Good morning, and welcome to the Hyatt’s Second Quarter 2024 Earnings Call. All lines are in a listen-only mode. After the speakers remark’s, we’ll have a question-and-answer session. [Operator Instructions] Thank you. I would now like to turn the call over to Adam Rohman, Senior Vice President of Investor Relations and FP&A. Thank you. Please go ahead.

Thank you, and welcome to Hyatt's second quarter 2024 earnings conference call. Joining me on today’s call are Mark Hoplamazian, Hyatt's President and Chief Executive Officer, and Joan Bottarini, Hyatt's Chief Financial Officer. Before we start, I would like to remind everyone that our comments today will include forward-looking statements under federal securities laws. These statements are subject to numerous risks and uncertainties as described in our annual report on Form 10-K, quarterly reports on Form 10-Q, and other SEC filings. These risks could cause our actual results to be materially from those expressed in or implied by our comments. Forward-looking statements in the earnings release that we issued today along with the comments on this call are made only as of today and will not be updated as actual events unfold. In addition, you can find a reconciliation of non-GAAP financial measures referred to in today's remarks on our website at hyatt.com under the Financial Reporting 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. Please note that unless otherwise stated, references to our occupancy, average daily rate, and RevPAR reflect comparable system-wide hotels on a constant currency basis. Additionally, percentage changes disclosed during the call are on a year-over-year basis unless otherwise noted. With that, I'll now turn the call over to Mark.

Thank you, Adam. Good morning, everyone, and thank you for joining us today. I want to start by sharing my appreciation for our colleagues around the world who live our purpose every day to care for our guests, our colleagues, owners and each other. I've been very fortunate to visit with many of you over the last quarter, and I'm continually inspired by the power of care and what differentiates Hyatt from others, our people. Our purpose and execution of our strategy are evident in our operating results, which reflect record levels of fees, role of Hyatt numbers and raising our pipeline. This morning, we reported system-wide RevPAR growth of 4.7%, and as anticipated, group and business transient were our strongest customer segments in the quarter. Easter taking place in the first quarter of 2024 was a tailwind for group and business travel in April and a headwind to leisure travel. Leisure transient revenue decreased approximately 2% in the quarter, but was up 2% when excluding the impact of Easter, significant renovations at several key US resorts and our hotels in Maui, which were negatively impacted by the wildfires in Q3 of last year. Through the first six months of 2024, leisure transient revenue was up 2% compared to 2023 despite these temporary headwinds and we remained significantly above pre-pandemic levels. Looking ahead, transient pace for resource in the Americas is flat in the third quarter, excluding resorts under significant renovation, while pace for all-inclusive resorts is down slightly as demand in Mexico and the Caribbean reflects a return to pre-pandemic seasonality. Group room revenue increased approximately 8% in the quarter, the strong results in most US major urban markets during the months of May and June. Group pace for US full service managed properties is up 7% for the…

Thanks, Mark, and good morning, everyone. System wide RevPAR increased 4.7% led by increased business and group travel. In the United States, RevPAR increased over 2%, reflecting the timing of Easter and strong results from group business transient travel. Large corporate accounts contributed to both group and business transient travel, benefiting hotels in major urban markets. As Mark noted, we are lapping challenging comparisons in Maui due to the wildfires in the third quarter last year, and we have several resorts undergoing exciting transformational renovations. The Confidante is being rebranded as Andaz Miami Beach, while Hyatt Regency Scottsdale and Hyatt Regency Indian Wells will be rebranded under the Grand Hyatt brand later this year after extensive renovations. RevPAR growth in the Americas, excluding the United States, increased approximately 9% with notable strength in Canada and South America, while our all-inclusive properties in the Americas had net package RevPAR growth of 2% for the quarter. In Greater China, RevPAR decreased by approximately 3%. As a reminder, the second quarter of last year saw a dramatic recovery for domestic travel, and RevPAR surpassed pre-pandemic levels for the first time. We expected growth rates to normalize starting in the second quarter this year. However, unfavorable macro conditions, and greater outbound Chinese travel negatively impacted results in the quarter. Domestic travel was down 9% in the quarter compared to last year, with a notable impact on hotels in secondary and tertiary markets. While we saw a positive RevPAR growth in most major markets, this could not offset weaker demand in secondary and tertiary markets. Despite these pressures, we increased our RevPAR index by approximately 3% during the quarter, which is a testament to our strong brand recognition in China. Although domestic travel declined, we're seeing demand for travel from affluent customers increase. However, they…

