Good morning, and welcome to the Hyatt Third Quarter 2024 Earnings Conference Call. [Operator Instructions] Thank you. As a reminder, this conference call is being recorded. I would now like to turn the call over to Adam Rohman, Senior Vice President of Investor Relations and Global FP&A. Thank you. Please go ahead.

Thank you. And welcome to Hyatt's third 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 different 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 occupancy, average daily rate and RevPAR reflect comparable system-wide hotels on a constant currency basis. Percentage changes disclosed during the call are on a year-over-year basis unless otherwise noted. Additionally, we have updated our inventory schedule on Page 84 of the earnings release to now include hotels and rooms associated with Mr. and Mrs. Smith and other strategic alliances. And with that, I'll now turn the call over to Mark.

Thanks, Adam. Good morning, everyone. And thank you for joining us today. Before I turn to the quarter, I would like to acknowledge the damage caused by recent hurricanes in the Southeast United States. In response, Hyatt colleagues have come together through our Hyatt Care Fund to provide financial support to those in need. Our purpose to care for people so they can be their best resonates in times like these and we are thankful that our colleagues are safe. I recently spent time in Europe and Asia, where I met with many of our teams and owners, including a visit to the newly opened and stunning Park Hyatt London. The hotel is a flagship representation of the Park Hyatt brand in one of the most vibrant cities in the world. I also had the opportunity to visit with our new Standard International colleagues in Bangkok who are preparing for several exciting openings of Standard branded hotels across Asia over the coming months. The trip left me filled with excitement for Hyatt's future as we continue to grow across many markets globally, while delivering differentiated guest experiences for the high-end travelers in each segment that we serve. Now turning to the quarter, our third quarter results reflect the strength of our asset-light business model, including double-digit growth in growth fees, record number of rooms in our pipeline and a record number of World of Hyatt members. This morning, we reported system-wide RevPAR growth of 3%, and we continue to see high-end consumers prioritizing travel as RevPAR growth was strongest amongst our luxury brands. Leisure transient revenue decreased approximately 4% in the quarter driven by the United States and Greater China. Through the first nine months of 2024, revenue was flat compared to 2023 despite headwinds from renovations at certain resort…

Thanks, Mark. And good morning, everyone. During the third quarter, system-wide RevPAR increased 3%, led by increased business in group travel. In the United States, RevPAR increased over 1%. Group was strong in the quarter, reflecting continued momentum for corporate meetings and social events. Associations drove the growth in group rooms revenue and business transient was led by large corporate accounts benefiting hotel sales in major areas. On the leisure front, we continue to lap challenging comparisons in Maui due to the wildfires last year, the quarter was also negatively impacted by hurricane activity and an increase in international outbound travel. RevPAR in the Americas, excluding the United States, increased approximately 4% and all-inclusive properties in the Americas reported net package RevPAR 5% below last year, driven by the impact of hurricanes. Despite some of the headwinds and challenging comparisons for leisure travel, the forward booking activity that Mark mentioned earlier supports our continued confidence that the strong demand levels we have experienced are sustainable. In Greater China, RevPAR decreased approximately 7% as we lapped unusually high levels of domestic travel last year, especially from higher-income travelers. While domestic travel was down 9%, we did experience a moderate increase among international inbound travelers. The stimulus measures enacted by the government in late September are targeted at boosting domestic spending and, while still early, we're seeing improved RevPAR results from our hotels in the month of October compared with the third quarter. Asia-Pacific, excluding Greater China, once again produced great results with RevPAR up approximately 10% due to strong inbound travel with notable demand coming from Greater China and the United States. RevPAR increased by double-digits compared to last year in South Korea, Japan and India. In Europe, RevPAR increased 15%, driven by the Summer Olympics in Paris and Euro 2024…

[Operator Instructions] The first question comes from the line of Joe Greff with JPMorgan. Please go ahead.

