Good morning. Welcome to the Hilton fourth quarter and full-year 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 touch-tone phone. Please note this event is being recorded. I would now like to turn the conference over to Jill Slattery Chapman, Senior Vice President, Investor Relations and Corporate Development. You may begin. Thank you, Chad. Welcome to Hilton's fourth quarter and full-year 2022 earnings call. Before we begin, I 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 2022 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 on 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 fourth quarter and full-year results and discuss our expectations for the year. Following their results, we'll be happy to take your questions. With that, I'm pleased to turn the call over to Chris. Thank you, Jill. Good morning, everyone, and thanks for joining us today. We're happy to report a strong end of another year of continued growth. Together with our team members, owners, and communities, we've navigated through the most challenging times our industry has experienced and are deep into recovery throughout the world. During the year, we continued investing in new innovations and partnerships that meet guests' evolving needs and further strengthen our value proposition for Hilton Honors members and owners. We remain committed to delivering reliable and friendly experiences to our guests, and we continue to enhance our network through our strategic and disciplined approach to development, enabling us to serve even more guests across more destinations for any stay occasion they may have. Our strategy drove strong performance for the year, with system-wide RevPAR up 42.5% versus 2021, and approximately 1% shy of 2019 levels. Both adjusted EBITDA and EPS surpassed our expectations and prior peaks, with margins of roughly 69%, up more than 300 basis points year-over-year, and more than 800 basis points over 2019 levels. Strong results and higher margins enabled us to generate the highest levels of free cash flow in our history and to return more than $1.7 billion to shareholders for the full-year. Turning to results for the quarter, system-wide RevPAR grew 24.8% year-over-year and increased 7.5% compared to 2019, with performance improving sequentially versus the third quarter. We saw continued progression across all segments, with leisure, business transient, and group RevPAR all exceeding 2019 levels. System-wide occupancy reached 67%, up from the third quarter and just three points shy of prior peak levels. Overall rates remained robust, increasing 13% versus 2019, with all segments exceeding expectations. As expected, leisure trends remained strong throughout the quarter, with RevPAR surpassing 2019 levels by approximately 12%, modestly ahead of third quarter performance. Strong leisure transient demand continued to drive rates up in the high teens compared to 2019. Business transient RevPAR also continued to improve, with business travel up 3% versus 2019. Nearly all industries saw a continued recovery compared to the prior quarter. Small and medium-sized businesses remained an important and growing part of our business travel segment, accounting for roughly 85% of our segment mix and enhancing our overall resiliency. Group saw the biggest quarter-over-quarter improvement, with RevPAR fully recovering to 2019 levels, driven by both occupancy and ADR gains. Company meetings boosted performance, improving more than seven points versus the third quarter. As we look to the year ahead, acknowledging macroeconomic uncertainty, we expect system-wide top line growth of 4%-8% versus 2022. We expect performance to be driven by continued growth in all segments and aided by easy first quarter comps due to Omicron, meaningful recovery across Asia, and solid growth in U.S. urban markets as group business continues to recover. Comprising roughly 20% of our normalized mix, group is a segment with the greatest visibility. For 2023, group position is up 25% year-over-year and nearly back to 2019 levels. Even with robust forward bookings, the pipeline still remains strong, with tentantive bookings up more than 20% versus last year, helped by rising demand for company meetings as organizations bring their teams back together. Additionally, pricing for new bookings is up in the low double digits, and lead volumes in January were at all-time highs. Turning to the development side, we continue to deliver on our commitment to capitalize growth. For the full-year, we added nearly a hotel a day, totaling more than 58,000 rooms, and celebrated the opening of our 7,000th hotel. Since our go-private transaction 15 years ago, we've more than doubled the size of our system. Our rooms in the U.S. are up nearly 100%, and our international portfolio is now 3.5x larger. Additionally, we've added 10 new brands to our system, more than doubling our portfolio of brands. We achieved all of this without any acquisitions, and more than 90% of the deals in our current pipeline did not have any key money or other financial support. In the fourth quarter, we celebrated the opening of our 60,000th Home2 Suites room, our 150,000th DoubleTree room, our 200th hotel in Cancun, and our 600th hotel in Asia Pacific, including our first Hilton Garden Inn in Japan. We also saw continued strength in construction starts throughout the year, leading to starts of more than 70,000 rooms for the full-year. In the U.S., starts increased more than 9% versus 2021. We now have more rooms under construction than all major competitors. With a record pipeline of more than 416,000 rooms, half of which are under construction, we expect net unit growth of 0.5%- 5.5% for the year, and remain confident in our ability to return to 6%- 7% net unit growth over the next couple of years. Our disciplined development strategy continues to enhance our network effect and enables us to serve more guests across more destinations for any stay occasion. Building on this commitment, last month, we launched our newest brand, Spark by Hilton, a value-driven product that delivers our signature reliable and friendly service at an accessible price. Spark provides a simple, consistent, and comfortable stay with practical amenities and unexpected touches, filling an open space in the industry by creating a new premium economy lodging option to meet the needs of even more guests and owners. Premium economy represents a large and growing segment of travelers, totaling nearly 70 million annually in the U.S. alone, for which we have not had a tailored brand to serve. This cost-effective all conversion brand offers a streamlined reinvestment plan focused on core guest elements and enables owners to leverage our industry-leading commercial engines and powerful network effect. To date, we have more than 200 deals in various stages of negotiation, almost all of which are conversions from third parties. We've identified more than 100 U.S. markets