Hyatt Hotels Corporation (H) Q4 2013 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2013 Hyatt Hotels Corporation Earnings Conference Call. My name is Philip, and I'll be your operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Atish Shah, Senior Vice President of Investor Relations. Please proceed.

Thanks, Philip. Good Morning, and thank you for joining us for Hyatt's Fourth Quarter 2013 Earnings Call. Here with me in Chicago is Mark Hoplamazian, Hyatt's President and Chief Executive Officer, and Gebhard Rainer, Hyatt's Chief Financial Officer. Mark is going to start by making some brief remarks, and then we will read and respond to questions emailed to us this morning. Finally, we will take live Q&A towards the end of the call. Let me remind everyone that certain statements made on this call are not historical facts and are considered forward-looking statements. These statements are subject to numerous risks and uncertainties as described in our Annual Report on Form 10-K and other SEC filings, which could cause our actual results to differ materially from those expressed in or implied by our comments. Forward-looking statements in the earnings release that we issued this morning, along with the comments on this call, are made only as of today, February 14, 2014, and we undertake no obligation to publicly update any of these forward-looking statements as actual events unfold. You can find a reconciliation of non-GAAP financial measures referred to in our remarks on our website at hyatt.com under the Press Release section of our Investor Relations link and in this morning's earnings release. An archive of this call will be available on our website for 90 days and a telephone replay of this call will be available for 1 week per the information included in this morning's release. Also, I would like to remind everyone that we are holding an Investor Meeting in one month, on Friday, March 14 in New York City. If you haven't already registered, we'll be sending out a reminder early next week. We expect a full house, so please look out for the reminder and register. We will look forward to seeing you on the 14th. And with that, I will turn it over to Mark to get started.

Thanks, Atish. Good morning, everyone, and welcome to our fourth quarter 2013 earnings call. Overall, 2013 was a strong year for Hyatt and one of our most active as well. And I'd like to cover a brief recap of the year. So adjusted EBITDA increased by over 12% compared to 2012. Our comparable owned and leased margins increased by 100 basis points. Management and franchise fees increased more than 11% over the prior year. We opened 51 new hotels, one of our highest expansion years on record, with meaningful, high-quality growth around the world in places like Paris, New York, Orlando, Austin, Omaha, Bangalore, Ahmedabad and Shenyang, to name a few. And we launched 2 new all-inclusive brands, Hyatt Ziva and Hyatt Zilara with a Hyatt Ziva Resort now open in San Jose Del Cabo and a Hyatt Zilara Resort open in Cancun. Our base of executed contracts for new hotels expanded to 240 hotels, or 54,000 rooms, the largest it has ever been. That represents a 20% increase over the past year, and of course, as calculated net of the openings in 2013 that I just mentioned. And we recycled a significant amount of capital, selling over $500 million of full and select-service hotels at attractive prices with new management or franchise agreements for each hotel. We also realized more than $400 million of cash proceeds from repayments of loan receivables and the sale of preferred equity and joint venture investments. We deployed over $1.2 billion of capital into acquisitions and other investments. We expect this investment spending to generate strong returns in the years ahead. We also returned more than $275 million to shareholders through our share repurchases. We repurchased shares at a weighted average price under $42 per share, and reduced our share count by more than…

Thanks, Mark. Now we'll start with the questions received this morning, and then towards the end of the call, we'll take your questions.

The first group of questions that we received was -- in terms of group business, and our outlook, so the first question was, please provide an update on group trends and general thoughts around propensity to hold group meetings. Is Corporate America getting more optimistic, or still cautious?

