Hyatt Hotels Corporation (H) Earnings Call Transcript & Summary

All right. Good morning, everybody. I think that video nicely captures the excitement we have to be with you all today. So welcome, everyone, and thank you for joining us at Hyatt's 2023 Investor Day at the beautiful Moshe Resort and Playadel-Carmen. We're thrilled to have you all in addition to all of you who are live streaming the events. As you may have seen from the press release we sent out this morning, we have a lot of exciting information to cover. But before I get started, I would like to remind everyone that our presentation and comments today will include forward-looking statements under federal securities laws. These statements are subject to numerous risks and uncertainties as described on the slide and in our SEC filings. These risks could cause our actual results to material differently those expressed in or implied by our presentation and comments and forward-looking statements in today's presentation are made only as of today and will not be updated as actual events unfold. I'd also like to remind everyone that we filed an 8-K this morning, which includes the full presentation, along with definitions and reconciliations of non-GAAP measures, and we have posted the presentation and will post this video recording on our Investor Relations website later today as well. So, we have an exciting agenda today. Mark Hoplamazian will kick us off discussing our transformation. We'll then take a deep dive into ALG with Rodrigo Lagodo and Race [indiscernible], two great leaders from ALG joining Mark for this section. Then Mark Vondrasek will cover all the great things we're doing on the commercial services front. We'll then dive into growth with Mark Hoplamazian. And next, Margaret Egan will take us through exciting progress we're making with the world of care, and Joan Bottarini will explain what it all means with respect to our financial results. We'll then hear from Hyatt's Executive Chairman, Tom Pritzker, who will reflect on 65 years with Hyatt, and we'll end the presentation with a Q&A session with our speakers. We've got a great lineup, and we're excited. And for those of you who want to send in questions, you can e-mail them throughout the presentation to investorrelations@hyatt.com, and we'll spend time taking questions at the end of the event. So to set the stage for my introduction of Mark, I want to start with Hyatt's global footprint in 2009. It's common when I talk to prospective investors, this is the Hyatt that they think of. The one that was 399 hotels, heavily dependent on owned and leased performance and with a presence largely in key gateway cities around the world and with a relatively modest pipeline producing modest growth. 120,000 rooms, 270 submarkets in a pipeline of 27,000 rooms. As we fast forward to today, what may not be fully appreciated is the significance of our growth. In the short period of time being public, our hotel portfolio has tripled, and our pipeline has more than quadrupled. We truly are a transformed company with significant global distribution a portfolio that is highly differentiated from our peers, and we're intently focused on serving the high-end customer in each segment that we're in. At the end of 2022, we reached 304,000 rooms over 700 submarkets and have impressively built our pipeline to 117,000 rooms. So now to tell us more about the new Hyatt, fee-based, resilient and asset-light, I'm very, very proud to welcome to the stage our President and CEO, Mark Hoplamazian.