Good morning, everybody. Thanks for taking my questions. Kind of a two-parter on the updated guidance. Net rooms growth organically looks like it's down relative to a quarter ago. Can you help us reconcile the drivers of that shift. And then, with respect to this most recent pending acquisition, the joint-venture, can you talk about sort of -- I don't know, maybe you can frame it on a trailing 12-month EBITDA basis. I know you gave out year fee contribution, but if you can maybe talk about what the run rate might be presently and then maybe how you're thinking about it for next year as we kind of think about incorporating not just the rooms, but also sort of years one through three contribution. Thank you.

Great. Thank you very much, Joe. On the outlook for net rooms growth, a few things that I want to note. The first is, our gross openings this year are expected to be over 6%, lower than our expectations because of slippage of over 2,000 rooms into 2025. And part of that is hotels that are under construction that slipped for openings -- or that we expect to slip, I should say, we're not at the end of the year yet. So who knows? They may be pulled forward. And some conversion deals that we've been working on that aggregate up to a significant number of rooms. So that's the first development, I would say, from our last update. The second is that attrition of rooms came in higher than we expected. It's approaching something like 1.5% this year, which is significantly higher than our typical run rate, which has been between 0.5% and 1%. And some of that difference, about 40% of that difference has to do with brand standard and market-specific issues that affected our renewal or agreement to move forward with certain hotels in our portfolio. Some of it is markets that have become, I would say, more challenging or where the central business district has moved and we are looking for new representation. In a couple of cases, owners that we didn't come to agreement with on bringing hotels to brand standards. So part of that has to do with just discipline in maintaining standards and elevating the quality of our portfolio. And a few hotels with larger room counts that were conversion hotels expected to open this year that came out. The overall momentum though remains intact and we're -- and we're looking into a first quarter of '25 where gross openings are tracking to…

Yes. I would just add that we did disclose our expectation for gross management fees from the joint venture. And then incremental to that is the Hyatt platforms that Mark just described.

Yes. So separate and apart from those fees, those are strictly fees that we're counting from management. These are all managed hotels. There's no franchises in these 12,000 rooms that we're bringing on. In addition to those management fees, there are other fees and revenues that we -- that Hyatt will realize through Hyatt-owned platforms in the distribution space that will be incremental to that number. So we'll provide you more details when we get to closing.

Thank you. Your next question comes from the line of Daniel Politzer with Wells Fargo. Please go ahead.

Hi, good morning, everyone. And thanks for taking my question. You guys mentioned a couple of times the credit card fees adding -- it being additive in the quarter and certainly that's been a trend among your peers. Can you maybe talk about the order of magnitude or upcoming timing of the renewal and maybe how we should think about that non-RevPAR fee component of your growth going forward?

Well, I think we were -- we haven't gone into breaking out the details of what's in non-RevPAR fees. What I would say is the average spend per card -- the data that we have that I think will be reflective of the strength of our customer bases, and not the -- the spend per card holder is higher than many, many other -- I wouldn't say all because I don't -- I can't say that conclusively, but it's at the very-high end of affiliated or co-branded credit cards. Second, the volumes have been growing, partly because we continue to expand our World of Hyatt membership base that have the card. And also, they are -- they kind of fit a profile where their spending is not directly linked to a specific state of the economy because they have relatively higher net worth and household income. So we think we'll continue to grow. For those of you who are tracking multiyear, we've been compounding growth of World of Hyatt membership by over 20% for the last couple of years in a row. We don't see that actually -- we see -- we're confident that it's going to continue to grow. I can't say that it's going to continue to compound at 20% forever. That would be fantastic, but very high. But it is in excess of actually the total rooms that we're adding. And I think part of that is that we are gaining some traction with respect to other experiences that we're offering and different price points that we're offering. So we're excited about all of that. In terms of the contract itself, I think we've made this comment before, but this is an arrangement that had a life through '25 or towards the end of '25. And so, we are actively engaged in looking at how our next phase of our credit card will be structured. And of course, no one waits until the deadline to get these deals done. So we're working on it now.

