Q1 2026 Hilton Worldwide Holdings Inc Earnings Call

April 28, 2026

Speaker #1: Should you need assistance, please press star, then zero. After today's prepared remarks, there will be a question-and-answer session. To ask a question, you may press star then one.

Speaker #1: Please note this event is being recorded. I would not like to turn the conference over to Mr. Charlie Ruehr, Vice President, Corporate Finance and Investor Relations.

Operator: Good morning, welcome to the Hilton Q1 2026 earnings conference call. I would now like to turn the conference over to Mr. Charlie Ruehr, Vice President, Corporate Finance, and Investor Relations. You may begin.

Operator: Good morning, welcome to the Hilton Q1 2026 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please press star then zero. After today's prepared remarks, there will be a question-and-answer session. To ask a question you may press star then one. Please note this event is being recorded. I would now like to turn the conference over to Mr. Charlie Ruehr, Vice President, Corporate Finance, and Investor Relations. You may begin.

Speaker #1: You may begin.

Speaker #2: Thank you, Chuck. Welcome to Hilton's first quarter 2026 earnings call. Before we begin, we would like to remind you that our discussion 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.

Speaker #2: After today's prepared remarks, there will be a question-and-answer session. To ask a question, you may press star then one. Please note this event is being recorded.

Speaker #2: We undertake no obligation to. 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.

Charlie Ruehr: Thank you, Chuck. Welcome to Hilton's Q1 2026 Earnings Call. Before we begin, we would like to remind you that our discussion 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. Financial measures discussed in today's call in our earnings press release and on our website at ir.hilton.com. This morning, Christopher J. Nassetta, our President and Chief Executive Officer, will provide an overview of the current operating environment and the company's outlook. Kevin Jacobs, our Executive Vice President and Chief Financial Officer, will then review our Q1 results and discuss our expectations for the year. Following the remarks, we'll be happy to take your questions. With that, I'm pleased to turn the call over to Chris.

Charlie Ruehr: Thank you, Chuck. Welcome to Hilton's Q1 2026 Earnings Call. Before we begin, we would like to remind you that our discussion 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 undetake no obligation to - . 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 Executive Vice President and Chief Financial Officer, will then review our Q1 results and discuss our expectations for the year. Following the remarks, we'll be happy to take your questions. With that, I'm pleased to turn the call over to Chris.

Speaker #2: Kevin Jacobs, our Executive Vice President and Chief Financial Officer, will then review our first quarter results and discuss our expectations for the year. Following the remarks, we'll be happy to take your questions.

Speaker #2: With that, I'm pleased to turn the call over to Chris.

Speaker #3: Thanks, Charlie, and good morning, everyone. we certainly appreciate you joining us today. Before we begin, I'd like to acknowledge all those impacted, by the Middle East conflict, and I'd like to thank our team members who have adapted, very quickly and continue to provide extraordinary hospitality during this difficult time.

Speaker #3: We remain hopeful for a swift resolution. Turning to results, we're pleased to report a great first quarter during which strong RevPAR and net unit growth drove top and bottom line results above the high end of our guidance.

Speaker #2: the call over to Chris.

Christopher J. Nassetta: Thanks, Charlie. Good morning, everyone. We certainly appreciate you joining us today. Before we begin, I'd like to acknowledge all those impacted by the Middle East conflict. I'd like to thank our team members who adapted very quickly and continue to provide extraordinary hospitality during this difficult time. We remain hopeful for a swift resolution. Turning to results, we're pleased to report a great Q1, during which strong RevPAR and net unit growth drove top and bottom line results above the high end of our guidance. Performance was driven by strengthening underlying demand trends, along with ongoing system-wide share gains. Our industry-leading brands, strong commercial engines, and powerful partnerships continue to differentiate us from the competition while a culture of innovation fuels additional growth opportunities.

Chris Nassetta: Thanks, Charlie. Good morning, everyone. We certainly appreciate you joining us today. Before we begin, I'd like to acknowledge all those impacted by the Middle East conflict. I'd like to thank our team members who adapted very quickly and continue to provide extraordinary hospitality during this difficult time. We remain hopeful for a swift resolution. Turning to results, we're pleased to report a great Q1, during which strong RevPAR and net unit growth drove top and bottom line results above the high end of our guidance. Performance was driven by strengthening underlying demand trends, along with ongoing system-wide share gains. Our industry-leading brands, strong commercial engines, and powerful partnerships continue to differentiate us from the competition while a culture of innovation fuels additional growth opportunities.

Speaker #3: Performance was driven by strengthening underlying demand trends along with ongoing system-wide share gains. Our industry-leading brands' strong commercial engines and powerful partnerships continue to differentiate us from the competition while a culture of innovation fuels additional growth opportunities.

Speaker #3: All of this, coupled with our asset-light, fee-based business model, positions us to continue producing significant free cash flow and driving meaningful shareholders' shareholder returns.

Speaker #3: In the quarter, we returned more than $860 million to shareholders, and we remain on track to return approximately $3.5 billion for the full year.

Speaker #3: For the first quarter, system-wide RevPAR increased 3.6% year-over-year, driven by broad growth across all chain scales, brands, and segments, as well as sequential monthly improvement throughout the quarter in the US.

Christopher J. Nassetta: All of this, coupled with our asset-light, fee-based business model, positions us to continue producing significant free cash flow and driving meaningful shareholder returns. In the quarter, we returned more than $860 million to shareholders, and we remain on track to return approximately $3.5 billion for the full year. For Q1, system-wide RevPAR increased 3.6% year-over-year, driven by broad growth across all chain scales, brands, and segments, as well as sequential monthly improvement throughout the quarter in the US. In the quarter, business transient RevPAR was up 2.7%, representing a four-point step-up in demand from Q4 when adjusting for day of week and holiday shifts, driven by improving midweek demand across all chain scales.

Chris Nassetta: All of this, coupled with our asset-light, fee-based business model, positions us to continue producing significant free cash flow and driving meaningful shareholder returns. In the quarter, we returned more than $860 million to shareholders, and we remain on track to return approximately $3.5 billion for the full year. For Q1, system-wide RevPAR increased 3.6% year-over-year, driven by broad growth across all chain scales, brands, and segments, as well as sequential monthly improvement throughout the quarter in the US. In the quarter, business transient RevPAR was up 2.7%, representing a four-point step-up in demand from Q4 when adjusting for day of week and holiday shifts, driven by improving midweek demand across all chain scales.

Speaker #3: In the quarter business transient RevPAR was up 2.7%, representing a 4-point step up in demand from the fourth quarter when adjusting for day-of-week and holiday shifts, driven by improving midweek demand across all chain scales.

We continue to differentiate ourselves from the competition, while a culture of innovation fuels additional growth opportunities. All of this, coupled with our asset-light, fee-based business model, positions us to continue producing significant free cash flow and driving meaningful shareholder returns.

Speaker #3: Leisure transient RevPAR was up 3.5%, driven by concentrated spring break demand that enabled strong rate growth. Group RevPAR was up 4.3%, driven by growth in company meeting and convention demand.

In the quarter, we returned more than 860 million dollars to shareholders and we remain on track to return approximately 3.5 billion dollars for the full year.

Speaker #3: We continue to see healthy underlying momentum for group, supported by strong growth in corporate lead volumes. As we look ahead to the second quarter, we remain encouraged by a continuation of demand trends that we've been observing since late 2025 and now through April, but we do expect some headwinds related to the Middle East.

For the first quarter systemwide, revpar increased 3.6% year-over-year driven by broad growth across all chain scales Brands and segments, as well as sequential monthly Improvement throughout the quarter in the US.

Christopher J. Nassetta: Leisure transient RevPAR was up 3.5%, driven by concentrated spring break demand that enabled strong rate growth. Group RevPAR was up 4.3%, driven by growth in company meeting and convention demand. We continue to see healthy underlying momentum for group, supported by strong growth in corporate lead volumes. We look ahead to Q2, we remain encouraged by a continuation of demand trends that we've been observing since late 2025 and now through April, but we do expect some headwinds related to the Middle East. For the full year, we expect improving performance in the lower and mid-chain scales, with RevPAR strength continuing to move downstream from luxury and upper upscale toward a more balanced convergence demand shape, or what I have been calling a C-shaped economy.

Chris Nassetta: Leisure transient RevPAR was up 3.5%, driven by concentrated spring break demand that enabled strong rate growth. Group RevPAR was up 4.3%, driven by growth in company meeting and convention demand. We continue to see healthy underlying momentum for group, supported by strong growth in corporate lead volumes. As we look ahead to Q2, we remain encouraged by a continuation of demand trends that we've been observing since late 2025 and now through April, but we do expect some headwinds related to the Middle East. For the full year, we expect improving performance in the lower and mid-chain scales, with RevPAR strength continuing to move downstream from luxury and upper upscale toward a more balanced convergence demand shape, or what I have been calling a C-shaped economy.

Speaker #3: For the full year, we expect improving performance in the lower and mid-chain scales with RevPAR strength continuing to move downstream from luxury and upper-upscale toward a more balanced convergence demand shape, or what I have been calling a C-shaped economy.

In the quarter business, transient revpar was up, 2.7%, representing a 4-point, step up in demand from the fourth quarter, when adjusting for day of week and holiday, shifts driven by improving midweek demand across all chain scales. Leisure, transient revpar was up, 3.5% driven by concentrated spring break demand that enabled. Strong rate growth.

Speaker #3: This trend should be most evident in the US, where supportive tax and regulatory policy expected lower interest rates increased private sector investment in AI and the AI complex, and ongoing public infrastructure spending are benefiting the middle and lower-income consumer and driving broader demand growth.

Group revpar was up 4.3% driven by growth and Company meeting and Convention demand. We continue to see healthy underlying momentum for group supported by strong growth and corporate lead volumes.

As we look ahead to the second quarter, we remain encouraged by a continuation of demand trends that we've been observing since late 2025 and now through April. But we do expect some head headwinds related to the Middle East.

Speaker #3: As a result, for the full year, our system-wide RevPAR growth expectations are now 2 to 3 percent. Factoring in a range of scenarios for the Middle East conflict, and recovery.

Christopher J. Nassetta: This trend should be most evident in the US, where supportive tax and regulatory policy, expected lower interest rates, increased private sector investment in AI and the AI complex, and ongoing public infrastructure spending are benefiting the middle and lower income consumer and driving broader demand growth. For the full year, our system-wide RevPAR growth expectations are now 2% to 3%, factoring in a range of scenarios for the Middle East conflict and recovery. For the year, we continue to expect group to lead, followed by business and leisure transient. Turning to development, during Q1, we opened 131 hotels totaling over 16,000 rooms, representing our second strongest Q1 for hotel openings in our history. Our luxury and lifestyle brands continued to expand around the world, comprising 20% of total openings in the quarter.

Chris Nassetta: This trend should be most evident in the US, where supportive tax and regulatory policy, expected lower interest rates, increased private sector investment in AI and the AI complex, and ongoing public infrastructure spending are benefiting the middle and lower income consumer and driving broader demand growth. As a result for the full year, our system-wide RevPAR growth expectations are now 2% to 3%, factoring in a range of scenarios for the Middle East conflict and recovery. For the year, we continue to expect group to lead, followed by business and leisure transient. Turning to development, during Q1, we opened 131 hotels totaling over 16,000 rooms, representing our second strongest Q1 for hotel openings in our history. Our luxury and lifestyle brands continued to expand around the world, comprising 20% of total openings in the quarter.

For the full year, we expect improving performance in the lower and mid-chain scales, with RevPAR strength continuing to move downstream from luxury and upper upscale toward a more balanced convergence demand shape, or what I have been calling a C-shaped economy.

Speaker #3: For the year, we continue to expect group-to-lead followed by business and leisure transient. Turning to development, during the first quarter, we opened $131 hotels, totaling over $16,000 rooms.

Speaker #3: Representing our second-strongest first quarter for hotel openings in our history. Our luxury and lifestyle brands continue to expand around the world, comprising 20% of total openings in the quarter.

This trend should be most evident in the US where supportive tax and Regulatory policy. Expected, lower interest rates, increased private sector investment and Ai. And the AI complex and ongoing public infrastructure spending are benefiting the middle and lower income income consumer and driving broader. Demand growth

Speaker #3: Earlier this month, in Morocco, we proudly opened the World of Restorio Rabat Salé, kicking off 2026 with another key addition to the World of Restorio portfolio, which now includes 40 trading hotels worldwide with more than 30 in the pipeline.

As a result, for the full year, our systemwide RevPAR growth expectations are now 2% to 3%, factoring in a range of scenarios for the Middle East conflict and recovery.

For the year, we continue to expect group to lead, followed by business and Leisure transient.

Speaker #3: Additional marquee World of openings in 2026 will include the World of Restorio Admiralty Arch in London, and the World of Restorio Kuala Lumpur in Malaysia.

Turning to development during the first quarter, we opened 131 hotels. Totaling over 16,000 rooms representing our second strongest, first quarter for hotel openings in our history.

Speaker #3: Within lifestyle, our Curio Collection recently surpassed 200 trading hotels with notable openings in the quarter, including the newly built Monarch San Antonio and the converted Hotel Heron Alexandria Old Town, Virginia.

Christopher J. Nassetta: Earlier this month in Morocco, we proudly opened the Waldorf Astoria Rabat Salé, kicking off 2026 with another key addition to the Waldorf Astoria portfolio, which now includes 40 trading hotels worldwide with more than 30 in the pipeline. Additional marquee Waldorf openings in 2026 will include the Waldorf Astoria Admiralty Arch in London and the Waldorf Astoria Kuala Lumpur in Malaysia. Within lifestyle, our Curio Collection recently surpassed 200 trading hotels with notable openings in the quarter, including the newly built The Monarch San Antonio and the converted Hotel Heron Alexandria Old Town, Virginia. We also expanded our lifestyle footprint globally with the debut of Motto in Brazil.

Chris Nassetta: Earlier this month in Morocco, we proudly opened the Waldorf Astoria Rabat Salé, kicking off 2026 with another key addition to the Waldorf Astoria portfolio, which now includes 40 trading hotels worldwide with more than 30 in the pipeline. Additional marquee Waldorf openings in 2026 will include the Waldorf Astoria Admiralty Arch in London and the Waldorf Astoria Kuala Lumpur in Malaysia. Within lifestyle, our Curio Collection recently surpassed 200 trading hotels with notable openings in the quarter, including the newly built The Monarch San Antonio and the converted Hotel Heron Alexandria Old Town, Virginia. We also expanded our lifestyle footprint globally with the debut of Motto in Brazil.

Speaker #3: We also expanded our lifestyle footprint globally with the debut of Modo in Brazil. In Europe, this week, we will open a home-to-suites in Dublin, Ireland, which marks the European debut of our home-to-suites brand, one of our strongest performing brands in the portfolio with more than 800 hotels open in over 750 in development.

Our luxury and lifestyle Brands continue to expand around the world comprising, 20% of total openings in the quarter. Earlier this month in Morocco. We proudly open the Walter foreo, robot salet kicking off. 2026 with another key. Addition to the Walder restoria portfolio, which now includes 40, trading hotels worldwide with more than 30 in the pipeline.

Additional Marquee Walder openings in 2026 will include the Walder forstoria admiralty arch in London and the Walder forstoria Kuala Lumpur in Malaysia.

Speaker #3: This positions this brand for extended rapid growth and allows us to capture even more demand from this important region. Conversions represented 36% of openings for the quarter across 10 brands and dozens of countries, ranging from flagship Hilton openings in Malaysia, Vietnam, and Thailand, to spark openings in France, Canada, and the US.

Within lifestyle, arcul curio collection recently surpassed 200 trading hotels with notable openings in the quarter, including the newly built Monarch, San Antonio, and the converted Hotel here on Alexandria Oldtown Virginia.

We also expanded our lifestyle footprint globally with the debut of motto in Brazil.

Christopher J. Nassetta: In Europe this week, we will open a Home2 Suites in Dublin, Ireland, which marks the European debut of our Home2 Suites brand, one of our strongest performing brands in the portfolio with more than 800 hotels open and over 750 in development. This positions this brand for extended rapid growth and allows us to capture even more demand from this important region. Conversions represented 36% of openings for the quarter across 10 brands in dozens of countries, ranging from flagship Hilton openings in Malaysia, Vietnam, and Thailand to Spark openings in France, Canada, and the US. Following our Apartment Collection by Hilton brand announcement earlier this year, we now have our first 2 converted properties in Atlanta and Salt Lake City accepting bookings for this summer.

Chris Nassetta: In Europe this week, we will open a Home2 Suites in Dublin, Ireland, which marks the European debut of our Home2 Suites brand, one of our strongest performing brands in the portfolio with more than 800 hotels open and over 750 in development. This positions this brand for extended rapid growth and allows us to capture even more demand from this important region. Conversions represented 36% of openings for the quarter across 10 brands in dozens of countries, ranging from flagship Hilton openings in Malaysia, Vietnam, and Thailand to Spark openings in France, Canada, and the US. Following our Apartment Collection by Hilton brand announcement earlier this year, we now have our first two converted properties in Atlanta and Salt Lake City accepting bookings for this summer.

Speaker #3: Following our apartment collection by Hilton brand announcement earlier this year, we now have our first two converted properties, in Atlanta and Salt Lake City, accepting bookings for this summer.

Speaker #3: Conversions overall are expected to be up on a nominal basis in 2026 across every region, demonstrating the performance our system delivers to owners. Despite the current macro uncertainty, signings and starts continue to have momentum, during the quarter we announced multiple new signings across geographies including four new brand signings in Turkey, two LXR signings in Japan, the debut of Modo in Australia, and France, and the debut of Tapestry in Germany.

Canada and the US.

Christopher J. Nassetta: Conversions overall are expected to be up on a nominal basis in 2026 across every region, demonstrating the performance our system delivers to owners. Despite the current macro uncertainty, signings and starts continue to have momentum. During the quarter, we announced multiple new signings across geographies, including 4 new brand signings in Turkey, 2 LXR signings in Japan, the debut of Motto in Australia and France, and the debut of Tapestry in Germany. In India, we signed a strategic agreement with Royal Orchid Hotels Limited to open 125 Hampton hotels in the market, which puts us on track to exceed 400 hotels in the market in the coming years and reaffirms our commitment to expanding in this key emerging economy.

Chris Nassetta: Conversions overall are expected to be up on a nominal basis in 2026 across every region, demonstrating the performance our system delivers to owners. Despite the current macro uncertainty, signings and starts continue to have momentum. During the quarter, we announced multiple new signings across geographies, including four new brand signings in Turkey, two LXR signings in Japan, the debut of Motto in Australia and France, and the debut of Tapestry in Germany. In India, we signed a strategic agreement with Royal Orchid Hotels Limited to open 125 Hampton hotels in the market, which puts us on track to exceed 400 hotels in the market in the coming years and reaffirms our commitment to expanding in this key emerging economy.

Following our apartment collection by Hilton brand announcement earlier this year. We now have our first 2. Converted properties in Atlanta and Salt Lake City accepting bookings for this summer.