Thank you, Noah. Welcome, everybody. I'm thrilled to see so many of you here in person and to all of you streaming in, welcome to you, too. As Noah mentioned, we're here at this beautiful resort, the Moshe Resort here in Playa del Carmen, a hotel that actually in and of itself, is sort of a great example of the intentional evolution and of our portfolio and also our positioning. Now today, we're going to be spending a lot of time talking about what's changed. We're going to be talking about the new Hyatt. The powerful transformation that has taken place includes the momentum that we're building and the exciting implications it has for our future, and we're going to cover that in great detail. In fact, during my tenure as CEO, I can say without question, I've never been more excited, more energized and more confident about our momentum and our future. But first, it's critical, before we take a deep dive into those topics, that I spend a few minutes to tell you what's not changed. First, our purpose as a company to care for people so they can be their best, remains at the center of everything that we do. Advancing and scaling care is the superpower of the Hyatt family. It is what defines our culture. It's what defines the nature of our relationships with one another across the Hyatt family as well as with our guests, our customers and very importantly, with our hotel owners. What also hasn't changed is the overarching strategy of driving preference. The most simple statement of the outcome that we seek from our strategy is that each one of our stakeholders chooses Hyatt more over time, and that they consider it the most preferred hospitality brand, serving guests at the high end of each segment in which we participate. This results from how we deliver valued experiences for each of our stakeholders, our colleagues, our guests, our customers and our owners through caring for people so they can be their best self. So it's anchored in our purpose. It's about being the most preferred brand for all of our stakeholders, including investors. And our path to achieving preference has and remains and will remain embedded in purpose and care. This focus has guided our transformation and will continue to guide us as we embark on a very exciting future. Of critical importance, our purpose allowed us not just to survive the pandemic, but to come out of that period stronger, better and faster as a company with relationships across the Hyatt family that have never been closer. Even in the face of the unimaginable challenges during the pandemic, we applied care in every way possible every day. This included, for example, creating the Hyatt Care Fund funded through our foundation that distributed over $18 million to individual colleagues in need. It included a new app-based digital community that we built to allow Hyatt colleagues to stay connected with each other and with the whole Hyatt family. It included our Hyatt concierge staying in touch with our top-tier World of Hyatt members, providing them with reminders and care packages relating to their last trips and letting them know that we would be there when they were ready to travel again. And we also stayed in very close contact with the senior leadership of our top customers to understand how we could support them as they manage their way through the pandemic, even when they were not traveling at all. These actions are examples of the threads that are held strong and woven the fabric of a company that I'm deeply honored to be a part of and of which I could not be more proud. So with that as the backdrop of what hasn't changed and what won't change. Now let me tell you about what has changed and let's dive into our evolution. We've been on a transformative journey for a number of years, over which time we've built a bigger, more capable and more value-additive enterprise for all of our stakeholders, including our investors. Our evolution has been very deliberate and highly intentional. At the time of going public, we were 37% asset-light in our earnings base with approximately $60 million of free cash flow and roughly 400 hotels. We are at a very different point today as a company. Our asset earnings mix has more than doubled from 37% to 75%, driven by our fee revenue growing from about $220 million in 2009 to over $800 million in 2022 and approaching $1 billion in 2023. And from a significant reduction in our owned and leased portfolio over that same period of time. For reference, we owned over 100 hotels in 2009 compared to only 34 hotels today. The implications of this evolution are clearly reflected in our free cash flow progression, which now benefits from a heavier mix of higher-margin fee revenue with a much lower level of capital intensity. So the path and the power of our trajectory is clear, but what does that mean for the Hyatt of tomorrow? It represents a further acceleration in our momentum. In 2025, we believe our industry-leading growth will propel us to have a system of over 1,500 hotels, driving more than $1.2 billion in fee revenue with an asset-light earnings mix in excess of 80%. This, in conjunction with the further reduction of capital expenditures, leads to free cash flow of approximately $750 million. It's a powerful continuation of the momentum that we've clearly demonstrated through our transformation to date. Our transformation, as I said, has been very intentional, and it is clearly unlocking value. Now some of you have been covering Hyatt and aware of our transformation since the beginning of my tenure as CEO. And I -- sometimes I get the question, Mark, you've been the CEO for of Hyatt for a long time, why didn't you pursue the strategy earlier? The answer to this question is really straightforward. So sorry to disappoint those of you who expected a complicated answer. I knew after a matter of only months as CEO back in early 2007, that we needed to become an asset-lighter enterprise as an important component, not the only component, but an important component of an integrated strategy to drive the ultimate outcome that I described earlier, which is to be the most preferred brand for colleagues, guests, customers, owners and shareholders. However, the truth is that we first needed to lay the groundwork to make sure that this transition was successful. And along the way, we also, by the way, had to manage through the two worst downturns in our industry's history. And of course, we also went public. So a little context, where did we start this journey? The answer is with almost no pipeline and without a globally coordinated development effort. So during what we call Phase 1 between 2007 and 2016, we needed to focus on three things. First, we needed to build our pipeline and elevate our net rooms growth in order to significantly increase the rate of growth of our fee base. We wanted to have a growing fee base in order to replace earnings from owned hotels that were to be sold, which would allow us to maintain our financial capacity and our ability to make investments in further growth. This required a much larger development team focused on growth. Second, we needed to launch or acquire more brands that would allow us to enter more markets and provide a wider variety of experiences for our guests. And third, we needed to allow more time for our owned real estate values to recover following the 2008 financial crisis. This would allow us to realize what I would describe as appropriate valuations for our hotel assets when we started the permanent sell-down of assets. By the way, this is exactly what we did. Over this very important period, we quadrupled our pipeline, representing about 23% of our existing base in 2009 to 37% in 2016, while opening 60,000 rooms over that period of time. We launched Hyatt Place, Hyatt House, Andaz, Hyatt Centric, the Unbound Collection by Hyatt, Hyatt Ziva and Hyatt Zilara. And we leveraged our balance sheet to recycle our owned assets to more quickly reach critical mass of our new brands and expand our presence in very high barrier to entry markets where our guests are traveling. So in other words, we laid the foundation for our asset-light evolution during this critical period and have been demonstrating the benefits of that over this past 5-year period. So it's no coincidence that in 2017 that when we announced our plans to start to permanently sell down assets, we started to lead the industry in growth at the same time. It's also no coincidence that over $4 billion in owned real estate assets that we've sold since 2017 have been at a multiple of over 16 times a level that clearly validates that we're getting full and fair value for the assets that we're bringing to market. As you can see, we've been busy over this stretch of time. We've grown significantly, both organically and through acquisitions using our asset base as a means to accelerate our transformation. Importantly, we've been very intentional in how we have grown and what we've acquired. We've always kept preference and differentiation at the forefront of our strategy and we prioritized innovation with very bold actions to stay ahead of trends. I'll give you some examples. First, our entry into the all-inclusive resort space in 2013 with the launch of Hyatt Ziva and Hyatt Zilara. This represented an early move into the space by a major brand company. Second, our acquisition of Miraval in 2017 which