Got it. Thanks so much.

Thank you.

Our next question comes from the line of Ben Chaiken with Mizuho. Please go-ahead.

Hi, thanks. Thanks for taking my questions. Within distribution and destination, I think you said EBITDA in 4Q up 5%. Has the trajectory in this business changed at all? Was hurricane an impact? Just a little of any color on what you're seeing from a demand perspective? And then one quick follow-up. Thanks.

Yes, sure. In the third quarter, we definitely had some impacts from the hurricanes, definitely in the Caribbean and Southeastern United States. So bookings were a bit slower and, just frankly, a little bit less than what we had noted on our second quarter earnings call. And in the fourth quarter, as we noted in our prepared remarks, there is a lot of reason to be encouraged by our leisure booking trends. So through the end of -- coming out of September and into October, our leisure booking pace has really accelerated. So as we look at the segments in the markets that our distribution business is managing, those markets in particular are really accelerating. So into the fourth quarter, we expect an increase, as I said, about $5 million in excess of last year. And into the first quarter, we have a very strong booking pace there for our resorts and the distribution business actually also serves those resorts and other markets there. So we believe that booking pace will continue into the future, into the near future.

Got it. And then that's very helpful. I appreciate it. And then on room growth, the color on the 1.5% attrition was very helpful. Would you expect that attrition to leak into '25 as well? Or is this more so concentrated to a few examples and thus more of a 2024 dynamic? Just how you're thinking about it as we stand today? Thanks.

Thank you. Yes, I think there was a relatively higher number of hotels that were coming to end of life and PIP requirements that were not met. So maybe we had a bit of a blip here heading into the fourth quarter. I will say that if you look at the structure of our brand portfolio, we do not, at this point, have a brand into which we would encourage owners who want to downgrade their hotels to something that's at a lower level just to maintain those rooms in our portfolio. That's different than our competitors. And so, some of this is just maintaining brand integrity across our brands as they stand today.

Thanks.

Our next question comes from the line of Shaun Kelley with Bank of America. Please go ahead.

Hi. Good morning, everyone. And thanks for taking my question. Mark, maybe just to fill in from that last question about a couple of points. So first of all, for next year, if I caught you correctly, I think you said you feel comfortable at 6%, but that would be kind of closer to a gross basis. So even if attrition normalized a little bit, still a little bit below, I think your kind of longer-term algo you laid out last year at the Investor Day. So maybe if you could just walk us through pros, cons on that piece? And then, specifically, on that last thing you said about the ability to kind of trade-down on sort of the brand standard side, is that an opportunity for Hyatt? Maybe you could just talk about that as you think about that and conversions because I think you're absolutely right, that is activity that we see, but other brand families have opportunities there. Is that something that Hyatt could explore? Thanks.

Yes. Thank you, Shaun. First of all, that's correct. That's how -- you read my commentary correctly about 6% growth. I think that excludes any conversion activity. So I'm talking about pure organic in that number. And the fact is that we do have conversions that we continue to work on. They've been a material part of our total. So I think we've talked about a about a longer-term outlook of 5% to 6%, or 6% plus or minus -- maybe 6% to 7%. And I think those numbers, if you put 6% at the midpoint of that net of attrition still remains our outlook. So I think the level of conversions have continued to represent a pretty significant proportion of our total during this lull in new construction starts, especially in the U.S., and a rebound, which we have seen, in construction starts and construction activity in China. So we have seen increases in construction starts in China in the last two quarters and that represents -- so China -- rooms in China represent about 37%, 38% of our total pipeline. And in terms of rooms under construction, they represent 31%, which is up from last quarter percent of rooms under construction. So we're seeing some positive signs there that undergird organic. I think the number of portfolio deals and conversions, pure conversions, not acquisitions of platforms remains high and we are continuously pursuing those in -- especially in markets in which we have a particularly low relative penetration. Was there a second part of your question?

Yes. With respect to the brand standards, we have --

There is potential opportunity for that.