Speaker #3: In India, we signed a strategic agreement with Royal Orchid Hotels to open 125 Hampton Hotels in the market, which puts us on track to exceed $400 hotels in the market in the coming years, and reaffirms our commitment to expanding in this key emerging economy.

Conversions overall are expected to be up on a nominal basis in 2026 across every region, demonstrating the performance our system delivers to owners.

Speaker #3: We continue to build out our presence in the fast-growing and expansive region of APAC ex-China, where approvals, openings, and new development construction starts were all up double digits in the first quarter.

despite the current macro and certainty signings and starts continue to have momentum. During the quarter, we announced multiple new signings across geographies including 4 new brand signings in Turkey.

2 LX signings in Japan.

Speaker #3: Globally, we now expect new development construction starts to be up over 20% for the year, with a strongest growth in the US and EMEA.

Speaker #3: Signaling continued developer confidence and a strong desire to have hotels a rebounding RevPAR environment. Our pipeline now stands at a record $527,000 rooms, and includes brand debuts in more than 25 new countries.

Christopher J. Nassetta: We continue to build out our presence in the fast-growing and expansive region of APAC ex-China, where approvals, openings, and new development construction starts were all up double digits in Q1. Globally, we now expect new development construction starts to be up over 20% for the year, with the strongest growth in the US and EMEA, signaling continued developer confidence and a strong desire to have hotels open in conjunction with a rebounding RevPAR environment. Our pipeline now stands at a record 527,000 rooms. It includes brand debuts in more than 25 new countries, with Hilton representing only 5.5% of global hotel supply and over 20% of rooms under construction, we have tremendous opportunity to grow our market share from here.

Chris Nassetta: We continue to build out our presence in the fast-growing and expansive region of APAC ex-China, where approvals, openings, and new development construction starts were all up double digits in Q1. Globally, we now expect new development construction starts to be up over 20% for the year, with the strongest growth in the US and EMEA, signaling continued developer confidence and a strong desire to have hotels open in conjunction with a rebounding RevPAR environment. Our pipeline now stands at a record 527,000 rooms. It includes brand debuts in more than 25 new countries, with Hilton representing only 5.5% of global hotel supply and over 20% of rooms under construction, we have tremendous opportunity to grow our market share from here.

The debut of motto in Australia and France and the debut of tapestry in Germany. In India, we signed a strategic agreement with Royal Orchid hotel to open a 125 Hampton Hotels in the market, which puts us on track to exceed, 400 hotels in the market, in the coming years and reaffirms our commitment to expanding in this key emerging economy.

Speaker #3: With Hilton representing only 5.5% of global hotel supply and over 20% of rooms under construction, we have tremendous opportunity to grow our market share from here.

Speaker #3: As we look ahead, we expect that our robust global pipeline strength in conversions, construction start momentum, and industry-leading brand premiums will support sustain net unit growth of between 6 to 7 percent for the full year, even with the current geopolitical uncertainty.

We continue to build out our presence in the fast, growing and expansive region of APAC X China, where approvals openings and new development development, construction starts. We're all up double digits in the first quarter globally. We now expect new development construction starts to be up over 20% for the year with a strongest growth in the US and emia signaling continued developer confidence in a strong desire to have hotels open in conjunction with a rebounding rebbe part environment.

Speaker #3: Innovation across our entire business is a core competency, and when deploying new technology, we're focused on broad, impactful use cases to enhance the guest experience, deliver value to owners, and empower team members.

Our pipeline now stands at a record 527,000 rooms, which includes brand abuse and more than 25%. With Hilton representing only 5.5% of global hotel supply, yet over 20% of rooms under construction, we have tremendous opportunity to grow our market share from here.

Christopher J. Nassetta: We expect that our robust global pipeline strength in conversions, construction start momentum, and industry-leading brand premiums will support sustained net unit growth of between 6% to 7% for the full year, even with the current geopolitical uncertainty. Innovation across our entire business is a core competency. When deploying new technology, we're focused on broad, impactful use cases to enhance the guest experience, deliver value to owners, and empower team members. We're leveraging AI to embrace the new ways customers are discovering and engaging with our brands, working with leading partners, including Google, ChatGPT, and Anthropic, all while remaining focused on strengthening direct loyalty-driven relationships and maintaining discipline in how we manage distribution. Building on this, earlier this quarter, we deployed an Anthropic-powered platform for customers to dream and shop, called the Hilton AI Planner.

Chris Nassetta: As we look ahead we expect that our robust global pipeline strength in conversions, construction start momentum, and industry-leading brand premiums will support sustained net unit growth of between 6% to 7% for the full year, even with the current geopolitical uncertainty. Innovation across our entire business is a core competency. When deploying new technology, we're focused on broad, impactful use cases to enhance the guest experience, deliver value to owners, and empower team members. We're leveraging AI to embrace the new ways customers are discovering and engaging with our brands, working with leading partners, including Google, ChatGPT, and Anthropic, all while remaining focused on strengthening direct loyalty-driven relationships and maintaining discipline in how we manage distribution. Building on this, earlier this quarter, we deployed an Anthropic-powered platform for customers to dream and shop, called the Hilton AI Planner.

Speaker #3: As we advance our strategy, we're leveraging AI to embrace the new ways customers are discovering and engaging with our brands, working with leading partners including Google, ChatGPT, and Anthropic all while remaining focused on strengthening direct loyalty-driven relationships and maintaining discipline in how we manage distribution.

As we look ahead, we expect that our robust global pipeline strength and conversions, construction start momentum, and industry-leading brand premiums will support sustained net unit growth of between 6% to 7% for the full year, even with the current geopolitical uncertainty.

Speaker #3: Building on this, earlier this quarter, we deployed an Anthropic-powered platform for customers to dream and shop called the Hilton AI Planner. This LLM-powered tool combines our incredibly rich property content with vast information about local venues and activities to allow customers to search for and tailor an experience that is unique to their interests.

Speaker #3: The AI Planner enables guests to spend more time dreaming within our native environment, which should drive incremental demand across our portfolio as customers book with us more often and more quickly.

Innovation across our entire business is a core competency, and when deploying new technology, we're focused on broad, impactful use cases to enhance the guest experience, deliver value to owners, and empower team members. As we advance our strategy, we're leveraging AI to embrace the new ways customers are discovering and engaging with our brands. We're working with leading partners, including Google, ChatGPT, and Anthropic, all while remaining focused on strengthening direct, loyalty-driven relationships and maintaining discipline in how we manage distribution.

Speaker #3: We're just getting started on how technology can customize customer experience, and the Hilton AI Planner is one great example of how we're delivering our signature Hilton hospitality and enhancing the dream shop book and stay guest journey.

Christopher J. Nassetta: This LLM-powered tool combines our incredibly rich property content with vast information about local venues and activities to allow customers to search for and tailor an experience that is unique to their interests. The Hilton AI Planner enables guests to spend more time dreaming within our native environment, which should drive incremental demand across our portfolio as customers book with us more often and more quickly. We're just getting started on how technology can customize the customer experience, the Hilton AI Planner is one great example of how we're delivering our signature Hilton hospitality and enhancing the dream shop, book, and stay guest journey.

Chris Nassetta: This LLM-powered tool combines our incredibly rich property content with vast information about local venues and activities to allow customers to search for and tailor an experience that is unique to their interests. The Hilton AI Planner enables guests to spend more time dreaming within our native environment, which should drive incremental demand across our portfolio as customers book with us more often and more quickly. We're just getting started on how technology can customize the customer experience, the Hilton AI Planner is one great example of how we're delivering our signature Hilton hospitality and enhancing the dream shop, book, and stay guest journey.

Speaker #3: During the quarter, we were proud to once again be recognized as the top-rated hospitality company by on the Fortune and Great Place to Work list of the 100 best companies to work for in the United States.

Building on this earlier this quarter, we deployed an anthropic powered platform for customers to dream and Shop called the Hilton AI planner. This llm powered tool. Combines our incredibly Rich property content with vast information about local venues and activities to allow customers to search for and tailor an experience that is unique to their interests.

Speaker #3: Marking our 11th consecutive year earning this distinction. We also continue to be recognized for our world-class culture globally, receiving Great Place to Work honors in 17 countries, including seven number one rankings.

The AI planner enables guests to spend more time dreaming within our native environment, which should drive incremental demand across our portfolio as customers book with us more often and more quickly.

We're just getting started on how technology can customize the customer experience.

Speaker #3: Overall, we are very encouraged by the strength of the demand environment across all our brands. We remain confident that our powerful network effect, industry-leading RevPAR premiums, and fee-based capital-like business model will continue to draw on strong drive strong operating performance, net unit growth, and meaningful cash flow, enabling us to return an increasing amount of capital to shareholders.

Christopher J. Nassetta: During the quarter, we were proud to once again be recognized as the top-rated hospitality company on the Fortune and Great Place to Work list of the 100 best companies to work for in the United States, marking our 11th consecutive year earning this distinction. We also continue to be recognized for our world-class culture globally, receiving Great Place to Work honors in 17 countries, including seven number one rankings. Overall, we are very encouraged by the strength of the demand environment across all our brands. We remain confident that our powerful network effect, industry-leading RevPAR premiums, and fee-based capital-light business model will continue to drive strong operating performance, net unit growth, and meaningful cash flow, enabling us to return an increasing amount of capital to shareholders.

Chris Nassetta: During the quarter, we were proud to once again be recognized as the top-rated hospitality company on the Fortune and Great Place to Work list of the 100 best companies to work for in the United States, marking our 11th consecutive year earning this distinction. We also continue to be recognized for our world-class culture globally, receiving Great Place to Work honors in 17 countries, including seven number one rankings. Overall, we are very encouraged by the strength of the demand environment across all our brands. We remain confident that our powerful network effect, industry-leading RevPAR premiums, and fee-based capital-light business model will continue to drive strong operating performance, net unit growth, and meaningful cash flow, enabling us to return an increasing amount of capital to shareholders.

And the Hilton AI planner is 1. Great example of how we're delivering our signature Hilton hospitality and enhancing the dream shop book and stay guest Journey.

Speaker #3: Now I'll turn the call over to Kevin to give you a few more details on the quarter and expectations for the full year. Thanks, Chris, and good morning, everyone.

Speaker #3: During the quarter, system-wide RevPAR increased 3.6% versus the prior year on a comparable and currency-neutral basis. Growth was driven by broad growth across all chain scales, brands, and segments, as well as sequential improvement throughout the quarter in the US.

Speaker #3: Adjusted EBITDA was $901 million in the first quarter, up 13% year over year, and exceeding the high end of our guidance range. Outperformance was predominantly driven by better-than-expected system-wide RevPAR growth.

Christopher J. Nassetta: Now, I'll turn the call over to Kevin to give you a few more details on the quarter and expectations for the full year.

Chris Nassetta: Now, I'll turn the call over to Kevin to give you a few more details on the quarter and expectations for the full year.

That, our powerful network effect, industry-leading RevPAR, premiums, and fee-based capital-light business model will continue to drive strong topline growth, strong operating performance, net unit growth, and meaningful cash flow, enabling us to return an increasing amount of capital to shareholders.

Speaker #3: Management franchise fees grew 10.4% year over year. For the quarter, diluted earnings per share adjusted for special items was $2.01. Turning to our regional performance, first quarter comparable US RevPAR increased 3.4%, driven by group growth trends continuing from the prior quarter.

Now, I'll turn the call over to Kevin to give you a few more details on the quarter and expectations for the full year.

Kevin Jacobs: Thanks, Chris. Good morning, everyone. During the quarter, system-wide RevPAR increased 3.6% versus the prior year on a comparable and currency-neutral basis. Growth was driven by broad growth across all chain scales, brands, and segments, as well as sequential improvement throughout the quarter in the US. Adjusted EBITDA was $901 million in Q1, up 13% year over year and exceeding the high end of our guidance range. Outperformance was predominantly driven by better than expected system-wide RevPAR growth. Management franchise fees grew 10.4% year over year. For the quarter, diluted earnings per share, adjusted for special items, was $2.01.

Thanks, Chris and good morning everyone. During the quarter. Systemwide ref par increased 3.6% versus the prior year on a comparable and currency neutral basis.

Speaker #3: Broad business travel strength and leisure demand from a concentrated spring break. For full year 2026, we expect US RevPAR growth to be at the high end or above system-wide guidance.

Growth was driven by broad growth across all chain scales Brands and segments, as well as sequential Improvement throughout the quarter in the US.

Speaker #3: The Americas outside the US first quarter RevPAR increased 4.4% year over year. Driven by strong demand across all segments and continued strength across the Caribbean and South America.

Adjusted EBITDA was $901 million in the first quarter, up 13% year-over-year and exceeding the high end of our guidance range.

Our performance was predominantly driven by better-than-expected systemwide RevPAR growth.

Management and franchise fees grew 10.4% year-over-year.

Speaker #3: For full year 2026, we expect RevPAR growth to be in the low to mid single digits. Europe, RevPAR grew 6.9% year over year, led by growth across all segments.

Kevin Jacobs: Turning to our regional performance, Q1 comparable US RevPAR increased 3.4%, driven by group growth trends continuing from the prior quarter, broad business travel strength, and leisure demand from a concentrated spring break. For full year 2026, we expect US RevPAR growth to be at the high end or above system-wide guidance. In the Americas outside the US, Q1 RevPAR increased 4.4% year over year, driven by strong demand across all segments and continued strength across the Caribbean and South America. For full year 2026, we expect RevPAR growth to be in the low to mid-single digits. Europe, RevPAR grew 6.9% year over year, led by growth across all segments. Continental Europe strength related to the 2026 Winter Olympics and other regional event-driven demand.

For the quarter, diluted earnings per share adjusted for special items was $2.11.

Speaker #3: Continental Europe strength related to the winter Olympics and other regional event-driven demand. For full year 2026, we expect RevPAR growth to be in the low to mid single digits.

Turning to our regional performance. First quarter comparable, usrf bar, increased 3.4% driven by group growth Trends continuing from the prior quarter.

Broad business, travel strength, and Leisure demand from a concentrated spring break.

Speaker #3: In the Middle East and Africa region, RevPAR decreased 1.7% year over year as strong early quarter performance was offset by weakness following travel disruptions from the conflict across the Middle East.

For full year 2026, we expect US RevPAR growth to be at the high end, or above, systemwide guidance.

Speaker #3: For full year 2026, we expect RevPAR to be down in the mid to high teens as a result of the ongoing conflict in the region, and we expect the biggest impact to be on second quarter performance.

In the America's outside, the US first quarter, ref bar increased 4.4% year-over-year driven by strong demand across. All segments, and continued strength, across the Caribbean and South America,

For full year 2026, we expect revpar growth to be in the low to mid single digits.

Speaker #3: In the Asia-Pacific region, first quarter RevPAR was up 9.1% in APAC ex-China, led by Australasia RevPAR growth, and extended Chinese New Year and other regional events.

Kevin Jacobs: For full year 2026, we expect RevPAR growth to be in the low to mid-single digits. In the Middle East and Africa region, RevPAR decreased 1.7% year over year, as strong early quarter performance was offset by weakness following travel disruptions from the conflict across the Middle East. For full year 2026, we expect RevPAR to be down in the mid to high teens as a result of the ongoing conflict in the region, and we expect the biggest impact to be on Q2 performance. In the Asia Pacific region, Q1 RevPAR was up 9.1% in APAC ex China, led by Australasia RevPAR growth and extended Chinese New Year and other regional events.

Speaker #3: RevPAR in China increased 1.3% in the quarter, driven by business segment recovery, but offset by continued pressure in group from software convention and company meetings activity and leisure due to weaker inbound travel.

York Park group 6.9% year-over-year led by growth across all segments, Continental Europe, strength related to the Winter Olympics, and other Regional event, driven, demand, for full year 2026. We expect refer growth to be in the low to mid single digits.

In the Middle East and Africa region. Ref part decreased. 1.7% year-over-year. As strong early quarter. Performance was offset by weakness following travel. Disruptions from the conflict across the Middle East.

Speaker #3: For full year 2026, we expect RevPAR growth in Asia-Pacific to be low single digits, with RevPAR flat in China. Turning to development, as Chris mentioned, for the quarter, we grew net units 6.3% and now have more than 527,000 rooms in our pipeline.

For full year 2026. We expect rev part to be down in the mid tide, teens as a result of the ongoing conflict in the region and we expect the biggest impact to be on second quarter performance.

Speaker #3: 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 the Hilton portfolio.

Kevin Jacobs: RevPAR in China increased 1.3% in the quarter, driven by business segment recovery, but offset by continued pressure in group from softer convention and company meetings activity, and leisure due to weaker inbound travel. For full year 2026, we expect RevPAR growth in Asia Pacific to be low single digits, with RevPAR flat in China. Turning to development, as Chris mentioned, for the quarter, we grew net units 6.3% and now have more than 527,000 rooms in our pipeline. We continue to have more rooms under construction than any other hotel company, with approximately 1 in every 5 hotel rooms under construction globally slated to join the Hilton portfolio. We expect to deliver between 6% to 7% net unit growth for the full year.

In the asia-pacific region, first quarter, ref par was up 9.1% in APAC, X China led by australasia revpar growth and extended Chinese New Year and other Regional events.

Speaker #3: We expect to deliver between 6% to 7% net unit growth for the full year. Moving to guidance for the second quarter and including the impact from the Middle East conflict, we expect system-wide RevPAR growth to be between 2% and 3%.

Revpar in China, increased 1.3% in the quarter, driven by business segments recovery, but offset by continued pressure in group from software convention and Company, meetings, activity and Leisure due to weaker inbound travel.

Speaker #3: We expect adjusted EBITDA to be between a billion and 15 million and a billion and 35 million dollars, and diluted EPS adjusted for special items to be between $2.18 and $2.24.

For full year 2026, we expect revpar growth in asia-pacific to be low single digits with revcar flat in China.

Turning to development is Chris mentioned for the quarter. We grew net units, 6.3% and now have more than 527,000 rooms in our pipeline.

Speaker #3: Both impacted by the significant Middle East RevPAR decline and several one-time and timing items that are unique to the second quarter year over year comparison.

Speaker #3: For the full year, we expect RevPAR growth of 2% to 3%, driven by strengthening underlying fundamentals across chain scales and segments, and factoring for a range of scenarios for the Middle East.

Kevin Jacobs: Moving to guidance for Q2, including the impact from the Middle East conflict, we expect system-wide RevPAR growth to be between 2% and 3%. We expect adjusted EBITDA to be between $1.015 billion and $1.035 billion, and diluted EPS adjusted for special items to be between $2.18 and $2.24, both impacted by the significant Middle East RevPAR decline and several one-time and timing items that are unique to the Q2 year-over-year comparison. For the full year, we expect RevPAR growth of 2% to 3%, driven by strengthening underlying fundamentals across chain scales and segments, and factoring for a range of scenarios for the Middle East.