[Operator Instructions] Our first question will come from Shaun Kelley from Bank of America. Please go ahead. Your line is open.

Good morning, everyone. Thanks for taking my question. I had sort of a two-parter on just what's going on in the leisure transient area. So Mark and Joan both, I think you mentioned this kind of throughout the script around kind of what you're seeing there. But can you just elaborate a little bit across the US specifically, in terms of patterns and how, let's call it, de-risked you think your outlook is from here, specifically on the leisure side? And then secondarily on that, could you comment specifically on, I think, some comment around the Caribbean and Mexico in the prepared remarks, Mark, I think you said something about return to pre-pandemic seasonality. And if we take barrel out of it. Just what are we seeing kind of on the ground in -- across ALG and the Caribbean and Mexico? Thanks.

Great. Thanks, Shaun. I'll start, and I think Joan will add some additional color. I would say that we are lapping some unusual periods last year. And so the results that we're reporting are -- when I say unusual results last year, I mean, both calendar changes and also significant demand in certain parts of the year. So what we're seeing is sort of evening out of demand over time. The disruption in airline traffic due to the systems outages was a unfortunate shock to the system. And -- but that was relatively short lived. Nonetheless, it did cause a lot of disruption in terms of bookings. And secondly, we have a few issues with respect to -- not issues, but just headwinds with respect to -- two major resorts under complete renovation at this point, plus the Maui issues that everyone knows about. Overall, I would say that the general level of demand has been maintained at a very high level, significantly above sort of the levels that we experienced in pre-pandemic times, and rate continues to be holding up, continues to hold up and expand slightly. So I feel like we are maintaining at a high level of demand this point. And I think our outlook is informed by -- what we think is going to be a somewhat tougher third quarter but a more robust fourth quarter. And that's based on the visibility that we have to schedules -- airline schedules heading into the fourth quarter and also overall demand that we're seeing in terms of bookings. The booking curve, though, really, it's like the wave curve for cruises. We really see a significant increase in October and November in terms of bookings into festive and the following year. So I think that we'll have a lot more information on the next quarterly conference call as to what those bookings are starting to look like and shape up to be.

Yes. And what I would add that, with respect to your question, Shaun, on what's happening in all inclusive in the Caribbean, we had a really strong first quarter double-digit growth in net package RevPAR. And in the second quarter, we had about a 2% increase. And if you look at over the first half of the year, that averages to about 7%. So really strong. And the first quarter, second quarter dynamic was impacted by the Easter holiday. As we look forward, Mark mentioned that in the third quarter, we certainly had those temporary disruptions in -- with the early hurricane and the system disruptions. But as we look forward into the fourth quarter, we're seeing pacing up into the festive season in the mid-single digits. So when you put that all together, we've got sustaining momentum on the leisure front in the Caribbean and our net package RevPAR and we think the full year will be about in that mid-single digit in that mid-single-digit range.

Just a quick add. It's 2% growth in the second quarter in the Americas. But if you look at the HIC portfolio, our own inclusive portfolio globally, it was up 3% because Europe continues to -- we're lapping strong results last year, but has strengthened from there. So we're really encouraged to see that as well.

Thanks so much.

Our next question comes from Joseph Greff from JPMorgan. Please go ahead. Your line is open.