There is opportunity. It's something we've been looking at ever since the beginning of time actually. And we constantly listen to our owners and take their feedback and consider that into how we think about brand standards. It's also true that serving the high end of each segment that we serve requires investment into the properties that we have. So our owners recognize that. They're well-capitalized and that's why our attrition has historically been so low is because owners have invested in the properties and they've been performing. So I think this is a bit of anomaly that Mark described this year and we don't expect those levels to continue going forward.

I would say, Shaun, just to paint a broader picture of this, if you think about where that kind of attrition has come from and where these other brands have been launched with respect to capturing those that are coming out of those other brands in the mid-scale or upper mid-scale or upscale categories. Those brands are materially older than Hyatt Place and Hyatt House. When we launched Hyatt Place, it was on the back of over 100 AmeriSuites hotels. If you just look at total life post opening of our portfolio, we're only now getting to the very beginning of seeing hotels that are past the 20-year mark of being open. It sounds crazy to say that, given how much growth we've had in Hyatt Place and Hyatt House. You might forget that really -- we launched Hyatt Place, for example, 17 years ago. So -- but AmeriSuites were built prior to that time. So, yes, we're now starting to see that. Our competitors are in version something high, I don't know, four, five, six of the prototype that they're using for their current brands and so forth. So you've got many, many generations that stretch back into the 1980s and I think that the incidence of those hotels reaching obsolescence or maybe they are an anachronism in their current marketplace as we just have this level of product aging. By the way, I'm not criticizing those brands, it's just the nature of the business and also the evolution and the movement of CBDs, central business districts, across many cities and towns in the United States. So we've got our eyes wide open. We're very committed to brand quality and consistency. Our owners, especially in the Hyatt Place and the Hyatt House category, are coming to us and saying, hey, you need to hold everyone's feet to the fire because we're investing, we want everyone to invest because it's our brand equity. And so, we're very aligned with our owner advisory group on this topic. But it is the -- we're experiencing something new that we really haven't had an issue with or had to consider as much as we do today prior to this time. I hope that's helpful.

Yes, thank you very much.

Our next question comes from the line of Connor Cunningham with Melius Research. Please go ahead.

Hi, everyone. Thank you. Maybe on the inorganic side, you've obviously been very active from an M&A standpoint post your transformation. Can you just talk about the opportunity that you see there now and maybe what the multiples that you're kind of seeing in the market? Are they still relatively depressed. Do you see deals, all that stuff? Thank you.

Sure. I think the way that platform acquisitions tend to be valued, they look like a very high multiple at the inception. I think if you looked at Two Roads or at ALG, ALG was also -- we bought it in the middle of COVID. So the trailing multiple was stratospheric. So you don't -- we don't underwrite on the basis of trailing as much as understanding what's ahead for each portfolio. Every portfolio has got its own dimensions and different tenor and quality of the contracts that underlie the management agreements and the franchise agreements. All of it -- excuse me, all of that is taken into account for deals that we do and deals that we don't do. And so, I would say that, typically, you would see a going-in multiple that's significantly higher, probably double or more what you would expect to see on a run rate basis. Why? Because it takes some time to plug into loyalty programs, into other distribution channels and also to complete it to the extent that it's relevant renovation programs. So I would say going-in multiples will look high. You really have to be careful and underwrite correctly for the growth in fee revenue and therefore EBITDA associated with these platforms to buy them down to something that's in the low-double-digits. Our general belief is that if we can have confidence that we end up on a glide path to a low double-digit multiple of earnings on an asset-light platform, that is value-accretive every day. And that -- and we currently are in -- if you look at the last four acquisitions that we made, we're tracking below 10. So we're in high-single-digits. So that's particularly good. And that's our design. That's what we're going to continue to focus on. We have so much white space that the other dimension that we have that others might not have as -- in as much capacity is to fill in a number of market tracks that we just don't have any representation in. So a lot of this that we see are places where we are way underpenetrated relative to our larger competitors. Therefore, the idea of adding new existing properties, this is not adding necessarily new capacity in different markets or adding new capacity in markets where we have very little representation is easily absorbed and also very welcomed by our loyalty members.