We continue to have more rooms under construction than any other Hotel company with approximately 1 in every 5 hotel rooms under construction globally. Slated, to join the Hilton portfolio. We expect to deliver between 6% to 7%. Net unit growth for the full year,

Speaker #3: As a result, we expect adjusted EBITDA of between $4 billion and 20 million dollars and $4 billion and 60 million dollars, and diluted EPS adjusted for special items of between $8.79 and $8.91.

Speaker #3: Please note that our guidance ranges do not incorporate future share repurposes. Repurchases. Moving on to capital return, we paid a cash dividend of 15 cents per share during the first quarter for a total of $35 million.

moving the guidance for the second quarter in, including the impact from the Middle East conflict. We expect systemwide ref for growth to be between 2% and 3%. We expect adjusted ebit da to be between a billion and 15 million and a billion, and 35 million and diluted EPS, adjusted for special items to be between 2 and 18 cents, and 2.224 both impacted by the significant Middle East ref, part Decline, and several 1-time and timing items that are unique to the second quarter year-over-year comparison,

Speaker #3: Our board also authorized a quarterly dividend of 15 cents per share for the second quarter. For 2026, we expect to return approximately 3.5 billion dollars to shareholders in the form of buybacks and dividends.

Kevin Jacobs: As a result, we expect adjusted EBITDA of between $4.02 billion and $4.06 billion, and diluted EPS adjusted for special items of between $8.79 and $8.91. Please note that our guidance ranges do not incorporate future share repurchases. Moving on to capital return, we paid a cash dividend of $0.15 per share during Q1 for a total of $35 million. Our board also authorized a quarterly dividend of $0.15 per share for Q2. For 2026, we expect to return approximately $3.5 billion to shareholders in the form of buybacks and dividends. Further details on our Q1 results can be found in the earnings release we issued earlier this morning. This completes our prepared remarks.

For the full year, we expect RevPAR growth of 2% to 3%, driven by strengthening underlying fundamentals across chain scales and segments, and factoring for a range of scenarios for the Middle East.

Speaker #3: Further details on our first quarter results can be found in the earnings release we issued earlier this morning. This completes our prepared remarks. We would now like to open the line for any questions you may have.

Speaker #3: We would like to speak with as many of you as possible, so we ask that you limit yourself to one question. Chuck, can we have our first question, please?

As a result, we expected, just a debit de of between 4 billion, and 20 million and 4 billion in 60 million and diluted, EPS adjusted for special items of between 8.79 and 8.91 cents.

Please note that our guidance ranges do not incorporate future, share, repurposes, repurchases.

Speaker #4: Thank you. Our first question will come from Sean Kelly with Bank of America. Please go ahead.

Speaker #5: Hi, good morning. Everyone, thank you for taking my question. Chris, obviously, a big notable change in the US demand dynamic. So hoping you could just unpack that a little bit for us.

Moving on to Capital return. We paid a cash dividend of 15 cents per share during the first quarter for a total of 35 million. Our board, also authorized a quarterly dividend of 15 cents per share for the second quarter.

For 2026, we expect to return approximately 3.5 billion dollars to shareholders in the form of BuyBacks and dividends.

Speaker #5: Our math gets us to probably nearly a 200 basis point increase in your outlook from where you were, at the beginning of the at the beginning of the year.

Further details on our first quarter results can be found in the earnings release. We issued earlier this morning.

Kevin Jacobs: We would now like to open the line for any questions you may have. We would like to speak with as many of you as possible, so we ask that you limit yourself to one question. Chuck, can we have our first question, please?

Speaker #5: So could you just walk us through that and maybe elaborate a little bit on your comment around the C-shaped economy? Are you actually seeing some evidence of that convergence as we get here into April, or what gives you that confidence to kind of make that statement?

F, that you limit yourself to 1 question.

Chuck. Can we have our first question, please?

Operator: Thank you. Our first question will come from Shaun Kelley with Bank of America. Please go ahead.

Speaker #5: And what are you seeing that's getting you excited about the business? Thanks.

Thank you. Our first question will come from Sean Kelly with Bank of America. Please go ahead.

Shaun Kelley: Hi, good morning, everyone. Thank you for taking my question. Chris, obviously, a big notable change in the US demand dynamic, hoping you could just unpack that a little bit for us. Our math gets us to, you know, probably nearly a 200 basis point increase in your outlook from where you were, you know, at the beginning of the year. Could you just walk us through that and maybe elaborate a little bit on your comment around the C-shaped economy? Are you actually seeing some evidence of that convergence as we get here into April, or what gives you that confidence to kind of make that statement? What are you seeing that's getting you excited about the business? Thanks.

Speaker #3: Thanks, Sean. I think that's a great way to start with the Q&A because it's the biggest question out there. I think if you go back, I can have the team fact-check me, but if you go back to mid-year last year, I was very much of the mind that I saw if you lift up it up above a lot of noise, that there were some really good fundamental things happening from a macro point of view in the US economy that, to my mind, sort of had to eventually translate into higher growth rates.

Speaker #3: Now, I will admit that certainly in the third quarter, as we reported, while I said that, I also said we're not seeing the green shoots or a whole lot of evidence of that yet.

Christopher J. Nassetta: Thanks, Shaun. I think that's a great way to start with the Q&A because it's the biggest, you know, biggest question out there. I, you know, I think if you go back, I can have the team fact-check me, but if you go back to, like, midyear last year, I was very much of the mind that I saw, you know, if you lift it up above a lot of noise, that there were some really good fundamental things happening from a macro point of view in the US economy that, to my mind, sort of had to eventually translate into higher growth rates. Now, I will admit that certainly in Q3, you know, as we reported, while I said that, I also said we're not seeing the green shoots or, you know, a whole lot of evidence of that yet.

Chris Nassetta: Thanks, Shaun. I think that's a great way to start with the Q&A because it's the biggest, you know, biggest question out there. I, you know, I think if you go back, I can have the team fact-check me, but if you go back to, like, midyear last year, I was very much of the mind that I saw, you know, if you lift it up above a lot of noise, that there were some really good fundamental things happening from a macro point of view in the US economy that, to my mind, sort of had to eventually translate into higher growth rates. Now, I will admit that certainly in Q3, you know, as we reported, while I said that, I also said we're not seeing the green shoots or, you know, a whole lot of evidence of that yet.

Hi, good morning after, uh, everyone, thank you for taking my question. Um, Chris obviously, a big notable change in the US demand Dynamic. So, hoping you could just unpack that a little bit for us, um, our math gets us to, you know, probably nearly a 200 basis point increase in your outlook from where you were, uh, you know, at the beginning of the at the beginning of the year. So could you just walk us through that and maybe elaborate a little bit on your comment around? The c-shaped economy are, are you actually seeing some evidence of that convergence as we get here into April or what gives you that confidence to to kind of make that uh that statement and what are you seeing? That's getting you excited about the business. Thanks.

Speaker #3: But then again, if nothing, I've been consistent. In the fourth quarter, I repeated my view that we were that we had to start to see what I sort of made up on my own that instead of a K, a C economy where you see convergence of the lower end, the middle, the middle class, mid-price segments in our industry, moving up.

Speaker #3: And in the fourth quarter, we started to see a little bit of evidence of that. Now, I would say, as we're in the first quarter and looking into Q2, where we have part of the quarter behind us, obviously, in the sense of April, we have very good sightlines into May, we're seeing it, right?

The Q&A because it's the biggest, you know, biggest question out there. I, you know, I think if you go back, I I I can have the team fact, check me. But if you go back to like, mid-year last year, I was very much of the mind that I saw. You know, if you lift up, lift it up a lot of noise that there were some really good fundamental things happening from a macro point of view in the US economy that to my mind, sort of had to eventually translate into higher growth rates. Now, I will admit that certainly in the third quarter, you know, as we reported while I said that,

Kevin Jacobs: I, you know, if nothing, I've been consistent. You know, in Q4, I repeated my view that we were, you know, that we had to start to see what I sort of made up on my own, instead of a K, a C economy, where you see convergence of the lower end, you know, the middle, the middle class, mid-price segments in our industry moving up. In Q4, we started to see a little bit of evidence of that. Now, I would say, as we're in Q1 and looking into Q2, where we have, you know, part of the quarter behind us, obviously, in the sense of April, we have very good sight lines into May. You know, we're seeing it, right?

Chris Nassetta: I, you know, if nothing, I've been consistent. You know, in Q4, I repeated my view that we were, you know, that we had to start to see what I sort of made up on my own, instead of a K, a C economy, where you see convergence of the lower end, you know, the middle, the middle class, mid-price segments in our industry moving up. In Q4, we started to see a little bit of evidence of that. Now, I would say, as we're in Q1 and looking into Q2, where we have, you know, part of the quarter behind us, obviously, in the sense of April, we have very good sight lines into May. You know, we're seeing it, right?

Speaker #3: We're seeing what to me was inevitably on its way, but it takes time for these things to sort of seep into the economy. So I said it in my prepared comments, and at the risk of taking too much time here, but I do think it's the most important question and answer.

I also said we're not seeing the green shoots or you know, a whole lot of evidence of that yet but I you know, but then again my if nothing I've been consistent um you know, in the fourth quarter I repeated my view that we were you know, that we had to start to see what I sort of made up on my own. Instead of a k, a c economy where you see convergence of the lower end, you know, the middle, the mid middle class mid, you know mid price segments in our industry moving up and in the fourth quarter we started to see

Speaker #3: What's driving it? Well, I think what's driving it is a number of very big picture things that are going on. One, forget for the moment the spike in energy prices and oil because of the war in Iran.

Speaker #3: I mean, broadly structurally, particularly in housing, you have inflation coming down. And as a result, broadly, again, not in this exact amount, broadly rates have come down.

Kevin Jacobs: We're seeing what, to me, was inevitably on its way. You know, it takes time for these things to sort of seep into the economy. You know, I said it in my prepared comments and at the risk of, you know, taking too much time here, I do think it's the most important question and answer. You know, what's driving it? Well, I think what's driving it is, you know, a number of very big picture things that are going on. One, forget for the moment the spike in, you know, energy prices and oil because of the war in Iran. I mean, broadly, structurally, particularly in housing, you have inflation coming down. As a result, broadly, again, not, you know, in this exact broadly, rates have come down.

Chris Nassetta: We're seeing what, to me, was inevitably on its way. You know, it takes time for these things to sort of seep into the economy. You know, I said it in my prepared comments and at the risk of, you know, taking too much time here, I do think it's the most important question and answer. You know, what's driving it? Well, I think what's driving it is, you know, a number of very big picture things that are going on. One, forget for the moment the spike in, you know, energy prices and oil because of the war in Iran. I mean, broadly, structurally, particularly in housing, you have inflation coming down. As a result, broadly, again, not, you know, in this exact broadly, rates have come down.

Speaker #3: And I think they're as the next you can debate how fast, when, second half of this year, first half of next year, but I think there's a broad understanding that particularly if we get the Middle East stuff sort of settled down, you're going to be in a lower inflationary environment, and it will allow the Fed to continue to bring rates down to stimulate the real economy.

Speaker #3: Which is what they're trying to do. You're in, obviously, a one of the most deregulatory environments in what I can remember in modern history, and that means financial services, energy, you name it, across the spectrum, that you have a broad deregulatory regime.

A little bit, um, of evidence of that. Now, I would say as we're in the first quarter and looking into Q2 where we have, you know, part of the quarter behind us. Obviously, in the sense of April, we have very good sight lines in the may, you know, we're seeing it right. We're seeing what to me was inevitably on its way. But, you know, it takes time for these things to sort of seep into the economy. So, you know, I said it in my prepared comments and at the risk of you know, taking too much time here but I I do think it's the most important question and and answer you know what's driving it? Well I think what's driving it is you know these a number of very big picture things that are going on, 1, forget for the moment. The spike in you know, Energy prices and oil because of the war in Iran. I mean, broadly structurally. Particularly in housing you have inflation coming down

Kevin Jacobs: I think they're, you know, you can debate how fast, when, H2 of this year, H1 of next year. I think there's a broad understanding that, particularly if we get the Middle East stuff sort of settled down.

Chris Nassetta: I think they're, you know, you can debate how fast, when, H2 of this year, H1 of next year. I think there's a broad understanding that, particularly if we get the Middle East stuff sort of settled down.

Speaker #3: And that, in addition to that, in the backdrop, because of the bill that was passed last year, you are in a multi-year position where you have very, very business-friendly tax attributes, right?

Christopher J. Nassetta: Allow the Fed to continue to bring rates down to stimulate the real economy, which is what they're trying to do. You're in obviously one of the most deregulatory environments in what I can remember in modern history, that means financial services, energy, you know, you name it, across the spectrum, you know, that you have a broad deregulatory regime. That, you know, in addition to that, in the backdrop, you know, because of the bill that was passed last year, you are at, in a multi-year position where you have very, very business-friendly tax attributes, right? That's a, you know, very hard to get done. You know, it's certainly not gonna get undone during this administration.

Chris Nassetta: You're gonna be in a lower inflationary environment and it will allow the Fed to continue to bring rates down to stimulate the real economy, which is what they're trying to do. You're in obviously one of the most deregulatory environments in what I can remember in modern history, that means financial services, energy, you know, you name it, across the spectrum, you know, that you have a broad deregulatory regime. That, you know, in addition to that, in the backdrop, you know, because of the bill that was passed last year, you are at, in a multi-year position where you have very, very business-friendly tax attributes, right? That's a, you know, very hard to get done. You know, it's certainly not gonna get undone during this administration.

Speaker #3: And that's a very hard-to-get-done it's certainly not going to get undone during this administration. And let's be honest, when you look at it historically, it takes a lot, even with change of administration, to get that kind of sweeping tax policy change.

And as a result, broadly again not you know in this exact amount broadly rates have come down and I think they're, you know, as the next you can debate how fast when second half of this year first half and next year, but I think there's a broad, understanding that particularly, if we get the Middle East stuff, sort of settled down, you're you're going to be in a, you know, a lower inflationary environment, and it will allow the FED to continue to bring rates down to stimulate the real, the real economy, um, which is what they're trying to do. You're in, obviously a

Speaker #3: So I think you have a number of years in running room in favorable tax policy. And then I'll state the obvious. You have a lot of investing going on in America.

Speaker #3: Where is that investing? Obviously, AI. All the AI companies, the whole AI complex around it, data centers, energy, it's like one of the it's like the Great Race.

1 of the most deregulatory environments in in what I can remember in modern history and that means financial services energy, you know, you name it across the Spectrum. You know, that you have a broad deregulatory re deregulatory regime and that you know, in addition to that in the backdrop, you know, because of the bill that was passed last year, you are at in a multi-year position where you have very, very business friendly.

Speaker #3: People are spending money like crazy in and around that. You have infrastructure, which I've talked about for a number of quarters, the Biden-era infrastructure bill, $1.6 trillion, very little of which percentage-wise has been spent.

Christopher J. Nassetta: Let's be honest, when you look at it historically, it takes a lot, even with change of administration, to get that kind of sweeping tax policy change. I think you have a number of years and running room and favorable tax policy. Then, like, I'll state the obvious, you have a lot of investing going on in America. Where is that investing? Obviously, AI. All the AI companies. The whole AI complex around it. Data centers, energy. It's like a, it's like the great race. People are spending money like crazy in and around that. You have infrastructure, which I've talked about for a number of quarters. The Biden-era infrastructure bill, $1.6 trillion, very little of which percentage-wise has been spent.

Chris Nassetta: Let's be honest, when you look at it historically, it takes a lot, even with change of administration, to get that kind of sweeping tax policy change. I think you have a number of years and running room and favorable tax policy. Then, like, I'll state the obvious, you have a lot of investing going on in America. Where is that investing? Obviously, AI. All the AI companies. The whole AI complex around it. Data centers, energy. It's like a, it's like the great race. People are spending money like crazy in and around that. You have infrastructure, which I've talked about for a number of quarters. The Biden-era infrastructure bill, $1.6 trillion, very little of which percentage-wise has been spent.

Speaker #3: The CHIPS Act to resure critical manufacturing, again, $800 billion, very little of that is spent. Why? Because it takes time to get these things land, permits, build.

Um tax uh tax attributes, right. And I thought, you know that that that that's a, you know, very hard to get done. You know, it's certainly not going to get undone during this Administration and let's be honest when you look at it historically it takes a lot, even with change of administration to get that kind of sweeping tax policy change. So I think you have a number of, you know, of of years and Running Room and favorable tax.

Speaker #3: So these things, these things they take a number of years to sort of seep into the system. But I think you're starting to see it.

Speaker #3: The best evidence of that, if you go back and there's the correlation sort of got obtuse or broken apart during COVID. A lot of things.

Speaker #3: But over long spans of time, the highest correlation, 95% plus, over a very long span of time, the correlation in demand growth for hotel rooms has been growth in NRFI, non-residential fixed investment.

Christopher J. Nassetta: The CHIPS Act to reshore, you know, critical manufacturing. Again, $800 billion, very little of that is spent. Why? Because it takes time to get these things like land, permits, build. These things, you know, they take a number of years to sort of seep into the system. I think you're starting to see it. The best evidence of that, if you know, if you go back and there's the correlation sort of got obtuse or broken apart during COVID, like a lot of things. You know, over long spans of time, the highest correlation, 95% plus over a very long span of time. The correlation in demand growth of hotel rooms has been growth in NRFI, Nonresidential Fixed Investment.

Chris Nassetta: The CHIPS Act to reshore, you know, critical manufacturing. Again, $800 billion, very little of that is spent. Why? Because it takes time to get these things like land, permits, build. These things, you know, they take a number of years to sort of seep into the system. I think you're starting to see it. The best evidence of that, if you know, if you go back and there's the correlation sort of got obtuse or broken apart during COVID, like a lot of things. You know, over long spans of time, the highest correlation, 95% plus over a very long span of time. The correlation in demand growth of hotel rooms has been growth in NRFI, Nonresidential Fixed Investment.

Speaker #3: Sort of like we've lived in crazyville post-COVID where you have all this swirling stuff going on, hard to understand. But to me, over the long term, that is exactly what is going to drive the business.

For a number of quarters, you know the Biden era, infrastructure Bill 1.6 trillion. Very little of which percentage-wise has been spent the chips act to reassure. You know, critical manufacturing. Again 800 billion. Very little of that is spent why? Because it takes time to get these things like land, permits build. So, these things, you know these things. You know, they take a number of years to sort of

Speaker #3: And that's exactly what's going to drive the mid-market of the business. All that investing in non-residential fixed investment that takes the middle class getting in the game and if you look at those numbers, they've been moving up and they're perennially bad at forecasting NRFI, from my experience.

Speaker #3: But the actual numbers being reported are moving up. And my guess is the next several years, they're going to keep moving up. And as they do, you're going to see this convergence with all of those things going on.

Christopher J. Nassetta: Sort of like we've lived in Crazyville post-COVID, where you have all this swirling stuff going on, hard to understand. To me, you know, over the long term, that is exactly what is gonna drive the business, and that's exactly what's gonna drive the mid-market of the business. All that investing in Nonresidential Fixed Investment that takes the middle class getting in the game. If you look at those numbers, they've been moving up and they're, you know, perennially bad at forecasting NRFI from my experience. The actual numbers being reported are moving up, and my guess is the next several years, they're gonna keep moving up. As they do, you're gonna see this convergence. With all of those things going on, you're gonna see this convergence.

