Good morning, and welcome to the Hilton second quarter 2022 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's prepared remarks, there will be a question and answer session. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Jill Slattery, Senior Vice President, Investor Relations and Corporate Development. You may begin. Thank you, Chad. Welcome to Hilton's second quarter 2022 earnings call. Before we begin, we would like to remind you that our discussions this morning will include forward-looking statements. Actual results could differ materially from those indicated in the forward-looking statements, and forward-looking statements made today speak only to our expectations as of today. We undertake no obligation to update or revise these statements. For a discussion of some of the factors that could cause actual results to differ, please see the Risk Factors section of our most recently filed Form 10-K and first quarter 10-Q. In addition, we will refer to certain non-GAAP financial measures on this call. You can find reconciliations of non-GAAP to GAAP financial measures discussed in today's call in our earnings press release and on our website at ir.hilton.com. This morning, Chris Nassetta, our President and Chief Executive Officer, will provide an overview of the current operating environment and the company's outlook. Kevin Jacobs, our Chief Financial Officer and President, Global Development, will then review our second quarter results and discuss expectations for the year. Following their remarks, we'll be happy to take your questions. With that, I'm pleased to turn the call over to Chris. Thank you, Jill. Good morning, everyone, and thanks for joining us today. As our second quarter results demonstrate, we have a lot to be proud of. System-wide RevPAR achieved 98% of 2019 peak levels, with all major regions except for Asia Pacific exceeding 2019 RevPAR. We continued to execute on our strong development story, reaching 7,000 hotels globally and grew our industry leading RevPAR premiums, all while maintaining good cost discipline. Coupled with the resiliency of our asset-light, fee-based business model, these accomplishments enabled us to deliver EBITDA 10% higher than the second quarter of 2019, with margins of nearly 70%, up more than 800 basis points above 2019 levels. As a result, we continued returning meaningful capital to shareholders after resuming our capital return program last quarter. Turning specifically to results, we reported RevPAR, adjusted EBITDA, and adjusted EPS above the high end of our guidance for the second quarter. System-wide RevPAR increased 54% year over year and was just 2% below 2019 levels, improving each month throughout the quarter, with June RevPAR surpassing prior peaks. All segments improved quarter over quarter, led by business transient and group. Leisure transient trends remained robust as consumer spending continued to shift from goods to services, particularly travel and entertainment. Weekend RevPAR was up approximately 14% compared to 2019, driven by robust rate gains. In June, weekend ADR was up 20% versus prior peaks. Business transient demand continued to improve throughout the quarter, driving weekday occupancy up 6 points from April to June. Weekday RevPAR was 95% of 2019 levels, with ADR exceeding prior peaks. U.S. Business transient RevPAR surpassed prior peak levels in June, with demand improving across nearly all industries. On the group side, RevPAR in the quarter was roughly 85% of 2019 levels. Full year group position improved meaningfully throughout the quarter, with strong forward bookings across all location types and nearly all major categories. Group mix is beginning to normalize, with the percentage of company meetings increasing. Bookings for company meetings strengthened each month of the quarter, with tentative pipeline for the year up materially versus 2019, boosted by high teens rate increases. In the U.S., total group position is nearly at prior peak levels for the third quarter and exceeds prior peaks for the fourth quarter. With continued improvement in these segments and positive momentum across all regions, we remain optimistic for continued recovery throughout the balance of the year. As a result, we are raising our expectations for the full year to reflect the quarter's strong results and better anticipated trends in the back half, with RevPAR surpassing 2019 levels. For the full year, we expect to deliver adjusted EBITDA above 2019 and to generate the highest level of free cash flow in our history. We expect to return between $1.5 billion and $1.9 billion to shareholders in the form of buybacks and dividends, or approximately 5% of our market cap at the midpoint. Turning to unit growth, we continue to drive a disproportionate share of global development, with nearly one in every five rooms under construction around the world slated to join our system. Additionally, our development market share is more than three times larger than our existing share, meaningfully higher than our peers, given our industry-leading RevPAR premiums. This is reflected in the more than 14,000 rooms we opened in the quarter. We signed more than 23,000 rooms, bringing our development pipeline to a record 413,000 rooms. With nearly half of our pipeline under construction, we remain on track to deliver approximately 5% net unit growth for the year. According to STR, our year to date net additions are higher than all major branded competitors. Our conversion openings totaled more than 3,400 rooms in the quarter, representing roughly 24% of total openings. One of the most notable conversion openings in the quarter was the Waldorf Astoria, Washington, D.C. Inspired by the legacy of the old post office building, the property brings Waldorf Astoria's iconic history, stunning design, and unforgettable experiences to our nation's capital. Our disciplined development strategy continues to enhance our network effect, enabling us to serve more guests across more destinations for any stay occasion. During the second quarter, we celebrated the opening of our 2,800th Hampton hotel, 60,000 Embassy rooms, and several key luxury announcements, including the openings of Conrad properties in Nashville and Sardinia, and the signings of the Waldorf Astoria Sydney and Waldorf Astoria Kuala Lumpur. Earlier this month, we celebrated the highly anticipated opening of the Conrad Los Angeles, anchored within the Grand L.A. The spectacular 305-room hotel marks the brand's debut in California and makes L.A. the second U.S. city alongside Las Vegas to feature all three of our luxury brands. The