with no Hilton-branded product, providing a great opportunity for the brand and the company to expand its presence. As a testament to the strength of our system and our continued success of our customer-focused strategy, Hilton Honors surpassed 150 million members during the fourth quarter and remains the fastest-growing hotel loyalty program. Honors members accounted for approximately 64% of occupancy in the quarter, up more than 300 basis points year-over-year and roughly in line with 2019. Additionally, we welcomed approximately 200 million guests to our properties during the year, exceeding pre-pandemic peak levels. We remain focused on ensuring Hilton has a positive impact on the communities we serve. For the sixth consecutive year, we were included on both the World and North America Dow Jones Sustainability Indices, the most prestigious ranking for corporate sustainability performance. For the seventh consecutive year, we were ranked among the world's best places to work by Fortune and Great Place to Work. As our performance demonstrates, our team members have proven that we can handle whatever comes our way, and because of our hard work and discipline, we are incredibly well positioned for the future. We're at a pivotal moment with great opportunities ahead in a new golden age of travel, and we're more confident than ever that our team is poised to deliver in 2023 and beyond. I'll turn the call over to Kevin to give a little bit more detail on the quarter and the expectations for the full-year. Thanks, Chris. Good morning, everyone. During the quarter, system-wide RevPAR grew 24.8% versus the prior year on a comparable and currency-neutral basis and increased 7.5% compared to 2019. Growth was driven by continued strength in leisure as well as steady recovery in business transient and group travel. Strength over the holiday travel season also benefited results. Adjusted EBITDA was $740 million in the fourth quarter, up 45% year-over-year and exceeding the high end of our guidance range. Outperformance was driven by better than expected fee growth, particularly in the Americas, Europe, and the Middle East, as well as roughly $30 million in COVID-related government subsidies, which benefited our ownership portfolio. Recovery in Japan following borders reopening in October also contributed to strong performance in ownership. Management and franchise fees grew 31% year-over-year, driven by continued RevPAR improvement. Good cost discipline further benefited results. For the fourth quarter, diluted earnings per share adjusted for special items was $1.59, increasing 121% year-over-year and exceeding the high end of our guidance range. Turning to our regional performance, fourth quarter comparable U.S. RevPAR grew 20% year-over-year and increased 8% versus 2019. All three segments showed quarter-over-quarter improvement as compared to 2019, with performance continuing to be led by strong leisure demand. Both business transient and group RevPAR recovered to above 2019 peak levels for the first time since the pandemic began, driven by continued recovery in occupancy and strong rate. In the Americas outside of the U.S., fourth quarter RevPAR increased 53% year-over-year and 25% versus 2019. Performance was driven by strong leisure demand over the holiday travel season, particularly at resort properties, where RevPAR was up over 60% versus peak levels. In Europe, RevPAR grew 67% year-over-year and 20% versus 2019. Performance benefited from continued strength in leisure demand and recovery in international inbound travel, particularly from the U.S. In the Middle East and Africa region, RevPAR increased 26% year-over-year and 34% versus 2019. The region benefited from international inbound travel during the World Cup in Qatar. In the Asia Pacific region, fourth quarter RevPAR was up 29% year-over-year and down 19% versus 2019. RevPAR in China was down 37% compared to 2019, taking a step back quarter-over-quarter as loosening travel restrictions led to a surge of new COVID cases. Demand is expected to gradually recover throughout the year, but remains volatile in the near term due to rising infections. The rest of the Asia Pacific region saw significant improvement, with RevPAR excluding China up 8% versus 2019. Performance was largely driven by strength in Japan following borders reopening. Turning to development. For the full-year, we grew net units 4.7%, modestly lower than expected, largely due to the ongoing COVID environment in China, which weighed on Q4 openings. Conversions accounted for 24% of our gross openings for the year. Additionally, our pipeline grew year-over-year, ending 2022 at more than 416,000 rooms, with nearly 60% of those located outside the U.S. and roughly half under construction. Looking to the year ahead, despite the near-term macroeconomic uncertainty, we are encouraged by the robust demand for Hilton branded products in both the U.S. and international markets. For full- year 2023, we expect net unit growth of between 5% and 5.5%. Turning to the balance sheet, in January, we completed an amendment to our revolving credit facility to increase the borrowing capacity under the facility to $2 billion and extend the maturity to 2028. As we look ahead, we continue to remain confident in the strength of our liquidity position and financial flexibility. Moving to guidance. For the first quarter, we expect systemwide RevPAR growth to be between 23% and 27% year-over-year. We expect adjusted EBITDA of between $590 million and $610 million, and diluted EPS adjusted for special items to be between $1.8 and $1.14. For full- year 2023, we expect RevPAR growth between 4% and 8%. We forecast adjusted EBITDA of between $2.8 billion and $2.9 billion. We forecast diluted EPS adjusted for special items of between $5.42 and $5.68. 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 fourth quarter, for a total of $123 million in dividends for the year. For full-year 2022, we returned more than $1.7 billion to shareholders in the form of buybacks and dividends. In the first quarter, our board authorized a quarterly cash dividend of $0.15 per share. For the full-year, we expect to return between $1.7 billion and $2.1 billion to shareholders in the form of buybacks and dividends. Further details on our fourth quarter and full-year 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 with as many of you as possible, 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 is from Carlo Santarelli with Deutsche Bank. Please go ahead. Hey, guys. Thank you, and thanks for all the color you provided. Kevin or Chris, whoever wants to kind of tackle it. Obviously, you know, given the strength in the first quarter and acknowledging there's seasonality and it doesn't flow this simply, it does look like at least for the back half of the year, you guys are looking at a flattening out. Of RevPAR. Could you more or less frame kind of how you're thinking