Chris Nassetta: Sort of like we've lived in Crazyville post-COVID, where you have all this swirling stuff going on, hard to understand. To me, you know, over the long term, that is exactly what is gonna drive the business, and that's exactly what's gonna drive the mid-market of the business. All that investing in Nonresidential Fixed Investment that takes the middle class getting in the game. If you look at those numbers, they've been moving up and they're, you know, perennially bad at forecasting NRFI from my experience. The actual numbers being reported are moving up, and my guess is the next several years, they're gonna keep moving up. As they do, you're gonna see this convergence. With all of those things going on, you're gonna see this convergence.

Speaker #3: You're going to see this convergence. By the way, if that's not enough, I mean, I know it's a whole different topic of displacement and everything.

Speaker #3: It goes with AI. But AI is also going to provide one of the greatest productivity booms I mean, it's going to be equal to or bigger than the internet productivity boom.

Speaker #3: And yes, there are people, there's winners, there's losers, there's need to retrain and shift and reskill people, all of that stuff. We won't get into today with the limits of time.

Seep into the system, but I think you're starting, you know, you're starting to see it the, the best evidence of that. If you, you know, if you go back and there's the correlation sort of got obtuse or broken apart during Co like a lot of things but you know over long spans of time the highest correlation 95% plus over a very long span of time that correlation and demand growth of hotel rooms has been growth and nrfi non-residential fixed investment. Sort of like, we've lived in Crazy postco where we have all this swirling stuff going on hard to understand. But to me, you know, over the long term, that is exactly what is going to drive the business. And that's exactly what's going to drive the, mid-market of the business. All that investing in non-residential fixed investment, that takes the middle class getting in the game. And if you look at those numbers, they've been moving up and they're, you know, perennially bad at forecasting, nrfi for my experience, but the actual numbers being reported are moving,

Speaker #3: But there is no world where economically it's not advantageous to have productivity gains. There is no world there is no time in American history where big productivity gains weren't matched with big economic growth.

Christopher J. Nassetta: By the way, if that's not enough, I mean, I know it's a whole different topic of displacement and everything that goes with AI. AI is also gonna provide one of the greatest productivity booms. I mean, it's gonna be equal to or bigger than the Internet productivity boom. Yes, there are people, there's winners, there's losers, there's need to retrain and, you know, shift and re-skill people, all of that stuff we won't get into today with the limits of time. There is no world where economically it's not advantageous to have productivity gains. Like, there is no world. There is no time in American history where big productivity gains weren't matched with big economic growth. I sort of put all that together and I, you know, I feel like, okay, it's happening. Like, I want it to keep happening.

Chris Nassetta: By the way, if that's not enough, I mean, I know it's a whole different topic of displacement and everything that goes with AI. AI is also gonna provide one of the greatest productivity booms. I mean, it's gonna be equal to or bigger than the Internet productivity boom. Yes, there are people, there's winners, there's losers, there's need to retrain and, you know, shift and re-skill people, all of that stuff we won't get into today with the limits of time. There is no world where economically it's not advantageous to have productivity gains. Like, there is no world. There is no time in American history where big productivity gains weren't matched with big economic growth. I sort of put all that together and I, you know, I feel like, okay, it's happening. Like, I want it to keep happening.

Up and my guess is the next several years, they're going to keep moving up and as they do, you're going to see this convergence with all of those things going on. You're going to see this convergence. By the way, if that's not enough.

Speaker #3: So I sort of put all that together and I feel like, okay, it's happening. I want it to keep happening. We don't I want to be thoughtful about we're talking about a little bit of fourth quarter and the first quarter.

Speaker #3: And now looking into the second quarter, and I don't want to overcook it, but all of those things I've been thinking, I think are happening.

Speaker #3: And I think it's now showing up in our business. And it makes me feel good that we that we could be in a time frame honestly where I love it when we're sitting around at this very table every week talking about performance.

Speaker #3: And every time we talk, it's getting better. Right? And that's what's been happening for a while. For weeks and weeks, it's getting better. So and as we look further out in the year with the visibility we have, here in the US, it feels better.

Christopher J. Nassetta: You know, I wanna be, you know, thoughtful about, like, we're talking about, you know, a little bit of Q4 and the Q1 and now looking into the Q2, and I don't wanna overcook it, but You know, all of those things I've been thinking, I think are happening, and I think it's now showing up in our business. It makes me feel good that we, you know, that we could be in a timeframe, honestly, where, you know, like, I love it when we're sitting around at this very table every week talking about performance, and every time we talk, it's getting better, right? That's what's been happening for a while. You know, for weeks and weeks, it's getting better.

Chris Nassetta: You know, I wanna be, you know, thoughtful about, like, we're talking about, you know, a little bit of Q4 and the Q1 and now looking into the Q2, and I don't wanna overcook it, but you know, all of those things I've been thinking, I think are happening, and I think it's now showing up in our business. It makes me feel good that we, you know, that we could be in a timeframe, honestly, where, you know, like, I love it when we're sitting around at this very table every week talking about performance, and every time we talk, it's getting better, right? That's what's been happening for a while. You know, for weeks and weeks, it's getting better.

I mean I know it's a whole different topic of displacement and everything that goes with AI. But AI is also going to provide 1 of the greatest productivity booms. I mean it it it's going to be equal to or bigger than the internet productivity. Boom. And yes, there are people. There's Winters, there's losers, there's need to retrain, and, you know, shift and reskill people, all of that stuff. We won't get into today with the limits of time. But there is no world where economically. It's not advantageous to have productivity gains like there is no world. There is no time in American history, where big productivity gains weren't matched with big economic growth. So, I sort of put all that together and I, you know, I feel like, okay, it's happening. Like, I want it to keep happening. We don't, you know, I, I want to be

Speaker #3: So reality is we gave guidance to Middle East. I'll leave that to somebody else to ask. Create some uncertainty, but I think you could make an argument that we are being reasonably conservative with our full-year guidance.

You know, thoughtful about, like, we're talking about, you know, a little bit of fourth quarter and the first quarter, and now looking into the second quarter, and I don't want to overcook it, but, um, I, you know, all of those things I've been thinking, I think, are happening. And I think it's now showing up in our business, uh, and it makes—it makes me feel good that we, you know, that we could be in a time frame, honestly, where

Speaker #5: Thank you so much.

Speaker #4: The next question will come from Dan Politzer with JPMorgan. Please go ahead.

Christopher J. Nassetta: It, you know, as we look further out in the year with the visibility we have, you know, here in the US, it feels better. You know, reality is, you know, we gave guidance to Middle East. I'll leave that to somebody else to ask. Creates some uncertainty, you know, I think you could make an argument that we are being reasonably conservative with our full year guidance. Thank you so much.

Chris Nassetta: It, you know, as we look further out in the year with the visibility we have, you know, here in the US, it feels better. You know, reality is, you know, we gave guidance to Middle East. I'll leave that to somebody else to ask. Creates some uncertainty, you know, I think you could make an argument that we are being reasonably conservative with our full year guidance.

Speaker #6: Hey, good morning, everyone. And thanks for the question. I suppose I'll take the bait on the Middle East there. Can you just remind us what the exposure in terms of EBITDA or fees across your businesses there?

Speaker #6: And I guess, how do you think about the Middle East dynamic and disruption there flowing through to the other regions of your business? Throughout the course of the year, and impacts the US outbound travel?

Speaker #3: Sure. Middle East is about 3% of the business, you'd say. All right. Well, it's not that big a part of the business. But like Q2, you see that it's impacted by a few things.

You know, like I love it when we're sitting around in at this very table every week, talking about performance. And every time we talk, it's getting better, right? And that's what's been happening for a while, you know, for weeks and weeks, it's getting better, you know? Like so I, you know, and as we look further out in the year with the visibility, we have, you know, here in the US. It feels it feels, it feels better. So, um, you know, reality is, you know, we we gave guidance to the Middle East. I'm, I'll leave that to somebody else to ask creates some uncertainty. But, you know, I, I think you could make an argument that we are being reasonably conservative with our full year guidance.

Shaun Kelley: Thank you so much.

Thank you so much.

Operator 2: The next question will come from Daniel Politzer with J.P. Morgan. Please go ahead.

Operator: The next question will come from Dan Politzer with JPMorgan. Please go ahead.

Speaker #3: Some one-time stuff that Kevin mentioned from last year but it's also impacted by the Middle East. I mean, the Middle East for Q2, which is when we think it'll probably be most dramatically impacted.

The next question will come from Dan Pulitzer with JP Morgan. Please go ahead.

Daniel Politzer: Hey, good morning, everyone, and thanks for the question. I suppose I'll take the bait on the Middle East there. Can you just remind us what the exposure in terms of EBITDA or fees across your business is there? I guess, how do you think about the Middle East dynamic and disruption there flowing through to the other regions of your business, you know, throughout the course of the year, and, you know, impacts the US outbound travel?

Dan Politzer: Hey, good morning, everyone, and thanks for the question. I suppose I'll take the bait on the Middle East there. Can you just remind us what the exposure in terms of EBITDA or fees across your business is there? I guess, how do you think about the Middle East dynamic and disruption there flowing through to the other regions of your business, you know, throughout the course of the year, and, you know, impacts the US outbound travel?

Speaker #3: If it's 3%, it could be down 50% or something like that. You guys could do the math. That could be one and a half points on system-wide.

Speaker #3: So whatever guidance we gave you, if the Middle East were doing what it normally does, it wouldn't be which had been running in the high single-digits, low double digits.

Hey, good morning everyone, and thanks for the question. Uh, I I suppose I'll take the bait on the Middle East there. Uh, can you just remind us what the the, the exposure in terms of i-bidder fees across your business is there? And, and I guess, how do you think about the Middle East Dynamic and disruption there blowing through to the other regions of your business? You know, throughout the throughout the course of the year? Um, and you know, impacts the US outbound travel.

Christopher J. Nassetta: Sure. Middle East, about 3% of the business. You'd say, All right, well, it's not that big a part of the business. You know, like Q2, you see that, you know, it's impacted by a few things, some one-time stuff that Kevin mentioned from last year, but it's also impacted by the Middle East. The Middle East, you know, for Q2, which is when we think it'll probably be, you know, most dramatically impacted, it could be down 50% or something like that. You know, you guys could do the math. That could be 1.5 points on system wide.

Chris Nassetta: Sure. Middle East, about 3% of the business. You'd say, All right, well, it's not that big a part of the business. You know, like Q2, you see that, you know, it's impacted by a few things, some one-time stuff that Kevin mentioned from last year, but it's also impacted by the Middle East. The Middle East, you know, for Q2, which is when we think it'll probably be, you know, most dramatically impacted, it could be down 50% or something like that. You know, you guys could do the math. That could be 1.5 points on system wide.

Sure. Middle East is about 3 of the businesses, you'd say, all right, well, it's not that big a part of the business, but

Speaker #3: Now, for a quarter minus 50, you've flipped that around. And in Q2, you would be above where you were in Q1. So even though it is a small percentage of 3, when you get in very large numbers, small percentage of a large number becomes a decent-sized number.

Speaker #3: Having said that, we are already I mean, I don't know where this is all going to play out. I'm looking down at my window to Washington.

Christopher J. Nassetta: Whatever guidance we gave you, if the Middle East were doing what it normally does, it wouldn't be, you know, which had been running in high single digits, low double digits now, you know, for a quarter minus 50, you flip that around and in Q2 you would be above where you were in Q1. Even though it is a small percentage of three, when you get in very large numbers, small percentage of a large number becomes a decent sized number. Having said that, we are already, I mean, I don't know where this is all gonna play out. I'm looking down, out my window to Washington. We'll see. You know, I don't know.

Chris Nassetta: Whatever guidance we gave you, if the Middle East were doing what it normally does, it wouldn't be, you know, which had been running in high single digits, low double digits now, you know, for a quarter minus 50, you flip that around and in Q2 you would be above where you were in Q1. Even though it is a small percentage of three, when you get in very large numbers, small percentage of a large number becomes a decent sized number. Having said that, we are already, I mean, I don't know where this is all gonna play out. I'm looking down, out my window to Washington. We'll see. You know, I don't know.

Speaker #3: We'll see. I don't know. I suspect there will be an off-ramp eventually, just given a lot of things. Politically and otherwise, in the not-too-distant future.

You know, like Q2 you see that, you know, it's impacted by a few things. Some 1-time stuff that Kevin mentioned from last year, but it's also impacted by the Middle East. I mean, the Middle East, you know, for Q2 which is when we think it'll probably be you know, most dramatically impacted, you know. If it's 3%, it could be down 50% or something like that. You know, you guys could do the math, that could be 1 and a half points on systemwide. So, whatever guidance we gave you if the Middle East were doing what it normally does, it wouldn't be, you know, which had been running in.

Speaker #3: Things have already settled down a bit. I mean, we were already starting to see, again, in my weekly around this table, when I'm getting reports, certain markets within the Middle East that are some of our bigger markets are starting to sort of stabilize and move up.

Speaker #3: I mean, there's still quite impacted but they're getting better. And so what we tried to do in our guidance was, again, on the margin, be a bit conservative.

Christopher J. Nassetta: I suspect there will be an off-ramp eventually, just given a lot of things, you know, politically and otherwise, in the not too distant future. Things have already settled down a bit. I mean, we are already starting to see, again, in my weekly around this table, when I'm getting reports, you know, certain markets, you know, within the Middle East that are some of our bigger markets are starting to sort of stabilize and move up. I mean, they're still quite impacted, but they're getting better. What we tried to do in our guidance was, again, on the margin, be a bit conservative, and thinking about a range. Like in Q1, we think it was probably 30 or 40 bips, something like that. In Q2, I just gave you the metric.

Chris Nassetta: I suspect there will be an off-ramp eventually, just given a lot of things, you know, politically and otherwise, in the not too distant future. Things have already settled down a bit. I mean, we are already starting to see, again, in my weekly around this table, when I'm getting reports, you know, certain markets, you know, within the Middle East that are some of our bigger markets are starting to sort of stabilize and move up. I mean, they're still quite impacted, but they're getting better. What we tried to do in our guidance was, again, on the margin, be a bit conservative, and thinking about a range. Like in Q1, we think it was probably 30 or 40 bips, something like that. In Q2, I just gave you the metric.

Speaker #3: And thinking about a range like in the first quarter, we think it was probably 30 or 40 bips, something like that. And in Q2, I just gave you the metric.

Speaker #3: It's probably a point and a half for the full year. It's probably a half a point to a point impact depending on what you think the trajectory will be.

Speaker #3: And at the lower end of that range, and thus at the lower end of our overall guidance range, I think what we've assumed is it stays pretty bad.

You were in q1. So even though it is a small percentage of 3, when you get in very large numbers, small percentage of a large number because a decent sized number. Um having said that we are already I mean does I don't know where this is all going to play out. I'm looking down at that my window to Washington will see. I don't, you know, I don't know. I suspect there will be an off-ramp eventually just given a lot of things, you know, politically and otherwise and the not too distant future. Um, things have already settled down a bit. I mean, we were already starting to see again in my weekly around this table, when I'm getting reports, you know, certain markets, you know, within the Middle East that are some of our bigger markets are starting to sort of stabilize and move up. I mean there's there's still um, quite impacted uh, but they're getting better. And so what we tried to do in our guidance was again on the margin

Speaker #3: And that there is, in fact, some knock-on impact to your question. There's some knock-on impact on other markets. We've seen a little bit of that a little bit in India, particularly Bangalore, a little bit in the Seychelles and Maldives because of transit through Dubai.

Christopher J. Nassetta: It's probably a point and a half. For the full year, you know, it's probably a half a point to a point impact, depending on what you think the trajectory will be. If, you know, at the lower end of that range, and thus at the lower end of our overall guidance range, I think it, you know, what we've assumed is it stays pretty bad, you know. That there is in fact some knock on impact, to your question, there's some knock on impact on other markets. We've seen a little bit of that, you know, a little bit in India, particularly Bangalore, a little bit in the Seychelles and Maldives because of transit through Dubai, but not a lot of knock on impact. We've assumed if it stays really bad, there'll be a little bit more.

Chris Nassetta: It's probably a point and a half. For the full year, you know, it's probably a half a point to a point impact, depending on what you think the trajectory will be. If, you know, at the lower end of that range, and thus at the lower end of our overall guidance range, I think it, you know, what we've assumed is it stays pretty bad, you know. That there is in fact some knock on impact, to your question, there's some knock on impact on other markets. We've seen a little bit of that, you know, a little bit in India, particularly Bangalore, a little bit in the Seychelles and Maldives because of transit through Dubai, but not a lot of knock on impact. We've assumed if it stays really bad, there'll be a little bit more.

Speaker #3: But not a lot of knock-on impact. But we've assumed if it stays really bad, there'll be a little bit more. And then obviously, on the upside, that you continue to think stabilize and you continue to have recovery.

And be a bit conservative um and thinking about a a range like in the first quarter we think it was probably 30 or 40 bits something like that and in Q2 I just gave you the metric. It's probably a point in half for the full year. You know, it's probably a half a point to a point impact uh, depending on what you think, the trajectory will be and it, you know,

Speaker #3: But not necessarily a super V-shaped recovery, just sort of grinding back up through the rest of the year. So again, my experience I'm sad to say I've been doing this long enough.

Speaker #3: I've had to live through stuff like wars and pandemics and whatever else. It feels like. And so I feel like in this moment, we're trying to be responsible with you all in telling you we're giving you a range of outcomes that we think are rational.

Christopher J. Nassetta: Obviously on the upside that, you know, you continue to things stabilize and you continue to have recovery, but not, you know, not necessarily a super V-shaped recovery, just sort of grinding back up through the rest of the year. Again, my experience, you know, I'm sad to say I've been doing this long enough. I've had to live through stuff like wars and pandemics and like whatever else, you know, it feels like. You know, I feel like in this moment, you know, we're trying to be responsible with you all and telling you, we're giving you a range of outcomes that, you know, that we think, you know, are rational and if anything, probably on the conservative side as they should be.

Chris Nassetta: Obviously on the upside that, you know, you continue to things stabilize and you continue to have recovery, but not, you know, not necessarily a super V-shaped recovery, just sort of grinding back up through the rest of the year. Again, my experience, you know, I'm sad to say I've been doing this long enough. I've had to live through stuff like wars and pandemics and like whatever else, you know, it feels like. You know, I feel like in this moment, you know, we're trying to be responsible with you all and telling you, we're giving you a range of outcomes that, you know, that we think, you know, are rational and if anything, probably on the conservative side as they should be.

Speaker #3: And if anything, probably on the conservative side, as they should be. In terms of I mentioned it on the development side. Only about 2% of our deliveries for the year are coming out of the Middle East.

Speaker #3: But those are important deliveries. We do think things will slow down a little bit there. It's so early in the year. We don't know.