openings of the Hilton Maldives Amingiri Resort & Spa and the Hilton Tulum Riviera Maya All-Inclusive Resort were two of the latest additions to our rapidly expanding portfolio of resort properties in prime beachfront destinations. With 400 unique hotels and resorts open and in the pipeline, our conversion-friendly brands, Curio and Tapestry, continue to provide an attractive value proposition for owners. By providing authentic and curated experiences and drawing inspiration from their local communities, these brands enable owners to retain their own unique identities while also benefiting from the power of our commercial engines. During the quarter, we opened the Royal Palm Galapagos, marking the first international hotel brand in the Galapagos Islands and making Ecuador the thirtieth country in Curio's growing portfolio. Tapestry opened its 10,000th room in the quarter, including the Hotel Marcel New Haven, which is anticipated to be the first net-zero hotel in the U.S. and one of less than a dozen LEED Platinum certified hotels in the country. All of these openings continue to expand the offerings available to our Hilton Honors members. In the quarter, Honors membership grew 17% to 139 million members and accounted for approximately 62% of occupancy, up 350 basis points year-over-year and roughly in line with 2019. To address the evolving needs of guests who wanna travel with their pets, we have expanded our partnership with Mars Petcare to now include seven of our brands, including all our focused service and all suites brands, as well as Canopy. Through this expanded partnerships, guests will have access to virtual support from the Mars Petcare expert team and have more than 4,600 pet-friendly hotels to choose from. We continue to double down on the importance of the guest experience in their stay. Earlier this week, we launched our first ever global platform to focus on what has been missing from hotel advertising, the stay. Hilton. For the Stay places the hotel front and center. It goes without saying that our team members continue to be at the heart of that stay experience. I'm extremely proud that earlier in the quarter, Hilton was inducted in DiversityInc's Hall of Fame for our continued commitment to building an inclusive and welcoming environment. Now, I'll turn the call over to Kevin for a few more details on the quarter and the expectations for the rest of the year. Thanks, Chris, and good morning, everyone. During the quarter, system-wide RevPAR grew 54.3% versus the prior year on a comparable and currency neutral basis. System-wide RevPAR was down 2.1% compared to 2019. Growth was driven by continued strength in leisure demand through the start of the summer travel season, as well as stronger than expected recovery in business transient and group travel. Performance are driven by both occupancy and rate growth. Adjusted EBITDA was $679 million in the second quarter, exceeding the high end of our guidance range and up 70% year-over-year. Outperformance was driven by better than expected fee growth, particularly across the Americas and EMEA regions. Management and franchise fees grew 54%, driven by meaningful RevPAR improvement and strong Honors license fees. Cost control further benefited results. For the quarter, diluted earnings per share adjusted for special items was $1.29, exceeding the high end of our guidance range and increasing 130% year-over-year. Turning to our regional performance, second quarter comparable U.S. RevPAR grew 47% year-over-year and was up 1% versus 2019. Performance continued to be led by robust leisure trends and was further boosted by significant RevPAR recovery in business transient and group, up 16 and 20 percentage points respectively from the first quarter. In the Americas outside of the U.S., second quarter RevPAR increased 140% year-over-year and was up nearly 5% versus 2019. Performance was driven by strong leisure demand, particularly at resort properties. In Europe, RevPAR grew 283% year-over-year and was up 1% versus 2019. Performance benefited from reduced travel restrictions and greater than expected international inbound arrivals. In the Middle East and Africa region, RevPAR increased 68% year-over-year and was up 4% versus 2019. The region continued to benefit from robust domestic leisure demand and strong international inbound travel, particularly from Europe. In the Asia Pacific region, second quarter RevPAR was down 5% year-over-year and down 39% versus 2019. RevPAR in China was down 47% compared to 2019 as strict COVID policies and lockdowns in Shanghai and Beijing continued to weigh on travel demand early in the quarter. Demand recovered quickly once restrictions eased, with occupancy in China recovering from 37% in April to approximately 60% in June, less than 6 points shy of 2019 levels. The rest of the Asia Pacific region saw improvement as countries outside of China benefited from border reopenings. RevPAR for Asia Pacific ex China improved 12 percentage points throughout the second quarter, with April down 29% versus 2019 and June down 17%. We remain optimistic about continued recovery across the entire APAC region, including China, as COVID-related policies continue to ease and additional countries open their borders for international travel. Turning to development, our pipeline grew year-over-year and sequentially totaling over 413,000 rooms at the end of the quarter, with 60% of pipeline rooms located outside the U.S. and roughly half under construction. While macroeconomic uncertainty and variability across regions persists, owner and developer interest remains healthy. The development community continues to prefer our industry-leading brands and strong commercial engines. For the full year, we still expect net unit growth of approximately 5% and signings to exceed 100,000 rooms. Moving to guidance for the third quarter, we expect system-wide RevPAR growth to be between 25% and 30% year-over-year or up 1%-5% compared to third quarter 2019. We expect adjusted EBITDA of between $660 million and $690 million and diluted EPS adjusted for special items to be between $1.16 and $1.24. For full year 2022, we expect RevPAR growth between 37% and 43%. Relative to 2019, we expect RevPAR to be down 1%-5%. We forecast adjusted EBITDA of between $2.4 billion and $2.5 billion, with margins for the full year more than 600 basis points higher than 2019 levels. Our adjusted EBITDA forecast represents a year-over-year increase of more than 50% at the midpoint and exceeds 2019 adjusted EBITDA. We forecast diluted EPS adjusted for special items of between $4.21 and $4.46. 