Helpful. Thank you.

Sure.

Our next question comes from the line of Smedes Rose with Citi. Please go ahead.

Hi, thank you. I just -- I wanted to ask you, pro forma for your JV with Grupo Pinero, where do you see leisure as a percent of overall demand now in the Hyatt -- in the Hyatt system?

I think, right now, we're tracking between 50% and 55% leisure and this will take it up a little bit. It's a 30% increase in rooms and all inclusive. But relative to the totality, it's -- let's see -- about a 4% increase in our leisure rooms overall. These are hotels that trade at a lower net package revenue rate because they're 4.5 star hotels in the main and, therefore, it won't have as much as a 4% impact on our total mix.

Thanks. And could I just ask you one more quick one? You mentioned markets in tracks where you don't have a lot of representation. Do you feel like you could potentially be an acquirer of real estate in some of those markets to get sort of jump-started, if you will, or is the system sort of big enough now that you feel like it can kind of just sort of organically grow through conversions and people coming to you and developers coming to you, et cetera?

Yes. If I look back on our history, we've executed a few different acquisitions of specific hotels or groups of hotels where we felt that we had a clear pathway to reselling those hotels, but they were specifically because they were exemplary in their location. The two biggest examples I can give you, well, the two-off top of my head that I can think of right away are the Hyatt Regency Orlando, which we purchased for over $700 million, the only convention hotel in Orlando connected to both sides of the Orange County Convention Center right in the middle of that complex. And of a quality -- it was a Peabody before we bought it, of a quality and a team ethos and culture that was amazing. It is a family-owned and run business and the culture of the team just matched beautifully with ours and the quality of the asset was really high. So we ended up having a unique opportunity. We wanted to control it. We negotiated a deal and it was all-cash. We completed diligence in very short periods of time because we knew the hotel in the market very well. And as you know, we owned it for a number of years and earned a very good return on it while we owned it and then just sold it for over $1 billion. So that's one example. The second example is the Hyatt Regency Mexico City. We've been absent -- completely absent in that market, it's a top-five MSMA in the globe -- around the globe. And we've not been present there for over 25 years. This is a hotel that's right on the Chapultepec Park in the middle of Polanco. It's like Maine and Maine. And it was a Nikoo hotel. They wanted to deal with someone that they -- that didn't need a financing contingency or anything else. We came in, completed diligence and all-cash, bought the hotel for about $190 million and we recently sold it a couple of -- I guess, a year and a half ago, two years ago, three years ago, pre-COVID for like $400 million, something like that. But that's because we were able to first unlock some additional value on vacant lots that were a part of that. So that's really -- those are two examples. So the answer is, yes, if it's a unique opportunity that gets us an amazing a location in a market in which we are underpenetrated all day, we will do that as long as we have a clear path to sell. So we -- and we will remain open to those ideas. It's not exactly what we're rushing around looking for, frankly, but they do arise from time-to-time and we just have -- we're not running into ourselves in any market in the world. So we have a lot of space to run.

Great. Thank you so much.

Sure.

Our next question comes from the line of David Katz with Jefferies. Please go ahead.

Hi. Good morning, everyone. And congrats on your quarter. I wanted to -- I'm looking at the page in your deck where you've added quite a few brands and channels, et cetera, over the past couple of years. And I wanted to just get a sense from you, are these entirely kind of asset-free or when we say asset-light, that can be -- mean a range of different things, meaning are these entirely incremental to revenues and profits? Is there some sort of key money or other kinds of investment expectation that comes along with them? I'm just trying to sort of calibrate your earnings business as it grows going forward?