So I guess overall, as I've mentioned, total production and activity has been quite positive, and has been positive now for the last several quarters running. We've seen increased demand, both in corporate and association business. And overall, the -- as we look at the profile of the business being booked, we see healthy levels of business into '15 and '16. And as I mentioned during my remarks, the pace heading into '14 has remained steady, up in the low single-digit range. So overall, I would say that the trends and the profile are improving. Demand remains relatively robust. The profile, I can say that the -- in the quarter for the quarter bookings has been a bit more volatile quarter-over-quarter if you look back over the last 4 quarters, but overall, production levels remain high. So I can't say that we are definitively seeing a shortening of the booking curve in a definitive way. What I do see is relative strength as we look out 1 and 2 years from now.

Great. Second question on group, you seem to be adding large group hotels to your own portfolio. Should we expect more of this going forward?

Well, Orlando was a key addition to our network in the U.S., so there's no question that, that's an important addition for us. And what I would say is, convention hotels has been -- consistently been one of the 4 targeted areas that we've been looking at, but we've made great progress and we feel like we're well covered in the major group markets in the U.S. So as I look forward in time, my guess is that we will end up spending more time and focus on the other areas, which are gateway city hotels, resorts and urban select-service hotels.

Shifting ahead to trends on group. On the domestic full service side, were there any markets that were particularly strong? And what impacted renovation projects over the last year or 2 have on these group results?

Particularly strong markets for us were Dallas, San Antonio, and San Francisco. And the renos continue to progress well, especially in San Francisco, San Antonio and New York. When you look at the owned portfolio renovations, New York, San Francisco and some other renovations, they all positively contributed towards the results. The managed hotels, including markets like San Diego and Washington and Dallas. For example, if you look at the Grand Hyatt Washington D.C., which was renovated over the past year, that's a very, very positive for us given the market conditions. So overall, we believe we have great presence in key cities, in key markets and we have a refreshed product.

Great. Last question's on group had to do with our mix. So first question was, related to U.S. business, how much of it is group?

So group is approximately 40% to 45% of our U.S. managed full service room revenue.

And then the second question was, group mix for the owned business, particularly given the acquisitions?

The mix is approximately 40% to 45%. It's lower in owned hotels, full service hotels outside of the U.S. So worldwide, it's in the high 30s. The U.S. component is the higher component.

Great, thanks. Next question was on Playa resorts. How much EBITDA, if any, did Playa contribute in the quarter, and can you give us an update on future plans for Playa, including a potential IPO?

Sure. So in the quarter, the EBITDA recorded in our results from Playa were about $4 million. In terms of the future, this is a very active year for the company, a significant amount of renovation. I would describe it as a redevelopment of the resort in Jamaica as consuming a lot of time and attention. And so, there's a lot going on this year, and therefore, too early to really talk about a potential liquidity event relating to Playa.

Great. Next question is on margins. How should we think about flow through margins from RevPAR growth to EBITDA growth going forward, now that we are at peak occupancies?

So the way to look at that would be if you look at our U.S. owned occupancy levels, which are about peak, primarily due to strong transient demand, which means that range should continue to be the driver of RevPAR growth going forward, which should track improved sell through. We expect higher rate progression this year as our group base is strong and our corporate negotiated rates are increasing in the mid-single digit range. Our flow through on the mix of RevPAR, that is mostly rate, would be north of 60%. Additionally, it's worthwhile mentioning that we have the opportunity to drive flow through higher as group recovers, which drives higher-margin banking revenues as well.

Great. Next questions were on our acquisition in San Antonio. How much incremental EBITDA did you generate in the fourth quarter from buying out your partner in San Antonio?

So the answer is really very little, less than $1 million.

And second question is, why is now the right time to buy the San Antonio asset?

So first of all, the Grand Hyatt San Antonio is a great asset, so we've been very happy to be present in that hotel and managing it since it opened, and we're happy to own it. We've been a JV partner in the hotel for some time. In terms of timing and profile and so forth, of course, we as you've heard, were positive on the group outlook, but I guess more importantly, as we look at it, it's a JV interest, and increasingly, we'd like to either control those JV interests or sell our JV interests and we've done both. So we -- in Seattle, we sold some JV interest a couple of years ago. In this case, we bought out our partner and ultimately, the benefit for us is going to be to have full control over the asset. As we look forward in time at some point, we will look to include this in our recycling program, and having the flexibility to do that, is really the key issue.