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 the second quarter for a total of $41 million. Our board also authorized a quarterly dividend of $0.15 per share in the third quarter. Year to date, we have returned more than $800 million to shareholders in the form of buybacks and dividends. For the full year, we expect to return between $1.5 billion and $1.9 billion to shareholders in the form of buybacks and dividends. Further details on our second 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. We would like to speak to all of you this morning, so we ask that you limit yourself to one question. Chad, can we have our first question, please? Thank you. We will now begin the question and answer session. To ask a question, you may press Star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press Star then two. Our first question comes from the line of Carlo Santarelli with Deutsche Bank. Please go ahead. Hey, Chris, Kevin, Jill, everyone. Chris, maybe this one's best for you. Just in terms of how you're thinking about the rest of the year, what is it that you guys see here at the end of July? I'm sure you have a pretty good look into August, but you know, clearly the September, October, you know, busier business travel season, group season, et cetera. What is it that you see in this period that kind of gives you the confidence in the guidance raise for the rest of the year? How do you kind of think about or feel when you look out to 2023? Carlo, thanks for the question. That obviously is the prime question, I think, on everybody's mind. I think it would be sort of best to start by saying, as everybody on this call knows, that there's certainly a lot of uncertainty in the world. I think, you know, we have to sort of be mindful of that as everybody has. I mean, we have been as much as we, you know, see what's going on, and we're watching the broader environment and lots of talk of slowdown and seeing it in certain industries, certainly, I think predominantly industries that had, you know, reached high water marks that were, you know, had favorable impacts from COVID, but nonetheless, you know, starting to see slowdown. You know, we have been looking very carefully at our business, as you would guess, at all the segments that, you know, sort of any forward-looking trends that we can see. I would say, you know, what we're seeing still is very positive. We see, you know, as Kevin and I both said in our prepared comments. Continued strength in leisure. We expect to see that continue into the fall at higher rates than normal. I mean, lower rates than summer, like always, but higher rates than you would have typically seen pre-COVID, just because of increased leisure business. Business transient, you know, continues to recover, led by recovery in the big corporates, which are not back to where they are, but, you know, they're back to sort of 80% of where they were. The SMB side of the business that has been quite robust. I mean, in the second half of the year, you know, based on the trends we've been seeing, our expectation is business transient's gonna be sort of on a revenue basis equal to 2019 levels. Then, you know, when we think about the group side, while we don't think in the second half we'll get all the way back to where we were in 2019, we're gonna get awfully close. As I said in my prepared comments, if we look at the booking position in third and fourth quarter or second half of the year, it's over 2019 levels. Our sales teams, you know, tell me, you know, keep telling me, you know, they can hardly keep up with the demand. Now, reality is, again, we're in an uncertain world. The booking windows are short, so our visibility is limited, certainly on transient business. We can't really look too deeply into the fall on transient. Again, we can on the group side, and those stats are good. The current trajectory is good. Looking at July, you know, June as we said was over 2019 levels. July is trending in a very good way, and it will be over 2019 and improve, you know, over and above what we saw in June. You know, everything we're seeing sort of real time, everything we have in terms of sight lines into the future all feel pretty good. Recognizing it's not, you know, there's a lot of macro uncertainty and recognizing that our, you know, our booking windows and sight lines are, you know, are not that far out. I think what is causing it, you know, like, sort of as you see other industries, you know, sort of being impacted every day, including today is a big reporting day. Again, I think a lot of what you see coming, sort of going the wrong way are industries that were at crazy peaks because they were huge beneficiaries, many of them of COVID, and the pandemic. We were obviously not a big beneficiary. I think that's a fairly nice way of putting it. You know, our industry got hammered. What we're benefiting from, I think, is, you know, sort of a handful of things. One, there's a lot of pent-up demand. We hear it all the time. I mean, while I don't have tremendous sight lines in the sense of real transient booking data to give you know, just 'cause it doesn't exist, you know, we talk to our customers all the time, not just the group customers. We're talking to all of our customers, and we're in a regular dialogue with our SMBs, with the big corporates. You know, the anecdotal feedback that we're getting as we go into the fall is people have to travel more. You know, more offices are open, more people are back in the office. While people are worried about where the macro environment is going, they've got to run the businesses. In fact, the more worried they are, the more they realize they sort of got to get out there and make sure they're hustling. There is an element of pent-up demand. There is clearly, and I'm not gonna say I was right, but I've been right. There's clearly a massive shift in spending patterns, right, away from goods into services. I said in my prepared comments, I've been saying since the beginning of the pandemic that the world is not gonna go upside down, that it may go upside down for a while, but it will normalize, and that's exactly what we're seeing. Not only do you have pent-up demand, but you just have new demand that's coming as people are sort of shifting their spending patterns. That means leisure, business, group, that people are shifting back to a more normalized lifestyle. Maybe it's not exactly the way it was, but it's more like it was than you know than it was. It's more like it was pre-COVID than it is during COVID. We're the beneficiary of that. You have, you know, infrastructure. Like, people