Yes. So, yes, there's key money that we deploy. That is covered in the CapEx figures that you see in our reported figures. And so, we do make investments from time to time, and we also invest sometimes in the capital stack of hotels. What you will not see or experience is guarantees. We do have some, but they are quite small. So we don't have synthetic real-estate exposure through leases. We're sort of allergic to leases actually. And we don't have -- well, that's -- leases are actual real-estate exposure. We don't have synthetic real estate exposure through guarantees. It's not -- I'm not saying we have zero guarantees. I'm saying that they are small and they are infrequent because we have aversion to operating guarantees as well. So we don't pretend that we are now asset-light while we are running around signing operating guarantees or synthetic leases to hide real estate exposure. And with respect to the investments that we have made, whether it's key money or actually helping to fund a given hotel through a preferred interest or sometimes an equity interest, although that's very rare or occasionally some guarantees on debt repayment, they're all disclosed. So they're already in our numbers.

Got it. Okay. Thank you very much.

Sure.

Our next question comes from the line of Patrick Scholes with Truist Securities. Please go ahead,

Patrick, if you're speaking, you must be on mute because we can't hear you.

Sorry. There we go. Thank you. Good morning, everyone. Going back a few questions concerning some older hotels aging out of the system, it's -- what I heard from that is that you folks could really use a sort of an upscale conversion brand, perhaps equivalent to something like Hilton's DoubleTree. Is that completely out of the question or might it be something that you would be contemplating introducing? Thank you.

Look, I learned a long time ago that you never say never. It's not something that we have chosen to pursue to date. As we look forward, of course, we're looking at the total state of our real estate -- the real estate that underlies our portfolio. So it is something that I think because of our relative penetration or distribution and because of the growth and the strength of our channels and direct channel, it's possible that we could craft something that would work for existing owners. What we don't want to do is do something that is going to be a detriment to either our brand reputation and serving the higher end guests in each segment. And we also don't want to end up in a situation in which you've got something that is so -- that has scrambled kind of portfolio that you can't tell what you're going to get. So I think those are the sort of guardrails. So I would say stay tuned. We will continue to monitor it and discuss this, but there's nothing that we have done to date at least that would be in that category. And I would say converting former Hyatt Regencies into Hyatt Places is not trivial in terms of capital to actually conform it to the brand standards of a Hyatt Place. So it's not that we haven't done any of those, but it's more typical for us to convert hotels from other brands that are closer in area programming and size and shape of rooms into Hyatt Places, which we have done. Again, not trivial, but definitely possible. So, yes, we were -- our eyes are wide open. Those other brands -- our other brand competitors have very large collections in those other brands that they convert into, including some in the upscale or lower upscale. I'm sorry, in the mid-scale or lower mid-scale arena, I don't see us going there because it's not a market that we currently plan.

Okay. Thank you. And then follow-up question for you, Joan. And I apologize if you did quantify this earlier, but it sounds like there were some earnings impact from -- in the Caribbean for you folks from hurricanes. Can you give us what the EBITDA hit was and that will be something to help us going forward for 2025 when we're thinking about modeling what we're up against or what the tailwind might be? Thank you.

Sure. In the third quarter, what I had mentioned is that we were down in the Americas for net package RevPAR about 4% and that was primarily related to hurricane activity and that equates to -- for the quarter about $46 million of EBITDA.

Okay. Thank you. Sorry missed that.

Your next question comes from the line of Duane Pfennigwerth with Evercore ISI. Please go-ahead.

Hi, good morning. I wanted to ask you about your view of the optimal number of brands in your portfolio longer term. Do you envision keeping everything that you currently have now or is there a streamlining opportunity within the existing portfolio and maybe the groups you referenced, the new groups you referenced, the lifestyle and the luxury groups relate to those decisions? And then I guess just lastly, if you do see an opportunity to streamline, what are the criteria you think about to determine which of your brands wins? Thank you.