At the lower end of that range and thus, at the lower end of our overall guidance range. I think it, you know what we've assumed is, it stays pretty bad, you know? And that there is, in fact, some knock-on impact to your, to your question. There's some knock-on impact on other markets. We've seen a little bit of that, you know, a little bit in India, particularly Bangalore a little bit in the SE shells and maldis because of Transit through Dubai. But not a lot of knock-on impact, but we've assumed, if it stays really bad, they'll be a little bit more. And then obviously on the on the upside that, you know, you continue to think stabilized and you continue to have recovery but not, you know, not necessarily A a super v-shaped recovery, just sort of grinding grinding back up through the rest of the year. So again, my experience, you know, I I'm so sad to say I've been doing this long enough, I've had to live through stuff like Wars and pandemics and like, whatever else.

Speaker #3: And so again, that's why we I think but for that, we probably would have been telling you we're in the upper half of our 6 to 7 range.

Speaker #3: But because of the Middle East and potential for supply chain knock-on in other parts of the world, we feel like keeping the range where it was was more appropriate.

Christopher J. Nassetta: In terms of, you know, I mentioned it on the development side, you know, only about 2% of our deliveries for the year are coming out of the Middle East. You know, those are, you know, important deliveries. We do think things will slow down a little bit there. It's so early in the year. We don't know. Again, that's why, you know, I think for that, we probably would've been telling you we're in the upper half of our 6 to 7 range. Because of the Middle East and potential for supply chain knock on in other parts of the world, we feel like, you know, keeping the range where it was more appropriate. Again, I mean, you could say we're being too conservative or whatever, I mean, you know, war is war.

Chris Nassetta: In terms of, you know, I mentioned it on the development side, you know, only about 2% of our deliveries for the year are coming out of the Middle East. You know, those are, you know, important deliveries. We do think things will slow down a little bit there. It's so early in the year. We don't know. Again, that's why, you know, I think for that, we probably would've been telling you we're in the upper half of our 6 to 7 range. Because of the Middle East and potential for supply chain knock on in other parts of the world, we feel like, you know, keeping the range where it was more appropriate. Again, I mean, you could say we're being too conservative or whatever, I mean, you know, war is war.

Speaker #3: Again, I mean, you could say we're being too conservative or whatever. But I mean, war is war. There's a lot of possible outcomes we've tried to frame it around those and be thoughtful about it.

You know it feels like and so you know, I feel like in this moment, you know, we're we're trying to be responsible with you all and telling you we're giving you a range of outcomes that you know that we think you know, our our rational and if anything probably probably on the conservative side as as they should be. In terms of, you know, I mentioned it on the development side, you know, only about 2% of our deliveries for the year are coming out of the Middle East, you know? But those are you know, those

Speaker #6: Got it. Thanks so much for all the detail.

Speaker #3: Yep.

Speaker #4: The next question will come from Stephen Grambling with Morgan Stanley. Please go ahead.

Speaker #7: Thanks. Appreciate all the color on the macro. As we look at some of the actions outside of RevPar, particularly the launch of this Select brand, can you elaborate on how this compares to a typical brand agreement?

Speaker #7: And what are some of the guardrails for what brands you'd be willing to include going forward? And if I can just sneak one more that's related on, does this launch change the way you think about either the marketing or system funds allocations or even M&A?

Christopher J. Nassetta: There's a lot, you know, a lot of possible outcomes. We've tried to frame it around those and be thoughtful about it.

Chris Nassetta: There's a lot, you know, a lot of possible outcomes. We've tried to frame it around those and be thoughtful about it.

Are important deliveries. We do think things will slow down a little bit there. It's so early in the year, we don't know. And so again that's why you know, we I I think but, but for that, we probably would have been telling you were in the upper half of our, our 6 to 7 range but because of the Middle East and potential for supply chain, knock on and other parts of the world, we feel like, you know, keeping the range where it was was more appropriate again. I mean, you could say, we're being too conservative whatever, but I mean that, you know, Wars War, there's a lot, you know, a lot of a lot of possible outcomes. We've tried to frame it around those and be and be thoughtful about it.

Daniel Politzer: Got it. Thanks so much for all the detail.

Dan Politzer: Got it. Thanks so much for all the detail.

Christopher J. Nassetta: Yep.

Chris Nassetta: Yep.

Got it. Thanks so much for all the detail.

Operator 2: The next question will come from Stephen Grambling with Morgan Stanley. Please go ahead.

Operator: The next question will come from Stephen Grambling with Morgan Stanley. Please go ahead.

Speaker #3: No to the last part of that. Let me but so I'll answer that. It doesn't change any of that. I mean, the way to think about Select is anything we bring into the system, the first step is quality: does it add to our network effect?

The next question will come from Steven Gremlin with Morgan Stanley. Please go ahead.

Stephen Grambling: Thanks. Appreciate all the color on the macro. As we look at some of the actions outside of RevPAR, particularly the launch of this Select brands, can you elaborate on how this compares to a typical brand agreement, and what are some of the guardrails for what brands you'd be willing to include going forward? If I can just sneak one more that's related on, does this launch change the way you think about either the marketing or system funds, allocations, or even M&A?

Speaker #3: Is it a swim lane or a brand that we think our customers want that has the quality that we have promised to give our customers?

Speaker #3: And that we think it will create a benefit, a strengthening to our network effect. That's always the first filter. So if it doesn't meet the criteria of we already have something on top of it or we don't like the quality, we're not doing it.

Thanks appreciate all the color on the macro as we look at um some of the actions outside of revpar, particularly the launch of this select Brands, can you elaborate on how this compares to a typical brand agreement and what are some of the guardrails For What brands you'd be willing to include going forward? And if I can just sneak 1 more that's related on, does this launch change the way you think about either the marketing or system, funds allocations or even m&a.

Christopher J. Nassetta: No, no to the last part of that. Let me. I'll answer that. That doesn't change any of that. I mean, the way to think about Select is like anything we bring into the system, the first step is quality. Does it add to our network effect? Is it a swim lane or, you know, a brand that we think our customers want that has the quality that we have promised to give our customers, and that we think it will create a benefit, a strengthening to our network effect? That's always the first filter. If it doesn't meet the criteria of like, we already have something on top of it or we're, you know, or we don't like the quality, we're not doing it.

Chris Nassetta: No, no to the last part of that. Let me. I'll answer that. That doesn't change any of that. I mean, the way to think about Select is like anything we bring into the system, the first step is quality. Does it add to our network effect? Is it a swim lane or, you know, a brand that we think our customers want that has the quality that we have promised to give our customers, and that we think it will create a benefit, a strengthening to our network effect? That's always the first filter. If it doesn't meet the criteria of like, we already have something on top of it or we're, you know, or we don't like the quality, we're not doing it.

Speaker #3: And by the way, we've had dozens of opportunities in Select that you don't know about because we haven't done them. We've done one. I suspect there will be others.

No, no to the last part of that, let me let you but so I'll answer that, that doesn't change any of that. I mean, the way to think about select is like anything. We bring into the system, the first step is

Speaker #3: I don't know how many there'll be because we're super stringent on what we would do. And so the way to think about it and you'll tell us a great example is it's a great smaller brand.

Speaker #3: They've struggled to really customers love it. The quality is good. And they have a real following but they've had a real problem without having global scale and all the network effect that we have and the ability to invest in technology and all those things at the level we do to sort of make it work the way they want it to work.

Christopher J. Nassetta: By the way, we've had dozens of opportunities in Select that you don't know about because we haven't done them. We've done one. I suspect there will be others. I, you know, I don't know how many there'll be because we're super stringent on what we would do. The way to think about it, and Yotel is a great example, it's like it's a great smaller brand. They've struggled to really, you know. Customers love it. The quality's good. Problem without having global scale and all the network effect that we have, and the ability to invest in technology and all those things at the level we do to sort of make it work the way they want it to work.

Chris Nassetta: By the way, we've had dozens of opportunities in Select that you don't know about because we haven't done them. We've done one. I suspect there will be others. I, you know, I don't know how many there'll be because we're super stringent on what we would do. The way to think about it, and Yotel is a great example, it's like it's a great smaller brand. They've struggled to really, you know. Customers love it. The quality's good and they have a real following but they've had a real problem without having global scale and all the network effect that we have, and the ability to invest in technology and all those things at the level we do to sort of make it work the way they want it to work.

Speaker #3: And so that was a unique opportunity for us to say we love it. Our customers, we did a lot of work. We think our customers like it.

Speaker #3: It would resonate 12. The quality is good. And importantly, we're entering into agreement with that is consistent with the way we would approach any franchise agreement.

The first filter. So we if if it doesn't meet the criteria of like we already have something on top of it or we you know, or we don't like the quality we're not doing it. And by the way we've had dozens of opportunities in select that you don't know about because we haven't done them. This is, we've done 1, I suspect there, there will be others. I, you know, I don't know how many they'll be because we're super stringent on on, uh, on what we would do. And so, what the way I think about it is a great example is like,

Speaker #3: This is a franchise relationship with them. We are getting and if you look at the I know there's been a lot of noise out there.

Speaker #3: But if you there's a ramp involved, like a lot of our larger multi-unit franchise deals. But if you look at a run rate basis, this is very consistent in how we charge for license fees, system fees, all of that.

Christopher J. Nassetta: You know, that was a unique opportunity for us to say, We love it. Our customers, we did a lot of work. We think our customers like it would resonate well, the quality is good. Importantly, we're entering the agreement that is consistent with the way we would approach, you know, any franchise agreement. This is a franchise relationship with them. We are getting, you know. If you look at, I know there's been a lot of noise out there, but if you know. There's a ramp involved, like a lot of our larger, you know, multi-unit franchise deals.

Chris Nassetta: You know, that was a unique opportunity for us to say, We love it. Our customers, we did a lot of work. We think our customers like it would resonate well, the quality is good. Importantly, we're entering the agreement that is consistent with the way we would approach, you know, any franchise agreement. This is a franchise relationship with them. We are getting, you know. If you look at, I know there's been a lot of noise out there, but if you know. There's a ramp involved, like a lot of our larger, you know, multi-unit franchise deals.

Speaker #3: And it is on a fee per room basis, very consistent with a product in that category. And so the difference is it's just a little unique brand.

It's a great smaller brand. They've struggled to really, you know, customers love it. The quality is good, um, and they have a real following but they've had a real, you know, problem without having global scale and all the network effect that we have and the ability to invest in technology and all those things at the level we do just sort of make it work the way they want it to work. And so you know that was a unique opportunity for us to say we love it. Our customers, we did a lot of work. We think our customers like it will resonate 12. The quality is good and importantly, we're entering the agreement with that is consistent with the way we would approach.

Speaker #3: And so could we could you do it somewhere else? Yeah, you could say what's the difference between that and doing it as a TAP or whatever.

Speaker #3: Well, you'll tell us a good example. It's unique. It doesn't fit in TAP or Curio. It's its own thing. And so we didn't want to try and we want to have we don't want to have cognitive dissonance with our customers as we bring things in the system.

Christopher J. Nassetta: If you look at a run rate basis, this is very consistent in how we charge for license fees, system fees, all of that, and it is on a fee per room basis, very consistent with a product with, you know, in that category. The difference is, it's just a little unique brand, and so, like, could we, you know, could you do it somewhere else? Yeah, you could say, like, what's the difference between that and, like, doing it, you know, as a Tap or whatever? Well, Yotel is a good example. It's unique. It doesn't fit in Tap or Curio. It's its own thing. Like, we wanna have, you know, we don't wanna have cognitive dissonance with our customers as we bring things in the system.

Chris Nassetta: If you look at a run rate basis, this is very consistent in how we charge for license fees, system fees, all of that, and it is on a fee per room basis, very consistent with a product with, you know, in that category. The difference is, it's just a little unique brand, and so, like, could we, you know, could you do it somewhere else? Yeah, you could say, like, what's the difference between that and, like, doing it, you know, as a Tap or whatever? Well, Yotel is a good example. It's unique. It doesn't fit in Tap or Curio. It's its own thing. Like, we wanna have, you know, we don't wanna have cognitive dissonance with our customers as we bring things in the system.

Speaker #3: And we liked the brand. We wanted it to stand on its own. But we want to do it in the right way. We want to get paid for the effort.

Speaker #3: And we want to want it to be something our customers really think enhances the broader system. And so there'll be others, I'm sure. We're working on a bunch of others.

Speaker #3: But I said turn-down ratio is very, very high. Obviously, the appetite for folks to that have small brands I think is quite high in an environment where we have this much scale and the ability to how we work with all the intermediaries that dollars we can invest in our commercial engines and technology.

You know, uh, any franchise agreement. This is a franchise relationship with them. We are getting, you know, and if you look at the, I know there's been a lot of noise out there. But if you, you know, there's there's a ramp involved, like a lot of our larger, you know, multi-unit franchise deals. But if you look at a run rate basis, this is very consistent in how we charge for license fees system fees all of that. And it is on a fee per room basis. Very consistent with a product with with, you know, at at at, in that category. And so, the, the difference is, it's just a little unique brand. And so, like, could we, you know, could you do it somewhere else? Yeah, you could say like, what's the difference between that and like doing it, you know, as a tap or whatever? Well, yotel is a good example, it's Unique. It doesn't fit in tap or Carrillo. It's its own thing.

Christopher J. Nassetta: We liked the brand, we wanted it to stand on its own, but we, you know, we wanna do it in the right way. We wanna get paid for the effort, and we wanna, you know, want it to be something our customers really think enhances the broader system. There'll be others, I'm sure. We're working on a bunch of others. I said, like, turndown ratio is very, very high. Obviously, the appetite for folks to, you know, that have small brands, I think is quite high, you know, in an environment where we have this much scale and the ability, you know, to how we work with all the intermediaries, the dollars we can invest in our commercial engines and technology. It's a, you know, I think we have a real competitive advantage.

Chris Nassetta: We liked the brand, we wanted it to stand on its own, but we, you know, we wanna do it in the right way. We wanna get paid for the effort, and we wanna, you know, want it to be something our customers really think enhances the broader system. There'll be others, I'm sure. We're working on a bunch of others. I said, like, turndown ratio is very, very high. Obviously, the appetite for folks to, you know, that have small brands, I think is quite high, you know, in an environment where we have this much scale and the ability, you know, to how we work with all the intermediaries, the dollars we can invest in our commercial engines and technology. It's a, you know, I think we have a real competitive advantage.

Speaker #3: I think we have a real competitive advantage. That's why the average market share of our brands is so high. And much higher than our competitors.

Speaker #3: And so increasingly, little micro brands around the world, I think not all of them, but some are figuring that out. And we've been talking to a bunch of them.

Speaker #3: And so I suspect some others some others will come into the fold over time. But we'll be hyper-disciplined about it. Again, quality, the brand works, fits in our ecosystem, and we get the fees per room are good.

And so we didn't want to try and like we want to have, you know, we don't want to have cognitive dissonance with our customers. As we bring things in the system and we liked the brand, we wanted it to stand on its own, but we, you know, we want to do it in the right way. We want to get paid for paid for the effort, um, and we want to, you know, want it to be something, our customers really think enhances the broader system, and so they'll be others. I'm sure we're working on a bunch of others, but I said, like, turn down ratio is very, very high. I obviously the appetite for folks to

Speaker #3: And we get paid for the effort.

Speaker #7: Thanks. Appreciate all the detail.

Christopher J. Nassetta: That's why our the average market share of our brands is so high and much higher than our competitors. Increasingly, you know, little micro brands around the world, I think, you know, not all of them, but some are figuring that out, and we've been talking to a bunch of them. I suspect some others, you know, some others will come into the fold over time, but we'll be hyper disciplined about it. Again, quality, you know, the brand works, fits in our ecosystem, and we get the fees per room are good. We get paid for the effort.

Chris Nassetta: That's why our the average market share of our brands is so high and much higher than our competitors. Increasingly, you know, little micro brands around the world, I think, you know, not all of them, but some are figuring that out, and we've been talking to a bunch of them. I suspect some others, you know, some others will come into the fold over time, but we'll be hyper disciplined about it. Again, quality, you know, the brand works, fits in our ecosystem, and we get the fees per room are good. We get paid for the effort.

Speaker #4: The next question will come from Lizzie Dove with Goldman Sachs. Please go ahead.

Speaker #8: Hi. Good morning. Thanks for taking the question. I wanted to go back to the AI and kind of technology side of things. Obviously, things are moving very, very quickly.

Speaker #8: You mentioned you launched the Hilton AI Planner. But I guess just now, another quarter into things, how do you think about what the kind of real opportunity set here is long term?

Speaker #8: Both obviously on the OPEX side of things internally, but then as you think kind of bigger picture externally from the distribution side of things also.

You know that have small Brands I think is quite High, you know, in an environment where we have this much scale and the ability, you know, to how we work with all the intermediaries, the dollars, we can invest in our commercial engines and Technology. It's a, you know, I think we have a real competitive advantage. That's why the average market share of Our Brands is so high and, and and much higher than our competitors. And so increasingly, you know, little micro Brands around the world. I think, you know, I'm not all of them but some are figuring that out and we've been talking to a bunch of them. And so I suspect some others, you know, some others will come into the fold over time but we'll be hyper disciplined about it again. Quality you know the brand Works fits in our ecosystem and we get, we get the fees per room are good and we get we get paid for the effort.

Operator 2: Thanks. Appreciate all the detail. The next question will come from Lizzie Dove with Goldman Sachs. Please go ahead.

Stephen Grambling: Thanks. Appreciate all the detail.

Thanks, appreciate all the detail.

Operator: The next question will come from Lizzie Dove with Goldman Sachs. Please go ahead.

Speaker #3: Yeah. I mean, we talked about this, I think, at fairly good length on the last call. And obviously, an important question. And given the amount of time we're spending on it and everybody is, it would be fair to say it's worth addressing.

The next question will come from Lizzie Dove with Goldman Sachs. Please go ahead.

Lizzie Dove: Hi. Good morning. Thanks for taking the question. I wanted to go back to the AI and kind of technology side of things. Obviously, things are moving very, very quickly. You mentioned you launched the Hilton AI Planner. I guess just now, you know, another quarter into things, how do you think about what the kind of real opportunity set here is long term? You know, both obviously on the OpEx side of things internally, but then as you think kind of bigger picture externally from, you know, the distribution side of things also.

Speaker #3: I would say you're right. A lot of effort going into it. By everybody, certainly by us. Things are moving very quickly. I would say as every day goes by, we're learning and iterating and thinking and doing different things and working with different partners in different ways.