don't talk about it. We passed a nearly $1 trillion infrastructure package last year. You know, very little of that has been spent. Traditionally, you would start to see spending in the second, third, and fourth year. We're just sort of coming into the zone, you know, over the next two or three years on $1 trillion of spending. I've said this so many times, you guys are tired of hearing it. The highest R-squared correlation to demand growth in hotel rooms is NRFI, non-residential fixed investment, AKA infrastructure. You know, I think we feel good about that being a underpinning broadly. Asia recovery, Kevin talked about it. Asia's been way behind. It's not recovering as quickly as we would've thought, particularly China. But I do. You know, it is recovering, and I think that, you know, provides, you know, some benefit, not just the rest of this year, but in the next year. Then probably last but not least, if we look at our customers, certainly like our Honors base, which are driving you know, the disproportionate share of our system-wide revenues, at the moment, they're still, you know, in pretty good shape. I mean, the median income of our higher-end Honors members is significantly over $100,000 median income. At the moment, they're still, you know, they're still in pretty good shape, and we haven't really yet seen any real cracks in the armor in terms of their spending patterns. I know that's a filibuster of sorts, but I think it gives you know it to answer the question it gives you color for as we sat in the very room we're sitting in and thought about how do we feel about the rest of this year. You know, that's how we sort of you know that's how you know we came up with our forecast and our outlook. As we think about next year, listen, I'd be silly to say I know, 'cause nobody knows. This is we're in pretty much uncharted waters, as the smartest economists I talk to are you know saying the same thing. Yeah, I don't know. I think a bunch of those things that I described are pretty good wind in our sails against what is obviously gonna be a slowing US and global economy, 'cause that's what central banks are going to do. We have some things that I think sort of, you know, are winds blowing, the other way. I think as we get into the first half of next year, you know, we're feeling like that, you know, that is going to be helpful to us. How we think the whole year will play out, obviously, it's premature for us to judge, and when we get a little bit closer to it, we'll have a little bit more precise view. Great. Chris, that's very helpful. Then I wanna be courteous to everyone on the call, but just quickly to clarify some of the comments from earlier. As you guys talked about group and 4Q being greater or being up year-over-year, I should say, what was that a revenue position comment you were making? Revenue. It- Revenue. Okay. Yeah, revenue. Could you talk about from an occupancy or occupied room night perspective, how group compares? Yeah. I think system-wide second half of the year, we think will be in the 90s. You know, it'll probably be, you know, 5 points off with the difference being made up in rates. Got it. Thank you, sir. Take care. Yep. Thank you. The next question is from Shaun Kelley from Bank of America. Please go ahead. Hey, good morning, everyone. Chris, maybe just to dig in, I mean, obviously you covered sort of most of the subjects in that last answer. So maybe to go, you know, a slight layer deeper. If we just think about, you know, the acceleration between, you know, kind of what you're implying for the third quarter and what you actually saw in the second, what are some of the biggest, you know, variances, you know, that are gonna drive that? The things that come to mind are obviously international and then the continued improvement you probably saw sequentially on business transient. Could you help unpack that a little bit? Yeah. I mean, sorry, I did give a bit of a filibuster, but just wanted to give the whole thing context and not have it be chopped up. My apologies for answering what are probably a bunch of your questions. I do think I sorta covered that. We certainly expect international travel to pick up. We don't think that's gonna move the needle in a necessarily huge way in the second half of the year. It really is what we described, what I already described, which is continuing strength in leisure, because, you know, weekend business, we think is still gonna remain strong. Consumer still has desire and capacity to do it. They are traveling more, you know, from a combination of leisure and business. We think that will mean leisure business will ultimately be, you know, at elevated levels relative to what we saw in pre-pandemic times. We do think, you know, from a revenue point of view, business transient is on track, largely because of the success we've had in SMB in the second half of the year. Just so on a revenue basis back to 2019 levels. Now, that depends, you know, we don't have all those bookings on the books that are confirmed at this point. If you look again at June and July, you talk to the customers, we look at, you know, detailed, you know, data on sort of how they're behaving right now, we feel good about that. You know, group. I covered. I mean, we think group will not recover to where we were in 2019. There's just not enough time. We think it's gonna get, you know, awfully close. We think there's a lot of momentum in the group side going into next year. I think net, Shaun, probably repeating myself, what it depends on is more of what we've been seeing. You know, just grinding up on business. I mean, we're at, for the whole quarter, we were at, you know, 95% on business transient, so we're getting awfully close. In June in the U.S., you know, we hit 2019 levels. It doesn't, you know, the rest of the year suggest the strengthening in group based on our real position of group room nights on the books, and similar to what we've seen in June and July in business transient and normal, you know, strength on weekends for leisure, but normal pattern of leisure backing off during the midweek as you go into the fall. Thank you very much. The next question will come from Joe Greff from J.P. Morgan. Please go ahead. Good morning, everybody. Morning, Greff. If you go back and you look at the last 2.5 years, it's been remarkable that your same-store RevPAR growth rate and your management and franchise fee growth rate have mirrored each other almost to a one-to-one relationship. You know, over that timeframe, you've grown your room count north of 10%. Does the relationship between RevPAR growth