Hilton Worldwide Holdings Inc.

Good morning and welcome to the Hilton third 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 touch tone phone. 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 third 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 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 third 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. We are pleased to report another quarter of very solid results that demonstrate continued recovery and the resiliency of our business model. Increases in vaccination rates and consumer spending coupled with improving business activity continue to drive solid travel demand throughout the summer and into the fall. As global borders reopen and the travel environment recovers, we remain extremely encouraged by people's desire to travel and connect more than ever before. In the third quarter, system-wide REVPAR grew 99% year over year. Compared to 2019, REVPAR was down roughly 19%, improving 17 percentage points versus the second quarter, with system-wide rates down just 2.5% versus 2019. Adjusted EBITDA totaled approximately $519 million. up 132% year-over-year and down 14% versus 2019. Performance was primarily driven by strong leisure trends with leisure room nights roughly in line with 2019 levels with leisure rates exceeding 2019 levels. Business travel continued to gain momentum with midweek occupancy and rates improving meaningfully versus the second quarter. In the quarter, business transient room nights were roughly 75% of prior peak levels. Group continued to lag but showed significant sequential improvement versus the second quarter, boosted by strength and social events. For the quarter, group rev par was approximately 60% of 2019 levels, improving 21 percentage points from the second quarter. Overall, system-wide rev par versus 2019 peaked in July at 85%, with rates just shy of prior peaks. As expected, recovery slowed modestly later in the quarter due to typical seasonality and customer mix shift, but overall trends remain solid. Both August and September rev par achieved roughly 80%. of 2019 levels, driven by continued strength in leisure and upticks in business travel post-Labor Day as offices and schools reopen. These trends improved modestly into October, with month-to-date rev par at approximately 84% of 2019 levels and rates in the U.S. nearly back to prior peaks. Roughly 40% of system-wide hotels have exceeded 2019 REVPAR levels in October month to date. Additionally, bookings for all future periods are just 8% below 2019. With loosening travel restrictions and strong non-residential fixed investment forecasts, we remain optimistic for future travel demand. TSA reported third quarter travel numbers were nearly 80% of 2019, with demand picking up further following the announcements of the U.S. border reopening and the lift of the international travel ban for vaccinated travelers. Additionally, studies show that nearly 70% of U.S. businesses are back on the road, up 28 points from the end of the second quarter, with roughly 80% of our typical corporate mix coming from small and medium-sized businesses, And with the lagging recovery of larger corporate travel, we've taken the opportunity to continue our work from before COVID to further increase our focus on this segment of demand. This demand is higher rated and more resilient, which has helped us recover more quickly in business transient and should drive rate compression in the future as larger corporate travel picks up. On the group side, Our position for the rest of the year remains fairly steady with forward booking sentiment improving as variant concerns taper. Additionally, the recent reopenings of some of our large urban properties like the New York Hilton Midtown increase our confidence in our positioning as group recovers. Turning to development, we added nearly 100 hotels and 15,000 rooms across all major regions and delivered strong net unit growth of 6.6% in the third quarter. Conversions represented roughly a third of openings. Year to date, we've added more than 42,000 net rooms globally, higher than all our major branded competitors. Our performance reflects the success of our disciplined growth strategy, the strength of our brands, network effect, and commercial engines across the world. It also illustrates our increasing confidence in a strong recovery in global tourism in the months and years to come. During the quarter, We launched our large-scale franchise model in China, enabling independent owners to explore franchising opportunities with our Hilton Garden Inn brand, with a prototype developed specifically for the Chinese market. To date, we have signed more than 100 deals to develop Hilton Garden Inn properties in China, strengthening our confidence in the long-term growth of our focus service brands and our ability to cater to a growing middle class. Following our recently announced exclusive license agreement with Country Garden, we were thrilled to open our first Home 2 suites in China. With plans to grow to more than 1,000 properties, we look forward to leveraging our partnership to capture the rapidly growing demand for mid-scale hotels in China. We also celebrated the opening of our 500th Home 2 suites following the brand's launch just 10 years ago, making it one of the fastest-growing homes brands in industry history and boasting the industry's largest pipeline in North America with more than 400 hotels in development. Our luxury and lifestyle footprints also continue to expand globally with the debut of the Canopy by Hilton in Spain and the highly anticipated opening of the Mango House, LXR, and the Seychelles. Marking another important milestone in its global expansion, LXR celebrated its debut in Asia Pacific with the opening of the Roku Kyoto. In the quarter, we signed nearly 24,000 rooms, up approximately 40% year-over-year, driven by strength in the Americas and Asia Pacific regions. Driving our positive momentum and luxury, we announced the signing of the Conrad Los Angeles, the brand's first property in California. The 300-room hotel is expected to open in 2022 as part of the Grand LA mixed-use development. With approximately 404,000 rooms in development, more than half of which are under construction, we expect positive development trends to continue driven by both new development and conversion opportunities. For the full year, we expect net unit growth in the 5% to 5.5% range, and we continue to expect mid-single-digit growth for the next several years. For our guests, flexibility has always been important, but the pandemic has made choice and control even more critical. We were excited to launch several new commercial programs and loyalty extensions including the launch of Digital Key Share, a first for a major hospitality company. This feature allows more than one guest to have access to their room's digital key. Additional technology enhancements have enabled our elite honors members to begin enjoying automatic room upgrades. Gold and Diamond members may be notified of a complimentary upgrade prior to arrival, enabling guests to choose their upgraded room directly by using the Hilton Honors app. We continue to focus on new opportunities to further engage our 123 million honors members, and our thrill to see engagement is nearly back to 2019 levels. In the quarter, membership grew 11% year over year. Honors members accounted for 59% of occupancy, with the U.S. at 66%, just two points below 2019 levels. During the pandemic, approximately 23 million U.S. households brought home a new pet, including my own. And like so many others, my family loves traveling with our new dog, Miller. In the coming months, Homewood Sweets will join Home 2 in becoming 100% pet-friendly in the U.S. with plans for all limited service brands to be pet-friendly by the first quarter of next year. And thanks to our exciting partnership with Mars Pet Care, we're offering new pet-focused programming and benefits. Our guests are eager to travel with their furry little friends, and by making that simpler, we're able to capture demand and bring new business into the system. As the global travel environment improves, I continue to be impressed by our team members' dedication to providing exceptional experiences to our guests. That's why I am particularly proud that last week, we were named the number three world's best workplace by Fortune and Great Place to Work. After six consecutive years of being ranked, Hilton was the only hospitality company on the list. We truly believe that Hilton continues to be an engine of opportunity for all of our stakeholders around the world and are very optimistic for the future. With that, I'll turn the call over to Kevin for a few more details on our results in the quarter.