Hilton Worldwide Holdings Inc.

Good morning and welcome to the Hilton first quarter 2021 earnings conference call. All participants will be in a 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, Senior Vice President, Investor Relations and Corporate Development. You may begin.

Thank you, Chad. Welcome to Hilton's first quarter 2021 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. 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 first quarter results. Following their remarks, we'll be happy to take your questions. With that, I'm pleased to turn the call over to Chris.

Thank you, Jill. Good morning, everyone, and thanks for joining us today. It has been a little over a year since the pandemic started. Over that time, we acted swiftly to address the challenges we face so we could quickly turn our focus to best positioning ourselves towards recovery and beyond. I'm really proud of how we've set up the company for the future, and most importantly, I'm grateful to our team members who have continued to lead with hospitality and to all of our stakeholders for their ongoing support. In the first quarter, system-wide RevPAR decreased 38% year-over-year and 53% versus 2019. Rising COVID cases and tightening travel restrictions, particularly across Europe and Asia-Pacific, weighed on demand through January and most of February. However, March marked a turning point. As we lapped the start of the U.S. lockdowns, RevPAR turned positive. up more than 23% year-over-year. System-wide occupancy reached 55% by the end of the month, driven by strong leisure demand. As expected, recovery in group and corporate transient continued to lag, but both segments showed sequential improvement versus the fourth quarter. Overall, this positive momentum has continued into the second quarter. While recovery varies by region and country, we can see the light at the end of the tunnel. In the U.S., more than 50% of adults have received at least one dose of a COVID-19 vaccine. As a result, we're seeing a significant lift in forward bookings and occupancy, which is now around 60%, as well as lengthening booking windows. This mirrors trends in other countries around the world. For instance, China is running in the low 70s occupancy. We do expect this momentum to continue. Vaccine distribution, coupled with relaxed travel restrictions and increasing consumer confidence should drive further red par improvements in the coming months and quarters. In fact, we are on pace to see record leisure demand in the U.S. over the summer months. with April bookings for the summer exceeding 2019 peak levels by nearly 10 percent. We also expect continued corporate office reopenings to drive a meaningful pickup in business transient demand towards the back half of the year. Based on what we've seen in China and pockets of the U.S., once restrictions are lifted and offices reopen, business travel returns. In the first quarter, business transient revenue was roughly 75% of 2019 levels in states that were further along in their reopening process. Additionally, recent forecasts for non-residential fixed investment are up more than three percentage points from prior projections to 7.8%, indicating even greater optimism around business spending. On the group side, forward booking activity continues to improve month over month, Group bookings made in the first quarter for the back half of the year were roughly flat with 2019 booking activity, suggesting customers are increasingly optimistic about safety measures and loosening pandemic restrictions. Near-term group bookings continue to be driven largely by social events and smaller group meetings, but we are seeing a slow shift back to a more normal mix of business, with corporate group leads up more than 70 percent for future periods. Associations and trade shows have also started opening up housing and registration sites for events later this year, further signs of moving forward with in-person group meetings. As we look out to next year, our group position is roughly 85 percent of peak 2019 levels, with rate increases versus 2019. Group bookings were up in the mid-teens for 2023 versus 2019. In fact, last week, I was in Mexico to chair the World Travel and Tourism Council's Global Summit, where more than 800 participants from all over the world attended in person and thousands more attended virtually. The conference demonstrated that it is possible to meet in a safe way, and hybrid events can be incredibly effective at expanding participation and enhancing collaboration. It was great to be in the same room with other hospitality and government leaders talking about the bright future that lies ahead for our industry. The event made me even more optimistic for our recovery and confident that we are beginning to see a new era of travel emerge. Turning to development, during the quarter we added 105 hotels, totaling more than 16,500 rooms to our system, and achieved net unit growth of 5.8%. We celebrated the openings of our 100th Curio and our 50th Tapestry Hotel, demonstrating the strength of our conversion-friendly brands. Overall conversions accounted for approximately 24% of additions in the quarter. We also continued to enhance our resort footprint during the quarter, With the openings of the 1500-room Virgin Hotel Las Vegas, the Hilton Abu Dhabi Yaz Island, the all-inclusive Yucatan Resort Playa del Carmen, and the six spectacular properties along the California coast, customers have even more opportunities to stay with us as travel resumes. Building on our already impressive portfolio in the world's most desirable locations, During the quarter, we signed agreements to bring our Waldorf Astoria and Canopy brands to the Seychelles. The properties are scheduled to open in 2023, joining the Mango House Seychelles LXR Hotel and Resort set to open later this summer. In the quarter, we signed nearly 22,000 rooms, modestly ahead of our expectations. This included our first Signia Hotel. Additionally, through our strategic partnership with Country Garden to introduce the Home2 Suites brand to China, we added more than 5,000 rooms to our pipeline. We're excited for the opportunities this partnership provides with one of our fastest-growing brands. Home2 recently celebrated its 10th anniversary, marking the milestone with nearly 1,000 rooms, hotels open and in the pipeline. On Entrepreneur Magazine's annual Franchise 500 list, which featured 11 of our 18 brands, Home 2 was the number two hotel brand, ranking only behind Hampton. Overall, we are very happy with our development progress and excited for additional growth opportunities. With more than half of our 399,000-room pipeline under construction, we're confident in our ability to grow net units in the mid-single-digit range for the next several years, and continue to expect growth in the 4.5% to 5% range in 2021. In an environment where safety and cleanliness are top priorities for travelers, we continue to create more opportunities for our guests to enjoy a contactless experience from pre-arrival to post-checkout. Our digital key feature, which enables guests to bypass the front desk and go straight to their rooms, is now available in the vast majority of our hotels worldwide. Additionally, we've joined forces with Lyft to mobilize Honors members to contribute to the Lyft Vaccine Access Initiative, which funds rides for those in need of reliable transportation to their vaccine appointment. We're excited to continue the momentum of our partnership with Lyft by supporting this important cause. During the quarter, we also launched two new co-branded credit cards in Japan. building on our 25-year partnership with American Express and marking the first time our co-branded cards have been made available to customers outside the United States. These cards are designed with both frequent and occasional travelers in mind and offer customers the opportunity to earn Hilton Honors bonus points on everyday spending as well as at our properties worldwide. As a result of our strong partnerships, industry-leading brands, and unmatched value proposition, our loyalty program continues attracting new members. We ended the first quarter with more than 115 million honors members, up roughly 8% year over year, with membership increasing across every major region despite lower demand due to the pandemic. As I reflect on the quarter and the past year, I'm very proud of the determination, creativity, and hospitality that our Hilton team members have demonstrated. This earned us recognition by Fortune and Great Place to Work as the number one best big company to work for and number three best company to work for in the United States. Overall, I'm pleased with our first quarter results and feel very good about the momentum for the remainder of the year. I'm optimistic for the future of travel and for Hilton as we emerge stronger and better positioned, continuing to drive value for our guests, our owners, our communities, and and, of course, our shareholders. With that, I'm going to turn the call over to Kevin to give more details on our results for the quarter.