and, say, fee growth or that sensitivity change going forward, where maybe there's, you know, if RevPAR were to experience a decline, that sensitivity to the downside. Is maybe more favorable than what it would have been the last couple of years, just because of the growth in the room count? Well, I think the answer is yes. What largely would drive it is what you're saying, the non-RevPAR-related fees are growing as a percentage of the fee base. You know, the impact on the downside, you know, was accentuated because of the extremes. In a normal, like, you know, sorta, you know, normal recessionary environment, you don't see those sort of extreme impacts in terms of declines, RevPAR to EBITDA. We think in a normal kind of environment, yeah, it would be more one for one, and we'd get the benefit of the things you described. Great. Thank you. The next question is from David Katz from Jefferies. Please go ahead. Hi. Good morning, everyone. Thanks for taking my question. Congrats on the quarter. I wanted to just touch on the owned and leased portion of the model, which I think swung to, you know, positive this quarter. It was a little earlier than what we anticipated. Can you know, just talk about what's driving that? Is there a, you know, strong business component to that? You know, give us some help with the rest of the year and sort of what's in there and how we might think about that. Yeah. David, I think, look, first of all, I would say, yeah, you're right, it did swing to a profit. You know, we've been saying for a while that the growth rate would be more than the overall portfolio. In fact, that was the case when the numbers were still negative. It was, you know, in a weird way, it was still growing faster, improving the growth rate of the company. It's all fundamentals, though. I mean, if you look at where the portfolio is located, you know, in this particular quarter, you know, the real strength regions were U.K., particularly London and Central Europe. You know, Japan still a little bit further behind. As APAC recovers, you have even a little bit more of a tailwind there from that part of the portfolio. The RevPAR growth in the quarter was significantly ahead of even where, you know, I gave the Europe, the EMEA number. I gave the Europe number in my prepared remarks. The RevPAR for this portfolio was even further ahead of that. That's where it's coming from. We expect those trends to continue, again, particularly as Japan is a little bit further behind on recovery. We expect, you know, going forward that portfolio, while, you know, remember, it's a small part of the business, and over time will continue to be a smaller part of the business, but it will be a tailwind to our growth rate, you know, for a while as those regions recover. Can I, if I may, not to overstay my welcome, but, you know, should we perhaps look at the 19 levels, or any past levels of profitability and, you know, how might those guide us as we think about the future? Yeah. I think it's, you know, there's no reason why it won't get back to or even exceed prior levels. You gotta remember the portfolio does get a little bit smaller over time. We exited seven of those assets last year, three of which, you know, came into the system and shifted over to paying fees, but four of which went away altogether. You know, that's not gonna make a huge difference on that. But I would say, you know, keeping in mind that the portfolio continues to get smaller, I would say that, you know, recovering to where it was on a lag is a good way to think about it. Excellent. Thanks. Sure. The next question is from Smedes Rose from Citi. Please go ahead. Hi. Thanks. I just wanted to ask you just a little bit on the pipeline. You continue to see you know sequential growth there and significant signings. It just seems a little bit kind of you know a lot of crosscurrents going on, because you keep hearing about you know developer challenges. I'm just wondering if you could speak to where you're seeing the growth. I know you've spoken about China, but you know how is it looking in the U.S., and what sort of challenges maybe are developers you know facing? Is Hilton you know helping at all in terms of you know loans or anything of that sort? Yeah. A really good question. You know, I mean, what's going on essentially, let me just sorta everywhere but China, is that demand, you know, from owners to sign new deals has actually moved up pretty nicely. You would say, "Why, with all the swirling winds and all the uncertainty?" Well, I mean, look at, you know, like, they own assets. Look at the results we're delivering and what we think we'll deliver, you know, for the year and where we are relative to 2019. You know, you think about margins, not our margins, but with all the changes we've made in the hotels. I mean, the reality is, not in every single case, but in many cases, the hotels that our owners own are performing extraordinarily well. They're at high RevPARs with higher margins than they had pre-COVID. Listen, this is what they do for a living. They're seeing great success. They're seeing tremendous flow-through. They're seeing incredible rate and, you know, sort of pressure, and that makes them wanna do more of what they do. As Kevin said, we won't get to our peak in signings, you know, but we'll get, you know, we're getting closer. We'll get over 100,000 rooms. And again, I think it's just +7%. That's without China. China, actually, we will open more rooms in China this year, but we won't sign as many simply because, you know, the, you know, their. Well, the way they're addressing COVID with the lockdowns and the like have slowed development activity there. We have every confidence that when they reopen, it will pick up at a fast pace. From a cultural point of view, you really don't get signings done when things are closed. It's just not the way things happen, and it's been a little delayed. I think the reality is when you know, with the demand in the rest of the world, when you get that, you know, when you get that part of the engine firing as well, you know, the numbers are gonna feel pretty good. You know, then it has to translate, and I think, you know, that will translate over time as sort of the world, you know, settles down a bit and people have a little bit more visibility on what's going on. The demand is there. Market share, we're out of the business of describing exactly what our market share is, for a whole bunch of competitive reasons. But I will say, you know, market share is up, you know, again, in a meaningful way, significantly above 2019 levels, significantly above