is the foundation of our robust well-being offerings. And again, one of the first brand companies to invest significantly behind well-being. Third, our entry into the lifestyle space in 2007 with the launch of Andaz, along with the subsequent acquisitions of Two Roads Hospitality and Dream Hotel Group. This has positioned us as the leader in the luxury lifestyle space. And finally, our acquisition of Apple Leisure Group, which vastly expanded our resort offerings and positioned Hyatt as the largest luxury all-inclusive resort company in the world. And during all of this, we made major investments in our loyalty program in data and digital capabilities, and that all underpins the execution of our strategy. We relaunched our loyalty program with World of Hyatt in 2017. We prioritize the use of data to unlock insights. And we invested heavily in digital capabilities to drive direct bookings and improve the guest and colleague experience. All these moves are driving our transformation and you'll hear a lot more about this from Mark Vondrasek in a few minutes. So let's be clear about one thing. This kind of work is not easy. Acquiring the right companies at the right valuation, that's only the first step and actually not even the most important step, integrating them both in terms of systems and most importantly, culture is absolutely critical, ensuring that each of the brands that we launch or acquire has the right market fit to be successful for our colleagues, our guests, our customers and our owners takes a significant amount of effort and expertise. We did all these things while maintaining the highest level of support for existing guests, customers and owners, consistent with our history and culture that's deeply rooted in care, which means we've had to work very differently. Our agile way of working was a necessity during COVID-19, and we've carried that mindset forward. We've built back differently, and we are working very differently today. Our mindset and our leadership behaviors are focused on agility and speed. We are providing autonomy by pushing down decisions, promoting experimentation and working in a much more cross-functional way. This allows us to do more with less resources because we're working more efficiently in how we do our work. Our agile way of working has unlocked possibilities, and that is allowing us to move with great speed. I'll give you some examples a bit later. The end result of all of that I've just covered is a fundamentally different company today. The compounding impact of our industry-leading growth and successful acquisition activity, coupled with our strategic investments with a special focus on data and digital and loyalty all supported by a culture that is adept at moving with speed and agility, equals a transformed company that is creating durable and growing value, one that is differentiated and driving preference in a way that is materially stronger and at a faster pace than it was just several years ago. Hyatt's transformation to a more fee-based and more asset-light, a more cash flow generative and a more resilient business is driving value to shareholders with 2022 serving as just the first year in which our results truly begin to reflect our performance as a different company. It was a record year on multiple dimensions. And for those of you who are shareholders, you've also been rewarded without performance in our stock. We're not just delivering strong results. We're doing so at a rate that is outpacing the competition. Whether you measure it by our performance by rooms growth, fee revenue, pipeline expansion or loyalty membership, we're nearly double and, in some cases, triple the rate of growth of our next closest competitor. Our relative performance clearly supports how we are moving with agility and growing more quickly, both organically and inorganically, which is helping to drive significant outperformance in the growth of fees and loyalty membership. The simplest way to think about this is that our value creation wheel is spinning much faster than our competitors. We also continue to be optimistic about the future and feel optimally positioned. We commented last week that we continue to see very strong demand trends, and we feel very confident in achieving mid- to high- single-digit RevPAR growth through the back half of 2023. As we look to 2024 and beyond, we're also optimistic in our outlook for that period. It's important to remember that even in our most recent quarter, our system-wide occupancy was still 450 basis points below 2019 levels. This has primarily been an ADR recovery so far, but that's changing. It's changing because group continues to strengthen, cross-border travel is recovering. Asia Pacific is finding its footing and showing momentum and business transient continues to move upward and gain momentum. As we look at the long term, we see multiple reasons for secular tailwinds, and we're not the only ones. For example, Smith Travel Research is projecting 8% growth for 2024 for luxury and upper upscale, and it is critical to remember that the rate of new supply remains extremely low, especially in the chain scales where our inventory is most concentrated. We also remain optimistic about the resilience of leisure and the high-end customer. Bookings, survey data, the broader structural and demographic data that we have supports that we are very well positioned to benefit from the growth in this area for years to come. And we see no signs of this slowing. This has been the strongest area of ADR gains compared to pre-COVID-19 levels and demand remains incredibly robust for our differentiated portfolio. And we're very excited about what we're seeing with respect to group bookings and the acceleration of the recovery in Asia Pacific. To provide context for group. Group pace in 2024 is 3% of last year. It's notable that just 3 months ago, it was actually pacing 2% behind last year. What this means is that we're booking into 2024 at a faster velocity and our lead volume is running significantly ahead of last year for future year bookings. As for Asia Pacific, we're seeing powerful trends. In April, Asia Pacific was already 8% ahead of 2019 levels, and that's still with a significant constraint in international flight capacity. We're confident that this will continue to serve as a strong tailwind into next year. Further, our acquisition of ALG, which we will talk about in a lot more detail shortly, could not have been better time to take advantage of the growing popularity and attractiveness of this segment, as well as the broader shift of extended weekends and prioritizing well-being, connection and experiences. Apple Leisure Group's portfolio continues to benefit from Airlift that is significantly ahead of 2019 levels into our key destinations, and we feel this will continue to propel strong demand into our all-inclusive resorts. This, combined with continued adoption of ALG Resorts by our World of Hyatt members as well as the overall increase in popularity of all-inclusive more broadly, leaves us very optimistic about the future of all-inclusive. And Hyatt's leadership position in this segment. Lastly, we're also optimistic about our growth profile, and we see conversions as an important part of our industry-leading growth. The power of our system and momentum in our brands is leading to increased preference for owners. There's a vast opportunity for conversions of independent hotels, and we will continue to focus on this area to drive incremental growth. For all these reasons, we remain very optimistic, and we are confident in our outlook and ability to maintain our momentum and deliver strong results into the future. Our portfolio is uniquely positioned to benefit from these current trends. The significant concentration of our earnings mix comes from leisure transient and group. We're looking at this data in a different way by hotel type, you can see a large majority of our earnings is driven by luxury, lifestyle, resorts and group or convention hotels. The chart on the right is a different way of making a similar point. We serve a high-end customer base, one that has proven durable through cycles. Further, we believe that group and convention business will be a continued source of strength. We're seeing strong group booking trends, especially from corporations and expect this growth to continue. What's really interesting and frankly astounding is that there's practically no new meeting space being built in the United States at this time. According to Smith Travel, there are just over 10 luxury and upper upscale hotels under construction in the United States that are larger than 400 rooms. In other words, not only is their low supply growth overall, there's next a zero supply growth in hotels that can serve larger groups. So where do we stand? Well, when you think about Hyatt, we have 76 hotels in the United States that are over 400 rooms. These hotels include nearly 4 million square feet of meeting space and account for a large percentage of group earnings that you see represented on this page. We see a really bright future ahead for this segment. We feel great about our positioning. And you will hear how we've differentially performed in the group segment from Mark Vondrasek in a few minutes. This provides us confidence that we'll be able to capture the tailwind from industry trends