Hilton Worldwide Holdings Inc.

Good morning and welcome to the Hylton fourth quarter 2023 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. And to withdraw from the question queue, 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 fourth quarter and full year 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 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'll 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 and the company's outlook. Kevin Jacobs, our Chief Financial Officer and President, Global Development, will then review our fourth quarter and full year results and discuss our expectations for the year. 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. Good morning, everyone, and thanks for joining us today. We are happy to report a great end to what was another really strong year for Hilton. For the year, system-wide rev par grew 12.6% versus 2022, with solid growth across every major region and chain scale. Compared to 2019, rev par increased 10.7%. Strong top line performance drove record adjusted EBITDA of nearly $3.1 billion, up roughly 20% year over year to the highest level in our company's history. During the year, we launched two new brands, introduced new innovations, expanded our partnerships, and opened a near record number of rooms, all of which further strengthened our network and enabled us to welcome more guests than ever before. Our strong top and bottom line performance drove significant free cash flow, enabling us to return $2.5 billion to shareholders. Turning to results for the quarter, system-wide REVPAR increased 5.7% year-over-year, exceeding our expectations, driven by strong international and group trends. Group REVPAR rose 6% year-over-year due to an uptick in small company meetings and convention demand. Business transient recovery continued in the quarter, with rev par up more than 4%, boosted by gains in both rate and occupancy. As expected, leisure transient rev par increased 3%, decelerating modestly versus the third quarter, largely due to seasonality. Compared to 2019, system-wide rev par grew 13.5% in the quarter, up more than 200 basis points sequentially compared to the third quarter. Demand continued to improve, with December system-wide occupancy reaching 2019 peak levels. Group rep are outperformed expectations, increasing 8% versus 2019, and up more than 700 basis points sequentially versus the third quarter. Business transient continued to recover, growing 5%, versus 2019. As expected, leisure REBPAR remained strong, growing 25% versus 2019 and decelerating sequentially due to calendar shifts. As we look to the year ahead, we expect system-wide top-line growth of 2% to 4% versus 2023. We expect performance to be driven by continued growth across all major regions with international markets modestly outpacing the U.S. We also expect positive rep part growth across all segments driven by continued recovery in business transient and group coupled with steady leisure demand. We expect continued recovery in small company meetings and large association and convention business to drive strong group performance. For 2024, Group position is up 16% year-over-year, with small companies' meetings increasing as a percentage of mix, further demonstrating the value of small and medium-sized businesses, given higher rates and greater resiliency. Turning to development, we continue to see positive momentum throughout the year, opening 24,000 rooms in the fourth quarter, marking the largest quarter of openings in our history. We achieved several milestones in the quarter, including the openings of our 250th True Hotel and our 1,000th Hilton Garden Inn. We also reached 70,000 rooms globally for Home 2. Additionally, we celebrated the opening of Signia by Hilton Atlanta, the city's largest ground-up development in over 40 years. The property, strategically located next to the Georgia World Congress Center and Mercedes-Benz Stadium, features nearly 1,000 rooms and over 100,000 square feet of meeting space, including the largest hotel ballroom in Georgia. For the full year, we opened 395 hotels, totaling approximately 63,000 rooms, and achieved net unit growth of 4.9 percent. Conversion activity remains strong, accounting for 30 percent of openings and demonstrating the strong value proposition Our system continues to deliver for owners. Full service and collection brands represented the large majority of conversions and continue to gain traction with owners. Both Curio and Tapestry opened more hotels in 2023 than in any other year. Even with robust openings, our pipeline reached the highest level in our history, driven by record signings of 130,000 rooms up 45% year over year and up 12% compared to pre-pandemic levels. At year end, our pipeline totaled over 462,000 rooms with roughly half under construction following a strong year in construction starts. For the full year, starts increased 15% driven by the U.S. We continue to have more rooms under construction than any other hotel company with approximately one in every five hotel rooms under construction globally slated to join our system. As we look to the year ahead, we expect continued positive momentum in signing starts and conversions to drive even stronger openings, boosted by our two newest brands, Spark and LiveSmart Studios. For the full year, we continue to expect NEC Munich growth to accelerate to the higher end of our 5.5% to 6% guidance range, with the opportunity for further upside of 25 to 50 basis points from our exclusive partnership with Small Luxury Hotels of the World that we announced this morning. This partnership will meaningfully expand our luxury distribution as we expect to add the majority of their over 500 hotels to our system. Adding this extraordinary portfolio with a heavy orientation to resort locations to our already strong and growing luxury portfolio will further enhance a powerful network effect and give our guests even more opportunities to dream, book, earn, and burn points. And we're doing so in a capital light way. The royalty rate will be in line with our existing brands, but fees will be paid only on the business driven through our channels. We expect over time to drive a meaningful portion of system revenues for SLH, and we'll start to integrate hotels into our system later this spring. Last quarter, we announced Hilton for Business, our multifaceted program designed to transform the travel experience for small and medium-sized businesses by providing a new booking website along with targeted benefits designed specifically for SMBs. The program launched in January. with thousands of companies registering in just the first few weeks. SMBs account for approximately 85% of our business transient mix and comprise a meaningful and growing percentage of our group mix. Given its greater resiliency and higher rates, we think this important customer base provides significant opportunities to drive further growth. Overall, we remain focused on creating unique experiences in our hotels including through innovative food and beverage offerings. We recently announced the launch of STIR Creative Collective, an in-house consulting and development arm that gives us the ability to work with our owners, operators, and hotel teams to elevate food and beverage offerings to meet the evolving needs of our guests. Several noteworthy STIR projects have already launched at the Conrad Orlando, the Canopy by Hilton in Toronto, and the New Signia in Atlanta. In a business of people serving people, our team members are at the heart of absolutely everything we do. We recently celebrated the remarkable achievement of being named the number one world's best workplace by Fortune and Great Place to Work. This recognition follows eight consecutive appearances on the world's best list and marks the first time a hospitality company has achieved the top honor in this best in class program. Additionally, for the seventh consecutive year, we were honored to be included on both the World and North America Dow Jones Sustainability Indices, the most prestigious ranking for corporate sustainability performance. Overall, we're extremely pleased with our performance with our world-class brands and powerful commercial engines driving a record pipeline and accelerating net unit growth. We're confident in our ability to continue delivering value for all of our stakeholders in 2024 and beyond. Now I'm going to turn the call over to Kevin to give a bit more detail on the quarter and our expectations for the year ahead.