where all our competitors are. You know, that's helping, you know, drive disproportionate interest. Not only do people wanna build more, but I think they wanna build more with us 'cause we're, you know, doing a better job, you know, in terms of driving share to help them drive profitability. Thanks. Let's just quickly add. I saw you guys are announcing a new ad campaign with a different kind of focus, but I'm just wondering, I guess you'd know this, but is that essentially supported by or funded by owners, or is there corporate implications as well for that? That is funded by the system, which means essentially it's funded by owners. You know, we have. I mean, the grossly simplified explanation is people will either pay us a management fee or a franchise fee, and then we have corporate expenses, and then they pay system fees for a bunch of things, marketing, technology, brand, you know, essentially, you know, system charges and those that we manage, you know, on a dollar-for-dollar not-for-profit basis, if you will, on their behalf. All of the marketing dollars that we're talking about in our campaign come out of that. They're not corporate dollars. They're for the benefit of the system. Okay, great. Thanks a lot. Appreciate it. Yep. The next question is from Robin Farley from UBS. Please go ahead. Great, thanks. Just one follow-up on your comments on the, you know, demand from owners and kind of the record level of signings. Some others in the industry have talked about, you know, getting record signings, but that construction starts have been matching the signings. I know your rooms under construction currently are ahead of 2019, which is a great achievement. I'm wondering if you're seeing, though, new construction starts, which you know, would not impact your unit growth this year, but you know, might have implications for 2023 or 2024, just kind of what you're seeing on the construction start front. Thanks. Yeah, happy to answer that, and Kevin can jump in if he wants to add anything. First of all, just to be clear, I didn't say we're hitting records on signings. I said we're over 100,000. I think our peak was 116, 115, 116, something like that. So we're getting closer, and we're getting over 100 without as much help as we'd like from China. On the start side, we do believe starts will go down again this year, given all of the things that are going on in the world with supply chain, labor, financial markets, you know, fears over the macro and recession. We think they will be down. Having said that, it's, you know, our best estimates at this point, we've talked about this on prior calls, is that we will probably have hit the floor in starts in the U.S. last year. We think we'll be up modestly this year and probably hit the floor outside the U.S. this year. Our expectation is, given what I described before in terms of just where we are with RevPAR, where we are with margins, the owner desire to do things, that all things being equal, we are of the mind that this year would be the low point in starts and that they would start moving back up. That puts us in a position to do as we have been expecting and suggesting we would do, which is for the next couple of years, deliver in the mid-single digit NUG. Okay, great. Thank you. Just one quick follow-up on the margin performance up 600 basis points. I think that you have guided before that you would hold on to 400-600 basis points of that. Do you think it's looking like you're at the higher end or maybe even above that at this point? We're doing better on margins. The faster recovery, even better cost discipline than we assumed, so we're doing better on margins than we had suggested before. I mean, in terms of holding on to that into 2023. Yeah. Actually, if you recall, we thought just because of the recovery in the real estate, because at lower margins, it would help EBITDA growth, but it might or the arithmetic would hurt margins. We had thought that we might, you know, sort of be flat or even a little bit down as we got through that this year. Obviously, with the guidance we gave you, we're 150 basis points above what we did last year, which was meaningfully above 19, which is getting us to the higher end of the 600. You know, we think we're gonna be able to continue to drive margin growth from there. Great. Thank you. Yeah, I think that last thing that Chris said is important in the sense that when we gave you that number, that was sort of just helping people model sort of a recovery and where it was gonna go. It was not meant to be sort of a stopping point, you know. Between the mix continuing to grow over time towards fees, non-RevPAR driven fees and cost control, we think margins will continue to grow over time. Yeah. On average, if you just do the math in your model, my guess is it will be similar to ours. It's a 50-100 basis points natural accretion in margin every year just based on the business model. Great. Thanks very much. The next question is from Richard Clarke from Bernstein. Please go ahead. Hi, good morning. Thanks for taking my question. Just maybe sort of I'm picking it a bit too much here, but if I look at your sort of Q3 and then your full year RevPAR guidance and maybe some of your commentary, it looks to me you're sort of saying that Q3 is gonna be better than Q2, and then maybe Q4 will be a slight pullback, that you're only expecting leisure demand to sort of run through the fall. And obviously with group being stronger in Q4, you know, are you expecting some elements maybe just to step back a little bit in Q4, or am I reading a little bit too much into your guidance there? I think you're reading a little too much into it. I think at this point, we sort of view the second half of the year, third and fourth quarter in a very similar way. Obviously, the third quarter is a much bigger, more important quarter in the sense of all forms of travel. You have sort of seasonal things going on, but in terms of the basic breakdown of what we think and performance of the segments, we are not forecasting any difference, any meaningful difference. Thanks. Maybe just a quick follow-up to the last question. I think at the full year results, you specifically sort of guided you were hoping for 66,000 construction starts this year. I don't think you gave a number in response to that. Is that still what you're looking to get to this year? No, I think we had said that in the past and on prior calls. I think Chris said we expect, you know, starts to be down a little bit this year. There's a lot of year left, so we're not sure exactly where it's gonna play out, but probably be