Great. We received a few questions on our international business. First one was, what was China RevPAR in the fourth quarter, and what are expectations in 2014?

China was up approximately 5% in the fourth quarter of 2013, and full year, declined in the low single-digits. Growth in 2014 could be in the single-digit percentage range, based on stabilization and an easier comparable to prior results.

Second question, has Hyatt seen any impact on the pace of development for new hotels in China, given the government austerity measures?

Well, there's really been limited impact on actual openings or pace of development at this point. Our pipeline in China currently includes 60 hotels, so we've got a lot of activity underway, a number of them -- a large number for them are under construction, we have planned openings over the coming few years. And right now, very limited impact.

Last question on international business. Can you provide some additional commentary on trends in your international markets? Which markets contributed to the 1.3% RevPAR decline in Asia Pacific?

So first, the decline in reported RevPAR was primarily due to currency. We're up 4.2% in constant dollars in Asia Pacific, and the strength of the dollar relative to the yen was one of the primary drivers for the reported RevPAR decline versus constant dollar.

I also mentioned in my remarks that there was some continued drag from renovations for some of the Grand Hyatt Hotels, which is probably close to being in the range of about 100 to 150 basis points of RevPAR for the quarter.

Next category questions was on acquisitions and the transaction market. First question, what's the transaction market like, domestically and internationally?

I guess, overall, the environment for transactions remains healthy and high, lots of activity. And the -- there've been some larger deals, both on the buy-side and the sell-side, some portfolio deals and the like. And as we see -- as we have been actively engaged in a number of different places, we're also seeing some increase in activity in Europe. I think that has something to do with some activity on the part of the banks and other financing sources for existing properties. So the answer is, it's been very active, and it remains very active, and that's how we would expect to see 2014 unfold as well. I guess, the other thing, reflection I would make is that, over the past year, we've done deals with private equity firms, with private REITs and with public REITs across the board, and so we've seen activity in a number of different -- amongst a number of different types of buyers. And in terms of areas that we continue to look at, consistent with what we said over the last several years, we've really been focused on 4 targeted areas, as I mentioned earlier, gateway cities, resorts, urban select service and convention hotels. We've done a number of deals in each of these 4 areas.

Great. Are there any geographic markets that you are likely to target as you look for acquisitions?

There are a number of them. I had mentioned in the past that we continue to be active in gateway -- looking at gateway city opportunities in Europe. In the U.S., Miami and Los Angeles remain high priorities for us. And so I would say, among the 4 areas of activity, the key focus for us at the moment is gateway cities.

Great. We received a few other questions, so first one being, can you provide an update on the opening of the Park Hyatt in New York? Would you expect to put property level debt on this hotel? Can you update on depreciation guidance if it includes -- if it incorporates this acquisition?

Okay. So first of all, just by way of reminder, the way this deal is structured is a -- it's a commitment to purchase the hotel upon completion at a fixed price of $375 million. It's 210 keys, so about $1.8 million a key. We are a 2/3 joint venture partner in the JV that has the commitment to buy the hotel. In terms of depreciation, we did not include any depreciation in our outlook for 2014. At this point, we don't expect to be consolidating this hotel in our financial results for 2014. In terms of opening schedule, we remain focused on opening it mid-year. And in terms of financing for it, we do plan to go and seek property level debt, probably in the range of 50% of the total purchase price, so that's something that we'll be pursuing in the near future.

Next question, what's the timing of other development projects in the pipeline?

So I guess, if you mean on balance sheet, we have a -- projects in Rio, for the construction of a Grand Hyatt in Rio that we expect to open late in 2015. We have a number of select service joint venture investments in the U.S. and outside the U.S., so we expect to see openings over time over the coming -- including some openings in '14 and into '15 from those. And we've got a number of other investment activities underway, so the answer is, we'll continue to be active in using our capital base to find opportunities through JVs or otherwise.

