Meredith Prichard Jensen

Meredith Jensen inquired about optimizing the ALG distribution strategy, current trends in B2B consumer behavior, and how broadening the offering through Playa programs like ALG locks can increase client mix within ALG.

Answer

Mark Hoplamazian, President and CEO of Hyatt, described ALGV as a critical strategic asset, providing market visibility and serving millions of customers and travel agents as North America's largest packaging platform. He highlighted the team's discipline in market selection, automation, and AI utilization. He noted that while four-star and below segments have been weaker, direct production into Hyatt's own resources is increasing, primarily for five-star properties, and Playa Hotels' offerings are highly attractive to ALGV customers.

Meredith Jensen asked about optimizing the ALG distribution strategy, current trends in B2B consumer behavior, and how broadening the offering through Playa programs (like ALG locks) could increase client mix within ALG.

Answer

Mark Hoplamazian, President and CEO, Hyatt, highlighted ALGV as a critical strategic asset and the biggest packaging platform in North America, providing tremendous visibility into leisure travel dynamics. He noted the team's discipline in serving markets and the ongoing utilization of AI for efficiency and predictive analytics. He reiterated that four-star and below segments have been weaker, while direct production into Hyatt's own resources has risen, especially for five-star properties and offerings expanded by Playa Hotels, which are attractive to ALGV's customer base.

Meredith Jensen inquired if the launch of Bonvoy Outdoor serves as a framework for future loyalty sub-ecosystems, how it impacts digital distribution, and if platforms like citizenM or Outdoor are shifting Marriott's broader digital distribution strategy.

Answer

Tony Capuano (President and CEO) linked the Bonvoy Outdoor launch to the central reservations transformation, which will enable customers to shop by passions (e.g., surfing) rather than just geography. Leeny Oberg (CFO and EVP of Development) emphasized that Marriott aims for customers to use the Bonvoy platform for shopping and communication, controlling the experience as a critical advantage, while digital shopping remains very important.

Meredith Jensen inquired about the Bonvoy Outdoor Collection's potential as a framework for future loyalty sub-ecosystems and how new platforms like CitizenM or the Outdoor Collection influence Marriott's broader digital distribution strategy.

Answer

President and CEO Tony Capuano explained that the Outdoor Collection is linked to the central reservations transformation, enabling guests to search the portfolio by passions (e.g., surfing) rather than just geography. CFO Leeny Oberg emphasized the importance of controlling the customer experience through the Bonvoy platform, ensuring seamless shopping and communication while maintaining the quality of face-to-face lodging stays.

Meredith Jensen asked how Wyndham views opportunities and challenges arising from the evolving lodging sector supply, including short-term rentals, shifting distribution, and the entry of OTAs and Airbnb into the traditional lodging space, often referred to as 'shadow supply'.

Answer

CEO Geoff Ballotti explained that Agentic AI and the potential for short-term rentals to enter the distribution space are bringing a more frequent and automated rhythm to search, shifting traditional SEO to generative engine optimization (GEO). He emphasized that Wyndham's strategy focuses on reputation and confidence, which are top signals in any search. Through initiatives like Wyndham Connect, the company is improving guest confidence and driving more frequent and immediate reviews on platforms like TripAdvisor and Google Reviews, aiming to boost online review scores as a key indicator of quality and consistency in large language model searches.

Meredith Jensen inquired about how Wyndham views the evolving lodging sector supply, including short-term rentals and distribution shifts, and how it addresses challenges from 'shadow supply' and OTAs entering the lodging space.

Answer

CEO Geoff Ballotti discussed how agentic AI and the rise of short-term rentals are changing search dynamics, moving towards generative engine optimization (GEO) focused on trust and contextual relevance. Wyndham's strategy emphasizes reputation and confidence, utilizing Wyndham Connect to enhance guest confidence and drive more frequent reviews across platforms (TripAdvisor, Google Reviews, OTAs) to boost online scores, which are key indicators of quality in large language model searches.

Meredith Jensen from HSBC asked for more detail on the $550 million of potential capital deployment mentioned in the presentation, inquiring about the opportunities being considered for shareholder returns and business development.