a little bit less than that. Okay. Thanks very much. The next question is from Chad Beynon with Macquarie. Please go ahead. Good morning. Thanks for taking my question. When you think about some of the restrictions with flight capacity that we hear about in the U.S. and in Europe not being able to keep up with consumer demand, do you believe any of this presents a risk to any parts of your recovery, or is it negligible and just more of kind of a soundbite for the airline industry? You know, we've been watching that, as you would guess, really carefully and studying our data along with the airline data, and we haven't seen any real impact. We just can't find it. So we feel pretty good about it. I mean, talking to them, not just listening, but I know most of the CEOs in the airline space and talking to them, I think they are making pretty darn good progress in terms of getting capacity back, getting the teams that they need in terms of pilots, flight attendants, you know, maintenance crew, getting them trained. So, I mean, it's not done by any means, but I think every day it gets a little better. I think we feel like we'll be fine. I mean, if you look at the patterns, like in the second quarter, I was actually surprised. It's, you know, directional. I'm not gonna tell you like we have perfect data on this, but it's pretty good directional, and it's consistent with what, you know, the same way we would have analyzed it pre-COVID. You know, in a normal world, like 60% of our business was fly to, and 40% of it was drive to. In the second quarter, we think it was two-thirds drive to, one-third fly to. Part of what's going on is people are with restricted capacity. They're just driving more, they're driving longer distances, and they're staying in a tighter, you know. They may be driving further, but they're not going cross-country or whatever. It's more, you know, regional and local business, but that works. At the moment, you know, while the airlines are sort of working their issues out, I think people are acting, you know, sort of accordingly in terms of how they're getting places. We're not seeing any impact. Talking to customers, we don't think that it's gonna impair the rest of the year. Thanks, Chris. Appreciate it. Yep. The next question is from Vince Ciepiel with Cleveland Research Company. Please go ahead. Great. Thanks for taking my question. I'm curious, you know, how you're thinking about planning the business over the course of the next twelve months. It clearly sounds like the trend lines in corporate and group are getting better. Obviously, you believe leisure is continuing to fetch healthy ADRs and remain pretty stable at the high levels. As you think about, like, an efficient mix within those three buckets of demands, how are you approaching that, and how are you handling pricing out the corporate and the group business as it comes back? Yeah, I mean, the truth is we're doing it with a lot of flexibility because while we have a belief, which we've articulated in a bunch of different ways on this call, we know that we may not be perfectly right. As we've, I think, proven during COVID, you know, our teams, including our sales teams, our commercial teams, are unbelievably quick on their feet. You know, we retooled everything when we had to in COVID. We've retooled, you know, a dozen times through COVID as demand patterns have sort of been normalizing. I think, you know, what we will be set up for and then ready to pivot is a world that I described, which is a world that is getting, you know, reasonably close to pre-COVID normalization. I mean, just like in Q2, by way of example, if you look at the segments, compared to, you know, 2019, 55% of our overall system revenue came from business transient, 25% from leisure transient, and 20% from group. If you look at the depths of COVID, you know, it probably the most extreme times it went to, like, 35% business, 55% leisure, and 10% group. In the second quarter, it was almost 50% business transient. It was like, you know, 34, 35% leisure and 16 or 17% group. The, you know, as I said before, we've sort of expected that, you know, as much as everybody wants to think everything's different, we sort of have been planning throughout and taking it in steps for a normalization to maybe not be exactly where we were pre-pandemic, but more looking like that than where we were. That's what's happening. You know, that's what we'll be set up for. As I said, the key here always is, you know, flexibility and be prepared to pivot. On the margin, you know, I do think, you know, we will continue to have higher levels of leisure than we had pre-pandemic. You know, my guess is we will have potentially a surge in group just because of so much pent-up demand as well. You know, what are we doing? We're making sure we're staying super aggressive on leisure strategies, making sure that we're staying super aggressive with our group sales team, and that we're all over every opportunity, and that we are focused on that. On the business transient side, while we love our big corporates and we continue to work with them, we've had a lot of success with the SMBs. In the end, we think that when we normalize, we will have lower big corporates and higher SMBs at a higher rate. We have deployed accordingly in our sales teams across the board to make sure that we're working those SMB accounts, that we're covering a lot more of those in a very thoughtful way to continue to build that business. At a high level, that's sorta when we are sitting at this table talking about how we're gonna deploy over the next 12 months. That's how we're thinking about it. If the world, you know, pivots, we'll pivot very quickly with it. My guess is that's how the world's gonna play out. You know, a little bit more leisure, a lot more group, a bunch more business transient, and for us, with a real focus on the SMBs. That's some helpful high-level color there. Maybe just a little bit more specifically, on that larger corporate, I would imagine a lot of that falls under the corporate negotiated rates. Can you remind us where those have been through COVID? Are they flattish with 'nineteen levels and- They've been flat. They've been almost, you know, all of our large corporate clients during COVID agreed to keep rates flat to 2019 levels. Now in those negotiations, again, keeping it in perspective, it's, like, 7% of the business right now, maybe seven and a little bit of change. Like, just keep that in perspective. I think, you know, what we're indicating is probably mid-single-digit kind of increases for those accounts. Again, you