Great. Next question, what is the $29 million in other income, and how should we be modeling other income in the future?

Well, other income inherently is difficult to model. As you know, we are an active investor, and we are active in our asset recycling. So in the fourth quarter, the return related to the New Orleans preferred investment and sale of the company's residual interest is reflected in other income. We have transaction costs in there and a number of other things and special items that are reflected in other income.

Okay. How much tax expense, if any, was related to the Hyatt Regency New Orleans investment and what was included in the tax line item on the income statement?

There was a $20 million tax included in relation to New Orleans, and this is really a reflection of the high state tax in Louisiana.

Okay, great. And our last question was on a new line that we provided in our fee detail, which is on Page 8 of the schedules. The question was, are you going to keep providing this? What was it by quarter historically and what's driving it? And so this line is other fee revenue. It's a new break out. We are going to provide this into the future. Historically, you could look at the fact book that we'll be posting on our website to see how that number has developed. What's in it is really termination fees and other more one time in nature type fees. That wraps up the questions we've received in advance. Philip, if we could queue up the live Q&A, and we can take our first question.

[Operator Instructions] And looks like our first question comes from the line of Joe Greff. Joseph Greff - JP Morgan Chase & Co, Research Division: Most of my questions have been asked and answered. Mark, towards the end of your prepared comments, you referenced being confident in your 2014 Group outlook. Can you just elaborate what you mean by that? And are you incrementally more positive on 2014 Group than say, your level from 3 months ago?

Sure. I would say, our overall confidence in Group has grown over the last several quarters. As I mentioned, the level of production has been really strong for the last several quarters. Total production has been up in the high single digit range over that period of time. I would say, '14 remains pretty steady in terms of our current outlook, in that our pace, looking into the next year is sort of up in the low single-digit range as it was a quarter ago. The thing that's evolving, though, is that the -- if I look at -- out into '15 and '16, pace looks incrementally stronger to me. So I guess, overall, my confidence level is higher and I'm encouraged to see the continued level of high production. And I do believe that we'll see good demand throughout '14. So I would describe, if I parse it very precisely, I would say my outlook specifically for '14 is probably consistent with a quarter ago. My overall outlook is more positive.

The next question comes from the line of Steven Kent.

Just following up on Joe's question. Just how much would you have booked at this time for 2014 on the conference convention front? So just if you could, just sort of say, how that progresses as you go out through the year? And then, as we've talked about many times with you before, other hotel companies are very clearly pursuing an asset light strategy, you're pursuing more of an asset recycling strategy. How do you, long-term, look at those opportunities as a seller, especially on the valuation front, because it looks like prices are so high right now that maybe the opportunity is more on the selling front rather than on the buying front?

So on the first, on the group front, we would expect to see 70% to 75% of the Group business booked going into the year, and that's about where we are. So it's consistent with prior years, and that's about the level. The -- in the quarter for the quarter business that's been booked has not been -- it's been consistently positive over the last few quarters, but it's gone up and down and part of that has to do with just some shifts quarter-over-quarter in terms of group activity and timing of holidays and the like. So it's not something that I can say, I've got to stay a consistent beat on, in the same way that total production has been consistently up in the high-single digits, but a lot of that just has to do with timing, I think. But again, consistently positive. In terms of our strategy, we've been very consistent about how we were going to approach our business. We laid it out 4 years ago in -- as part of our IPO roadshow, and we remained committed to it and dedicated to it, and I think all you have to do is look at the activity level. We haven't stated some kind of a long-term, 3-year goal for some level of activity, in terms of either dispositions or acquisitions. But if you look at our activity base over this past year and into this year, we have been extremely active. And so I think our actions can sort of stand on their own and speak for themselves. We've been able to get tremendous access to a number of different markets in some key properties through this activity base. And as I mentioned during my prepared remarks, the results of the big investments that we've made have been pretty solid. So overall, we're pretty happy with how things have gone. And concurrently, we've been able to return a significant amount of capital to shareholders. We've repurchased over $800 million of the stock over the last few years. So we have done, I think -- we've traveled a long way in terms of demonstrating the efficacy of our strategy.

