pay down over 80% of the new debt financing with anticipated proceeds from the asset sales I just mentioned. We're very excited about the opportunity ahead of us and look forward to sharing more details once the transaction closes. We also closed on the acquisition of Standard International during the fourth quarter and finalized the 50% long-term strategic joint venture with Grupo Pinheiro to manage the Bahia Principe hotels and resorts. Additionally, we were active on the real estate front, selling Hyatt Regency O'Hare in Chicago, along with our share in two joint ventures, the Park Hyatt Los Cabos Hotel and Residences, and the Hyatt Centric downtown Nashville. We retained long-term management or franchise agreements for each property. We're also actively engaged in other discussions and expect to sell additional owned properties in 2025. Turning to growth, our pipeline expanded to approximately 138,000 rooms in the quarter, a new record for Hyatt, and represents 9% growth when compared to the fourth quarter of 2023. Our pipeline does not include the 7,100 rooms for the Venetian Resort Las Vegas, which joined the Hyatt system in early January of 2025. We now have nearly 10,000 rooms in Las Vegas that are part of World of Hyatt, including over 2,500 rooms at the Rio Hotel and Casino. We achieved net rooms growth of 7.8% in 2024, delivering industry-leading growth for the eighth consecutive year. There were several notable openings in the fourth quarter, enhancing our luxury resort and lifestyle offerings. These included Park High at London River Thames, Grand Hyatt Deer Valley, Thompson Palm Springs, and the addition of the Standard and Bahia Principe hotels. We expect organic net rooms growth to meaningfully accelerate in 2025, reflected in the outlook that we provided this morning. We kicked off the year in a big way with the addition of the Venetian Resort in January and through the first 45 days of the year, we have already opened 9,000 new rooms. Now turning to operating results, our fourth quarter results reflect the strength of our brands as we achieved several records during the quarter. This morning, we reported system-wide RevPar growth of 5% for the quarter and 4.6% for the full year. We continue to see high-end consumers prioritizing travel as RevPar growth was strongest among our luxury brands in both the quarter and for the full year. Leisure transient rooms revenue increased approximately 4% in the quarter, and for the full year, revenue increased approximately 1%. Results were strong for resorts in the Americas over the FESTA period, and transient pace for the first quarter of 2025 is up in the high single digits compared to the first quarter of 2024. Group rooms revenue was flat in the quarter and was up 5% when adjusting for the timing of the Jewish holidays in October and the U.S. elections in November. Looking ahead, 2025 group pays for the U.S. full service managed properties is up 7% compared to 2024 with average rate accounting for over half of the increase. We expect group contribution to be strong in the first quarter driven by the timing of Easter falling in April 2025 compared to March of 2024 and the presidential inauguration in DC in January. Business transient customers remained our strongest growth segment, delivering revenue growth of 10% in the quarter. We continue to see our large corporate customers back on the road, and we experienced an increase in both demand and average rate in the quarter. Overall, Business transient revenue was up 12% for the year, and this benefited major urban markets in the United States, including New York, Washington, D.C., and Seattle. World of Hyatt continues to deliver remarkable results and has fueled our commercial success. World of Hyatt membership reached a new record of approximately 54 million members at year-end, a 22% increase over last year. Loyalty room night penetration during the quarter set a record high, highlighting the engagement from our World of Hyatt members. Spend on our co-branded credit cards increased 18% in 2024 compared to 2023. And our consumer card was the winner of the Kiplinger's Reader's Choice Award for the best hotel credit card. Our focused effort to deliver more unique experiences for our guests more frequently and in more locations helps to position Hyatt as the brand of choice. Before I turn it over to Joan, I'd like to spend a few minutes reflecting on Hyatt's evolution to a brand-led organization. When we launched World of Hyatt in 2017, we aspired to create a loyalty program that would build community and engage with high-end travelers. World of Hyatt was and is the foundation of our brand portfolio, and we've deliberately expanded that portfolio to meet the needs of our existing customers and to attract new members. While growing an award-winning loyalty platform, We also took intentional steps to add brands that would complement our existing portfolio while accelerating the growth of our existing brands. We used customer insights to identify where and why our members wanted to travel and deliberately grew our portfolio of luxury, resort, and lifestyle hotels while at the same time expanding into the upper mid-scale segment. Since 2017, we've doubled luxury rooms tripled resort rooms, and quintupled lifestyle rooms. We also launched Yurkov and Hyatt Studios, our upper mid-scale brands. At the same time, we embraced the power of a differentiated loyalty program by providing more benefits for our members when many loyalty programs were taking benefits away. The relationship with our members is more than a transaction, because when they say the Hyatt, they welcome us into their lives. and we have always committed to caring for them so that they can be their best. We also extended care by providing our members with more ways to experience Hyatt, whether on property or through collaborations that extended the value of their membership. While care is hard to measure, we would know we were succeeding if our membership base and engagement at our hotels increased. And on those measures, we've been extremely successful. Since 2017, we have grown our loyalty membership base on average by 27% per year. And today, our members per hotel is significantly higher than our larger competitors. And the next step of our journey begins with our new brand groupings. Luxury, lifestyle, inclusive, classics, and essentials. Our brand-led organization allows us to further elevate the focus on our guests and customers that we serve in these brand groups. We're using new tools that deliver bespoke insights that will drive greater customer preference for each brand group and more loyalty to Hyatt. Even as we improve these abilities, we have the most white space and opportunities to grow compared to our major competitors. We expect to continue to grow at a healthy pace with well-defined brands and organic growth from our record pipeline. to serve many more stay occasions for our guests. Our growth in luxury and lifestyle will continue to be very intentional, ensuring we protect the ethos of each brand and to not just grow for the sake of growth. We will continue to be a leader in the all-inclusive space with an increasing level of powerful resources driving performance. For Hyatt, this means much more than just appending, quote, all-inclusive, unquote, to the end of an existing brand. It means providing a differentiated frictionless travel experience to vertically integrated channels like ALG Vacations and UBC while delivering the best food and beverage and entertainment offerings in the category. Our classics, which includes storied brands like Brand Hyatt and Hyatt Regency, and our essentials brand group, which includes our select service brands, will drive scale for Hyatt. We will focus on expanding our brand footprint as we still have many more markets to serve, especially among our essentials brands. This includes our upper mid-scale brands, which have great momentum with over 55 open Yurkov hotels and our first Hyde Studios hotel opening in the first quarter of this year. We have over 120 upper mid-scale hotels in the pipeline, which will fuel future growth. This is a view to our future. Differentiated offerings across distinctive brands and a highly focused approach to leveraging our loyalty program and the insights that matter the most as we serve high-end travelers across more and more of their stay occasions. We are committed to seeing our guests and customers as individuals and extending our purpose of care. We will not use a lowest common denominator approach in any aspect of our business. This leads to greater loyalty and share of wallet among our members and customers. at a higher average rate and at a lower cost of acquisition, driving better returns for our owners. Our owners realize the benefit of the Hyatt network and want to build more properties with us. That increases our brand footprint. This provides more opportunities in more places for our members and guests, driving further loyalty to Hyatt and better performance for our owners. When you put this together, We have the ability to generate significant fees per room, which increases our earnings, margins, and cash flow over time, and serves as a powerful growth engine into the future. I'd like to close by expressing my gratitude to all Hyde colleagues, including the 15,000 new colleagues from Standard and Bahia Principe, who live our purpose every day by caring for each of our stakeholders. Joan will now provide more details on our operating results. Joan? Over to you.