Hilton Worldwide Holdings Inc.

Good morning and welcome to the Hilton Second Quarter 2024 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 an opportunity to ask questions. 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 Chapman, Senior Vice President, Head of Development Operations and Investor Relations. You may begin.

Thank you, Chad. Welcome to Hilton's second quarter 2024 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 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. Good morning, everyone, and thanks for joining us today. We are pleased to report strong second quarter results with Redpar growth driving adjusted EBITDA and adjusted EPS above the high end of our guidance. We continue to execute on our successful development strategy, and in July, our system surpassed 8,000 hotels globally. Our newly acquired brands and recent strategic partnerships will help us build even more loyalty with guests, further enhancing our network effect and increasing our industry-leading RevPAR premiums. Coupled with our asset-light, fee-based business model, we are well-positioned to continue producing significant free cash flow and driving meaningful shareholder returns. In the quarter, system-wide REBPAR increased 3.5% year-over-year, above the midpoint of guidance due to robust group performance, continued recovery in business transient, and easier holiday comparisons. Transient REBPAR grew 2% year-over-year with increases in both business and leisure demand. REBPAR across large corporates rose 5% in the quarter, driven by strong trends across most industries. including notable recovery in technology. Leisure transient RevPAR continued to exceed prior peaks, supported by solid summer travel demand, particularly in international markets. Group RevPAR rose more than 10% year-over-year, led by strong demand for corporate and social meetings and events, and booking windows continued to lengthen. For the full year, group position is up 10 percent over last year, with position up mid-teens over the next several years. We expect full-year system-wide red part increase 2 to 3 percent, driven by positive growth across all major segments and regions. We tempered the high end of our expectations versus prior guidance due to softer trends in certain international markets and normalizing leisure growth more broadly. With continued strength in group and steady recovery in business transient, we expect higher-end chain scales to continue to outperform. Turning to development in the quarter, we opened 165 hotels, totaling more than 22,000 rooms, and achieved net unit growth of 6.2%. We marked several milestones in the quarter, including the opening of our 6,000th hotel in North America, and we surpassed 75,000 home-to-suites rooms globally. We also opened seven new resort properties in Europe, including the debut of Curio in Croatia and Doubletree in Malta. We welcomed graduate hotels and Nomad into our family of brands during the quarter, providing further opportunities to deliver exceptional guest experiences and accelerate our expansion in the fast-growing lifestyle segment. Demand for lifestyle products continues to increase as guests seek unique experiences and sought after destinations around the world. In the last year, we have expanded our lifestyle offerings by more than 30%, fueled largely by growth in Curio, Tapestry, and the recent acquisition of Graduate. With roughly 400 lifestyle properties today and hundreds more in the pipeline, we are well positioned for substantial growth over the next several years. Conversions accounted for roughly half of openings in the quarter, driven by the addition of Graduate and the continued strength from Doubletree and Spark. In the quarter, Spark opened 27 hotels, more than doubling its existing supply. The brand also celebrated its debut in Europe with the opening of Spark by Hilton London Romford just nine months after the first property opened in the U.S. The opening marks the start of an exciting journey for Spark to redefine the premium economy segment in Europe with further launches of the brand across continental Europe expected in the coming months. In the quarter, we signed 63,000 rooms, increasing our pipeline to approximately 508,000 rooms, which is up 8% from last quarter and 15% year-over-year. with notable strength across the EMEA and APAC regions. In particular, Hilton Garden Inn continued to gain tremendous traction with year-to-date signings up nearly 90% across 20 different countries. Overall, conversions accounted for over half of the signings in the quarter, driven by additions from our acquisitions and partnerships. Excluding acquisitions and partnerships, conversions accounted for 25% of signings in the quarter, largely driven by continued momentum with Curio, Tapestry, and Doubletree. System-wide construction starts in the quarter were up 160% versus last year, and up 37% excluding acquisitions and partnerships. With meaningful growth across both the U.S. and international markets, we remain on track to exceed prior peak levels of starts by year-end. Approximately half of our pipeline is under construction and we continue to have more rooms under construction than any other hotel company, accounting for more than 20% of industry share and nearly four times our existing share of supply. We've seen tremendous interest from owners through our exclusive agreement with small luxury hotels of the world, with the pace of initial property signups far exceeding our expectations. Under our strategic partnership, we added nearly 300 boutique luxury properties to our system in July, with an additional 100 properties expected to join later this year. Adding these unique properties to our network is highly complementary to our existing luxury portfolio and significantly increases our luxury offerings for guests around the world without any capital commitment. During the quarter, the first AutoCamp properties were added to our platforms. Each AutoCamp location provides a unique opportunity for guests to immerse themselves in nature without sacrificing the comforts of high-end accommodations. These exclusive agreements with SLH and AutoCamp provide honors members with new and exciting ways to earn and redeem points while broadening and enhancing our network effect. As a result of our strong pipeline, recent tuck-in acquisitions, and strategic partnerships, we now expect net unit growth of 7% to 7.5% for the full year. We are also proud to continue to be recognized for our industry-leading brands and culture. Brand Finance recently ranked Tilton as the most valuable hotel brand for the ninth consecutive year, claiming nine of the top 50 hotel brand spots. Additionally, Hilton was recently named the top workplace in the U.S. for millennials by Great Place to Work and Fortune for the seventh consecutive year. Since 2016, we've received over 540 recognitions as a great place to work across more than 60 countries, and we remain the number one great place to work in the world and the United States. We're very happy with our second quarter results, development milestones, and brand and commercial enhancements. which we think demonstrate the continued strength of our business model. Now I'm going to turn the call over to Kevin for a few more details on the results in the quarter and our expectations for the year.