Good morning everybody. Thanks for taking my questions. I have a multi-part question for you, Mark. Can you talk about what the recent trend lines are in China development and pipeline signings construction starts? How start of a difference is there between full service and select service hotel activity there? And maybe kind of put things in perspective, how much dependency on the 5.5% to 6% net rooms growth is China-related?

Sure. So first of all, China has been -- Greater China and Asia Pacific generally speaking, have been the highest producers of open rooms and also growth in pipeline. So the Americas and China together represent the majority of -- we have pipeline change that we've seen and also the openings. So we are continuing to grow faster than we're opening. But what we are seeing is not just openings, we're seeing great openings. We're seeing openings of high quality. We mentioned the Park Hyatt Changsha. We also just opened the Grand Hyatt Kunming. It's the 18th Grand Hyatt Hotel in Greater China -- I'm sorry in Mainland China. And so we really -- we've got some remarkable network effect going on amongst the highest end brands that we have in the country. So I've been actually super encouraged to see completions. Part of that is, frankly, not surprising to us because a majority of the owners that we're dealing with our state-owned enterprises. And I'm also -- I would just quickly point out that, the openings that we're talking about, we always say room is not room is not a room, a room. These are very high revenue hotels, it's not dominated by UrCove, even though UrCove is really healthy and continues to open at a good pace, UrCove being our upper mid-scale -- on the upper mid-scale segment in China. With respect to the impact of China growth overall on the annual energy, we'll have to get back to you on that. I don't have that off the top of my head. By the way, the signings also spell for, I would say, continued strength and a good platform heading into the future for Chinese growth. So overall, I'm pretty encouraged. There are a lot of -- there's a lot of headlines to sort through, and there's a lot of disruptions that you can see actually going on. It is relatively more impactful at lower chain scales. That's what we're seeing in China. Although some of our luxury hotels also -- in China have also seen some impact from the highest end Chinese consumers increasing their outbound travel.

Great. Thank you. And then just a quick follow-up. Joan, how do you plan to use the $500 million plus of proceeds from this -- close later this month asset sale? Obviously, you have enough liquidity and cash to take care of debt maturities end of this year to the end of 2025?

So, Joe, as Mark mentioned, we will announce any transactions when we close. And when we do that, we will update all components of our outlook that are impacted by the transaction, including shareholder returns. So, stay tuned for that announcement when we're ready to do it.

Thank you, guys.

Thank you.

Our next question comes from Dan Politzer from Wells Fargo. Please go ahead, your line is open.

Hey good morning everyone. Mark, I believe you mentioned that group was pacing, I think, up 7% in the second half of this year. Can you maybe talk about how it's pacing for 2025? And in terms of this year and next year, how much is on the books at this point and maybe give some historical context with how that's compared in the past?

Absolutely. I've been really taken with how strong group has been overall. It's both short-term and term and long the short-term vicinity, July was extraordinarily strong in terms of total bookings. Full -- sorry, full cycle, net production in the month was up 16%, a third of that was in the month for the year. So, we saw third quarter actually impacted by a very strong July booking activity base. August through December pace is up 6%, ADR is up 5% in the year for the year bookings. So, the bookings that we're getting are not just filling rooms at compromise rates. We are realizing great ADRs. For 2025, equally strong. ADR represents the vast majority of the plus 7.5% pace increase. Tentatives are running way ahead of anything we've ever seen at this time of the year ahead of 2025. So, we not only have great pace heading into next year, but we also have a swelling of tentative business that is really striking. The sales force is really taken growth [ph] ahead. And right now, we have about 60% of our total business on the books for next year. So that sort of addresses your other question. By the way, just as a quick note, pharma and tech are leading the way with respect to the July was dominated by pharma and tech. And all of our categories in terms of both association and corporate and across a number of different segments. I would add financial services to the pharma and tech comment, are all pacing well. So, we don't -- this is not like association has taken over and is pulling up on average. This is very, very well-balanced and widespread.