about the back half from a macro perspective? You know, what's more or less embedded in your guidance as it relates to the economy? I mean, listen, you can see in the fourth quarter. First of all, thanks for the question. I think that is the $64,000 question on everybody's mind. I mean, you could see in the fourth quarter we had really good strength across all the segments. We're, you know, early in the year, in the first quarter we continue to see that strength continue, you know, in substance relative to 2019. Obviously, versus 2022, it's way up because of the Omicron impact. You know, we continue, you know, from a fundamentals of the industry point of view, to feel very good about things. I mean, if the fundamentals are supply and demand, you know, that's what ultimately drives the result. The supply side is quite muted. We're, you know, currently experiencing, using the U.S. market, which is our biggest market, as an example, you know, equal to the lowest levels of supply that we've seen. Thankfully, we get more than our fair share, but overall in the market, very low levels of supply, and that continues to be met. With very strong demand. We have not seen, for the record, any weakening. We have not, you know, we haven't, like, seen any telltale signs. There's no threads of, like, any of our major segments sort of backing up. What I think is driving that is, you know, some both cyclical and secular sort of tailwinds. You know, first, you know, you continue to see consumers, shifting how they're spending their money, so maybe they're spending a little bit less, but how they're spending it continues to be shifted more towards experiences. We're, you know, sort of exhibit A on the experience side. The international markets are opening up. You know, You're starting to see, you know, not just inbound to the U.S., but across the world, people traveling. Asia-Pacific, you know, is opening up, you know, pretty fully. It will take a little bit more time. We saw that happen in Japan in the fourth quarter, which raged. You know, we had very strong results, we get the full benefit of that. China is obviously going through sort of what we went through, you know, 12- 18 months ago with herd immunity and the like, you know, our view is that's happening quite rapidly on the ground. You're already starting to see significant travel within China, in terms of uptick, we expect, particularly in the second half of the year, you're gonna have a big tailwind from that. There continues to be, you know, broader pent-up demand across all segments. I mean, you could argue in the leisure side, some of that has, you know, you know, the people have been doing a lot of it, but we don't see them slowing down, so we continue to think people, partly 'cause of the shift in, as I mentioned, towards experiences, we continue to see strength there. You know, on the business transient side, still good demand, very strong demand and growing demand. Lots of pent-up demand. As I mentioned in my prepared remarks, we finished, you know, the second half of last year on the group side as people really got comfortable we were through COVID and they could start planning events. They've been planning them like crazy. You know, even the biggest groups, all the association stuff, that really starts to hit in the second half of this year 'cause of all of the planning. Some of that's happening. I've been at a lot of big events, speaking at them lately. The group demand, which I think is pretty resilient, just 'cause people have gone years without doing things that they need to do for survival, is pretty resilient. Those, you know, those are, you know. The economics of supply and demand are really good. To be specific, you know, Carlo, and a very fair question, when we've given you a range of 4-8, what did we sort of build into it? I mean, part of the reason that you're suggesting a flattening or detail is because let's be honest, it's math. I mean, we're gonna be way up. You saw our guidance for the first quarter. The world was partly shut down, you know, in the first quarter of last year. That's just a comparability issue. We have anticipated, right or wrong, we've tried to be conservative, that the second half of the year you'll see macroeconomic conditions slow. If you were to categorize it, I would describe it as we have assumed in the second half of the year sort of a plateauing related to what we think will be a moderate recessionary environment in the second half of this year. That's what we have sort of built into what we've suggested to you in the numbers today. Great, Chris. Thanks. That's super helpful. Just one follow-up. As you guys think about 2023, and obviously some projects that likely were slated for the fourth quarter, as you mentioned, kind of slipping into 2023, as it pertains to conversion activity as a percentage of the unit growth this year, would you think that 24% is better, or would you think it's higher or lower than that 24% that you experienced in 2022? Yeah, Carlo, we think it's gonna be higher. I mean, a couple different reasons. One, conversions continue to be more important as the, as the world gets a little bit tougher, although those conditionings are loosening. It has been tougher for new construction, as you know, so conversions become even more important. Spark, as we've talked about in our prepared remarks, is a 100% conversion brand. We don't think there's gonna be a ton of those introduced, you know, this year, but by the end of the year, we'll start delivering those, and that'll drive a little bit higher level of conversion. The way we think about it, we don't guide specifically, but, you know, higher than that 24. Say, probably 30% or higher for the year. Sounds good. Thank you, Kevin. All right, see you guys. Thank you. The next question will be from Joe Greff from JPMorgan. Please go ahead. Good morning, guys. Morning, Joe. I just wanted to see, Chris, if you could talk about what's embedded in the second half of this year's guidance with respect to U.S. occupancy and pricing changes on a year-over-year basis? Yeah. I mean, I'm not gonna get highly specific 'cause we gave you a range, and it would be hard to, you know, do the range that way. I would say directionally, the way to think about it is that occupancy sort of flattens out. We don't believe in, at least in the numbers we're giving you, we don't anticipate that occupancy even gets back to 2019 levels. RevPAR levels, we think, throughout the year will be higher because of rate integrity. For all the reasons I described in my filibuster off of Carlo's question, we do continue to believe we will have good pricing power, you know, at least through this year, simply because there's no capacity addition really coming into the market. You asked the question about the U.S. market, and we do have these both cyclical and secular tailwinds that, you know, that are giving us increases in demand that we