But Mark, in the next, let's say, 12 to 24 months, do you think you're likely to become more of a net seller or a net buyer of hotel assets?

That's very difficult to say. We've been a net buyer, we were a net buyer this past year, a net investor, I would say, because not everything was a whole acquisition, but -- so that's been the case over the last couple of years. But as we mentioned, we are in the market with -- well, we just announced, obviously this hotel -- this sale -- the tenants held portfolio, not closed yet, just announced at this point and -- with RLJ, and we're pursuing the sale of another 9 full-service hotels. So we are -- we continue to look at disposition opportunities. At this point, very difficult to predict whether this year will prove to be as productive on the acquisition side. So difficult to say at this point.

Your next question comes from the line of Bill Crow. William A. Crow - Raymond James & Associates, Inc., Research Division: Yesterday, Starwood indicated that 2014 EBITDA would be negatively impacted by about $30 million from the sale of assets, either those announced over the course of 2013, or those that have been announced over the last month or so. As you think about all the sales that you've accomplished and your capital churn has been terrific, and all the acquisitions that you've also announced, including Orlando, can you provide any sort of ballpark estimate how we should think about the impact of 2014 EBITDA on a net basis, given the gives and takes. And if you're not prepared to do that, I'd certainly look forward to your event up in New York as an opportunity to provide that sort of information.

Sure. As of -- first of all, just by way of reminder for you and everyone else, we include a schedule every quarter that summarizes the impact of additions and subtractions in the portfolio, so you'll see that as part of our earnings release. And we've done that consistently. We'll continue to do it consistently quarter-over-quarter. We will provide an update on the announced deal, the 10 -- the sale of the 10 hotels once we close. We -- that's our bit -- it's been our practice in the past, that's what we'll do as we go forward. And then finally, on the other properties that are now -- for which we're now pursuing potential sale, I would say it really, obviously just depends on timing, which is impossible to predict at this point. So what we've been trying to do is be clear about the magnitude of the types of activity that we're engaged in, that's why we provided an approximate estimate for the total EBITDA associated with the full service properties that we're now pursuing -- investigating a sale of. But it's really very difficult to provide specific estimates of EBITDA impact until you know more about timing. And so our practice has been and will continue to be for us to update as soon as we are able to.

Yes, the only thing I would add is that the biggest drivers of the acquisition in Orlando will be in that $45 million of incremental EBITDA, Playa would be about $10 million this year versus last, and then San Antonio would be in the $15 million range as a positive. And then, you would have to deduct some of the sales we did last year, particularly the full service sales. So -- and that would be probably in the $20 million range. So net-net, it's a positive and we can walk through that in a little bit more detail, to help you get there.

Your next question comes from the line of Thomas Allen.

So we've been dealing with some pretty terrible weather so far this year. Did that result in any large groups canceling? And if they have, have they been rebooking for dates soon thereafter or has it been -- have they not rebooked?

A little bit of both, really. We've seen overall negative impact on some of our hotels because of weather, but at the same time, there was positive impact at some of the resort destinations and some airport location hotels. So at the moment, the net impact is really not material, but hard to predict as to how long this extreme weather pattern is going to go on and what the end result is going to be, but right now, it's sort of on both sides.

And then, New York is your -- is the city that you have most exposure to in the U.S. How is the Super Bowl -- how did that impact results and did it come in, in line with expectations, or better or worse?

So the Super Bowl was a bit mixed. I think there was some -- I think, given the weather on the day of the game, some overreaction in retrospect to the weather problems. And then also, by virtue of the fact that the NFL is actually headquartered in New York, the tick up from the NFL itself was lower than for cities outside of New York, which is also an interesting dynamic for the game. So I would say there was a bit of negative impact, but overall, really not very material.

