Hilton Worldwide Holdings Inc.

Good morning and welcome to the Hylton second quarter 2023 earnings conference call. All participants will be in the 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. 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 Chapman, Senior Vice President, Investor Relations and Corporate Development. You may begin.

Thank you, MJ. Welcome to Hilton's second quarter 2023 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 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 Nassata, our President and Chief Executive Officer, will provide an overview of the current operating environment and the company's outlook. Kevin Jacobs, our Chief Financial Officer and President, Global Development, will then review our second quarter results and discuss our expectations for the year. 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, and good morning, everybody. We appreciate you joining us today. We're excited to report strong second quarter results with REBPAR, adjusted EBITDA, and EPS exceeding our expectations. Adjusted EBITDA for the quarter hit a record $811 million, the highest single quarter in our company's history. Performance continued to be driven by solid fundamentals along with continued share gains. Our industry-leading brands, strong commercial engines, and powerful partnerships continue to strengthen our system and differentiate us from the competition, while a culture of innovation continued to fuel additional growth opportunities. Despite macro challenges over the near term, we're confident in our ability to continue driving solid top-line and bottom-line growth, and in turn, growing free cash flow. Given the strength of our results thus far and our expectations for the rest of the year, we're increasing our guidance for return of capital for the full year to between $2.4 and $2.6 billion. Turning to results in the quarter, system-wide REVPAR increased 12.1% year-over-year, as strong demand drove continued pricing power across all segments. System-wide occupancy improved more than four points during the quarter, to reach 77 percent in June, our highest level post-pandemic. Business transient REVPAR remained strong, growing 11 percent year-over-year as trends continued to normalize. Leisure REVPAR increased 7 percent versus last year, driven by solid rate growth and despite more difficult year-over-year comparisons. Group recovery remained robust in the quarter, with REVPAR growing 19 percent year-over-year. Compared to 2019, system-wide rev par grew more than 9% in the quarter, with all segments performing well versus prior peaks and accelerating sequentially versus the first quarter. Stable demand and rising rates drove leisure rev par growth of 26% versus 2019 and business transient growth of 6%. Group red bar was roughly flat versus prior peak levels and improved versus the first quarter. As we look to the back half of the year, we expect continued strength driven by recovery in international markets, business transient, and group demand. On the group side, we continue to see very positive trends. Our bookings in the quarter for 2024 arrivals grew 30%. with group position now at 13% up, driven by the corporate segment. And our sales team saw the largest revenue bookings in our history for all future arrival periods. Based on all that, we now expect full-year REBPAR growth of between 10 and 12%. Turning to development, we signed more than 36,000 rooms in the second quarter, representing the largest quarterly signings in our history. Conversions accounted for nearly a third of signings in the U.S. Signings in international markets doubled versus last year, accounting for roughly half of system-wide signings in the quarter, driven by strong momentum across Europe and Asia Pacific. In Europe, we signed agreements across 14 countries, including our first tapestry hotel in the French Riviera and our first curio in Croatia. In China, Hilton Garden Inn continued to show tremendous growth since launching our new franchise business model. In the quarter, we signed approximately 3,700 HCI rooms in China more than three times last year and accounting for more than a third of our signings in China. Signings in the Americas were up 25% year-over-year with strong interest in the U.S. despite tighter credit conditions. We've signed more than 50 true hotels year-to-date, representing the strongest pace since 2017, as the operating success of existing true properties is leading to a surge in new signings. Results were further helped by Spark, with approximately 60 hotels signed and another 400 in negotiation just six months since its launch. Nearly all deals are conversions from third-party brands, and half represent new owners to Hilton. With our first Spark scheduled to open in September and roughly 20 by year end, Spark is well positioned to disrupt the premium economy segment while expanding our customer and owner base, especially in markets where there is no Hilton brand presence today. In addition to the strong start for Spark, we recently launched an inventive new extended stay brand in the U.S. Under the working title Project H3, The apartment-style accommodations are designed for guests booking 20 or more nights, built with the staying power of Hilton's award-winning hospitality. We have received tremendous interest from owners and developers due to the strong market opportunity, cost-efficient build, and high-margin model. We currently have more than 300 deals in negotiation. Our system-wide pipeline now stands at a record 3,000 properties totaling approximately 441,000 rooms, increasing 7% year-over-year and 3% from last quarter. Following another strong quarter of starts, up more than 73% year-over-year, and over 40% year-to-date, roughly half of our pipeline is currently under construction. We have more rooms under construction than any other hotel company, ensuring guests will have even more options to stay with us in the years to come. Specifically in the U.S., our under-construction pipeline has continued to increase up 15% year over year, which will contribute to increased openings later this year and next. In fact, in the coming weeks, we're going to open nearly 2,000 additional hotel rooms in New York Times Square with the debut of our first-ever Tempo by Hilton. and a new tri-brand property featuring Home 2 Suites, Hampton Inn, and Motto. In the quarter, we celebrated several milestones, including the openings of our 2900th Hampton Inn and our 600th Home 2 Suites property, which remains one of the fastest-growing brands in the industry. Additionally, we surpassed 150,000 rooms in Asia Pacific, including the openings of the Hilton Okinawa Miyako Island Resort in Japan and the Conrad Shenzhen our first luxury hotel in China's thriving technology hub. We expect openings to accelerate as the year progresses, given strong international and conversion trends, and expect conversions to account for around 30% of openings. For the full year, we expect net unit growth of approximately 5%. With forecasts for our highest level of signings, the largest pipeline in our history, and approaching the largest under construction pipeline in our history, We expect net unit growth to accelerate to 5% to 6% next year and to return to 6% to 7% over the next couple of years. As part of our commitment to deliver exceptional experiences for guests, we remain focused on initiatives to drive increased loyalty and satisfaction. We know, for instance, that food and beverage experiences are an integral part of travel and want to ensure our hotels themselves are great dining destinations. We recently formed a first-of-its-kind partnership with the James Beard Foundation, serving as the premier sponsor of the 2023 Restaurant and Chef Awards, and continue expanding our partnerships with world-class talents such as Michael Mina, Jose Andres, Nancy Silverton, and Paul McGee. Hilton Honors remains the fastest growing hotel loyalty program with more than 165 million members, up 20% year-over-year, driven by strong growth across all major regions. Honors members accounted for 64% of occupancy in the quarter, up two points year-over-year. Hilton team members and our award-winning culture continue to differentiate our brands from the competition. Just yesterday, our Waldorf Astoria Home 2 and True brands were named best in category by J.D. Power for their respective segments in North America. Last week, Hilton was again named as a top employer for millennials for the sixth consecutive year. Since 2016, we've been recognized by Great Place to Work as the world's best hospitality company in over 60 countries. We're thankful for the great work our team members do to serve our guests around the world. We have incredible opportunities ahead to further position ourselves as the leader in hospitality, and we're very excited for the future of travel. With that, I'll turn the call over to Kevin to give you a few more details on the quarter and expectations for the full year.