Answer

CFO Michele Allen clarified that the $550 million figure represents the 'art of the possible' for capital allocation this year, combining excess free cash flow and leverage capacity. She specified that approximately $110 million is earmarked for key money to drive high-quality growth. The remainder provides flexibility to balance an active deal environment with opportunistic share repurchases throughout the year.

Meredith Prichard Jensen asked about the evolution of booking windows and length of stay, considering the mix of leisure, infrastructure, and extended-stay demand, and how trends compare to the recent past.

Answer

CEO Geoffrey Ballotti confirmed that length of stay continues to increase, up 140 basis points in the quarter, and leisure demand remains strong, with weekend RevPAR up 3% (ex-hurricane). He noted that this strength continued through holiday periods and into January, while infrastructure demand is driving significant share gains during the midweek.

Meredith Prichard Jensen asked about internal targets for technology-driven merchandising and requested more detail on the drivers of ancillary fee growth, particularly the co-branded credit card.

Answer

CEO Geoffrey Ballotti did not provide specific targets but highlighted that technology is driving record loyalty enrollments and direct bookings. CFO Michele Allen confirmed the credit card program is the largest ancillary growth driver, fueled by initiatives like Wyndham Business. She noted numerous opportunities exist across partnerships and on-property technology, like Wyndham Connect, which is already generating incremental revenue for franchisees.

Meredith Jensen asked about the strategy for balancing occupancy and rate, the number of owned Cambria and Everhome hotels, and trends in international conversion activity.

Answer

CEO Patrick Pacious responded that franchisees are successfully gaining occupancy share, which is a positive indicator for future rate growth, noting that the limited-service model supports this strategy. CFO Scott Oaksmith specified that the company owns 13 hotels: eight Cambrias, three Radissons, and two Everhomes. Pacious added that international conversion activity is high, particularly in Europe, while other regions show a mix similar to the U.S.

Meredith Prichard Jensen asked about trends in length of stay and booking windows, given the mix of business and extended-stay guests. She also inquired about international expansion opportunities, including the potential for conversions, consolidation, or M&A.

Answer

CEO Patrick Pacious noted that booking windows have contracted but that their business travel segment (construction, logistics) actually has a longer length of stay. CFO Scott Oaksmith confirmed this, stating that stays of 14+ nights increased by 5 percentage points year-over-year. On international strategy, Pacious described it as an exciting growth area, highlighting opportunities in the Caribbean and Latin America via the Radisson brands and extended-stay potential in Canada.

Meredith Prichard Jensen from HSBC inquired about the brand formats for upcoming owned hotel openings, the company's management strategy for these assets, and whether the growing corporate travel mix could alter the business's historical seasonality.

Answer

CEO Patrick Pacious clarified that Choice does not intend to grow its management business, which was acquired with Radisson, and primarily uses third-party managers for its owned assets. CFO Scott Oaksmith specified that two Everhome Suites and two Cambria hotels are expected to open in 2025. Regarding seasonality, Oaksmith acknowledged that more business travel could eventually even out quarterly performance but advised no change to modeling assumptions for 2025, as Q2 and Q3 are expected to remain the strongest.

Meredith Prichard Jensen asked for the company's long-term vision for its chain scale mix over the next five years and also inquired about the fee structure for international pipeline additions.

Answer

CEO Patrick Pacious outlined a strategy aligned with macro trends like retirements and infrastructure spending, highlighting significant growth in the extended-stay segment. For international, he explained the fee structure varies, with direct franchising in markets like EMEA yielding higher royalty rates than master franchise agreements in other regions.

Meredith Prichard Jensen asked about Viking's business outside of Europe, including expeditions and Asia, and its impact on seasonality. She also inquired about the operational and environmental benefits of the new hydrogen-powered Viking Libra.

Answer

Chairman and CEO Torstein Hagen highlighted growth opportunities in China, the established Mississippi product, expansion in Egypt, and the well-received Expedition product. Regarding the Viking Libra, he explained it will use hydrogen fuel cells for 'true zero emission' capability, particularly in sensitive areas like Norwegian fjords. He added that the new design is slightly longer, allowing for more cabins and providing an economic benefit.