Got it. Thanks for the detail. And then in terms of the incentive management fees, Joan, I think you called out China, renovation, Maui, certainly headwinds in the back half of the year. But as we think about third quarter versus fourth quarter, should we see it start to grow again in the fourth quarter as you kind of get through some of those? Or should we expect this to be down for the remainder of the year?

Yeah. So with respect to fees overall, the change in our outlook that we provided reflects a 13% growth year-over-year. So I just wanted to reinforce that that point at the outset. And the change we made to our outlook at the midpoint, the $15 million, the breakdown between that is about 50% about 50% driven by our IMF and driven by basin incentive fee. And then also about 50% through China and what we're seeing there, the dynamic there in demand and the remaining by US and a little bit of FX that we're seeing. So it's concentrated in those two areas. And you saw the performance in the second quarter. So as you look at that and think about the rest of the year, we anticipate that we'll be performing better relative to last year in the second half as it relates to incentive fees.

And just to clarify, sorry, Joan, you said base in incentive, you meant base in franchise. So 50% incentive and the other 50% is the base in franchise fee based.

Understood. Thank you so much.

Thank you.

Thank you.

Our next question comes from Michael Bellisario from Baird. Please go ahead. Your line is open.

Folks, good morning, everyone.

Good morning.

Good morning.

One, two parter on net unit growth. You did about 1% net in the first half of the year were openings below your expectations? Or did you see any outsized deletions in the quarter? And then second part on the back half, just help us understand the puts and takes to get to the low end high end? And then could you also provide some more details on the -- I think you said potential portfolio transactions? Is that organic strategic deals or you're referring to potential brand M&A? Thanks.

Thanks. First of all, there were some terminations and they were not particularly outsized, but they did affect the first half. And as we look forward, we've got a pretty robust opening schedule for Q3 and Q4. But I would quickly add, in Q2, for example, our room openings were about one-third conversions. And we actually believe that we will end the year at closer to 50% of the total net rooms growth being conversions. And those are conversions that are known to us, but also some that are subject to completing some other transactions that we're working on right now. Since the first quarter of this year, I've been talking about the fact that we see a robust opportunity and real opportunities, not just theoretical to do portfolio deals. And sometimes that means doing a strategic partnership like portfolio deal like the Lindner Hotels deal, where we signed franchise agreements for all of their -- all of those hotels. Sometimes they come in the form of an acquisition of a brand or a management platform like we did with [indiscernible] hotels, just as one example. We have in the -- in sort of the hopper at this point, and we've been working on several that we feel really good about. Now it's now August 5 and whether we actually have everything closed and those hotels in the system to count as NRG at December 31 or sometime in January. I can't tell you that. But I don't either -- neither do I care because the point is not to make a particular date, it's that the overall rate of growth and our momentum is actually maintained. And so I've always said whether we have slippage into January or not is sort of irrelevant to me. You have to look at it on a smooth basis over time. And that's where we are. So we do expect more conversion activity. I would just add one thing. I don't want to imply that this is an open opera [ph]. We've actually applied a tremendous level of data and analytics to the markets that we believe would provides the biggest network effect. We've done it by price point and by brand segment. And we have then cross-match that with a huge number of portfolios that we've identified and qualified across the globe. And we did all that work in the third and fourth quarter of last year. That's actually proven to be extraordinarily helpful in focusing our resources and time and attention. And, of course, we are also very focused on making sure that we understand the customer base like we always do. That's what we start with. And each of these acquisitions or partnerships that we do have embedded growth, already identified embedded growth and that they are asset light. So those are the principles that we continue to follow.

That’s helpful. That was going to be my follow-up. Thank you.

Our next question comes from Stephen Grambling from Morgan Stanley. Please go ahead. Your line is open.

