Hilton Worldwide Holdings Inc.

Good morning and welcome to the Hilton fourth quarter and full year 2020 earnings conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 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 telephone keypad. 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 Jill Slattery, Vice President, Investor Relations. Please go ahead.

Thank you, Chad. Welcome to Hilton's fourth quarter and full year 2020 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 publicly update or revise these statements. For a discussion of some of the factors that could cause actual results to differ, please see the risk factor section of our most recently filed Form 10-K as supplemented by our 10-Q filed on November 4th, 2020. 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. This morning, Chris Nassetta, our President and Chief Executive Officer, will provide an overview of the current operating environment. Kevin Jacobs, our Chief Financial Officer and President, Global Development, will then review our fourth quarter and full year results. Following their remarks, we will be happy to take your questions. With that, I'm pleased to turn the call over to Chris.

Thank you, Jill, and good morning, everyone. We certainly appreciate you all joining us today, and I hope everybody is staying well. I want to start with something difficult. I want to start by extending my most heartfelt condolences to the Sorensen family. and the thousands of Marriott associates around the world following the heartbreaking news of Arnie's passing. To say I'm deeply saddened by that loss would be an understatement. I had, as many of you know, had the opportunity to work with Arnie in a number of capacities throughout my career, including earlier on at Host. I think it's very fair to say he was an exceptional leader, but also an incredible person. and a great friend. Our industry is better because of him, and I am a better professional and a better person because of him. On behalf of everyone at Hilton, his family and the entire Marriott family are in our thoughts. As we all know, this past year has presented unique challenges, including a pandemic that devastated lives, communities, and businesses across the world, widespread economic declines and acts of social injustice. Due to the extraordinary levels of disruption, our industry experienced demand declines we've never seen before in our 101-year history. Guided by our founding purpose to make the world a better place through the light and warmth of hospitality, we acted quickly to ensure the safety and well-being of our people. We also took steps to protect our business by right-sizing our cost structure and enhancing our liquidity position while continuing to drive net unit growth and increase our network effect. As a result of these moves, we expect to recover from the pandemic as a stronger, higher margin business that is even better positioned to deliver performance for our owners and strong free cash flow for our shareholders. While it's certainly been a very difficult year, we're proud of everything we've accomplished, but we certainly could not have done it without the support of all of our stakeholders. For that, I'd like to extend a heartfelt thank you to all of our loyal customers, our important owner partners, our communities who supported us and enabled us to support them, our team members who gave their hearts and souls to our business, and our shareholders who stood by us. Because of our amazing people, we've been able to lean on our award-winning culture, which earned the number one best place to work in the United States for the second consecutive year and the number three world's best workplace to help get us through these trying times. Turning to results, for the full year, system-wide REVPAR declined 57% with adjusted EBITDA down only modestly more. illustrating the resiliency of our fee-based model. We also demonstrated the strength of our brands and power of our customer-centric strategy by achieving market share gains across every region, even in a distressed business environment. For the quarter, system-wide REVPAR declined 59%, relatively in line with our expectations. The positive momentum and demand that we saw through the summer and early fall was disrupted in November, December by rising COVID cases tightening travel restrictions, and further hotel suspensions, particularly in Europe. Similar to the third quarter, drive-to leisure travel drove an outsized portion of demand. Business transient and group trends showed modest sequential improvement versus the prior quarter, but overall demand remained quite muted. As we look to the year ahead, we remain optimistic that accelerating vaccine distribution will lead to easing government restrictions and unlock pent-up travel demand. For the first quarter, overall trends so far appear to be similar to the fourth quarter, with modest increases in demand in the U.S., offsetting stalled recoveries in Europe and Asia Pacific. We expect improving fundamentals heading into spring, with essentially all system-wide rooms reopened by the end of the second quarter. We expect a more pronounced recovery in the back half of the year, driven by increased leisure demand and meaningful rebounds in corporate transient and group business. Over the last year, the personal savings rate in the United States has nearly doubled, increasing by more than $1.6 trillion to $2.9 trillion, with the potential to go even higher given additional stimulus. We expect this to drive greater leisure demand as travel restrictions ease and markets reopen to tourism. Additionally, conversations with our large corporate customers, along with sequential upticks in business transient booking pace year to date, indicate that there is pent-up demand for business travel that should drive a recovery in corporate transient trends as the year progresses. On the group side, We saw a meaningful step up in new group demand in January with our back half group positions showing significant sequential improvement versus the first half of the year. With roughly 70% of bookings made within a week of travel, overall visibility remains limited. However, we continue to see signs of optimism. In fact, the vast majority of our large corporate accounts agreed to extend 2020 negotiated rates into this year. Despite the challenges in 2020, we opened more than 400 hotels totaling nearly 56,000 rooms and achieved net unit growth of 5.1%, slightly ahead of guidance. Fourth quarter openings were up nearly 30% year over year, largely driven by new development in China where our focus service brands continue to command a disproportionate share of industry growth. We also celebrated Our one millionth room milestone and the openings of our 300th hotel in China, our 600th DoubleTree Hotel, and our 900th Hilton Garden Inn. We ended up the year with 397,000 rooms in our development pipeline, up 3% year over year. While market disruption weighed on new development signings, conversion signings increased more than 30% versus the prior year. As owners look to benefit from the strength of our network, we anticipate continued positive momentum and conversion activity, particularly through Doubletree and our collection brands. During the quarter, we signed agreements to expand our Curio collection in Mexico and bring our Tapestry collection to Portugal. This marks one of several new Tapestry hotels scheduled to open across Europe this year. We also announced plans to debut LXR in the Seychelles with Mango House Seychelles. The property will deliver a truly unique hospitality experience with spacious guest rooms and suites and five world-class food and beverage venues. Scheduled to open in the coming months, the hotel underscores our commitment to further expanding our resort portfolio. Building on that momentum, we kicked off 2021 with an agreement to bring LXR to Bali. Additionally, we celebrated the openings of Oceana Santa Monica, which marked LXR's U.S. debut, as well as the Waldorf Astoria Monarch Beach Resort and the Hilton Vancouver Downtown, which was converted from a competitor brand. With these notable openings and many exciting development opportunities in front of us, we are confident in our ability to continue delivering solid growth over the next several years. The pandemic rapidly changed guest behaviors, priorities, and concerns. We listened to our customers and moved quickly to launch modifications to our Honors Loyalty Program, deliver industry-leading standards of cleanliness and hygiene with Hilton CleanStay, and provide flexible, distraction-free environments for remote work with workspaces by Hilton. Additionally, with an even stronger focus on recovery, last month we implemented Hilton Event Ready Hybrid Solutions, an expanded set of resources to help event planners address the dramatic shift towards hybrid meetings as group business rebounds. Our flexibility and innovation drove continued growth in our honors network, ending the year with more than 112 million members who accounted for approximately 60% of of system-wide occupancy. Throughout 2020, we also remain focused on our corporate responsibility and our commitment to our ESG initiatives. We're proud to contribute to our communities, and we're honored to be named the Global Industry Leader in the Dow Jones Sustainability Index for the second year in a row. In a year marked by challenge and change, we effectively executed our crisis response strategy, carefully managed key stakeholder relationships, and continue to press forward on strategic opportunities. I'm confident that there are brighter days ahead and that we are in a stronger, more resilient, and we are better positioned than ever before. With that, I'm going to turn the call over to Kevin for a few more details on the fourth quarter and the full year.