Sure. First of all, I hope -- our goal has been to add brands that have brand equity and brand rationale unto themselves that are distinctly identifiable and can be described as offering a different type of experience than other brands that we already own. So, so far, knock wood, I don't think we've overlapped in terms of buying a brand that is the substantive equivalent of an existing brand. Having said that, some are small and yet -- and still growing. So we have a lot of room to grow just within our current brand portfolio. Second, we have collection brands. JdV by Hyatt is one example. Destination by Hyatt is another example. Unbound Collection is another example where we have brought some third-party brands into those collections. There's a magnificent small boutique hotel brand in Scandinavia called Story, the Story Hotels that are JdV by Hyatts. There's a magnificent small collection of very high-end resorts in Europe called 7Pines that are part of the destination brand. So we have examples of other brands that we have brought into our collection brands and that is neither atypical nor something that we will stop doing. So there's -- there are opportunities when we're working with mostly family or individual founders who want to continue to grow their brand equity, but be affiliated. So I think that's where the primary "consolidation" might look like. But right now, in our business, because we have third-party owners going to them and saying, yes, you bought this brand from us and because you believed in it, now it's going to be converted into some other brand of ours, doesn't typically work well. So that's that. In terms of our brand evolution organizationally, yes, your point is well taken and the purpose of forming a lifestyle group and separately a luxury group is to hyper-focus on distinct customer groups that we're serving and to more -- with higher fidelity and more breadth and depth, personalize the experiences of those guests to our brands and have much sharper definition of each brand, one by each. So that's really the goal, but it's going to be broken down, so that you don't have -- when you approach Hyatt, you're not going to have a cacophony of a laundry list of brands. You're going to see collections or groups that have logic for distinct customers and guests. And that's really of doing the evolution that we're doing in our organization.

That's really interesting. Thank you.

Our last question comes from the line of Brandt Montour with Barclays. Please go ahead.

Good morning, everybody. Thanks for squeezing me in here. I just -- Mark, just a clarification on the commentary on gross net unit growth. I think you said specifically that 6% growth excludes any conversion activity, but we know that conversions are a big part of your growth. So I kind of took that as 6% growth ex sort of like big portfolio deal -- conversion deals--

If I had said that, I misspoke. I meant big portfolio deals, not conversions. Conversions, like run of the mill conversions, one by each, they are included in that number. So I apologize if I said that.

No, I'm really happy we cleared it up. And then because other people had a second question, I'm going to throw an extra one in here, if you don't mind. The first quarter pace that you gave for transient business looked really strong. I'm just curious -- that was a revenue number. I was just curious if you could sort of suss out the pricing embedded in that? And then tell us, generally speaking, how much occupancy at this point would even be booked for that period and the visibility implied in there?

I actually don't have a good handle on what the total occupancy that's spoken for, but it's not insignificant. This is not a -- this is not -- on the basis of 5% of the business book for leisure, especially in the all-inclusive segment, which I'm more familiar with in terms of how the forward bookings work. And in the ADR composition -- I'm sorry. Flat meaning? ADR? ADRs are flat, so it's mostly occupancy is what I'm getting from one of my team members here. So that's the answer on that one.

Great. Thanks, everybody.

Sure. And I want to just close, we didn't really talk about two things that I think are critically important. The two businesses that we are now in one case, [technical difficulty] in another case 50% JV will be a 50% JV owner once we close. Our -- I will tell you that our partners and the colleagues that we are bringing into the Hyatt family are aligned to it culturally and in values. And I think this was the major win that we had with ALG. I think the culture worked beautifully and my speech to all of those colleagues that became members of the Hyatt family was, when culture works, everything works. It becomes easy because it's like fluid. And when culture doesn't work, there's a zero-sum game that sneaks in and it becomes a disaster. I'm telling you that I feel as strong, if not stronger about the standard colleagues that are coming to join the Hyatt family as well as the Bahia Principe Group, which is super professional. They started this business 50 years ago. Don Pablo Pinero created an amazing business from scratch and his family has carried on that legacy beautifully. And so, I feel really strongly that this culture of care and the values that we share are going to position us for fantastic success going forward. So I thank you for your time. Of course, please come and experience care by visiting our properties, please. And lastly, Happy Halloween.

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