Hi, thanks. You called out the lease structure in Europe is allowing for rapid expansion in the region. How should investors think about the cyclicality of the fees associated with that growth versus the US? And does the structure alter how we may need to think through how that market could scale, or its sensitivity to things like interest rates?

So Stephen, I'm sorry, I missed the gist of the question was -- at the beginning. Just repeat beginning part of your question, I apologize.

Just understanding the cyclicality of these lease-oriented management rates in Europe and how to think about the scaling in that region?

Okay. I don't look at it as cyclical. Of course, it's dependent on then prevailing rates. But if you look at the form of ownership and the form of transactions that are done in Europe, a significant proportion of them are done through leases. We have, I think, one or two leases in our portfolio in Europe. We have not stepped into being a lessee pretty much anywhere in the world. I think we have in Grand total, certainly less than 10, or is it five now. We have five leased hotels. And we just don't -- leases are not really an easily managed class of ownership for us. Having said that, there are a large number of developers in Europe and owners who are both very experienced in leases, but also won't do a deal in any of the form. And that's a capital base that we have historically not actually focused our time and attention on, and we are now enabled to do that through all hotels acquisition, but also now as we develop those relationships, we can extend that to some of our other brands, mostly in the select and upscale and upper midscale. So for that purpose, I am excited about it, and I am excited that we -- that's a very, very large capital base. Some of the institutions are huge and have even come to the United States, with deals to be the lessor for hotels. Again, this is not a form and format that we prefer. And therefore, we do really -- we're not underwriting anything that I can think of across the globe right now in which we would be a lessee. So it's just not something we do. But working with lessee to become the manager of the hotel or the franchisor, that is something that has got a significant new chapter growth opportunity for us in Europe, especially.

So, that all makes sense. I guess, as a clarification, are these management fee structures or franchise fee structures unique or different relative to the US or other markets, just given the unique ownership structure being leased?

No. They're quite typical, actually. So I mean rates might vary -- royalty rates might vary or the rent might look different or whatever, even there are certain bespoke issues. But generally speaking, and we have -- the vast majority of the Lindner portfolio actually is leased in by the Lindner group. So they are the lessee and we are the franchisor to the lessee. They are the lessee and the manager, by the way. And we -- our deal with them is as arrangement. So -- and those franchise deal terms are not different than what you would see in a normal franchise deal that you would do with an owner as opposed to a lessee.

Great. That’s helpful. Thanks so much. I jump back in the queue.

Our next question comes from Richard Clarke from Bernstein. Please go ahead. Your line is open.

Hi. Good morning. Thanks for taking my questions. I just want to -- now we've got revised full year guidance. I just wanted to call back to the Analyst Day you did last year. If I do the math correctly, it looks like in 2025 to hit those targets. You'll have to grow EBITDA about 14%, free cash flow about 28%, and all while taking CapEx down by about 41%. So just your confidence in hitting those 2025 targets based on where we are now in 2024?

Thank you, and good afternoon, Richard. I would say the outlook really is dependent a bit on what the overall economy and how macro factors impact. Having said that, there are certain dynamics, and I don't want to tilt too far into interpreting and extrapolating macro indicators from a very short-term to highly disruptive period, which is what we're living through right now into the future. The underlying issue that we focus on is the general economic health and growth rate for the key markets that we are participating in. And yes, it is true that the public markets have been extraordinarily disrupted. It is not true that, that is reflective of a massive disruption in the US economic outlook or otherwise. Secondly, the rates have come down. Fixed rates have come down variously between 40 and 50 basis points -- excuse me, over the last five or six days. The floating rate market is actually quite stable at this point, spreads have widened out a bit, but not materially on the fixed rate side, not so much on the floating rate side. So, I'm looking at a situation in which we do expect that the backdrop for openings and our net rooms growth is set up to be able to expand, assuming that we see rate adjustments in the future, and we see the overall economic -- sorry, financial market environment, the capital market environment improving. Secondly, CapEx has been dropping. I was thrilled to see the outlook that we've got currently and it's going to be lower than that next year. So we are on path with respect to the drop in CapEx and further expansion of conversion from EBITDA to free cash flow by virtue of our asset-light trajectory. So if you put all that together, I feel pretty good about our outlook at this point. We are obviously tracking below the 6% to 7% NRG that we had put out at Investor Day. I do think that, that's temporal. And whether we get fully recovered to what we know we can sustain over the long term by next year or whether it takes 1.5 years, I can't really predict at this point. But I would say the general direction of travel is consistent with what we set out in the Investor Day.