think are gonna allow us to continue to have pricing power. We're not assuming in the second half of the year that that pricing power is increasing. You know, I would say we assume it's flattening or maybe even modestly lower to get, you know, to get to the ranges in numbers that we've suggested to you. You know, on the occupancy side, you know, if the world's better than everybody thinks, there may be some opportunities. Again, we've, you know, at a very high level, we've assumed not a crash landing, sort of soft to bumpy landing, you know, in the U.S. with a, you know, with a moderate recessionary environment in the second half, but with some structural things that are going to help the business globally that I talked about and help the business in the U.S. in terms of spending patterns, group demand, and pent-up demand on certain categories of business travel. Great. Just as my follow-up, Chris or Kevin, when you think about the fees not related to RevPAR growth in the franchising and licensing line, specifically the credit card fees, as well as, you know, royalty fees coming from timeshare, do you think that grows in line with RevPAR, or how are you thinking about how that changes over the course of this year versus last year? Yeah. Joe, I think, look, historically or not historically, over the last few years, it's been less volatile, right? If, if RevPAR was up 45%-ish for the year this year, you know, those fees were up something less than that, although still very robustly. You know, HGV is public, so you can look at what they've grown when they report. I think in a more normalized RevPAR environment of 4%-8%, they should grow, you know, they should grow slightly high-- they should grow at a rate that's better than the overall business. You know, largely dependent on spend. Although, you know, our credit card program set a record for spend in the fourth quarter and for the full-year. It was spend about 50% higher than it was even in 2019. That program is doing quite well, although it should be, you know, it should grow better than RevPAR over time, but it'll be a little bit less volatile than it's been just given what's been going on in the world. Thank you, guys. Sure. The next question is from Shaun Kelley from Bank of America. Please go ahead. Hi. Good morning, everyone. Morning. Chris or Kevin, just maybe we could talk about the development side. I mean, obviously, the kind of shifts from China side, the overall outlook on the construction starts remains robust, and, you know, we just continue to get a lot of investor concern about, you know, the ability of developers to finance, you know, new projects. How has that changed with the interest rate environment or the economy? How did your conversations go, you know, kind of throughout the quarter? And then, you know, if you could talk, maybe dig, as my follow-up, dig a little bit deeper into Spark. There's been a bit of concern or question in the past about kind of going further down in the chain scales, and just hoping you could unpack that a little bit for us. Why is right now the opportunity set, you know, right for moving into the premium economy space? Yeah, sure. Shaun, thanks. I'll start with sort of maybe the construction trends more broadly and then maybe hand it off to Chris to cover Spark a little bit. I think what you've seen. Look, there's a lot of puts and takes, right? You're talking about the interest rate environment and availability of capital, and obviously rates are a lot higher than they had been, and availability of capital is a little bit, you know, more constrained, but there's still plenty of money available for the right projects in the world. If you think about what's going on at the local and regional bank level is different than what's going on at the money center banks in terms of capital constraints and things like that. You have some, you know, you have some headwinds, as we would say, in terms of construction costs coming down. They're still higher than they were in 2019 by about 20%-30%, but that's off of peaks and moving in the right direction. As we've been talking about, the fundamental environment gives people more confidence that, you know, when they develop the hotel and it opens, it will perform at a higher level than maybe it otherwise would have. Their pro forma goes up. You sort of put all that in the gunkulator, and that's why starts started to build in the U.S. and ended up higher in the U.S. last year than they were the year before. Depends on where you are in the world. Obviously, it was really difficult. Not only was it difficult to get hotels open/impossible in China at the end of the year because literally the offices that gave you your certificate of occupancy were closed. That's why you saw a little bit of softness in our NUG. That same environment is going on in starts. If you're in China, you know, starts have been behind. We think starts are gonna continue to build from here. You know, the fundamental setup does give developers optimism. That, you know, and the way they're thinking about it, they can absorb, not in all cases, but in a lot of cases, they can absorb a higher cost of their construction loan and thinking that the world will be in a better place when they open the hotel, it will perform better, and that when they roll their construction loan into a permanent loan, that hopefully the rate environment will be a little bit more normalized. Those are sort of some of the puts and takes of what's going on in the world. Supporting that, I'll talk about Spark. You know, when we talk to our owner, I would say at this point, the majority of our system are making more money. Each individual hotels are making more money than they were at the peak of 2019. That's driving optimism. The reason they're making money is more efficiencies, higher margins. Obviously, rate integrity and pricing power has helped that. You know, they've got the bulk of the portfolios is producing more free cash flow than it ever has, and this is the business they're in, and many of them are quite, you know, good at finding the money in a local and regional context as they have decades-long relationships. As Kevin said, that's why you saw in the second half of the year, we saw a inflection point where started to go up here in the U.S. and generally around the world. We think that trend, we don't see anything that suggests that trend is reversing itself. On Spark, listen, we spent a lot of time. We have, you know, the truth is, you know, we have been thinking about, you know, something in this space for a long, long time, you know, almost the entire time I've been at the company. We had a lot of... obviously, we've doubled the size of our brand portfolio, so it's not like we've been sitting around doing nothing. We had not entered that zone. Three years ago or so, we started to look at it and say like, you know, because it's a very big customer base, it's a