and strategic investments that will carry us well beyond 2023. The trends are in our favor. And of highest importance, we have the culture and the strategy to capitalize on those trends. The House of Hyatt as we affectionately call it, which is our summary -- which is a summary of our strategic approach has remained consistent over the past 6 years. We will continue to focus our strategy to create value for all of our stakeholders and are confident in our plan to execute with our purpose to care for people so they can be their best, serving as the foundation to our approach. So we've clearly established how we transformed, but let's dive a little deeper into our capital strategy and how that's been a powerful way to accelerate our progression to an asset-light enterprise, vastly improving our free cash flow generation in a very short amount of time and driving increased preference for our guests, customers and owners. The execution of our capital strategy has been remarkable. Over the past 5 years, we have realized proceeds of about $3.8 billion from the sale of owned hotel real estate net of acquisitions. And we invested approximately $3.6 billion to acquire three platforms: Miraval, Two Roads Hospitality and Apple Leisure Group. Now we closed on the Dream Hotel Group acquisition in 2023, and that's not included in this figure because we're looking at 2022 data. The earnings contribution in 2022 from our acquisitions was nearly double the earnings that we lost from our asset dispositions. I'll say that one more time. The earnings from our acquisitions was nearly double the earnings that we lost from our asset dispositions. More specifically, the implied adjusted EBITDA multiple from the $3.8 billion of net real estate that was sold was over 16x while the earnings multiple from the platforms that we acquired was approximately 8x. Additionally and very importantly, the platforms that we acquired are predominantly asset-light, meaning they need far less capital than the assets that we sold. For example, we estimate that the owned real estate that we sold since 2017 would have required $130 million in CapEx per year on a run rate basis. By comparison, the platforms that we acquired collectively needed only $40 million of CapEx in 2022. This is a key driver when you look at how our level of capital investment has been reduced over time with approximately $200 million in CapEx in 2022. And compared to an average of over $320 million invested each year between 2017 and 2019. Ultimately, the successful execution of our capital strategy has led to a transformed free cash flow profile. In 2022, free cash flow was $473 million, over 50% better than any previous year in Hyatt's history. We are more fee-based, more asset light, more cash flow generative and resilient, and our journey is not complete, we're only just beginning. Looking ahead, we're now providing full guidance for 2023, which Joan will cover in more detail and expect our free cash flow to expand further to approximately $550 million in 2023. And beyond 2023, we expect to generate approximately $750 million of free cash flow in 2025 after taking into account a decline of $100 million in earnings from the sale of $1.3 billion in assets, which we plan to execute between now and the end of '24. This again highlights how profound our transformation has been and the pace of change that we're driving. Our capital strategy has been a key lever to drive preference and unlock value. We're committed to continuing down this path. In the near term, we remain focused on completing our $1.3 billion asset sale commitment by the end of 2024. Beyond 2024, we have significant capacity to continue down this path. Our owned hotel adjusted EBITDA is approximately $300 million when adjusting for the expected stabilized performance of the Hyatt Regency Irvine, which will reopen in the fall. This implies a value of approximately $2.6 billion to $3.2 billion that remains after the completion of our sell-down commitment. In other words, we have a clear path forward to further transform our business by selling down our owned hotel assets and unlocking more value for our shareholders in the future. As we've maintained in the past, our first priority is to utilize capital to propel growth that is meaningful and valuable. And as to acquisitions, we will continue to maintain a very disciplined approach. We're committed to creating value for our shareholders, and we will continue to prioritize investments that are accretive to our earnings. Our investment strategy will be based on five key factors that are listed on this slide. These are the same factors that we have applied consistently and have served us incredibly well with our successful acquisition so far. They will continue to inform our activity going forward. So let's dive a little deeper into our acquisitions and why they've been so successful. As we covered these four acquisitions have, that we've made in the last 5 years, have been transformative to our portfolio, leading to increased guest preference, enhanced loyalty and compelling financial results. First, let's look at our Miraval acquisition. We acquired this brand in 2017 to extend our reach into wellbeing. Miraval, it's a world-renowned destination span well-being platform with luxury clientele who seek luxury experiences, and it's powerfully additive to our existing customer base. The strategic merits were clear, and they've been validated. We expect that these three properties will generate $35 million in adjusted EBITDA for Hyatt this year. And notably, these hotels run a 45% World of Hyatt room night contribution, while generating over $900 in total revenue per available room, which is 87% higher than the U.S. luxury chain scale average. This illustrates the strength of our world of high customer base and the value that the Miraval acquisition has brought to our members as it's a very differentiated experience from anything that our competitors can offer. Furthermore, the knowledge and the practices that we've gained through the experts at Miraval, have informed offerings to guests and group customers across our portfolio that's made a meaningful difference in our momentum. Next, our acquisition of Two Roads Hospitality in 2018 has been an incredible success. Our expected fees in 2023 plus estimated pipeline fees result in a fee multiple of under 6x the purchase price. The question naturally arises how was this acquired at such an attractive valuation. But the truth is that the value was unlocked after the acquisition, it was our ability to successfully integrate the company and scale these brands. Let me give you some data. In total, in just over 4 years, 2 of which were during the depth of the pandemic, we've grown the portfolio by 50%, and we've grown the pipeline by 100%. And again, you can see the power of the World of Hyatt program. It drove 43% of room nights to these brands in 2022 with further growth continuing into 2023. So I think you understand the trend. Acquiring a company based on economics that don't include the power of our system, then plugging the acquired brands into our system has unlocked significant value through great execution. And then there's Apple Leisure Group. Our biggest acquisition, which made us the largest all-inclusive hotel company in the world by a very wide margin. The success of our acquisition is well known. But what we're also thrilled about is the cultural fit between our companies that has enabled the acceleration of results and will do so into the future. We'll cover this in more detail in the next segment, but we're thrilled with how this has performed. And again, it's notable that after less than 1 year, in fact, it's just about 10 months. World of Hyatt members already account for 21% of room nights at ALG Americas resorts. And finally, our Dream Hotel Group acquisition. This fits perfectly with prior acquisitions. It broadens Hyatt's lifestyle reach while providing a new experience for our World of Hyatt members. It's a brand that is highly differentiated from anything in our portfolio and different from offerings by our competitors. It also happened to expand our brand presence in New York City by 30%, and we feel great about the economics and value accretion of this deal. We're excited to get it plugged into the world of Hyatt System and let our members enjoy a myriad of new experiences across the globe and to have Dream Hotel Group owners profit from the power of our system. What's the total impact of all this acquisition activity? Well, we already talked about how it's transformed our earnings profile and is driving record free cash flow. However, what may not be fully appreciated is how it's transformed and differentiated our portfolio. As a result of these acquisitions, we have over 50,000 incremental luxury and lifestyle or resort rooms and a robust pipeline of over 20,000 rooms associated with these brands. Further, the value that we've unlocked is very significant, especially relative to our overall size as a company. Once Stream Hotel Group is fully stabilized, we expect these platforms to contribute over $500 million of earnings with very strong free cash flow conversion because they are all asset-light businesses. This acquisition activity is truly compelling when you combine these powerful economics with significantly enhanced guest preference.

