Guidance and Outlook
Q: What's changed in outlook considering Q1 and RevPAR?
A: Despite a slightly lighter RevPAR in Q1 due to more under-construction properties and weather impacts, we maintained our guidance for the year. The broader economy remains reasonably strong and resilient, with strong employment and corporate profits. Group business demand is incredibly strong, and we expect modest growth, mostly from rate increases, as we continue to have pricing power.

U.S. RevPAR Growth and China Performance
Q: U.S. at lower end of range; thoughts on China impact?
A: In the U.S., April is in line with expectations, and we expect the U.S. to be at the lower end of our 2% to 4% RevPAR growth. Europe remains resilient, up 10% in the quarter. China was flattish and expected to be the same for the year as domestic travel stabilizes and outbound travel increases. Increased inbound travel and more flights will help China. We are benefiting from Chinese travelers in Southeast Asia and Japan.

Group and BT vs. 2019 Levels
Q: Where are Group and business transient versus 2019?
A: Both Group and business transient revenues are exceeding 2019 levels, but from a demand standpoint, they are slightly below. Group demand is expected to return to 2019 levels by year-end, with strong growth. Business transient is modestly below 2019 but improving, particularly with large corporates traveling more. We expect occupancy to build throughout the year, maintaining pricing power.

Lower-End Chain Scale Outlook
Q: Will lower-end segments be positive year-over-year?
A: Yes, modestly. We expect the lower-end chain scales to be positive but lower in performance compared to higher chain scales. They were impacted more in Q1 due to factors like more properties under construction and difficult comps, but we anticipate improvement in the second half of the year.

Fee Growth and Seasonality
Q: Can we sustain fee rate improvement seen in Q1?
A: While there were some timing items in fees, much of the improvement is due to strength in parts of the world where our managed business is bigger. We expect incentive management fees to continue as a strong contributor throughout the year, with no anomalies affecting this trend.

Net Unit Growth and Acquisitions
Q: How will acquisitions impact net unit growth?
A: We incorporated SLH into our 6% to 6.5% NUG guidance. Graduate Hotels will be added once closed. SLH properties will come into our system over the next couple of years, contributing an estimated 0.25% to 0.5% to NUG. We expect to maintain 6% to 7% NUG over the next few years, primarily through organic growth.

Pipeline Under Construction and Development Environment
Q: What's driving the increase in pipeline under construction?
A: The increase is from both the U.S. and international markets, with conversions moving to construction more quickly. While labor and material costs have leveled off, capital remains more expensive but slightly less so than last year. Better developers and projects are getting financed, and we are taking share despite fewer projects overall.

Group Business Beyond 2024
Q: Is Group business building for 2025 and beyond?
A: Yes, bookings for 2025 and 2026 are up 13% and 15%, indicating strong demand and growth in Group business commitments for the future.

Honors Loyalty Program Engagement
Q: How are you increasing Honors engagement?
A: Honors occupancy reached a historical high of 64%, up 300 basis points year-over-year. We're enhancing engagement through partnerships like SLH and AutoCamp, and aiming for 75% Honors occupancy over time. We focus on providing customers with more options and experiences to drive loyalty.

Competition for Conversions
Q: Where is competition for conversions most intense?
A: Competition varies by deal and market. In luxury, there's more competition due to more brands. In middle tiers, we often lead. Last year, we captured 40% of all U.S. conversion deals. Our new brand, Spark, will be disruptive in segments we haven't been in before, and we're successful globally in conversions.

NoMad Brand Plans
Q: What are your plans for the NoMad brand?
A: NoMad is a strong luxury lifestyle brand. We believe it can reach upwards of 100 hotels over time, mostly through new builds and some conversions. It's a longer-term growth opportunity that will fit nicely into our portfolio and contribute positively to NUG.

Impact of Olympics and Economic Risks
Q: How will the Olympics and economy affect results?
A: The Olympics will positively impact Europe and Paris but won't dramatically affect our numbers as France is a smaller part of our portfolio. Regarding economic risks, our outlook assumes a soft landing with continued growth and strong employment. Our core customers have a median income of $150,000, indicating resilience against economic pressures.

Europe Demand Dynamics
Q: Where is demand in Europe coming from?
A: Demand in Europe is strong across the board, with robust Group, business, and leisure travel. The strength of the dollar enhances purchasing power for leisure travelers, contributing to increased demand in the region.

Flow-Through on Revenue to EBITDA
Q: What's driving strong EBITDA flow-through in Q1?
A: Strong discipline and focus on our high-margin fee business led to good flow-through. Incremental dollars from fees and incentive management fees drop straight to the bottom line, resulting in better margins even when top-line revenue is lighter than expected.

Timing Items and Guidance Increase
Q: Explain timing items and guidance adjustments.
A: Timing items of about $5 million to $10 million in Q1 will largely reverse in Q2. We increased our guidance midpoint by $45 million, considering an incremental FX headwind of about $10 million to $15 million over the year.

Occupancy Below 2019 Levels
Q: Is occupancy lagging due to structural shifts?
A: The lower occupancy compared to 2019 is mainly due to seasonality and the holiday shift affecting leisure travel. We expect occupancy levels to normalize, as we were close to 2019 levels by Q4 last year.

China Operations and Impact
Q: What's needed to improve China performance?
A: Inbound travel to China needs to increase, along with more flights from major destinations. While domestic travel has stabilized, increased international travel will drive growth. We're starting to see more flights scheduled and expect that to benefit us in the second and third quarters.