huge opportunity to better serve our existing customers, but also an important opportunity to acquire new customers. If you look at that customer base, at least half, probably, I think, arguably, more than half of that customer base are customers that are early in their travel lives that are gonna grow up and do other things. The sooner you get them into the system and building loyalty with them, the better off you are. We, you know, as always, when we look at brands, it starts with a sort of a customer acquisition and a network, you know, continuing to build the network effect for our existing customer base. you know, we were confident, you know, when we started looking at it three years ago, that there was a lot of reasons to be serious about it. Comes the hard part of trying to figure out how do we engineer something at this price point that really works, that it works for customers, meaning that the experience they have with us is gonna be great, you know, friendly, reliable, consistent, and that we can apply the same magic, if you will, from a commercial point of view, you know, to our ownership community that we have in our other brands so that we drive superior performance to our competition. There's a reason we spent three years on it, because it's not easy. We think we figured it out. I would say, you know, and time will tell, this will be the most disruptive thing we've done in terms of brand space because it is very ripe for disruption. If you go look at hotels at this price point in this segment, you will find a very high beta situation in terms of the physical attributes. It's very hard to fix when you have a big system that's already out there. You'd say, "Well, this is all conversion." It is all conversion. What we did over the last few years is figure out with our supply management team, with our design teams, with our brand teams and everybody else in this company, how can we engineer a product where every single hotel, 100% of the time when it comes in the system, has been refreshed, everything that is customer-facing. We built it. We built the rooms. We put it in real hotels. We built the lobbies, and we brought customers in to say, you know, "Is this what you want? Is it different?" What will be different about this in this space and why I am not worried about it and why, frankly, I mean, it's not sexy, okay? It's not as sexy as lifestyle and luxury. But in terms of an opportunity to be a value contributor in the billions of dollars for this company and its shareholders, I'm as excited about this as anything else we've done, because from a customer point of view, we are gonna give them a high quality, consistent experience at this price point that does not exist in the market because of the way we've engineered the retrofit of these properties. This will ultimately take some time, but it can happen quickly. It'll be thousands. It's the biggest segment in the U.S. It's the biggest segment in Europe. I mean, it will be thousands. It should be over time, the biggest brand we have in terms of number of units. As I said, most importantly, it always starts with what is best for better serving our existing customers and acquiring new customers, and how do we do it in a way that owners will get a superior return. We think we have cracked the code. We will have to prove it. It will come to life quite quickly, as Kevin said. We will have Sparks open this year. Won't have a too terribly big impact on this year's numbers, but as we get into next year and beyond, we think it will have a meaningful impact. As I said, ultimately, I look at these as opportunities as a consumer-branded company to think about a new product at our scale, being able to be deployed at scale, deployed globally, and have the opportunity to be worth billions of dollars, you know, to our shareholders. I think this is checks all of those boxes. We're super excited. We're not nervous. We've done all the work. I hope we've proven at this point, given this is the 10th or 11th brand that we've created out of the ashes or out of the dust, that we're pretty good at this at this point. Thank you very much. The next question is from Smedes Rose from Citi. Please go ahead. Hey, good morning. I just wanted to ask you a little bit on the owned and leased portfolio. I think you mentioned $30 million of COVID-related subsidies, I think, during the quarter. I'm just wondering, should we just assume that those start to kind of dissipate as we go through 2023, or are they just all gone at this point, or how are you thinking about that? Yeah. I think, yeah, I think it's played through based on the programs that have been approved thus far in Europe. I mean, if there's maybe a little bit more to come through based on things we've applied for that, you know, haven't quite come through yet, a very small amount. Who knows if anything more will come, but we're not expecting any. Then, the thing I would say is, if you look at it on a normalized basis, 'cause remember, we had subsidies in 2021 as well, if you sort of pull all that out, the growth has been quite dramatic, and we continue to think that that portfolio will grow at a higher rate than the overall business this year. Great. Thank you. Then, Chris, I was just wondering if you could just touch on, you know, you mentioned the U.S. pipeline, and we all see what's happening there. Any change in the way that Hilton is thinking about, you know, using key money in order to maintain or grow share or potentially lend to developers at this point, or? No, not, no. As I commented on in my prepared remarks, and if you look at the whole pipeline, more than 90% of it has no key money, no financial support. We have not changed our view on that. If you look at the aggregate dollars in CapEx, you know, and you peeled out what we're spending in key money, actually, if you average last year and this year together, 'cause we had some things we thought would happen last year that are happening this year, it's actually lower than what we've been, you know, what we've been suggesting to everybody over the last couple of quarters. No, I don't... We still view the opportunity to grow as, you know, very strong without the use of our balance sheet, that ultimately is driven by what you would guess it is. Everybody investing in our portfolio of brands is doing it to get a return, our brands are the highest performing brands in individual segments. Overall, when you aggregate them together and people are continuing to want to invest with us in that way. A long-winded way of saying, no, we don't see anything. In fact, I think the trend line for us overall in key money, I'm looking at Kevin, who runs development too, so make sure he agrees with this. The trend line is down, meaning, you know, over the last couple of years, we've had a little bit of elevated key money in aggregate dollars 'cause, you know, during COVID, a bunch of things we had been working on a long