Your next question comes from the line of Shaun Kelley.

So just wanted to ask a little bit more about just the overall capital recycling. So do you have higher level -- just because it's always difficult to predict exactly how this is going to come out. Where do you guys think we are in the cycle right now, in just kind of big picture terms, and how should we think about how that might kind of impact your buying and selling activity? Do you really think along those lines, or are you guys thinking so long term that, if you just find a good asset even late in the cycle, you just kind of have to jump on it?

So a couple of things. First of all, let's talk about -- let's break down the question a little bit, because if you think about operating results and where we are in that cycle, versus capital formation and third would be cost of capital, those are all dynamics that will impact level of activity and also attractiveness of activity. So I would say, on the operating results front, the evolution of the cycle has yielded continued positive momentum, and that's, that is, that remains the outlook for the industry. I think that a lot of that has to do with relatively more modest new supply in the U.S., which has been discussed a lot, so I'm not going to go back through that. On the capital formation front, a lot of capital has been raised in and amongst the types of buyers that we've been dealing with, private equity, private REITs and public REITs. And so there's -- there is capital available and demand. And cost of capital has actually remained very low. When you look at fixed rates based off of treasuries, treasuries have actually -- yields have declined since the beginning of this year. And so all of that bodes well for continued high levels of activity. For us, we've been active -- we have been active, we are active and we will plan to continue to be active through the cycle. Our view is less about trying to market time and be traders and rather think about the fact that we are going to be realizing value out of dispositions and investing capital in acquisitions or new investments at -- in relative close proximity, in terms of timing. So we'll benefit from higher valuation in the deal environment, both on the exit and it will impact our entry point. So we're really thinking about doing this, executing this over time and over the cycle. We do recognize that the activity level is quite strong and the valuations are good, which has obviously informed a lot of our selling activity. We've obviously been very active sellers. And we continue to pursue dispositions as we go into this year as we've talked about. So that's the way I would think about it.

Your next question comes from the line of David Loeb. David Loeb - Robert W. Baird & Co. Incorporated, Research Division: I wanted to ask, as you're approaching the sale to RLJ, you have exited and you're approaching the exit of a lot of the stuff that you purchased in Woodfin and LodgeWorks. Can you give us an update on how you view the returns so far in those investments?

Yes, we will absolutely happily do that once we close. I think it's appropriate for us to wait to do that and we will definitely go through that once that's happened. So we would -- assuming that the timing works out, we would plan to do that next month in the Investor Meeting. David Loeb - Robert W. Baird & Co. Incorporated, Research Division: And Mark, will that include a look at LodgeWorks in its entirety, since you still own a number of those assets?

Yes, it's interesting. So we can talk about operating results over time. It becomes virtually impossible to sort of do a "LodgeWorks comparison" once you start breaking up the portfolio, which we've already done. We've already sold 2 of the hotels this past year, the Andaz in Napa and the Andaz in Savanna, which were part of the acquisition. So we don't have a unified core body of properties that still exist that you can look at and say, oh, that's LodgeWorks. It becomes more challenging over time, but yes, we can absolutely give, I think some very good reference points on the progression of performance in those properties, how they've performed over time, and also specifically with respect to the Woodfin assets and the selected LodgeWorks assets that are part of the RLJ deal to provide more specifics about what kinds of returns we've realized over the ownership period.

[Operator Instructions] And your next question comes from the line of Harry Curtis.

Just turning to your share repurchase, can you give us a sense of whether the shares repurchased were A shares, B shares or some mix?

Over the course of 2013, they were a mix of Class A and Class B shares. And -- don't know if we've got a summary in the public domain. I guess you could -- try to remember what's actually been -- the specifics that we disclosed.

Yes, you can piece it together. I mean, if your question is with regard to this last quarter, or to date activity that we put in the release this morning, they're -- all of those were A shares.