Thank you very much, we will now take a 15-minute break. We do ask that everyone please return promptly at 9:25. Once again, a 15-minute break. [Break]

Welcome back, everyone. Our program will be convened in 2 minutes. We will restart our program in 2 minutes. Thank you. And now please welcome back Mark Hoplamazian.

First of all, I hope you enjoyed your break. And secondly, if you were paying attention to the video, it should wet your appetite to become a UVC member. We're going to explain to you what that means in just a few minutes because I am super excited to be here to tell you a lot more about ALG. Now the addition of ALG, as you know, doubled our resorts, the resort number -- the resorts in our portfolio, and it significantly accelerated our migration towards an asset-light earnings mix. The financial results from ALG have been remarkable, and we are very confident in the durability of those results going forward and further growth. Furthermore, we see a lot of further growth potential in the all-inclusive segment overall, which is rapidly growing in popularity and preference. With ALG's vertically integrated platform, we're uniquely positioned to capitalize on this trend and further expand our leading position in the all-inclusive market. Later in this presentation, two of our very talented ALG leaders, [ Rodrigo Laguna ], Group President of the [ Unlimited ] Vacation Club and [ Ray Snisky ], who's Group President of ALG Vacations, will join me to talk about their respective businesses. But first, I'd like to begin with the trends that we're seeing in the broader all-inclusive market that underscore the demand for this type of offering. One of the ways that we measure appeal and demand of all-inclusive more broadly is airlift to markets that are all-inclusive focused. 2023 scheduled airlift to ALG's key destinations is at record levels. And it has increased by nearly 250% since 2005. It's also notable that airlift to key all-inclusive markets has been recession resilient. As you can see, following the 2008 financial crisis, airlift fully recovered by 2010, and it rebounded very rapidly again after COVID-19 with another record year expected in 2023. Remember, Mexico and the Dominican Republic never shut down, never closed the country during COVID. This trend is notably stronger than non-all-inclusive oriented resort markets in the United States, which have not seen a similar pace of growth or resilience. Here is why all-inclusive has been growing. Simply put, guests love it. They love it for the benefits of convenience, simplicity and value. We all have very limited vacation time. So we want to make the most of it. We want to stay with hotel brands that we trust and that we know well. Leisure travelers also appreciate paying and all-in upfront cost. So there are no surprises during their trip. Our all-inclusive hotels offer a seamless high-touch and high-end guest experience. And yet, the average cost of an ALG vacation is less than other high-end alternatives. Guests pay 13% less per night when they stay at an ALG all-inclusive resort as compared to our non-all-inclusive competitive set within similar markets. Because of this, increasingly, we are seeing the higher-end traveler value the convenience and ease of an all-inclusive offering where they can get great service, as I hope you all agree and experienced last night, fantastic accommodations and at least in our case, a very elevated food and beverage experience, owners benefit too. All-inclusive guests follow a very predictable pattern. They book well in advance, and they have very low levels of last-minute cancellations. This enables us to effectively manage staffing and expenses, including very importantly, food and beverage costs. That predictability is critical. Further, ALG owners enjoyed the vertically integrated model that drives strong year-round occupancy, leveraging the distribution benefits of ALG vacations and the unlimited vacation club. For these reasons, ALG all-inclusive resorts have very strong financial returns, driven by high occupancy, highly effective cost management and very strong rates. In fact, our ALG owners are generating 34% more profit per available room with GOP margins that are 940 basis points higher than our non-all-inclusive comparative set. This strong level of outperformance is why 80 -- over 80% of the hotels in the ALG resorts portfolio are with multi-property owners, which is a clear demonstration and indicator of both owner satisfaction and a willingness to commit capital behind our brands. The benefits of luxury all-inclusive for owners and guests are evident, and it helps explain why so much of the market is gravitating towards this model. Nearly 80% of the rooms added to the all-inclusive segment since the start of 2020 have been luxury or upper upscale, which clearly illustrates the growing preference for a high-end all-inclusive experience. ALG has been at the forefront of luxury all-inclusive since it opened its first hotel in 2001, true pioneers. I'd like to go a layer deeper on ALG and why its footprint combined with its end-to-end solutions provide a unique platform for durability and growth. ALG's vertically integrated end-to-end solutions provide a seamless guest experience from start to finish. Now at Hyatt, we took the ALG brands, and we combined them with all the all-inclusive resorts, including Hyatt Ziva and Hyatt Zilara, and we formed the inclusive collection, the largest portfolio of luxury all-inclusive resorts in the world. The inclusive collection ensures guests are staying at the highest quality properties and receiving the best possible care. ALG Vacations is a booking platform that provides all-inclusive vacation experiences, including flights, transportation, excursions and resort packages. It is both B2B and B2C, used by travel advisers as well as consumers directly. ALG Vacations is differentiated by its resort packages, which take care of every piece of the guest vacation from when they board their flight to the moment when they return home. ALG Vacations resort packages offer guests peace of mind, knowing their entire vacation is taken care of in a reliable and very high-quality manner. The Unlimited Vacation Club is a membership program that provides exclusive offerings at ALG's all-inclusive luxury resorts. UBC is a very differentiated offering, which we will cover further shortly. This membership club provides members with discounts, free nights, upgrades and special access to areas on property. This vertically integrated approach allows ALG to offer more comprehensive and personalized experiences to guests. It also allows ALG to better control the quality and experience of a full vacation journey, which drives customer loyalty, which cultivates a love for our brands and results in industry-leading growth. Each of these offerings also fuels performance for owners. ALG Vacations drive strong year on demand and high margins, as we mentioned, and a portion of the unlimited vacation club membership revenue is shared with owners. With this vertically integrated platform, guests win and owners win. While ALG's three businesses generate revenue in different ways, they are all asset-light, and they are all durable, resulting in significant revenue and fee-based earnings. The inclusive collection generates management fees from hotel owners who pay for management and marketing services. Unlimited Vacation Club generates membership revenues from the sale of membership contracts. ALG vacations generates distribution and destination management revenues from reservations booked through its platform. ALG has been a pioneer in luxury all-inclusive. It's leadership in the space combined with the unique competitive advantages through its end-to-end solutions have propelled it to industry-leading growth. ALG's portfolio expanded from 9 properties in 2007 to 111 properties in 2022. It has grown at a remarkable 16% compounding durability even through very difficult economic environments. And as we'll cover shortly, we're set for another year -- another record year of see growth like this elsewhere in our industry. Let's do a deeper dive on each of these offerings that have propelled ALG's growth, and I'll begin with the inclusive collection. With ALG and Hyatt, together, we form the inclusive collection, which is comprised of 9 all-inclusive brands across 121 resorts, 38,000 rooms and approximately $3 billion in total systems revenue generated in 2022. Aswe continue to expand our portfolio in new markets and destinations, we see a significant opportunity to expand across the world. As an example, we just opened two luxury all-inclusive hotels in the Black Sea and Bulgaria just a couple of weeks ago. Our unwavering commitment to delivering exceptional experiences to our guests ensures continued growth, durability and success while delivering exceptional value to owners. All of the inclusive collection in perspective, it is by far the largest luxury all-inclusive platform in the world, with 33% of the global market and notably bigger than the next three competitors combined. We are the undeniable leaders in this space I'd like to now invite into this conversation, our Unlimited Vacation Club Group President, Rodrigo [indiscernible].

