Hilton(US:HLT)2022-05-03 18:01Financial Data and Key Metrics Changes - System-wide RevPAR increased more than 80% year-over-year, driving adjusted EBITDA up 126% [8][18] - Adjusted EBITDA was $448 million in the first quarter, reflecting continued recovery in travel demand [19] - Diluted earnings per share adjusted for special items was $0.71 [20] Business Line Data and Key Metrics Changes - U.S. business transient RevPAR increased sequentially, with March down only 9% compared to 2019 levels [9] - Group RevPAR was more than 75% of 2019 levels, improving approximately 25 points versus January [10] - Leisure travel continued to lead recovery, with segment RevPAR exceeding 2019 levels for the quarter [20] Market Data and Key Metrics Changes - First quarter comparable U.S. RevPAR grew 77% year-over-year and was down 13% versus 2019 [20] - In Europe, RevPAR grew 349% year-over-year but was down 30% compared to 2019 [21] - In the Asia Pacific region, first quarter RevPAR grew 11% year-over-year and was down 47% versus 2019 [21] Company Strategy and Development Direction - The company expects to return $1.4 billion to $1.8 billion to shareholders in the form of buybacks and dividends [7][24] - The development pipeline grew to over 410,000 rooms, with 60% located outside the U.S. [22][14] - The company aims for net unit growth of approximately 5% for the year, with a long-term target of 6% to 7% growth [16][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued demand recovery and the ability to reprice rooms in real time, creating a natural inflation hedge [11][12] - The company anticipates reaching 2019 system-wide RevPAR levels during the third quarter [12] - Management noted that macro risks and uncertainty exist but forecast for economic growth remains healthy [11] Other Important Information - The company has resumed its Capital Return Program, completing approximately $265 million of buybacks through April [7][24] - Hilton Honors membership grew 15% to more than 133 million members, with members accounting for 60% of occupancy [16] Q&A Session All Questions and Answers Question: How much of your second quarter and full year RevPAR guidance is occupancy-driven versus rate driven? - Management expects the largest part of RevPAR growth to come from rate growth, with occupancy growth also anticipated [27] Question: What kind of pricing power do you think you have at occupancy levels that are commensurate with 2019 levels? - Management believes meaningful pricing power will be available next year due to high demand and limited supply [36] Question: Can you talk a little bit about the capital return guidance? - The capital return guidance implies a high end of the leverage range of 3.5x, with potential for modestly higher leverage in the future [40][41] Question: What's your level of confidence in the 5% guide this year? - Management is highly confident in achieving the 5% net unit growth guidance, with expectations for construction starts to be flat or slightly down [42] Question: How do you think the situation in China will shape up? - Management expects China to reopen for domestic travel in the second half of the year, which will benefit business significantly [61] Question: Can you talk about the booking window? - Booking windows are extending, with approximately 50% of business now booked beyond 7 days [63] Question: How are you thinking specifically about guidance for China and Europe over the balance of the year? - Management expects Western Europe to continue recovering, while Eastern Europe will remain challenged; China is anticipated to recover rapidly once lockdowns ease [60][61]