Okay, all those were A shares. So is your sense and you may not know this, but is your sense that most of the kind of remaining family members are pretty satisfied, and are -- and will you -- is it less likely that you'll be able to buy B shares, going forward?

It's really impossible for us to predict that, Harry.

Okay. And then last question is, can you just give us an overall sense of when you do buy shares back and you balance it against your capital recycling or your asset recycling, how does share repurchase fit in?

It fits in pretty directly, and as a regular matter. So we've been very consistent about being in the market over a number of quarters now. And we view it as an important tool in our toolkit for how we think about total returns provided to shareholders, including returns of capital, and that's the way we will continue to look at it.

And our next question comes from the line of Nikhil Bhalla. Nikhil Bhalla - FBR Capital Markets & Co., Research Division: So my first question is about, can you just remind us what your exposure is through New York and Washington D.C.? I recall your [indiscernible] EBITDA before, but if you can just update us?

So we're having a bit of a hard time understanding you. I don't know if you are on a mobile or you can get closer to a phone. But I think the question you asked is, what is our earnings exposure to New York and Washington D.C, is that accurate? Is that correct? Nikhil Bhalla - FBR Capital Markets & Co., Research Division: That's correct, yes.

Okay, so in the earnings release, we provided a schedule that shows that exposure to -- this is for our owned and leased portfolio. Our exposure to New York is around 10% of our earnings, and in D.C., it's quite small. Is it even on the list of the top markets?

It's not on the list of the top market. So this is Page 15 on schedule. So this gives you a breakout for our owned markets. And what's the top market? So New York is 10%, D.C. actually is not one of our top 10 owned markets, but it is a big managed market for us, so...

Yes. So if you look at it on a managed basis, D.C., Chicago would be the markets in which we have the most exposure from a managed portfolio perspective. Nikhil Bhalla - FBR Capital Markets & Co., Research Division: Any way to quantify how much of the managed portfolio do you have in D.C. on the percentage of total?

I don't have a figure off the top of my head.

We can do that and get back to you with an exact number of what we finished out the year at, for that. Nikhil Bhalla - FBR Capital Markets & Co., Research Division: Okay. And then just one follow-up question. You referenced your base being very strong in 2015 and '16. Are there any specific markets that are driving that, or is it fairly broad-based at this point?

Yes. At this point, it's pretty broad-based.

Your next question comes from the line of Joshua Attie.

I remember on the last conference call, I think you mentioned that property taxes and rent increases were going to put pressure on owned hotel margins, kind of through the first half of 2014. Can you just update us on how to think about that?

Yes, I would say that remains the case. We'll end up effectively lapping the time that those changes came through, so it is -- so that remains accurate from what we said before, so through the first half is the way you should think about the drag. We did -- I did mention in my remarks what the impact of those increases were, which, if I remember off the top of my head, was almost 100 basis point difference in margin progression in the fourth quarter of last year.

Okay. And one question on Playa. It seems like the EBITDA forecast for next year has come down substantially, and there are some onetime items in there. But can you just address, has your overall view of that investment changed at all?

No, it actually remains positive, and our outlook is quite solid. Business is healthy, the resorts are doing well, a number of the resorts are undergoing a lot of renovation. Jamaica really is a very extensive renovation, it's practically a redevelopment and an expansion at the same time. So -- which is really consistent with how we went into the investment and what we expected to see. So overall, our outlook is quite positive, and remains consistent with how we've been thinking about it since we made the investment, and it's also true that we have a lower estimate for this year based on the things that I mentioned.

Currently, at this time, we have no further questions queued. And I would like to turn the call over back to Atish for closing remarks.

Great. Thank you very much, Philip. Thank you very much, everyone, for joining us today. We look forward to seeing you on March 14. Thanks very much for your interest in Hyatt. Have a good day.

Ladies and gentlemen, that concludes today's conference. Thank you, all, for your participation. You may all now disconnect. Have a wonderful day.