Okay. Makes sense. Maybe just as a follow-up, you've changed the definition of EBITDA, moved the transactional cost out of that. I guess in my experience, companies often do that when they know they've got a big cost coming up. So maybe what was the thesis behind making that definitional change to adjusted EBITDA?

Sure. Richard, the rationale was pretty simple. These are onetime costs that we experience in relation to our integration activity and also our transaction activity. And so, as we consider true core earnings in EBITDA, we felt as though it was a better representation to remove these and also provide the visibility to all of you with respect to what those costs are outside of adjusted EBITDA. Integration costs, you will have seen that we've put on a separate line, and you'll see all of that through 2023. And recast that we did in the first quarter. And then transaction costs for last year we assumed about $10 million within the 2023 annual year. And what I would say is with transaction costs, they can be variable, very variable from quarter-to-quarter. And we have very few, call it, dead deal or abandoned costs. So when we close on asset sales, they -- as we're working on transactions and asset sale transactions, they run through our G&A, and then they get re-reported into a gain and loss on the sale of an asset. And when we acquire a company or undertake transaction like we did with UVC, they get recorded into the asset base. So this is why made the change, the onetime nature and the variable nature we are looking at our operating core performance without these 2 items. So now they're on a separate line item going forward.

I would also just point out, Richard, I caught your implication that this might have to do with an outlook that includes some disruption because of the line item, that's not case. If we were able to predict with precision what the transactional activity and exactly how that fell over a given quarter, we would probably be making a lot of other prognostications and be magical in some fashion. So it's sufficiently uncertain that we could never plan around something like that, just to be clear.

Okay. Make sense. Thank you.

Our next question comes from Patrick Scholes from Truist. Please go ahead. Your line is open.

Hi. Good morning. Just a couple of questions on China and incentive management fees, currently, right now, what percentage of your incentive management fees, do come from China? And how does that historically compare? And then, my follow-up question is, what is your visibility into RevPAR or bookings in China, basically, what is the booking window for your Chinese business? Thank you.

Let me make sure I have all of those elements, Patrick. As far as the composition of the China incentive fees as a percent of total, what I can -- what I have off the top of my head is, total fees for Greater China relative to our overall base is about high single-digit composition. So that's Greater China, as a percentage of our total. We are earning incentive fees in our Greater China hotels over 90% of our hotels are earning incentive fees. It's the structure there where we're earning fees on the first dollar of GOP that we earn. And that has actually remained pretty consistent period-over-period, because of the nature of the structure maybe a point or two lower than we were last year. As we consider what's happening in the operating environment, yes, RevPAR was negative in the quarter and the demand expectations that we have going forward. Given what we're seeing around travel outside the outbound China, other regions in Asia Pacific and the decline in domestic travel, we expect that, that will continue in the second half of the year. So that's impacting top line Rev. It's also impacting total revenue, as you look at China total -- Greater China total revenue. So that dynamic is certainly impacting, a negative growth rate at RevPAR and then an impact on total revenue is impacting GOP margins. So it's just lesser fees that we're earning in Greater China in the quarter, certainly more than we had expected. And that's what's captured into our full year outlook, the impact of [indiscernible] into the revised RevPAR outlook.

Okay.

And the IMS is about 3% of our gross fees on a global basis.