Thanks, Mark. And hello, everyone. I'm excited to talk about the unique benefits of our UVC members experience and the differentiated source of demand is created for both Hyatt and ALG.

Thank you. So tell us a little bit at the high level, what differentiates UVC from other offerings?

Well, UVC is very different from a standard loyalty member program, which is free to join. UVC member pays on average a membership fee in the range of USD 10,000 to USD 15,000, plus a small annual fee. In return, they get a certain number of free nights discounted rooms of prices across all ALG resorts, which today average around 25%. And very importantly, VIP treatment while in property, including a streamlined checking process, access to special designated areas in property and invitations to exclusive member-only events. And a favorite part of me is the flexibility. Our members are in confined to certain weeks of the year are locked into specific contracts. They can choose to travel to any research location that is part of the using program whenever they want or however long they want and choose the price range they want for each trip.

So tell us about the trends and what this has looked like over time?

So I'm really proud of our consistently strong growth in active members. The secret to our success is very simple. Our members love the program. Once a UVC member sign up, they are members for an extended period of time. In fact, approximately 20% of our new contract sales annually are customers who are upgrading to hire tiers within the cloud. The higher your membership tier, the more benefits you receive. Now nearly all new UVC members are come from customer referrals or in property referrals. It speaks to members happens within the programs. Our focus on offering our members a unique look service experiences has driven our consistently strong membership growth rate. UVC also provides an embedded source of demand for higher-end ALG. Our members are the first to visit new properties, further contributing to the program success and providing value to owners through faster ramp-up and a durable source of demand.

Well, I can imagine that from an owner's perspective, having an installed demand base when you're opening a new hotel is extremely valuable. It also is true that they book direct, and that's got to be valuable as well.

Yes, that's right. Our owners love UVC members because even though they get a discounted rate, they are booking direct and spending more on property as compared to nonmembers. Furthermore, they are frequent visitors during off-peak periods, which helps occupancy at higher levels. And also very importantly, as just shared briefly, our owner shared in the economics of each signed contract. They get paid a commission from the initial membership, and we pay also rent for the UVC space on property used to solve memberships. You commented earlier on ALG Resorts having a much stronger GOP per room than competitor hotels. The UVC program is an important driver of that. Owners received impressive financial offset from the program, which ultimately drive strong margins and fuels more room growth.

So effectively, it's a program where guests win and owners win and Hyatt wins. So it's like a mutually beneficial platform, which is fantastic. But tell us a little bit about what membership looks like going forward?

So at the end of 2022, we had 131,000 active members, accounting for approximately 11% of the occupied rooms at ALG Resorts. And most recently, at the end of first quarter, our membership grew to 134,000 members. In terms of interesting trends, one area we've been very pleased is with a strong interest from World of Hyatt members. Our average new membership price has grown significantly over the past year, and we see World of Hyatt members opting for UVC membership at a higher frequency than nonmembers and purchasing higher-tiered memberships. In terms of overall growth of UVC members, the rate has been very reliable because as I noted, we historically see very low early termination rate of less than 6% of signed contracts, which demonstrates the high satisfaction of value that our members place on the program. UVC members were the first guest to return to our resorts after the pandemic. They continued making membership payments and our mix of occupied rooms from members increased because of their loyalty.

Well, the low cancellation rate really speaks to the durability. But let's talk a little bit about the way in which we can start thinking about future growth for UVC membership?

Yes. I think if we look at the graph that is there back here, we can see a very close correlation between the number of new contracts signed and the system size. This relationship has remained consistent since the program inception. You can see that as the system has grown, so have the number of people visiting our properties in [Indiscernible] rooms, and that's ultimately leading to record contract signing as we have more inventory. It's also notable that even in 2020, during the pandemic, the number of new contracts move in a very predictable way relative to the rooms available this year due to some of the hotels being closed.