time, you know, came together or some other people's deals blew up, and we were able to sweep in on some very strategic things, you know, at a moment in time. Those were lumpy, but, you know, we, you know, that we always have opportunities we're working on. I think those lumpy things, they're gonna be fewer of those lumpy things. I think, honestly, I think in an aggregate dollar sense over the next few years, the trend line is down, not up. Thank you very much. The next question comes from David Katz from Jefferies. Please go ahead. Hi, everyone. Thanks for taking my question. Just following on some of the earlier discussions about the thoughtful conservatism baked into the guidance. Could we talk about the capital returns a bit and just how you thought about pulling that together? Is that, you know, necessarily a kind of firm, you know, firm number in view of how the guidance is set up? You know, what could push that up or down going forward? Yeah, David, I have to say that, yes, it's a firm number. We wouldn't have given it to you. I assume that goes without saying. I can't help myself. Yeah, as of now, it's a firm number. That's what we think. It's a range for a reason. You know, there's a lot of year left and a lot could happen. I think if I did read your note this morning. I think I know where you're going with this is, you know, it is right now we're a little bit lower than our historic range of leverage. That range does assume effectively no borrowing for the year because we think that the borrowing. We don't like the borrowing environment right now. It's very choppy. Rates are higher than we're used to. You know, that assumes that leverage stays roughly flat to slightly down for the year. Yes, that's what the range of guidance and EBITDA will spit out for capital return. Again, recognizing that we're very high free cash flow business and we don't do, other than what we were just talking about with a little bit of key money and a little bit of capital, we don't do much else with the money other than pay a small dividend and use it for buybacks. That's the range for now. Yeah. The only thing I would add to all of that, I agree wholeheartedly. The only thing I would add to that is that's not, you know, our longer range views on the balance sheet and return of capital haven't changed. You know, we have been very consistent since the beginning of time, it feels like, saying we wanna be 3x-5.5x. We're at the low end or a little bit below the low end of the range for the reasons Kevin just described. We think that markets are choppy. They'll get better. Over the intermediate and longer term, we don't intend to run leverage at those levels. We would intend to be in the ranges, frankly, and we've said it on these calls, probably towards the high end of the range, in a more normalized environment or even beyond that. It's something that we would certainly, we've been asked and said many times publicly we would consider. We just need, you know, we're just looking for a little bit more stability in the debt markets. Obviously, as Kevin said, we don't have the need, and as I commented in my answer to the earlier question on key money, which is the primary use, you know, in terms of CapEx, we don't think we need a whole lot more. Any borrowing, you know, any re-leveraging or leveraging up, obviously, just affords us the opportunity to return even more capital. I think those opportunities will exist. We gave you what we think right now, and we'll see how the debt markets and broadly how the macro sorta shifts going forward. Appreciate that. Everything is well received since I misspoke on my question. I know you mean what you say. Can we talk about the new brand just a bit? Am I taking away from that the notion that you are fitting yourself into a space where there aren't necessarily direct competitors, or there are, and you believe you've come up with a better value proposition that will just compete better? I would say we don't think there are any real competitors. I mean, meaning that if we do our job, we're gonna sorta come in ± 20% below Tru, which would still probably be above, if you look on average, it will be above where most of the folks in the existing segment are. That's why, like we like to do, we're a branding company, you know, we've made up a segment. We've called it premium economy. Our view would be, you know, it is above the traditional economy space. It will price above, both because of the strength of our system, our commercial engines, loyalty system, and all those things, but importantly, 'cause it will be a better, higher quality, more consistent product. Got it. Thank you very much. The next question is from Robin Farley from UBS. Please go ahead. Great, thanks. My question and follow-up are both really sort of clarifications on earlier comments. Chris, you said you in your guidance, you were assuming that pricing power would flatten or even be modestly lower later in the year. I just wanted to clarify, were you saying the pricing power, like the rate of increase modestly lower or actually, you know, some rate actually lower? Just to clarify. No. Not rates actually lower, just basically plateauing, relative to 2019 in the second half of the year. Okay. Perfect. Thank you. On the occupancy, you mentioned that your guidance, you're really not even getting back to occupancy in 2019. I'm assuming that's just sort of a matter of time and that you would expect to be there by 2024. Are you know, do you have a view about? Yeah. I mean, I honestly, I think it may be a bit of conservatism on our part. I do think we can get that. By the way, Robin, we could get back there tomorrow if we wanted. We could dump rates. I know. Yeah. Yeah. We could occupy ourselves up. We don't wanna do that. We're actually manage, as you can see with the rate growth, we are trying to manage in this cycle, particularly given the environment, inflation and everything else, really effectively to drive the best bottom line results for our owners. In this case that, to a degree, our occupancy levels are driven by pricing strategies. Okay? Some of it is still, you know, I think there is more recovery and more pent-up demand, particularly business travel and the group segment. I absolutely believe there's never been a cycle that I'm aware of that in recorded history where we will not go above prior occupancy levels. I think that we will. It may happen this year. Honestly, if we continue to have pricing power, I kinda hope it doesn't, and I hope it happens next year because it means we, you know, that we continue to be able to drive rate and thus higher margins and more profitability for our ownership community. Great. Thank you. Just my other clarification on your net unit guidance. From the comment in the release, I guess I'd kind of understood the sort of the coming in just under 5%, the COVID delays in China, that it was maybe some openings that were sort of