He also asked about booking curve.

And the booking curves. Yes, the window. It's always been very short in Greater China. Relative to other regions of the world, it's -- one of the primary drivers of that is the group business. So in the US, our group business is 30-plus percent. And so we obviously have more visibility to group for longer periods into the future. In China, it's closer to 10%. So that's part of the visibility. But in China, it can be days in many markets where the booking windows fit. And right now, we're seeing very short windows consistent with what we typically experience.

I would also just add quickly that the level of outbound travel is significant, probably higher than we would have otherwise thought. And we have said for a couple of quarters now, that we do -- we embedded in our outlook, we believe that inbound traffic -- sorry, inbound lift -- airline lift into China will improve in the fourth quarter or towards the end of the year. We have not had that offset in China to-date. So if you go to pre-pandemic levels, there were plenty of outbound travel. Everyone talked about the outbound travel from China being a major driver world -- global travel demand. And if that was true then and it's beginning to be true again. But what was balanced then is an equal measure of high-rated business coming into China, that's not present currently.

Okay. Thank you for the color on all of that. Thanks.

Sure.

Our next question comes from Chad Beynon from Macquarie. Please go ahead. Your line is open.

Good morning. Thanks for taking my question. With respect to the RevPAR guidance, has anything -- or could you just kind of talk about what changed regarding the two components, ADR or occupancy? And yes, I guess, just kind of broadly, as you look out beyond 2024, if you think the gains are going to be more from ADR, if there's still occupancy opportunities? Thanks.

Yes. The composition, Chad, is about split the way we're looking at our forecast for the remainder of the year. We do have a strong group in the second half group on the books. You heard our pacing numbers at 7% and a healthy portion of that is rate growth. So maybe a little bit more skewed towards rate. And we definitely still have opportunity on the occupancy front. We've realized greater demand in the first half from business transient, which has been lagging for us and those occupancy rates in our convention and business hotels are much closer to kind of pre-pandemic levels. So -- but there's still some room grow on the occupancy side. As we look forward, our group bookings are nicely split between occupancy and rate. So we have opportunity on both fronts. Q – Chad Beynon: Thank you, Joan. And then with regard to rooms under construction, how is that pacing against the pipeline? And what do you think the biggest catalyst would be to get more of these pipeline rooms kind of shovel-ready?

Yes. Thank you. So over the course of the last several years, we've moved from percentage of our pipeline under construction from the high 30s to the low 30s, which is where we are now. So we have roughly 40,000 rooms under construction at the moment, that's about a 2% to 2.5% decline year-over-year in terms of rooms under construction, not surprising given the environment that everyone is talking about, but that's the -- those are the facts that are associated with that. China overall is a bit lower than that in terms of the proportion of the pipeline that's under construction. Part of that has to do with the fact that we've actually executed quite a few or we have entered into agreements to execute some conversions in China and that also inflates the pipeline that ends up in production earlier. But -- so it's not under construction, it may be under renovation or something else, but not technically under construction. The pipeline itself, I think the dynamics that would significantly change what we're seeing currently is availability of capital for new starts in the United States. That's probably number one. And number two would be a more favorable lending environment in China. We haven't been significantly hurt by that because most of our hotels are signed with state-owned enterprises. But it still has a marginal impact with respect to private developers who do depend on the debt markets in China to fund their projects. Q – Chad Beynon: Great. Thank you very much

We have no further…

So we – sorry go ahead.

We are just out of time for questions. I'll turn it back over to Mark Hoplamazian closing remarks.

Thanks. I just want to thank all of you for your time this morning, and we continue to appreciate your continued interest in Hyatt and look forward to welcoming you our hotels so that you can help our RevPAR outlook and otherwise, but mostly the experience and power of care as delivered by the Hyatt family. So we wish you all a great day ahead. Thank you.

This concludes today's conference call. Thank you for participating, and have a wonderful day. You may all disconnect.