Meredith Prichard Jensen asked for details on Viking's business outside of Europe, including expeditions and Asia, and its impact on seasonality. She also requested more information on the new hydrogen-powered ship, the Viking Libra, and its operational benefits.

Answer

Chairman and CEO Torstein Hagen detailed growth initiatives beyond Europe, including a unique product for the Chinese market, expansion in Egypt, a new vessel in India, and the 'extremely well received' expedition product. Regarding the Viking Libra, he explained its hydrogen fuel cells enable true zero-emission operations in sensitive areas and that its slightly longer design adds more cabins, improving its economics.

Meredith Prichard Jensen asked about potential new land-based products to increase wallet share and what future technology investments are planned to enhance direct customer interaction and booking.

Answer

Chairman and CEO Torstein Hagen indicated that the company will likely remain focused on ship-based experiences to maintain product control and scale, citing the expedition and Egypt offerings as successful expansions. He confirmed that significant future investments are planned for marketing technology, online booking, and website interaction to maintain a competitive edge, while dismissing gimmicky onboard tech.

Meredith Prichard Jensen asked for details on purchasing trends for optional shore excursions compared to the past, including variations by product and geography. She also asked if the average cruise duration for Ocean and River itineraries remains consistent.

Answer

EVP of Finance Linh Banh confirmed that trends for purchasing optional shore excursions and pre/post-cruise land extensions remain strong, as guests seek to augment their experiences. She noted that guests who purchase these add-ons tend to have slightly higher satisfaction scores. Banh also confirmed that the average cruise lengths remain consistent, with Ocean at about 10-11 nights and River at 7-8 nights.

Meredith Prichard Jensen asked about the strategic rationale behind the increased focus on growing the net lease portfolio, the valuation implications for SVC's stake in Sonesta, the expected timing for modeling hotel dispositions, and for a breakdown of demand segments like group and international.

Answer

President and CEO Christopher Bilotto explained the pivot towards net lease is a strategic growth initiative to improve portfolio fundamentals and open up new financing opportunities, not due to a lack of conviction in the hotel business. CFO Brian Donley added that SVC's 34% stake in Sonesta is expected to grow in value as Sonesta transitions to a higher-margin franchise model. Donley clarified that the hotel dispositions should be modeled as exiting the portfolio by the end of Q3 2025. Management noted that group business is typically medium-sized and they would follow up with specific demand percentage breakdowns.

Meredith Prichard Jensen questioned the strategy for pruning the net lease portfolio, the long-term target investment mix between hotels and net lease, the expected seasonality of the retained hotel portfolio, and the timeline for closing asset sales and subsequent debt paydown.

Answer

Jesse Abair, Vice President, said the company consistently reviews the net lease portfolio for disposition candidates. Todd Hargreaves, President and CIO, added that the long-term portfolio mix is expected to be 40% to 60% hotels and that the retained hotels are more urban and northern-focused. He anticipates closing the current sales by Q3 2025. Brian Donley, Treasurer and CFO, confirmed that Q2 and Q3 are the strongest seasonal periods for the hotel portfolio.

Meredith Prichard Jensen asked about the current outlook for hotel conversions compared to a year ago, especially in light of construction costs, and how this trend might relate to broader M&A discussions in the lodging sector.

Answer

CFO Kevin Jacobs noted that conversion prospects are strong, expected to account for about 40% of deliveries this year, as Hilton tends to gain share in softer environments. On M&A, CEO Christopher Nassetta reiterated a strong preference for organic growth, stating they are actively developing 2-3 new brands internally to fill niches in areas like Lifestyle and extended stay. He anticipates growing from 24 to at least 27 brands in the next couple of years through these organic efforts rather than large-scale acquisitions.

Meredith Prichard Jensen inquired about the current balance between occupancy and rate, and whether the conversation with hotel owners about pushing rates has shifted in recent months.

Answer

President and CEO Christopher Nassetta stated that the strategy has not materially shifted. He argued that even with moderating inflation, it remains above the Fed's target, which continues to support rate integrity. He noted that Hilton's sophisticated revenue management systems still indicate good pricing power in most segments, and he expects leisure rates to finish the year higher despite some demand normalization.