Hilton Worldwide Holdings Inc.

Good morning and welcome to the Hilton Third 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 presentation, there will be an opportunity to ask questions. 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 Chapman, Senior Vice President, Head of Development Operations and Investor Relations. You may begin.

Thank you, Chad. Welcome to Hylton's third 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 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 and the company's outlook. Kevin Jacobs, our chief financial officer and president global development, will then review our third quarter results and discuss our expectations for the year. Following their remarks, we'll be happy to take your questions. And with that, I'm pleased to turn the call over to Chris.

Thank you, Jill. Good morning, everyone, and thanks for joining us today. Our third quarter results continue to demonstrate the strength of our business model, as strong net unit growth helped drive solid bottom line performance. Adjusted EBITDA and adjusted EPS both exceeded the high end of our guidance, despite softer than expected rep part performance. We opened more hotel rooms than any other quarter in the history of our company and surpassed 8,000 hotels in our system. We also reached a milestone 200 million Hilton honors members in the quarter as our award-winning program, industry-leading brands, and exceptional service continued to increase guest loyalty. Turning to results, third quarter system-wide rep part increased 1.4% year-over-year. Below our guidance range due to slower ramp in September following Labor Day, weather impacts, unfavorable calendar shifts, and ongoing labor disputes in the U.S. Business transient REBPAR increased 2% with growth across both large corporates and small and medium-sized businesses. Leisure trends continue to normalize with REBPAR declining modestly from post-pandemic peaks. Group REVPAR rose more than 5% year over year, led by strong demand for both corporate and social meetings and events. For the full year, group position is up 10%, with group position in 25 and 26 up low double digits to mid-teens. Adjusting for holiday and calendar shifts, we estimate system-wide REVPAR grew at 2.3% in the quarter, just slightly softer than the second quarter and with all segments increasing. On an adjusted basis, leisure transient REBPAR increased nearly 2% driven largely by solid trends across continental Europe. In the fourth quarter, we expect REBPAR growth largely in line with third quarter driven by strong group bookings, continued business transient recovery, and favorable calendar shifts, partially offset by the election and ongoing labor disputes in the U.S. Weekday pace for October is tracking up more than 300 basis points versus September's weekday pace, driven by solid business transient performance and group strength. Company meetings and convention business continue to grow as a percentage of mix, driving longer booking windows. Given year-to-date performance and fourth quarter expectations, we expect forecast full-year red-par growth of 2% to 2.5% and full-year adjusted EBITDA growth of approximately 10%, demonstrating the continued resiliency of our business model. Turning to development in the quarter, we opened a record 531 hotels, totaling more than 36,000 rooms, and achieved the highest net unit growth in our history. at 7.8%. We marked several milestones in the quarter, including the opening of our 8,000th hotel worldwide, our 900th hotel in Asia Pacific, and our 900th hotel in EMEA. Home 2 Suites, which has more than doubled in supply in the last five years, opened its 700th hotel and continues to have the largest new development pipeline in the industry. We continue to expand our lifestyle portfolio, opening a number of new hotels in the quarter, including the Graduate Auburn and Graduate Princeton, the first two openings under our newly acquired Graduate brand. We also introduced several brands in new markets around the world, including Spark in Canada, Embassy Suites in the UAE, Canopy in Japan, and Hampton in Switzerland, demonstrating the strong value of our industry-leading brands in delivering for owners. We welcome nearly 400 luxury properties through our exclusive agreement with small luxury hotels of the world. These properties spanning 70 different countries provide honors members, even more opportunities to book unique luxury experiences and sought after destinations across the globe, including SLH and our existing luxury properties. We now have one of the largest luxury hotel portfolios in the industry. Conversions accounted for 60% of openings in the quarter driven by the addition of SLH properties and continued momentum from Spark. We opened more than 20 Spark hotels in the quarter and now have over 6,000 Spark rooms in supply just a year after the brand opened its first property. Spark now has open hotels in the US and the UK and Canada. And we recently announced plans to open hotels in Germany and Austria before the end of the year. The brand's pipeline is three times larger than its existing supply, and we expect continued launches in international markets to further boost Spark's trajectory, positioning us well for future growth in the premium economy space. In the quarter, we signed 28,000 rooms, expanding our pipeline to more than 492,000 rooms. which is up 8% year over year. Excluding partnerships, our pipeline also increased from the second quarter. We signed three luxury deals in Greece, Japan, and the UAE, and 35 lifestyle properties, including a record 15 Curios. Conversions accounted for more than 30% of signings in the quarter, driven by the strength of Spark and the continued momentum across Curio, Tapestry, and Doubletree. Construction starts remain strong, up 21%, excluding acquisitions and partnerships. We remain on track to exceed prior levels of starts by year end, with meaningful growth across both the US and international markets. 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. As a result of our strong pipeline and under construction activity, we continue to expect net unit growth of 7% to 7.5% for the full year and 6% to 7% for 2025. We continue to be recognized for our culture and award-winning brands. During the quarter, we were named the top hospitality workplace in Latin America and Asia, by great place to work, adding to the more than 560 great place to work awards and nearly 60 number one wins around the world since 2016. We're also proud to be named the number two workplace on the 2024 people magazine companies that careless and recently recognizes times best times, best hotel brand of 2024 overall. We're very pleased with our performance in the quarter and the milestones we've achieved. Our powerful network of brands continue to be an engine of opportunity for our guests, our owners, and our team members, and we're excited about our growth into the future. Now I'm going to turn the call over to Kevin for a few more details on our results for the quarter and our expectations for the full year.