pushed past December 31 in China that would maybe make then Q1 opening sort of ahead of the full-year number. In your comments, you made a comment about starts in China being behind. I guess I just wanted to get some clarification on whether it was just, you know, openings delayed by a few weeks or sort of a broader issue with the unit growth in China, you know, if starts are also behind. Thanks. I think it's both, Robin. I mean, the environment is creating a drag both on. It created a drag in the fourth quarter on openings and also has created a drag on starts because it just broadly when they reopen and then you know, before it was lockdowns, now it's they reopen and everybody gets sick, but the net result is that business activity comes, you know, is a drag on business activity. So signing starts and opens, we're all affected by it. We don't think it's a long-term trend in China. We think it's timing. Yes, by definition, if we, as I said earlier in the Q&A, if there was an environment where you literally have a completed hotel that can't open because it can't get a certificate of occupancy, we don't give you quarterly guidance. We're not gonna get into like when those hotels are gonna open, but I think you can assume they're gonna open on a delay. Okay. All right. Great. Thanks very much. Sure. The next question is from Richard Clarke from Bernstein. Please go ahead. Thanks. Good morning. I guess if I stare long enough at your release, I find one negative number, which is the pricing's down year-on-year for the Waldorf Astoria? Is there any particular pricing pressure at high-end hotels you're seeing or is that mix? Maybe more broadly on pricing, I guess what I observe is you seem to have taken a little bit less pricing than some of your peers, your occupancy's recovered a little bit quicker. Would that match what the strategy has been, and does that give you maybe a few more buttons you can press on pricing further through the recovery? First of all, on Waldorf, there's no there there. That's driven by individual hotels. Just, you know, the Waldorf brand, unlike our other brands, is not so many hotels that one dynamic in one particular market or two markets will drive it. We're not broadly seeing slowdown in luxury. To the contrary, we're continuing to see great strength. I'll pitch the second part of that to KJ. Yeah, Rich, I'm sorry. I didn't. Maybe a little bit of clarification on the second part. I'm not fully understanding where you were going with that. I'm sorry. Sure. I guess when I look at your pricing relative to the market, relative to some of your closest peers, it seems you've increased prices a little bit less than some peers and your occupancy's recovered quicker than some peers. Is that in line with your sort of central strategy? No. Our market share is up across the board, right? We're driving better revenue outcomes than our competitors. You may be looking at individual, I don't know what you're looking at in terms of our competitors or individual sort of spot rates for year-over-year. We'd be happy to look at. Yeah. The simplest way to look at system-wide last year, we finished in share at the highest levels in our history, and we gained share both in rate and occupancy. But those numbers across the system would not support that theory. Okay. Thank you. maybe just a quick follow-up. The reasonable size adjustment in the net other expenses from managed and franchised, the pass-through cost, that had been negative through the rest of the year, looking like maybe you were clawing back some of the losses through COVID. Just wondering if there's some specific program that's pivoted that the other way in Q4. No. There's always timing issues in terms of those line items. In the end, in the end, we have revenue and all of our various funds and programs are gonna run break even over time, and then you're just seeing timing issues on the P&L. Okay. Very clear. Thank you. The next question is from Chad Beynon from Macquarie. Please go ahead. Morning. Thanks for taking my question. Wanted to ask about the tight labor market that we continue to hear about in terms of the from the Fed's reporting. Obviously very strong in the experiential category on travel and lodging. Do you believe this has peaked when you talk to, you know, your partners, kind of your builders? What are they saying just in terms of the labor market? Secondarily, how does that factor into how you're thinking about, you know, IMFs and kind of profits in the back half of the year, if it hasn't? Thanks. I mean, the labor market situation has eased a lot. I mean, listen, we employ a lot of people. We operate a lot of hotels. As I talk to our team, but beyond that, talk to our franchise community, I think they would say that broadly, we are not fully back to, you know, the, you know, where we were in terms of access to labor, but we're getting awfully close. You know, if it was a on a scale of 1 to 10 a year ago, a 10 in terms of extremis, you know, it's a four or a five. I mean, it was something we were talking about every single day, every conversation, and it is not quite as topical, which is a good indication. I think the labor situation is easing. You continue to see, you know, across a broad universe of other industries, notwithstanding what the Fed is saying, a lot of layoffs, including, you know, of course, through technology, but through banking, also through retail, where people had really staffed up, you know, thinking that the COVID retail demand was gonna be maintained, and it hasn't. You know, there are a lot of people that are getting pushed back out into the job market, and that's affording us the opportunity to get the labor that we need. You've also seen while wage rates went up a lot during COVID, you know, a net from 19 to now, you've seen that start to stabilize, and those kind of big increases are not continuing. They're at a higher absolute level, but the rate of increase has diminished substantially. In terms of how we think about IMF, we feel good about IMF. I think, you know, for the year, we expect IMF to add significantly to the growth rate. We think this year, we expect that it will get over our prior high water marks of nine. Great. Secondly, just in terms of FX, the dollar has weakened a little bit against kind of the basket of the non-U.S. currencies. How are you thinking about an operational impact from that? Also, as that kind of feeds into guidance, is there a translational impact with just a slightly weaker dollar, versus what you saw in 2022? Thanks. You know, operationally, obviously, it has effects in each individual market where, you know, you're pricing labor in those currencies. It's a very small headwind, you know, single-digit millions of dollars headwind in this year's numbers. Appreciate it. Thank you. Sure. The next question is from Bill Crow from Raymond James. Please go ahead. Hey, good morning, guys. Thanks. Hey, Bill. Chris, as