Hi, good morning. Thanks for taking the question. I wanted to go back to the AI and kind of Technology side of things. Obviously, things are moving, very, very quickly. You mentioned you launched, the Hilton AI planner, but I guess just now, you know, uh, another quarter into things, how do you think about what the kind of real opportunity set here is long term, you know, both obviously on the Opex side of things internally. But then, as you think kind of big a picture externally from you know, the distribution side of

Speaker #3: And I think the opportunity gets more not less interesting. I know that's what you'd expect me to say. But I believe it to be true.

things also,

Christopher J. Nassetta: Yeah. I mean, we talked about this, I think at fairly good length on the last call. It's obviously an important question. Given the amount of time we're spending on it, and everybody is, it would be fair to say it's worth addressing. I would say, you know, you're right. There's a lot of effort going into it by everybody, certainly by us. Things are moving very quickly. I would say as every day goes by, we're learning and iterating and thinking and doing different things and working with different partners in different ways. I think the opportunity gets more, not less interesting. You know, I know that's what you'd expect me to say, but I believe it to be true. I think, you know, the three buckets of how we think about it haven't really changed.

Chris Nassetta: Yeah. I mean, we talked about this, I think at fairly good length on the last call. It's obviously an important question. Given the amount of time we're spending on it, and everybody is, it would be fair to say it's worth addressing. I would say, you know, you're right. There's a lot of effort going into it by everybody, certainly by us. Things are moving very quickly. I would say as every day goes by, we're learning and iterating and thinking and doing different things and working with different partners in different ways. I think the opportunity gets more, not less interesting. You know, I know that's what you'd expect me to say, but I believe it to be true. I think, you know, the three buckets of how we think about it haven't really changed.

Speaker #3: I think the three buckets of how we think about it haven't really changed. I think we think about this as a means to create to use our scale as a weapon in creating efficiency, which we think can translate into being more efficient at how we go to market and how we deliver for our owner community and more effective.

Yeah. I I mean, we talked about this, I think at at fairly good length on the last call and it's obviously an important question and, and given the amount of time we're spending on it and everybody is, it would be fair to say it's worth addressing. I would say, you know, you're right, a lot of effort going into it. Uh by everybody certainly by us.

Speaker #3: And yes, that could benefit our P&L too. But really, the largest part of our system costs really relate to the part of the system we manage on behalf of owners.

Speaker #3: So every time we can be more effective, more efficient in that world, it can translate into benefits for our owner community who need it and want it and deserve it.

Christopher J. Nassetta: I think we think about this as, you know, a means to create, you know, to use our scale as a weapon in creating efficiency, which we think can translate into being more efficient at how we go to market and how we deliver for our owner community, and more effective. You know, yes, that could benefit our P&L too, but really the largest part of our system costs really relate to the part of the system we manage on behalf of owners. Every time we can be more effective, more efficient in that world, it can translate into benefits for our owner community who need it, and want it, and deserve it. You know, our Project Rise, you know, this year was in part enabled by work that we're doing in this bucket, if you will.

Chris Nassetta: I think we think about this as, you know, a means to create, you know, to use our scale as a weapon in creating efficiency, which we think can translate into being more efficient at how we go to market and how we deliver for our owner community, and more effective. You know, yes, that could benefit our P&L too, but really the largest part of our system costs really relate to the part of the system we manage on behalf of owners. Every time we can be more effective, more efficient in that world, it can translate into benefits for our owner community who need it, and want it, and deserve it. You know, our Project Rise, you know, this year was in part enabled by work that we're doing in this bucket, if you will.

Speaker #3: Our project, Rise, this year was in part enabled by work that we're doing in this bucket, if you will. And so I'd say we're early days.

Speaker #3: And I think you have huge opportunities to think about systems and processes across what is a very big global company to continue to garner efficiencies.

Speaker #3: But most importantly, to be much more effective, be able to move quicker, add hotels, ramp them quicker just because we take great systems, but antiquated systems.

Speaker #3: And we hyper-modernize those. In the second bucket, you heard me mention we're working with a bunch of the folks out there, Gemini and OpenAI, we're going to be opening our app within their environment the next couple of weeks.

Um, you know, I I know that's what you'd expect me to say, but I believe it to be through true. I think, you know, the 3, buckets of how we think about it haven't really changed. I think, we think about this as a, you know, a means to create, you know, to use our scale as a weapon and creating efficiency, which we think can translate into being more efficient at how we go to market, and how we deliver for our owner Community, uh, and more effective. Um, and, you know, yes that could benefit our p&l too, but really the largest part of our system costs. Really relate to the part of the system, we manage on behalf of owners. So every time we can create, we can be more effective more efficient in that world. It can translate into benefits for our own owner Community who need it and want it and deserve it. Um, you know, our project rise, you know, this year was in part enabled by work.

Christopher J. Nassetta: I'd say we're early days, and I think you have huge opportunities to think about systems and processes across what is a very big global company to continue to garner efficiencies. Most importantly, to be much more effective, be able to move quicker, you know, add hotels, ramp them quicker just because, you know, we take great systems, but antiquated systems, and we, you know, we hyper modernize those. In the second bucket, you heard me mention we're working with a bunch of the folks out there, Gemini and OpenAI. You know, we're going to be opening our app within their environment the next couple weeks. Talked about our AI Planner in our environment that we did with Anthropic and Claude. We're working with everybody and, you know, while it's moving fast, you know, there's a long way to go.

Chris Nassetta: I'd say we're early days, and I think you have huge opportunities to think about systems and processes across what is a very big global company to continue to garner efficiencies. Most importantly, to be much more effective, be able to move quicker, you know, add hotels, ramp them quicker just because, you know, we take great systems, but antiquated systems, and we, you know, we hyper modernize those. In the second bucket, you heard me mention we're working with a bunch of the folks out there, Gemini and OpenAI. You know, we're going to be opening our app within their environment the next couple weeks. Talked about our AI Planner in our environment that we did with Anthropic and Claude. We're working with everybody and, you know, while it's moving fast, you know, there's a long way to go.

Speaker #3: Talked about our AI planner in our environment that we did with Anthropic and Claude. We're working with everybody. And while it's moving fast, there's a long way to go.

That we're doing in this bucket if you will. And so I'd say we're early days and I think yeah huge opportunities to think about systems and processes across what is a very big global company.

Speaker #3: And so I do increasingly feel really good about what the opportunities for us are. I mean, if you think about it at a high level, if you look at the quality using the US market as an example, if you look at the quality hotel market in the United States, we're over 25% of the market.

Speaker #3: I think that puts us in a and we are the only ones with that 25% of the market that control rate inventory availability, period, end of story.

Speaker #3: Nobody can get it unless we give it to them. In a world where you have a more competitive environment, there are a bunch of debates.

Christopher J. Nassetta: You know, increasingly feel really good about what the opportunities for us are. I mean, if you think about it at a high level, if you look at the quality, using the US market as an example. If you look at the quality, hotel market in the United States, we're over 25% of the market. I think that puts us in a position and we are the only ones with that 25% of the market that control rate, inventory, availability, period, end of story. Nobody can get it unless we give it to them. You know, in a world where you have, you know, a more competitive environment, there are a bunch of debates, who's gonna win, who's gonna lose. That's not for us to judge.

Chris Nassetta: I do, you know, increasingly feel really good about what the opportunities for us are. I mean, if you think about it at a high level, if you look at the quality, using the US market as an example. If you look at the quality, hotel market in the United States, we're over 25% of the market. I think that puts us in a position and we are the only ones with that 25% of the market that control rate, inventory, availability, period, end of story. Nobody can get it unless we give it to them. You know, in a world where you have, you know, a more competitive environment, there are a bunch of debates, who's gonna win, who's gonna lose. That's not for us to judge.

Speaker #3: Who's going to win? Who's going to lose? That's not for us to judge. I think they're probably going to be more there's going to be more than one winner.

Speaker #3: That's why we're working with everybody. But we realize the asset we have in the system and the control of the system and given our scale is really valuable and that effectively people really do need us if you're going to have you can't be missing 25 or 30 percent of the quality inventory in the US and have something that's a real full offering.

To continue to Garner efficiencies, but most importantly, to be much more effective. Be able to move quicker, you know, add hotels ramp them quicker just because, you know, we take great systems but Antiquated systems and we, you know, we we hyper modernize those, um, in the in the second bucket. You you heard me mention? We're working with a bunch of the folks out there Gemini and open AI. You know, we're going to be opening our app within their environment. The next couple weeks talked about our ai ai planner in our environment that we did with anthropic and Claude we're working with everybody and, you know, while it's moving fast, you know, there's a long way to go and so I do you know increasingly feel really good about what the opportunities for us are. I mean, if you think about it at a, at a high level, if you look at the Quality using the US market, as, as an example, if you look at the Quality, uh, Hotel market and

Speaker #3: And so I like where we sit. It's complicated. It's fast-moving. There's risks. But we're approaching it very much in the form of a partnership with all of the counterparties that are developing these technologies.

Christopher J. Nassetta: I think there are probably gonna be more than one winner. That's why we're working with everybody. We realize the asset we have in the system and the control of the system, and given our scale, is really valuable, that effectively, people really do need us if you're gonna have, you know. You can't be missing 25% or 30% of the quality inventory in the US and have something that's a real full offering. You know, I like where we sit. It's complicated. It's fast-moving. There's risks. We're approaching it, you know, very much in the form of a partnership with all of the counterparties that are developing these technologies. We wanna show up with all of them.

Chris Nassetta: I think there are probably gonna be more than one winner. That's why we're working with everybody. We realize the asset we have in the system and the control of the system, and given our scale, is really valuable, that effectively, people really do need us if you're gonna have, you know. You can't be missing 25% or 30% of the quality inventory in the US and have something that's a real full offering. You know, I like where we sit. It's complicated. It's fast-moving. There's risks. We're approaching it, you know, very much in the form of a partnership with all of the counterparties that are developing these technologies. We wanna show up with all of them.

The United States, we're over 25% of the market. I think that puts us in a, we and we are the only ones with that 25% of the market that can control rate, inventory, availability, period, end of story. Nobody can get it unless we give it to them, you know, in a world where you have a, you know, a more competitive environment, there are bunch of debates who's going to win who's going to lose. That's not for us to judge.

Speaker #3: We want to show up with all of them. And in the end, I do believe as a result of the great work they're doing and a result of discipline on our side, that there's real opportunities to create more efficient, more effective distribution.

Speaker #3: There's sort of just has to be. If we're smart about it and we intend to be. And then the last bucket, AI planner is in impact part of it.

Speaker #3: And you think about when we have a stay experience, people are with us. You're customers. We have all sorts of opportunities to equip our team members now with all the information we have with technology in the palm of their hands to deal with problems, to customize the experience.

Christopher J. Nassetta: In the end, I do believe, as a result of the great work they're doing and a result of discipline on our side, that there's real opportunities to create more efficient, more effective distribution. There sort of just has to be if we're smart about it, and we intend to be. The last bucket, you know, AI Planner is, you know, in fact part of it. You think about when we have a stay experience, people are with us, your customers. We have all sorts of opportunities to, like, equip our team members now with all the information we have, with technology in the palm of their hands to deal with problems, to customize the experience. We're testing and learning in the stay experience with really cool things that really revolutionize the stay.

Chris Nassetta: In the end, I do believe, as a result of the great work they're doing and a result of discipline on our side, that there's real opportunities to create more efficient, more effective distribution. There sort of just has to be if we're smart about it, and we intend to be. The last bucket, you know, AI Planner is, you know, in fact part of it. You think about when we have a stay experience, people are with us, your customers. We have all sorts of opportunities to, like, equip our team members now with all the information we have, with technology in the palm of their hands to deal with problems, to customize the experience. We're testing and learning in the stay experience with really cool things that really revolutionize the stay.

Speaker #3: And we're testing and learning in the stay experience with really cool things that really revolutionize the stay. But we also a lot of the engagement we have is with our customers is digital.

I think it. They're they're probably going to be more, there's going to be more than 1 winner. That's why we're working with everybody, but we realize the asset we have in in the system and the control of the system. And given our scale is really valuable that effectively people really do need us. If you're going to have, you know, you can't be missing 25 or 30% of the quality, um, inventory in in the US and, and have something that's a real full offering. And so, you know, I I like where we sit, it's complicated, it's fast moving, there's risks, but we're, we're approaching it, you know, very much in the form of a partnership with all of the counterparties that are developing, these Technologies, we want to show up with all of them. And in the end, I do believe as a result of the great work they're doing and a result of discipline on our side that there's real opportunities to create more efficient, more effective distribution. They're just, they're sort of just has

Speaker #3: Think about when they're dreaming booking, planning, post-stay, and they're not with us. And so that's about trying to make sure that the approach we have digitally with folks is utilizing all the best thinking in technology to create a very engaging experience so that, yes, when they're with us, they have the best stay experience in the business.

To be if we're smart about it and we intend to be. And then the last bucket, you know, AI planner is in. You know, is is, is, is in Impact, in fact, part of it, and you think about when we have a stay experience, people are with us, your customers, we have all sorts of opportunities to like equip, our team members now with with all the information we have with technology in the palm of their hands to deal with problems to customize the experience and we're testing and learning in the state.

Speaker #3: And that's why they want to come back. But when they're not with us in these other steps of the customer journey, they feel equally good about our ability to give to satisfy their needs and to customize at mass scale.

Christopher J. Nassetta: We also, you know, a lot of the engagement we have is with our customers is digital. Think about when they're dreaming, booking, planning, post-stay, and so, and they're not with us. You know, that's about trying to make sure that the approach we have digitally with folks is utilizing all the best thinking and technology to create a very engaging experience so that, yes, when they're with us, they have the best stay experience in the business, and that's why they wanna come back. When they're not with us in these other steps of the customer journey, they feel equally good about our ability to satisfy their needs and to customize at mass scale. Again, all this stuff, I mean, we're doing things. We talked about it.

Chris Nassetta: We also, you know, a lot of the engagement we have is with our customers is digital. Think about when they're dreaming, booking, planning, post-stay, and so, and they're not with us. You know, that's about trying to make sure that the approach we have digitally with folks is utilizing all the best thinking and technology to create a very engaging experience so that, yes, when they're with us, they have the best stay experience in the business, and that's why they wanna come back. When they're not with us in these other steps of the customer journey, they feel equally good about our ability to satisfy their needs and to customize at mass scale. Again, all this stuff, I mean, we're doing things. We talked about it.

Speaker #3: And so again, all this stuff, I mean, we're doing things. We talked about it. You can go play with the AI, the Hilton AI planner, stay planner.

Experience with really cool things that really revolutionize, the stay but we also you know, a lot of the engagement we have is with our customers is digital. Think about when they're dreaming booking planning post day and so and they're not with us and so you know that's about trying to make sure

Speaker #3: It's early days. But we're doing super important foundational work. And the last thing I'd say is our tech stack, and it's not by happenstance.

Speaker #3: It's very advanced. So many years ago, COVID turned into a time warp. But pre-COVID, so probably eight or nine years ago, we made the decision to really completely blow up all of our legacy architecture and make sure that our core systems and otherwise were cloud-based, open source, microservices-driven.

Christopher J. Nassetta: You can go play with the AI, the Hilton AI Planner, stay planner. You know, it's early days, we're doing super important foundational work. The last thing I'd say is, you know, our tech stack, and it's not by happenstance, you know, is very advanced. Many years ago, COVID, like, turned into a time warp. Pre-COVID, probably 8 or 9 years ago, we made the decision to really completely blow up all of our legacy architecture and make sure that our core systems and otherwise were, you know, cloud-based, open source, microservices driven, which means a totally modern tech stack that has, like, incredible agility. Agility, you know, and the ability to have control. It's a system built on, you know, on certain elements of table stakes sort of technology.

Chris Nassetta: You can go play with the AI, the Hilton AI Planner, stay planner. You know, it's early days, we're doing super important foundational work. The last thing I'd say is, you know, our tech stack, and it's not by happenstance, you know, is very advanced. Many years ago, COVID, like, turned into a time warp. Pre-COVID, probably 8 or 9 years ago, we made the decision to really completely blow up all of our legacy architecture and make sure that our core systems and otherwise were, you know, cloud-based, open source, microservices driven, which means a totally modern tech stack that has, like, incredible agility. Agility, you know, and the ability to have control. It's a system built on, you know, on certain elements of table stakes sort of technology.

Speaker #3: Which means a totally modern tech stack that has incredible agility and agility and the ability to have control. So it's a system built on certain elements of table stakes sort of technology.

Speaker #3: It might build off an existing platform. But where we customize and modify it, it's things we own and control. And so it gives us, we think, a really unique ability to be agile and do things for customers that are going to be unique that others that are going to be with monolithic providers can't do.

Speaker #3: And so that was a very purposeful decision to my tech team. They're extraordinary. And leading that effort over a bunch of years. And I would say it just puts us in a really good position in the world we live in where AI is coming and you have all this opportunity.

Um to give to satisfy their needs and to customize that mass scale. And so again, all this stuff, I mean, we're doing things. We talked about it, you can go play with the AI, the Hilton, um, AI plan or state planner, you know, it's early days but the, but we're doing super important foundational work. Uh, and the last thing I'd say is, um, you know, our Tech stack and it's not by happenstance, you know, is very Advanced. So um, many years ago, I co like turned into a Time Warp, but preco so probably 8 8 or 9 years ago, we made the decision to really completely blow up all of our Legacy architecture and make sure that our core systems and otherwise were, you know, cloud-based open source, micro-services driven, which means totally modern, tech stack that has like incredible agility and Agility, you know, and the ability to have control.

Christopher J. Nassetta: It might build off an existing platform, but where we customize and modify it, you know, it's things we own and control. It gives us, we think, a really unique ability to be agile and do things for customers that are gonna be unique that others, you know, that are gonna be with monolithic providers can't do. That was a very purposeful decision to my tech team. They're extraordinary, in leading that effort over a bunch of years. I would say it just puts us in a really good position in the world we live in, where AI is coming and you have all this opportunity. If you don't have the flexibility and agility on a tech stack, it doesn't really matter 'cause, you know, it'll, you know, it'll sort of like the machine stops.

Chris Nassetta: It might build off an existing platform, but where we customize and modify it, you know, it's things we own and control. It gives us, we think, a really unique ability to be agile and do things for customers that are gonna be unique that others, you know, that are gonna be with monolithic providers can't do. That was a very purposeful decision to my tech team. They're extraordinary, in leading that effort over a bunch of years. I would say it just puts us in a really good position in the world we live in, where AI is coming and you have all this opportunity. If you don't have the flexibility and agility on a tech stack, it doesn't really matter 'cause, you know, it'll, you know, it'll sort of like the machine stops.

Speaker #3: But if you don't have the flexibility and agility out of tech stack, it doesn't really matter because it'll sort of like the machine stops.

Speaker #3: So I'll leave it at that. We could talk AI all day. But we're and we do around here talk about it a heck of a lot.

Speaker #3: But that's probably enough for today. Thank you. The next question will come from Steve Politzer with Deutsche Bank. Please go ahead. Hey. Good morning.

So, it's a system built on, you know, on certain elements of table Stakes, sort of Technology, it might build off an existing platform but where we customize and modify it you know it's it's things we own and control and so it gives us we think a really unique ability to be agile and do things for customers that are going to be unique. That others, you know, that are going to be with monolithic providers. Uh, can't do. And so that was a very purpose.

Speaker #3: And thank you for taking our question. Just wanted to follow up on the expectation for conversions to be up in 2026 across every region.