know, in a lot of hotels, the reason we want that, even though SMB is maybe at a higher rate, is it provides a base of business, just like we put a base of group business on the books. It's another way to put a base of business on. It's hotel by hotel. There'll be some hotels that won't take any of it, or some hotels that'll take some of it because they need the base. But I would suspect, while it's way early to judge, it's sort of mid-single digit. You know, the goals would be, you know, to have dynamic pricing with all those accounts, and that the end result will be, you know, somewhere in the mid-single digits. That when we're all said and done, it'll be, you know, 6%-8% of the business, where it used to be. Helpful. Thank you. Where it used to be 10. Thank you. The next question will be from Patrick Scholes from Truist Securities. Please go ahead. Hey, good morning, everyone. Morning. Kind of following up on that question on corporate rates, you know, we're starting to get into negotiation season. I know you'd like to tell me, you know, if you're gonna see corporate rates, you know, up 50% next year. You know, how do you think about group and corporate rates increasing next year as it relates to negotiated rates? You know, I keep that in mind with you know, inflation next year, probably 20% higher than where it was in 2019. Yeah, I mean, it's hard to say, and we're not here giving guidance on next year. There's a long way. Sure. from here and there, and there's a lot of uncertainty in the world. I mean, probably the best I gave you a little bit of sense, although we're not in those negotiations in earnest yet with the big corporates where that would be. I think the way we would think about unmanaged business transient business would be somewhere in the 5%-10% range to keep pace with inflation. I think we would think about the group our group bookings the same way. In fact, all the group bookings that like we were doing generally new group bookings that we did in the second quarter for 2023 and for 2023 were in the high single-digit rate increases. I mean, as a data point. Okay. Thoughts on, you know, Airbnb supply. Certainly we're seeing in, you know, some of those really hot leisure markets, whether it's, you know, Vail, Aspen, Miami, a ton of Airbnb supply with everybody realizing how high the room rates are that they're gonna rent out their units. You know, what sort of impacts are you seeing, if any, in those markets? None. Now, in some of those markets, we may not be in them, but as you can see. Okay From the numbers that we're posting, at least what we're forecasting, what we're seeing in booking patterns, we're not seeing any impact. I mean, I think what they do is they serve a certain customer need, and we serve another customer need. I've said it for a long time, there's plenty of room for us to coexist given what we're delivering is very different and it's generally for a different type of stay occasion. There is zero discernible impact from any Airbnb supply. Okay. Thank you for the color. Yep. The next question is from Duane Pfennigwerth from Evercore ISI. Please go ahead. Hey, thanks for the time. Yeah. Maybe a short term and a longer term. Short term, which international geographies surprised you the most in 2Q? And then longer term, how do you think about the pacing of China reopen, you know, 2023 and beyond? What is your planning assumption at this point? Yeah. I'll offer an answer. Maybe Kevin will come over the top and offer a different one. I would say Europe was the big surprise for me. Europe's on fire. Huge surge in business. I mean, the big cities, London, everything are raging this summer, you know, in Q2, and they're raging in Q3. You know, Europe is now trending, you know, above 19%. I think for the full year, Europe will be not just for the second half. Europe was above in Q2. I think Europe will be ahead for the full year of 2019 in terms of RevPAR. That's been a pleasant surprise. China, the honest answer is we don't know. I mean, we are making progress. Kevin gave the data points. I mean, we've moved to, you know, from in the 30s to, you know, 60, and I think we're probably above that now. You have things ebbing and flowing. I saw this morning they're locking down part of Wuhan, 1 million people. You know, we're hopeful by the. I've been saying this, and I've been consistent by the time they have the Party Congress, which is in October, you know that they're at a different place. I think, you know, that is, you know, as we talk to our teams there, I think there is a lot of belief that, you know, as we get into the fall, things are going to normalize rapidly there. I do think it will be a while, and what do I know for the record for anybody listening to this. I do think it'll be a while before, you know, we have a ton of Chinese travelers traveling internationally or any of us are going to China. I'm hopeful that that would be next year. I haven't been since the end of 2019, and I'm dying to go. The reality is, as we saw in the early recovery of COVID, where they led the world, when China opens up, in China, for China, just Chinese travelers moving around China, the business can boom in a very big way 'cause if they're not leaving, they're staying, and they love to travel within China and see the destinations there. I think as we get into, you know, October and the rest of the year, I would hope and I do think and our teams think that you're gonna see a lot of activity in terms of what's going on in opening and travel within China. I do think that will then start to restart in a big way the development engine that wants to go and people wanna do it. It's just, it's been kinda hard to get it chugging again. Thank you. Yep. Ladies and gentlemen, this concludes our question and answer session. I would now like to turn the call back over to Chris Nassetta for any additional or closing remarks. As always, we appreciate you guys taking an hour out of your life to join us. We are obviously really pleased with the results in second quarter. You know, we see the recovery not just happening, but happening at an even faster pace than we thought. We know the world's got a lot going on, but as I said in a bunch of different ways, as did Kevin, we feel quite good. We are cautiously optimistic. We feel quite good about the momentum we have and the win we have in our sales through the rest of this year and into the first part of next year. We'll look forward to giving you an update after we finish the third quarter. Thanks, and have a great day. Thank you, sir. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.