Well, I suspect that there are at least a few people in the audience who have taken statistics. That is one of the closest and tightest lines of fit I've ever seen through every statistic class I've ever taken. So that's pretty remarkable. It's clearly demonstrating that UVC has the foundation to weather any economic cycle because it's remained durable and steadfast even through the pandemic. I was really struck by the fact that UVC members continue to make payments all the way through, so preserving their membership is really important. There's only one other thing I wanted to mention, which is you mentioned earlier that the average for the UVC memberships is between USD 10,000 to USD 15,000, but the actual range is quite broad because we have tiers that go up to $100,000 with many more benefits. So you basically have segmented the market and have products for many different types of customers.

Definitely, that's the case. That's a good one.

And I think that what you said earlier is that the World of Hyatt members are opting for higher tiers, so that demonstrates the match of the demographic profile. I think what's important is that the complementary customer base that we talked about in underwriting our deals and underwriting our acquisitions, this is a demonstration that there's a complementary customer base.

That's right. That's the case.

So I think that the benefit to owners that Rodrigo explained, it's one of the components of the program that is very underappreciated. This membership club is unique and really provides a competitive advantage because it is directly contributing to higher GOP margins for the owners, even while delivering great value to guests. Rodrigo, thank you. So now let's move to ALG Vacations, which is a powerful distribution and destination management platform that serves as one of the largest providers of U.S.-based leisure travel to Mexico and the Caribbean. And to do that and explain the power of the platform, I bring you the very powerful, Ray Snisky, our Group President for ALG Vacations. So thanks for joining us today. I think we should assume that people are generally familiar with ALG Vacations, but maybe not specifically understanding what it is. So let's start from some basics about what ALG Vacations is and how it's differentiated.

Sounds great. After last night, I think everyone in the room is completely aware of what ALG Vacations is. But really, what ALG Vacations is, is a leading online marketplace platform that provides personalized support to travel advisers and customers. We do this via a seamless booking experience with top-tier customer service. ALG Vacations is a market-facing product with 8 different and distinct vacation brands. We offer dynamic packaging and multichannel merchandising to airlines and hotels through both B2B and B2C. And that's powered by our Trisept technology platform. We have a diverse resort portfolio, including, obviously, all of our ALG all-inclusive properties as well as travel experiences through Amstar, our destination management company, that allows us to create that emotional connection with customers during those excursions. It's a complete end-to-end experience. We've optimized this distribution platform over decades with a heavy dose of business transformation during the last 30 months. We were able to create a silver lining through COVID. We improved business processes. We deployed automation and technology solutions, and we've taken steps to lower the risk profile of the business in any economic environment. The improvements have resulted in durable and sustainable advantage in driving value for the company. We didn't return from COVID, we came roaring back.

So I think it's important. You mentioned it's B2B and B2C. And I know you're trying to drive preference among both of those groups. So maybe just spend a minute describing what that means.

Exactly right. It drives preference and that's why we have 173,000 travel advisers on our platform. Collectively, they're driving $3.5 billion in annual travel bookings with access to 875,000 properties worldwide. Travel advisers are critical for many consumers looking at vacation. The decline in relevance of travel advisers has been predicted for many years. However, if you're going to spend $5,000 to $10,000 on a vacation. You want to get it right and the travel advisers make sure that this happens. The B2B channel is very strong for us, and it's actually booming right now. They actually have a 27% unit revenue increase over our B2C business. They book higher-rated hotels and higher room categories for longer lengths of stay. Travel advisers who book through ALG Vacations are using educational and promotional materials, consistency and high customer satisfaction to pull more and more customers to properties. Additionally, our travel advisers and guests appreciate that we handle transportation and these high emotionally connected experiences as evidenced by our very high conversion rate of guests, opting for transportation experience at time of booking. Over 80% of all customers traveling with ALG Vacations book transfer services through Amstar as part of their booked package. It's all part of the same company with the same great reputation, which provides added confidence in a seamless booking experience that captures all parts of the vacation journey. Being able to provide all of these services as one company drives value and is the reason why we continue to see ALG Vacations perform so well. A favorite stat of mine is our market share. We drive major market share in the areas that we play. It's estimated that ALG Vacations accounts for an astounding 12% of all passengers who travel from the United States into the largest all-inclusive markets of Mexico and Caribbean, driving strong market share for our owners. And if you just compare us in the segment in which we operate, we operate 100% in the leisure segment, that percentage of market share increases significantly. Our demand generation for ALG resorts is unique. It's a value-added for owners and further highlights the power of the ALG platform, which provides owners access to resources and support to help them optimize their performance. In fact, in owner surveys, our distribution capability is consistently mentioned as a leading driver in hotel management selection.

Yes. I just -- I want to just note two things. First, going back, you mentioned, you have 173,000 travel advisers on the platform. That's a proprietary platform, right? That's our proprietary platform...

That is absolutely correct.

Second, having achieved nearly 1,400 basis points of higher occupancy, okay, 1,400 basis points of higher occupancy versus non-all-inclusive comp set -- a non-all-inclusive comp set of similar quality properties is incredible. It's amazing how our ALG resorts are able to keep a strong and stable occupancy throughout the year, which is starkly different than non-all-inclusive -- than hotels in the non-all-inclusive competitive set.

It's absolutely right, Mark. Similar to what Rodrigo covered with the UVC program, this really is a big win for the guest, a win for the owner and a win for Hyatt. The end result is a terrific business that is generating strong results while delivering a distinct competitive advantage for our owners.