Speaker #3: Do you think this is a new normal for conversions moving forward? Or will we revert back to a more normalized conversion level versus new construction mix?

Christopher J. Nassetta: That, I'll leave it at that. We could talk AI all day, and we do around here, talk about it a heck of a lot. That's probably enough for today.

Chris Nassetta: That, I'll leave it at that. We could talk AI all day, and we do around here, talk about it a heck of a lot. That's probably enough for today.

Speaker #3: And is there anything to think about from a fee perspective longer term if conversions continue to be a greater portion of the fee mix moving forward?

Lizzie Dove: Thank you.

Decision to my Tech Team. Um, they're extraordinary uh, and and leading that effort over a bunch of years. And I would say it just puts us in a really good position in in the world we live in where AI is coming and you have all this opportunity, but if you don't have the flexibility and Agility out of text, I get it it doesn't really matter because you know sort of like the the machine stops. So um, that I'll leave it at that we could talk AI all day but we we're and we do around here. Talk about it. A heck of a lot, but that's probably probably enough for today.

Thank you.

Speaker #3: I don't think there's any material impact on the fee side of it. So answering that first, this year, we're going to tick up, as I said, last year, we were like 36%.

Operator 2: The next question will come from Steven Pizzella with Deutsche Bank. Please go ahead.

Operator: The next question will come from Steven Pizzella with Deutsche Bank. Please go ahead.

The next question will come from Steve Pelita with Deutsche Bank. Please go ahead.

Steven Pizzella: Hey, good morning, and thank you for taking our question. Just wanted to follow up on the expectation for conversions to be up in 2026 across every region. Do you think this is a new normal for conversions moving forward, or will we revert back to a more normalized conversion level versus new construction mix? Is there anything to think about from a fee perspective longer term if conversions continue to be a greater portion of the fee mix moving forward?

Steve Pizzella: Hey, good morning, and thank you for taking our question. Just wanted to follow up on the expectation for conversions to be up in 2026 across every region. Do you think this is a new normal for conversions moving forward, or will we revert back to a more normalized conversion level versus new construction mix? Is there anything to think about from a fee perspective longer term if conversions continue to be a greater portion of the fee mix moving forward?

Hey, good morning and thank you for taking our question.

Speaker #3: Current forecasts are we're trending a bit above that, probably 38 to 40 in the latest numbers. I mean, there's a lot of moving parts under the year for the year.

Speaker #3: But we think it's going to be up modestly. I actually think the math of it is such that in an absolute basis, I don't think you're going to see a big drop-off in conversions.

Christopher J. Nassetta: I don't think there's any material impact on the fee side of it, so answering that first. We, you know, this year we're gonna tick up. As I said, last year we were, like, 36%. Current forecasts are we're trending a bit above that, probably 38% to 40% in the latest numbers. I mean, there's a lot of moving parts under the year, for the year, but we think it's gonna be up, modestly. I actually, you know, I think the math of it is such that on an absolute basis, I don't think you're gonna see a big drop-off in conversions.

Chris Nassetta: I don't think there's any material impact on the fee side of it, so answering that first. We, you know, this year we're gonna tick up. As I said, last year we were, like, 36%. Current forecasts are we're trending a bit above that, probably 38% to 40% in the latest numbers. I mean, there's a lot of moving parts under the year, for the year, but we think it's gonna be up, modestly. I actually, you know, I think the math of it is such that on an absolute basis, I don't think you're gonna see a big drop-off in conversions.

Speaker #3: As a percentage of nug, I do think you will see it moderate over time. But that's because you've been in a world where construction starts haven't really gotten back to pre-COVID levels.

Just wanted to follow up on the expectation for conversions to be up in 2026 across every region. Do you think this is a new normal for conversions moving forward, or will we revert back to a more normalized conversion level versus new construction mix? And is there anything to think about from a fee perspective longer term, if conversions continue to be a greater portion of the fee mix moving forward? Um, I don't—I don't think there's any material impact on the fee side of it, so answering that first.

Speaker #3: And that will happen. And it is happening. It probably happens this year. And as you start to have that happen over the next two or three years, and new construction grows in an absolute sense, I think the percentage will decline.

Speaker #3: I don't think it'll ever go back down. I mean, we peaked during the Great Recession and the low '40s. We're sort of back there now.

Christopher J. Nassetta: As a percentage of NUG, I do think you will see it moderate over time. That's because you've been in a world where construction starts, you know, haven't really gotten back to pre-COVID levels, and that will happen and is happening. It probably happens this year. As you start to have that happen over the next 2 or 3 years, and new construction, you know, grows in an absolute sense, I think the percentage will decline. I don't think it'll ever go back down. I mean, we peaked during the Great Recession in the low 40s. We're sort of back there now. Went as low as high teens. I don't think we're gonna be in a world where it's high teens.

Chris Nassetta: As a percentage of NUG, I do think you will see it moderate over time. That's because you've been in a world where construction starts, you know, haven't really gotten back to pre-COVID levels, and that will happen and is happening. It probably happens this year. As you start to have that happen over the next 2 or 3 years, and new construction, you know, grows in an absolute sense, I think the percentage will decline. I don't think it'll ever go back down. I mean, we peaked during the Great Recession in the low 40s. We're sort of back there now. Went as low as high teens. I don't think we're gonna be in a world where it's high teens.

Speaker #3: Went as low as the high teens. I don't think we're going to be in a world where it's high teens. I mean, when it was in the high teens, let's be honest, we had one brand, one and a half brands sort of like Hilton and DoubleTree when it went down.

Speaker #3: Now we've got a dozen brands that are really a dozen or more brands that are really good candidates for conversions. And so I think you're probably sort of permanently in the 30 to 40 percent range.

I, you know, this year we're going to tick up. As I said last year, we were like, 36% current forecasts are we're trending. A bit above that probably 38 to 40 and the latest in the latest numbers. I mean, there's a lot of moving Parts on in the year for the year but we think we think it's going to be up modestly. I, I actually, you know, I think the math of it is such that an absolute basis. I don't think you're going to see a big drop off in conversions as a percentage of nug. I do think you will see it moderate over time, but that's because you've been in a world where construction starts, you know, haven't really gotten back to preco levels and that will happen and is happening, it probably happens this year and as you start to have that happen over the next 2 or 3 years um and new construction, you know, grows in an absolute sense.

I think—I think the percentage will decline. I don't think it'll ever go,

Speaker #3: I'm making that up. But I mean, directionally, if you did the math on new starts, I think you're sort of permanently in that range.

Christopher J. Nassetta: I mean, when it was in the high teens, let's be honest, we had one or one and a half brands, sort of like Hilton and DoubleTree when it went down. Now we've got, you know, a dozen brands that are really a dozen or more brands that are really good candidates for conversions. I think you're probably sort of permanently in the 30% to 40% range. I'm making that up, I mean, directionally, if you did the math on new starts, I think you're sort of permanently in that range.

Chris Nassetta: I mean, when it was in the high teens, let's be honest, we had one or one and a half brands, sort of like Hilton and DoubleTree when it went down. Now we've got, you know, a dozen brands that are really a dozen or more brands that are really good candidates for conversions. I think you're probably sort of permanently in the 30% to 40% range. I'm making that up, I mean, directionally, if you did the math on new starts, I think you're sort of permanently in that range.

Speaker #3: The next question will come from David Katz with Jefferies. Please go ahead. Hi. Good morning. And thanks for taking my question. I know you said you'd like to sort of leave the AI discussion right where it is.

Back down. I mean, we peaked during the Great Recession, and the low 40s were sort of back there. Now, we went as low as the high teens. I don't think we're going to be in a world where it's high teens. I mean, when it was 19, let's be honest. We had one or one and a half brands—what, one and a half brands, sort of like Hilton and DoubleTree when it went that low. Now we've got, you know, a dozen brands that are really—and a dozen or more brands that are really good candidates.

Speaker #3: But I wanted to ask something just a little more industry level, if that's okay. Which is, it's obvious that you're making great progress and working at terrific speed.

For conversions. And so, I think, I think you're probably sort of permanently in the 30-, 40% range. I'm I'm making that up, but I mean directionally, if you did the math on new starts, I think. I think you're sort of permanently in that range.

Speaker #3: Outside the industry, not talking about competitors or peers, right, there's sort of an independent track that's going on. And there's also an OTA environment that's also I assume moving as fast as they can.

Operator 2: The next question will come from David Katz with Jefferies. Please go ahead.

Operator: The next question will come from David Katz with Jefferies. Please go ahead.

The next question will come from David Katz with Jefferies. Please go ahead.

David Katz: Hi, good morning, and thanks.

David Katz: Hi, good morning, and thanks for -

Christopher J. Nassetta: Good morning.

Chris Nassetta: Good morning.

David Katz: taking my question. I know you said you'd like to sort of leave the AI discussion, you know, right where it is. I wanted to ask something just a little more industry level, if that's okay. You know, which is, you know, it's obvious that you're making great progress and working at terrific speed. You know, outside the industry, not talking about, you know, competitors or peers, right, there's sort of an independent, you know, track that's going on, and there's also an OTA environment that's also, I assume, you know, moving as fast as they can. How do you envision those dynamics sort of playing out, and do we evolve into kind of a different industry landscape in that regard?

Speaker #3: How do you envision those dynamics sort of playing out? And do we evolve into kind of a different industry landscape in that regard? Or are you just running your race in largely not paying a ton of attention to what they're doing?

Speaker #3: Oh, no. We, of course, are paying a lot of attention to what everybody's doing. I do think on the margin, it'll look a lot like it does over the next five years from now.

Speaker #3: It'll look like a lot like it does today or it has looked. I think on the margin, though, if we do our job, I think AI allows us, as I said, to be more efficient and more effective we did that is code for continuing to build more direct lines to our customers.

Um, I I know you said you'd like to sort of leave the AI discussion, you know, right where it is. Um, but I wanted to ask something just a little more industry level if that's okay. Um, you know, which is, you know, it's obvious that you're making great progress in working at terrific speed, you know, outside the industry not talking about, you know, competitors or peers, right? There's sort of an independent, you know, track that's going on and there's also an otaa environment. That's also, I assume, you know, moving as fast as they can.

David Katz: You know, are you just running your race and largely, you know, not paying a ton of attention to what they're doing?

How do you envision those dynamics sort of playing out, and do we evolve into kind of a different industry landscape in that regard, or, you know, are you just running your race and largely...

You know, not paying a ton of attention to what they're doing.

Christopher J. Nassetta: Oh, no. We, of course, are paying a lot of attention to what everybody's doing. I do think on the margin it'll look a lot like it does, you know, over the next 5 years from now, it'll look like a lot like it does today or it has looked. I think on the margin, though, if we do our job, I think AI allows us, as I said, to be more efficient and more effective. That is code for continuing to build more direct lines to our customers. I mean, that's where we have a terrific relationship with the OTAs, and we do a certain segment of our business with them, and I suspect we will for a very, very long time.

Chris Nassetta: Oh, no. We, of course, are paying a lot of attention to what everybody's doing. I do think on the margin it'll look a lot like it does, you know, over the next 5 years from now, it'll look like a lot like it does today or it has looked. I think on the margin, though, if we do our job, I think AI allows us, as I said, to be more efficient and more effective. That is code for continuing to build more direct lines to our customers. I mean, that's where we have a terrific relationship with the OTAs, and we do a certain segment of our business with them, and I suspect we will for a very, very long time.

Speaker #3: I mean, that's where we have a terrific relationship with the OTAs. And we do a certain segment of our business with them. And I suspect we will for a very, very long time.

No, no. We're we we of course are paying a lot of

I, I do think.

Speaker #3: But I think our ability our control over our inventory, our ability to customize the experience, in unique ways, it being a more competitive environment where there isn't just one winner in search probably when it's all said and done, I think that puts us in a position where we can it gives us an advantage relative to what we've had to continuing to build more direct business.

On the margin, it’ll look a lot like it does. You know, over the next five years from now, it’ll look a lot like it does today, or it has looked. I think, on the margin, though.

Speaker #3: Now, 80% plus of our businesses are already direct. So we've had a fair amount of success in doing that. But I think on the margin, it helps in that regard.

Christopher J. Nassetta: I think our ability, you know, our control over our inventory, our ability to customize the experience in unique ways, it being a more competitive environment where there isn't just one winner in search, probably when it's all said and done. I think that puts us in a position where it gives us an advantage relative to what we've had to continuing to build more direct business. 80% plus of our business is already direct, so we've had a fair amount of success in doing that. I think on the margin it helps in that regard. I go back to where I started. I don't see that the whole system changes in a material way anytime soon.

Chris Nassetta: I think our ability, you know, our control over our inventory, our ability to customize the experience in unique ways, it being a more competitive environment where there isn't just one winner in search, probably when it's all said and done. I think that puts us in a position where it gives us an advantage relative to what we've had to continuing to build more direct business. 80% plus of our business is already direct, so we've had a fair amount of success in doing that. I think on the margin it helps in that regard. I go back to where I started. I don't see that the whole system changes in a material way anytime soon.

Speaker #3: But I go back to where I started. I don't see that the whole system changes in a material way anytime soon. Okay. That'll do.

Speaker #3: Thank you very much. The next question will come from Robin Farley with UBS. Please go ahead. Great. Thank you. My question is not about AI.

If we do our job, I think AI allows us as I said to be more efficient and more effective. That is code for continuing to build more direct, uh, lines to our customers. I mean, that's where we have a terrific relationship with the OTAs and we do a certain segment of our business with them. And I suspect, we will for a very, very long time, but I think our ability, you know, our control over our inventory, our ability to customize the experience in unique ways, it being a more competitive environment where there isn't just 1 1 winner in search. Probably when it's all said and done I think that puts us in a position

Speaker #3: Just looking at results fantastic results. And I think that for your RevPar Rates higher than the market was expecting, I am curious last quarter you had a slide that showed that 100 basis point raise in RevPar would be 100 basis point raise in EBITDA.

Where we can it gives us an advantage relative to what we've had to continuing to build more Direct business. Now, 80% plus of our businesses are already direct so we've had a fair amount of success in doing that but um I think on the margin it helps in that regard but I go back to where I started. I don't

I don't.

Speaker #3: And it looks like it's maybe sort of more like a 50 basis point raise in EBITDA. Your G&A didn't change. Just anything else you would call out in that sort of flow-through to EBITDA from the raise?

See that the whole system changes in a material in a material way anytime soon.

David Katz: Okay. That'll do. Thank you very much.

Okay, that'll do. Thank you very much.

Operator 2: The next question will come from Robin Farley with UBS. Please go ahead.

Operator: The next question will come from Robin Farley with UBS. Please go ahead.

Speaker #3: Thank you. No, Robin. I think, look, I think the rule of thumb we would use and maybe the 100 basis points was a little bit a rounding.

Robin Farley: Great. Thank you. My question is not about AI. Just looking at results, you know, fantastic results, and I think that full year RevPAR raise higher than the market was expecting. I am curious, you know, last quarter you had a slide that showed that a 100 basis point raise in RevPAR would be a 100 basis point raise in EBITDA, and it looks like it's maybe sort of more like a 50 basis points raise in EBITDA. Your G&A didn't change. Just anything else you would call out in that sort of flow through to EBITDA from the raise? Thank you.

The next question will come from Robin Farley with UBS. Please, go ahead.

Speaker #3: And I think we've actually updated that more recently. The rule of thumb we'd use is about 25 or 30 million of EBITDA per point.

Great, thank you. Um, my question is not about AI. Um, I'm just looking at results—you know, fantastic results—and I think that

Speaker #3: And so we raised our guidance our RevPar guidance by one full point. So if you think about that as being typically 25 to 30 million, the things that are going on there is you just have the impact in the Middle East with a little bit of IMF and a little bit of FX, which caused us to raise the midpoint by 20 instead of call it 25 at the low end of the range.

Speaker #3: So that's the way to think about it. And it's not more complicated than that. Okay. Great. Thank you. Sure. The next question will come from Brent Montour with Barclays.

So, your rev parades higher than the market was expecting. I am curious, you know, last quarter, you had a slide that showed that a 100 basis point raised in revpar would be 100 basis point raised and Ava, and it looks like it's maybe sort of more like a, a 50 basis points, raise an Eva, your GNA didn't change, just anything else you would call out in in that um sort of flow through to Ava from the race. Thank you.

Kevin Jacobs: No, Robin, I think, look, I think the rule of thumb we would use and, you know, maybe the 100 basis points was a little bit of rounding, and I think we've actually updated that more recently. The rule of thumb we'd use is about $25 million or $30 million of EBITDA per point. We raised our guidance, our RevPAR guidance by 1 full point. If you think about that as being typically $25 million to $30 million, the things that are going on there is you just have the impact in the Middle East with a little bit of IMF and a little bit of FX, which caused us to raise the midpoint by 20 instead of call it 25 at the low end of the range.

Speaker #3: Please go ahead. Good morning, everybody. Thanks for taking my question. So back to demand you sounded really good on group business. That was sort of the downside, surprise for the industry last year.

Speaker #3: Obviously, with tariffs. And just sort of curious, when you think when you look out and expect group to still lead, are you actually seeing in the year for the year group bookings materialize better than plan?

Kevin Jacobs: That's the way to think about it, and it's not more complicated than that.

Speaker #3: Or is it really just sort of easy comps that give you that confidence? No. I mean, we're seeing real lead volumes. And bookings in line with the forecasting we have.

No Robin. I think look, I think the rule of thumb we would use and, you know, maybe the 100 basis points was a little bit rounding and we and I think we've actually updated that more recently, the rule of thumb we use is about 25 or 30 million of IBA per point. And so we raised we raised our guidance our, if our guidance by 1 full point, so if you think about that as as being typically third to 25 to 30 million, the things that are going on there is you just have the impact in the Middle East with a little bit of IMF. And a little bit of FX, which caused us to raise the midpoint, by 20, instead of call it 25 at the low end of the range. So, it's that, that's about, that's the way to think about it. And it's not more complicated than that.

Robin Farley: Okay, great. Thank you.

Christopher J. Nassetta: Sure.

Chris Nassetta: Sure.

Okay, great. Thank you.

Sure.

Operator 2: The next question will come from Brandt Montour with Barclays. Please go ahead.

Operator: The next question will come from Brandt Montour with Barclays. Please go ahead.

Brandt Montour: Good morning, everybody. Thanks for taking my question.

Christopher J. Nassetta: Sure.

Brandt Montour: Back to demand. You sounded really good on group business. That was sort of the downside surprise for the industry last year. Obviously, with tariffs. And just sort of curious, you know, when you look out and expect group to still to lead, are you actually seeing in the year, for the year group bookings materialize better than planned? Or is it really just sort of easy comps that give you that confidence?

Speaker #3: And atmospherically and the discussions that our sales folks are having broadly about sentiment in that space and the corporate space, for that matter, are much better, quite good.

Speaker #3: So I think it I think, listen, people are feeling better when they're spending more. They need to move more. They need to aggregate people more.

Speaker #3: And we're seeing it show up. So booking the booking position supports it. The leads more than support it. Thanks, everyone. The next question will come from Trey Bowers with Wells Fargo.