you think about Good morning. You talked about the strength of leisure in the fourth quarter and all of last year. When you think about leisure demand this year, how would your RevPAR 4%-8% growth for the year, how would that leisure be in that range or there's a lot of concern that it's gonna be, you know, significantly below that? I think we do think it would be within that range. We continue to see strength. We do expect, like all the segments, that you will see some plateauing as a result of a slower macro environment in the second half of the year. We still feel very good about it. The demand trends here and now are really strong. While there's a lot of noise out there, if you go back, we've, you know, just went back and looked at the number. You know, consumers still have incremental savings in the U.S. relative to the month before COVID of $1.5 trillion. That peaked at, like, $2.7 trillion. It's down to $1.5 trillion. They are spending it, and they're probably reading the papers and watching the news and getting more nervous. That would, you know, be a behavior set that would say that maybe they pull back a little bit. The reality is we're not seeing it. I think part of the reason we're not seeing it, okay, and time will tell, is because of the phenomena that I described earlier in the call, which is they're shifting their spending. Not only do they still have incremental savings in their pockets and feel reasonably good, but they're spending a lot more of it at bars and restaurants and travel as a percentage of their overall spend. You know, we have anticipated, like all segments, that there'll be a little bit of, a little bit of a headwind in the second half of the year. We do expect leisure to be in those ranges. Yeah. Thanks. If I could address my follow-up question on Spark, which is really an intriguing product. Does it kinda take care of two problems that are out there for the industry? One is obviously a lot of deferred CapEx over the last several years, but the other one is the age of select service hotels, Hampton Inn, what started in 84 or 85. We're dealing with hotels coming up on 40 years old. Is that part of the thought process is that you've got a lot of hotels that could ultimately fit within that brand? Listen, it is an ancillary benefit on the margin, meaning if we do have older Hamptons like other third party products that we think aren't fitting for Hampton, as you know, we've been quite disciplined in keeping the Hampton brand the strongest brand in lodging, in my opinion, by pushing properties out that are past their prime and don't make sense in the system. There, I think over the next 10 years, there is some percentage of those that, you know, that we will certainly look at keeping in the system. I think in the end, Bill, it will be a very small percentage of the overall system. If I look at the deals that we have in-house right now, 98% of the deals we are processing right now are third party brands. There are a few Hamptons in there. There's no other Hilton brands in there, you know, but there are a few Hamptons. You know, I would say it's an ancillary benefit on the margin. A lot of those hotels, frankly, you know, over time, are gonna exit the system as we've been doing for time and eternity. Great. Thanks for the time. Yep. The next question is from Patrick Scholes from Truist Securities. Please go ahead. Hi, good morning. It's Greg Miller on behalf of Patrick Scholes. Congratulations on what appears to be another successful thus far. Hey, Greg, can you hear us? You're. We can't understand what you're saying. Your connection is super garbled. Apologize, sir. We'll have to move on to our next question. That next question is from Brandt Montour with Barclays. Thank you. Hey, good morning, everybody. Thanks for taking my question. Actually, just one from me, Chris and Kevin. In terms of development and more medium to longer term, sort of net unit growth, and I, you know, your comments were well taken, Chris, on a couple of years. The world seems to have gotten a bit better for you though, right? Since 3 months ago, right? In terms of the speed at which China's reopening now, the excitement over Spark and then, you know, U.S. starts continuing to get a little better. I guess the question is, do you feel a little bit better about getting back to the 6 to 7 NUG than you did 3 months ago? Are we potentially even playing for maybe hitting that run rate in late 2024? Look, I think we said what we said for a reason, Brandt, not to, not to be sort of cagey about it, but there's a lot, you know, there's a lot can go one way or the other in the world. We still feel great about getting back to 6% or 6%-7%. I don't. Chris may have a different view. I don't feel differently today than I did three months ago about that. I think the world's coming our way a little bit, but we don't expect none of these things stay constant, right? I mean, these trends will change, and we always think the world's gonna come our way. I don't feel that much better three months from now. I, you know, I, you know, I'm probably more optimistic by nature than Kevin. That's our roles. No, I think we feel the same. We felt pretty good about getting back to it a quarter ago. I agree in the sense we don't feel differently. I think we were asked on last call, what is it, what does it look like, you know? We said it looks like, you know, you get this terra firma with a, with a view on the U.S. economy either in recession or out, you know, where people have a little bit more certainty. I don't think we've accomplished. That hasn't really changed. We said China, okay, you know that we gotta get China back and reopened. While it's not fully reopened, it's happening. I think on the, on the margin, we feel better about that. We in our heads had Spark, but we didn't tell you about Spark. We now have Spark there, and I think that provides, no pun intended, a little bit of spark to the, you know, to our progress in getting back there. You know, we felt pretty good about it a quarter ago. I think we feel pretty good about it now. Excellent. Thanks so much, guys. 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. Thank you, Chad, and thank you all for joining us. As you can imagine, or I hope you would imagine, we're pleased with the state of the recovery. Fourth quarter numbers are great. While we're, you know, sentient and watching the macro trends, you know, we feel very good about what we're seeing right now in the business and advanced bookings and all the things that, you know, sightlines that we have into the business. We think we're gonna have another really good year, and we appreciate the support. We appreciate the time. We'll look forward to catching up with everybody after the first quarter to give you more sightlines into what we're seeing then. Thank you, and have a great day. Thank you, sir. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.