Christopher J. Nassetta: No. I mean, we're seeing real lead volumes and bookings in line with the forecasting we have. Atmospherically, in the discussions that our sales folks are having, you know, broadly about sentiment in that space and the corporate space for that matter, are much better, quite good. I think it's, you know, I think listen, people are feeling better when they're spending more, they need to move more, they need to aggregate people more, and we're seeing it show up. Booking, the booking position supports it. The leads more than support it.

Chris Nassetta: No. I mean, we're seeing real lead volumes and bookings in line with the forecasting we have. Atmospherically, in the discussions that our sales folks are having, you know, broadly about sentiment in that space and the corporate space for that matter, are much better, quite good. I think it's, you know, I think listen, people are feeling better when they're spending more, they need to move more, they need to aggregate people more, and we're seeing it show up. Booking, the booking position supports it. The leads more than support it.

The next question will come from Brant Montour with barklay please. Go ahead. Good morning everybody. Um, thanks for taking my question, so, back to demand. Uh, you sounded really good on, on, on Group business. That was, that was sort of the downside surprise for the industry last year. Obviously, with with tariffs and just sort of curious, you know, when you think when you look out and expect group to still to lead, are you actually seeing, um, in the year for the year group, bookings? Materialized, uh, better than better than plan or is it really? Just sort of easy comps that give you that um, confidence.

no, I mean we're seeing

Speaker #3: Please go ahead. Hey, guys. Thanks for the question. Just getting back to Nug, to the extent that the disruption in the Middle East might cause some impact on 6 to 7 percent growth this year, is that just some of the either conversions or new builds kind of fall out of the system?

I think it, you know, I think

Speaker #3: Or are the expectation if you were not at the high end of that range for this year, would most of that just fall into 2027?

Speaker #3: It's just timing. We're not concerned that anything's falling out of the pipeline or conversion opportunities are drying up. It's just like there's a lot going on over there.

Listen, people are feeling better when they're spending more. They need to move more, they need to aggregate people more, and we're seeing it show up. So booking—the booking position supports it, the leads more than support it.

Brandt Montour: Thanks, everyone.

Thanks everyone.

Operator 2: The next question will come from Trey Bowers with Wells Fargo. Please go ahead.

Operator: The next question will come from Trey Bowers with Wells Fargo. Please go ahead.

The next question will come from Trey Bowers with Wells Fargo. Please go ahead.

Trey Bowers: Hey, guys. Thanks for the question. Just getting back to NUG. To the extent that the disruption in the Middle East might cause some impact on 6% to 7% growth this year, is that just some of the, either conversions or new builds kind of fall out of the system? Or the expectation if you were not at the high end of that range for this year, would most of that just fall into 2027?

Speaker #3: And some people have slowed construction. They've slowed decision-making on conversion deals that we're working on. So I don't think we feel like any of it really ultimately falls away.

Speaker #3: I think it's a question of when it gets done. And it's early to say. By the way, it might my team says it's our team says it's picking up by the day.

Christopher J. Nassetta: It's just timing. We don't.

Chris Nassetta: It's just timing. We don't.

Hey guys, thanks for the question. Uh, just getting back to NUG, to the extent that the disruption in the Middle East might cause some impact on 6% to 7% growth this year, is that just some of the either conversions or new builds kind of fall out of the system or the expectation? If you were not at the high end of that range for this year, would most of that just fall into 2027? It's time. It is.

Speaker #3: Like Saudi Arabia, sort of isn't missing a beat. UAE, a little bit more disrupted. Kuwait, Qatar, much more so because the issues there have been more dramatic.

Trey Bowers: Yeah.

Christopher J. Nassetta: We're not concerned that anything's falling out of the pipeline or, you know, conversion opportunities are drying up. It's just like there's a lot going on over there, and some people have slowed construction, they've slowed decision-making on conversion deals that they were working on. I don't think we feel like any of it really ultimately falls away. I think it's a question of when it gets done. It's early to say. By the way, our team says it's picking up, you know, by the day. You know, like Saudi Arabia, you know, sort of isn't missing a beat. UAE, a little bit more disrupted. You know, Kuwait, Qatar, much more so 'cause the issues there have been more dramatic. Really, it's not like one, you know, monolithic area. It's country by country.

Chris Nassetta: We're not concerned that anything's falling out of the pipeline or, you know, conversion opportunities are drying up. It's just like there's a lot going on over there, and some people have slowed construction, they've slowed decision-making on conversion deals that they were working on. I don't think we feel like any of it really ultimately falls away. I think it's a question of when it gets done. It's early to say. By the way, our team says it's picking up, you know, by the day. You know, like Saudi Arabia, you know, sort of isn't missing a beat. UAE, a little bit more disrupted. You know, Kuwait, Qatar, much more so 'cause the issues there have been more dramatic. Really, it's not like one, you know, monolithic area. It's country by country.

We're not concerned that anything's falling out of the pipeline or—

Speaker #3: So really, it's not like one monolithic area. It's country by country. And so we're watching it carefully. But I think it's I don't think these are things that disappear.

Speaker #3: I think it's just a function of it may push a quarter or two. Got it. Thanks. The next question will come from Dwayne Fenningworth with Evercore ISI.

You know, conversion opportunities are drying up. It's just like there's a lot going on over there and some people have slowed construction, they've slowed decision making on conversion deals that that we're working on. So I don't think we feel like any of it really ultimately Falls away. I think it's a question of when it when it gets done.

Speaker #3: Please go ahead. Hey, thanks. Just to stick on that theme, as you think about your share of rooms versus much larger share of rooms under construction, what markets do you feel like that disconnect opportunity is biggest?

Christopher J. Nassetta: we're watching it carefully. I don't think these are things that, like, disappear. I think it's just a function of, you know, it may push a quarter or 2.

Chris Nassetta: And so, we're watching it carefully. I don't think these are things that, like, disappear. I think it's just a function of, you know, it may push a quarter or 2.

Speaker #3: Basically, what geographies offer the best share gain opportunities you look out maybe over the next five years? Wow. There are a lot of them, I would say.

Speaker #3: I mean, where we have what we call inside the company springboard work, which is where we see sort of the disconnect in terms of demand for our products and what is the relatively low existing base of hotels.

And it's early to say, by the way, my, you know, my team says it's, you know, our team says, it's picking up, you know, by the day, you know, like Saudi Arabia, you know, sort of isn't missing a beat UAE a little bit more disrupted, you know, Kuwait, Qatar much more so because the issues there have been more dramatic. So really, it's not like, 1, you know, monolithic area, it's country by country. Um, and so we're watching it carefully. But I don't, I, I think it's, I, I don't think these are things that like disappear. I think it's just a function of, you know, it may push a quarter or 2.

Trey Bowers: Got it. Thanks.

Got it, thanks.

Operator 2: The next question will come from Duane Pfennigwerth with Evercore ISI. Please go ahead.

Operator: The next question will come from Duane Pfennigwerth with Evercore ISI. Please go ahead.

The next question will come from Dwayne Finn worth with evercore isi, please go ahead.

Duane Pfennigwerth: Hey, thanks. Just to stick on that theme, as you think about your share of rooms versus much larger share of rooms under construction, what markets do you feel like that disconnect opportunity is biggest? Basically, what geographies offer the best share gain opportunities you look out maybe over the next five years?

Speaker #3: So I would say India being first and foremost. I mean, we think easily it's a 10 or 20x sort of opportunity. We have whatever, 40 hotels in India.

Hey, thanks. Um, just to stick on that theme. As you think about, uh, your share of rooms versus much larger share of

Speaker #3: I mean, with the deals like the one we announced today, we sort of have 400 in and around the pipeline or under development. So India is definitely one.

Rooms under construction. Uh, what markets do you feel like that disconnect opportunity is biggest? Uh, basically, what geographies offer the best sheer gain opportunities, if you look out maybe over the next 5 years?

Christopher J. Nassetta: Wow. There are a lot of them. I would say, I mean, where we have what we call inside the company Springboard work, which is where we see sort of the disconnect in terms of demand for our products and what is a relatively low existing base of hotels. I would say, you know, India being, you know, first and foremost. I mean, we think easily it's a 10 or 20x sort of opportunity. We have, whatever, 40 hotels in India. I mean, with the deals like the one we announced today, we sort of have 400 in and around the pipeline or under development. India is definitely one. Southeast Asia is another where we have a big presence, but we think the opportunity is to be 3 or 4 times the size that we have.

Chris Nassetta: Wow. There are a lot of them. I would say, I mean, where we have what we call inside the company Springboard work, which is where we see sort of the disconnect in terms of demand for our products and what is a relatively low existing base of hotels. I would say, you know, India being, you know, first and foremost. I mean, we think easily it's a 10 or 20x sort of opportunity. We have, whatever, 40 hotels in India. I mean, with the deals like the one we announced today, we sort of have 400 in and around the pipeline or under development. India is definitely one. Southeast Asia is another where we have a big presence, but we think the opportunity is to be 3 or 4 times the size that we have.

Speaker #3: Southeast Asia, where we have a big presence, but we think the opportunity is to be 3 or 4 times the size that we have.

Speaker #3: Cala, the broader Cala environment. We've got a big presence of 300 hotels, but we think we could be easily 2 or 3 times that size.

Wow, there are a lot of them, I would say. I mean, where we have what we call inside the company 'springboard work,' which is where we see sort of the disconnect in terms of demand for our products and what is the relatively low existing base of hotels. So, I would say—

Speaker #3: KSA, we have 25, 30 hotels. We think we can easily be 4 to 5 times that, probably even more, as well as other parts of the Middle East.

Speaker #3: Obviously, the Middle East we just talked about. There's some challenges, but in part because I'm always an optimist, but I do think one way or another, this will settle down.

Speaker #3: And there's a lot of momentum underlying travel and tourism in the Middle East that I think will pick up pretty quickly when you get to the other side of this conflict.

Christopher J. Nassetta: CALA, the broader CALA environment, you know, we've got a big presence of 300 hotels, but we think we could be easily 2 or 3 times that size. KSA, you know, we have 25, 30 hotels. We think we can easily be 4 to 5 times that, probably even more, as well as other parts of the Middle East. Obviously, the Middle East we just talked about. There's some challenges, but yeah, in part because I'm always an optimist, but I do think one way or another, this will settle down. There's a lot of momentum underlying travel and tourism in the Middle East that I think will pick up pretty quickly when you get to the other side of this conflict.

Chris Nassetta: CALA, the broader CALA environment, you know, we've got a big presence of 300 hotels, but we think we could be easily 2 or 3 times that size. KSA, you know, we have 25, 30 hotels. We think we can easily be 4 to 5 times that, probably even more, as well as other parts of the Middle East. Obviously, the Middle East we just talked about. There's some challenges, but yeah, in part because I'm always an optimist, but I do think one way or another, this will settle down. There's a lot of momentum underlying travel and tourism in the Middle East that I think will pick up pretty quickly when you get to the other side of this conflict.

Speaker #3: So I mean, and I shouldn't forget Africa. Where huge population, what is we've been there for many, many decades. But have a relatively small base.

Speaker #3: And a huge opportunity. And so yeah, the reality is we've got 27 brands and if you look at the average number of brands that's deployed in any market, I think it's like four brands with 27.

You know, India being, you know first and foremost I mean we think easily it's a 10 or 20x, sort of opportunity, we have whatever 40 hotels in India. I mean with the deals. Like the 1 we announced today, we sort of have 400 in and around, uh, the pipeline or underdevelopment. So India is definitely 1. Um, southeast Asia is another where we have a big presence, but we think the opportunity is to be 3 or 4 times the size that we have. Kala the broader uh, kala environment. Yeah, we've got a big presence of 300 hotels, but we think we could be easily, um, 2 or 3 times that size KSA. You know, we have 2530 hotels. We think we can easily be 4 to 5 times that probably even more as well as other parts of the Middle East. Obviously the Middle East, we just talk

Speaker #3: So even where we have more density, there's a tremendous amount of network yet to build and thus growth. And then in the market sizes covered, I would argue in almost all of them, other than maybe Cala, where we have 300 hotels, the others were in sort of our nascent stages the brands well-known.

Christopher J. Nassetta: I shouldn't forget Africa, where, huge population, we've been there for many decades, but have a relatively small base and a huge opportunity. The reality is we've got 27 brands, and if you look at the average number of brands that's deployed in any market, I think it's, like, 4 brands with 27. Even where we have more density, there's a tremendous amount of network yet to build and thus growth. In the markets I just covered, I would argue in almost all of them, other than maybe CALA, where we have 300 hotels, the others we're in sort of our nascent stages. The brand's well-known. We perform really well.

Chris Nassetta: I shouldn't forget Africa, where, huge population, we've been there for many decades, but have a relatively small base and a huge opportunity. The reality is we've got 27 brands, and if you look at the average number of brands that's deployed in any market, I think it's, like, 4 brands with 27. Even where we have more density, there's a tremendous amount of network yet to build and thus growth. In the markets I just covered, I would argue in almost all of them, other than maybe CALA, where we have 300 hotels, the others we're in sort of our nascent stages. The brand's well-known. We perform really well.

Talked about there, there's some challenges but yeah in part because I'm always an optimist, but I do think 1 way or another this will settle down and there's a lot of momentum underlying travel and tourism in the Middle East that I think will pick pick up pretty quickly when you get, when you get to the other side of this conflict. So I mean, you know, and I, you know, I shouldn't forget Africa, um, where you know, huge population. What, what is, you know, we've been there many for for many, many decades. But

Speaker #3: We perform really well. We've had a presence a long time. But relative to the population and the demand base, we're just getting started. So it's why we get really excited when we think about I get the question, "Well, how long can you grow?

We have a relatively small base, um, and a huge opportunity. And so, yeah, the reality is we've got 27 brands, and if you look at the average number of brands that are deployed in any market, I think it's—

Speaker #3: 6 or 7 percent?" And my view is a long, long time. Simply because the world's a big place. Populations all over the world need to be served.

Speaker #3: They're all and most of the markets I just described, they're way underserved relative to any of the other more mature markets. And yet our brands do well there.

Christopher J. Nassetta: We've had a presence a long time. Relative to the populations and the demand base, we're just getting started. It's why we get really excited when we think about, you know, I get the question, Well, how long can you grow 6% or 7%? You know, my view is a long, long time. You know, simply because, you know, the world's a big place. Populations all over the world need to be served. They're all, and most of the markets I just described, they're way underserved relative to any of the other more mature markets. You know, yet our brands do well there. Customers recognize us, and it's an opportunity to really build a powerful network effect in many of those places.

Chris Nassetta: We've had a presence a long time. Relative to the populations and the demand base, we're just getting started. It's why we get really excited when we think about, you know, I get the question, Well, how long can you grow 6% or 7%? You know, my view is a long, long time. You know, simply because, you know, the world's a big place. Populations all over the world need to be served. They're all, and most of the markets I just described, they're way underserved relative to any of the other more mature markets. You know, yet our brands do well there. Customers recognize us, and it's an opportunity to really build a powerful network effect in many of those places.

Speaker #3: Customers recognize us. And it's an opportunity to really build a powerful network effect in many of those places. Thank you. Ladies and gentlemen, this concludes our question and answer session.

Mason stages. The brands? Well, known. We perform really well. We've had a presence, a long time.

Speaker #3: I would like to turn the conference back over to Chris Nissetta for any additional or closing remarks. Please go ahead. Thanks, everybody. As always, we appreciate the time.

Speaker #3: As you can tell, there's a lot going on in the world. There's no question about it. The Middle East is not helpful. But 75% of our business is still driven out of the US.

Speaker #3: And we have seen really nice uptick in performance driven by a really nice uptick in demand across all segments. We think that is sustainable as we look out for the rest of the year and beyond.

But relative to the populations and the demand base, we're just getting started. So it's why we get really excited when we think about, you know, I get the question, well, how long can you grow 6 or 7%? And, you know, my view is a long long time, you know, simply because you know, the world's a big place populations all over the world, need to be served. They're all, you know, and most of the markets I just described they're way underserved relative to any of the other more mature markets. And, you know, yet Our Brands do well their customers recognize us. And uh, it's an opportunity to really build a powerful Network effect and, and many of those places

Duane Pfennigwerth: Thank you.

Thank you.

Operator 2: Ladies and gentlemen, this concludes our question and answer session. I would like to turn the conference back over to Chris Nassetta for any additional or closing remarks. Please go ahead.

Operator: Ladies and gentlemen, this concludes our question and answer session. I would like to turn the conference back over to Chris Nassetta for any additional or closing remarks. Please go ahead.

Speaker #3: And so notwithstanding everything going on in the world, we feel really good about our ability to drive top-line drive unit growth. Obviously, the free cash flow that we need to drive.

Ladies and gentlemen, this concludes our question and answer session. I would like to turn the conference back over to Chris Netto for any additional or closing remarks. Please go ahead.

Christopher J. Nassetta: Thanks, everybody. As always, we appreciate the time. As you can tell, you know, there's a lot going on in the world. There's no question about it. The Middle East is not helpful. 75% of our business is still driven out of the US, and we have seen really nice uptick in performance driven by a really nice uptick in demand across all segments. We think that is sustainable as we look out for the rest of the year and beyond. Notwithstanding everything going on in the world, we feel really good about our ability to drive top line, drive unit growth. Obviously, the free cash flow that we need to drive and keep returning capital as a serial compounder. Yeah, we feel great about the business.

Chris Nassetta: Thanks, everybody. As always, we appreciate the time. As you can tell, you know, there's a lot going on in the world. There's no question about it. The Middle East is not helpful. 75% of our business is still driven out of the US, and we have seen really nice uptick in performance driven by a really nice uptick in demand across all segments. We think that is sustainable as we look out for the rest of the year and beyond. Notwithstanding everything going on in the world, we feel really good about our ability to drive top line, drive unit growth. Obviously, the free cash flow that we need to drive and keep returning capital as a serial compounder. Yeah, we feel great about the business.

Speaker #3: And keep returning capital as a serial compounder. So yeah, we feel great about the business. Look forward to catching up with you. After the second quarter to give you the update on everything going on.

Thanks everybody. As always, we appreciate. Um, the time um, as you can tell, you know, there's a lot going on in the world. There's no question about the Middle East is is not helpful but 75% of our business is still driven out of the US. And and we we have seen really nice uptick in in performance driven by a really nice uptick in demand, across all segments. We think that is

Christopher J. Nassetta: Look forward to catching up with you after Q2 to give you the update on everything going on.

Chris Nassetta: Look forward to catching up with you after Q2 to give you the update on everything going on.

Sustainable. As we as we look out for the rest of the year and Beyond and so, um, I was stating everything going on in the world, we feel really good about our ability to drive Topline Drive Unit growth. Obviously the free cash flow that we need to drive and and keep, uh, returning Capital as a serial compounder. So you know, we we feel good great about the business. Look forward to catching up with you after the second quarter to give you the update on everything going on.

Operator 2: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Q1 2026 Hilton Worldwide Holdings Inc Earnings Call

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