Well, thanks, Ray. Keep it up. So I hope that covering UVC and ALG Vacations, specifically helps give you a much better understanding of the vertical suite of services and the integrated approach that we take in serving our owners and our guests in the all-inclusive segment. So now let's turn to growth, one of my favorite topics. We're continuing to fuel the growth of the inclusive collection through the World of Hyatt loyalty program. As a reminder, UVC membership is exclusive to ALG properties. But the World of Hyatt benefits are available within all of the inclusive collection properties. Since integrating ALG resorts into the World of Hyatt loyalty program a year ago, we've seen the number of World of Hyatt members staying at ALG Resorts in the Americas increase from 0 to over 20% as of the first quarter of 2023. More than 500,000 guests has signed up for World of Hyatt membership at ALG Resorts since the program went live in May of 2022, 1 year, a powerful validation that ALG and Hyatt together are driving a very strong network. Further, this achievement demonstrates the exceptional value proposition that World of Hyatt provides to its members and highlights the potential for further growth in this segment. World of Hyatt members are driving value for our owners as they spend 30% more than nonmembers while on property at ALG resorts. And we're only deepening the opportunities we're bringing to World of Hyatt members by leveraging the power of the program. We're so pleased with these results and are excited to continue growing this segment. We have plans to open 12 new resorts in 2023, adding 5,000 rooms on a gross basis and expect net rooms growth to be in the low double digits. These new resorts will be located across 8 destinations in 4 different countries, expanding the collection's global reach and providing even more opportunities for guests and owners. Further, we continue to have exciting discussions around conversion opportunities as owners outside of the ALG network are increasingly attracted to the unique value drivers the platform offers. And remember, as we grow our room count, especially in the Americas, it doesn't just translate into more management fees. It drives more membership for UVC and more ALG Vacations bookings as well, as you just learned. We see a bright future ahead for ALG as part of Hyatt and as we scale growth in the all-inclusive segments across the world for many years to come. And lastly, as we bring it all together, the financial success of ALG has been incredible. ALG's asset-light platform has consistently outperformed our expectations, resulting in significant earnings and free cash flow generation. It's underappreciated how unique the attributes of the platform are and how they're driving long-term growth and financial outperformance. It's a model that is extremely difficult to replicate. And the broad growth and preference for all-inclusive suggests that we have significant room for further growth. The platform generated a cash flow conversion of approximately 75%. This strong cash flow generation has played a crucial role in Hyatt's overall transformation into a much stronger free cash flow enterprise. In summary, the growth potential of the ALG platform is significant, and we are investing behind it. We're working closely with our owners because as they grow, we grow; as they win, we win. Owners love that UVC and ALG Vacations drive demand generation, resulting in increased awareness and strong returns. And they're benefiting from -- even more from the integration of ALG resorts into the World of Hyatt loyalty program, providing global brand recognition, innovative technology and increased resources. We're excited about the future of ALG. We believe that we are not only -- we're only just getting started with unlocking the full potential of this platform, and we look forward to continuing to build on the success well into the future. So I hope that was very helpful in giving you a lot more detail around the ALG platform and how it operates. And now it gives me great pleasure to welcome Mark Vondrasek, our Chief Commercial Officer, to the stage to tell you a lot more about how we are personalizing the guest and customer experience.

Good morning, everyone. It is great to be here with you today. I know a lot has changed since we were last together in 2019, and that's certainly true from a commercial perspective as well. I think you only need to look at our brand bar to see how clearly our new Inclusive Collection has contributed to our growth. We've also added a few new brands since we were last together, Caption by Hyatt, UrCove, Dream Hotels and now, which we're very excited about, Hyatt Studios. We've entered nearly 200 new submarkets globally since we were last together as well. And I think this is particularly exciting for our World of Hyatt members, who've always told us they look for more luxury in more destinations. We now truly have an answer for every stay occasion, and we're excited. As you've heard from Mark, our World of Hyatt member base has risen from 10 million to 36 million members just 5 short years ago. We are at an all-time program high for loyalty room night penetration and direct channel contribution, and we're winning share globally. And as we've grown, so has our managed fee cost base. With increased strength and scale, there is now over $22 billion in revenue that flows into our system, up from $16 billion in 2019, generating 44% more spend out of system funds, excluding World of Hyatt and ALG. What this has allowed us to do is to invest over $120 million annually in digital to help us drive direct business. We've also built a team of over 35 colleagues in data and analytics to help us better understand what our guests and customers respond to. We're also making significant investments in our core technology platforms such as revenue management and our central reservation systems to support our growth. I'll share a little bit more about that with you in just a few minutes. But where we spend these incremental funds is largely driven by key insights that we learn from staying very close to our guests, customers and our owners. And I think we did this more than ever during the pandemic, even when many of them had no business to give us. So what I'd like to do is share just a few key macro and stakeholder insights that drive our work today commercially. First, remote working has increased the blur between leisure and business travel, heightened the demand to create a capability for hybrid meetings and recognizing the value of now traveling to build personal connections, even more than ever. In 2022, AHLA state of the industry report highlighted that 89% of the participants wanted to include some level of vacation time tagged on to their next corporate trip. Another COVID long-tail insight we believe we can build from, particularly here at Hyatt, is that people around the world seem to have a heightened focus on taking care of those closest to them. And as I think about this personally, I think the line between being okay and not okay got a lot thinner and a lot closer than any of us would care to admit over the last few years. We see this as an opportunity to even better connect with our guests and customers. Our Guest of Honor benefit, which is a World of Hyatt program benefit, is not just a relationship between me and you, the guest who shows us frequency at our hotels. But it recognizes if someone is important to you as our valued guest, then they should be equally important to us. And to be honest, most loyalty programs don't think about loyalty this way. We believe we can evolve this benefit, which has been with us a long time, to an even greater differentiator to match the insight I just shared. Well-being, you heard Mark talk a little bit about this. Well-being both mental and physical was always on our guests' and customers' minds, certainly pre-pandemic, but even more so now. We're seeing our guests and customers focusing on experiences over products, stopping and enjoying more experientially while with us today than ever before. A recent American Express global study found that 76% of global travelers want more from travel that improves their well-being, and well over half of them are willing to pay extra for that opportunity in those services. And lastly, as an insight, guests, customers, colleagues and owners expect flexible and secure technology solutions that are truly familiar to them. It's those insights that shape our areas of focus commercially, the things that we're working on that I want to step you through today. So I'm going to focus on 5 areas that are critical to our success commercially. First, harnessing the value from our exciting growth that Mark just shared with you, our opportunity to unlock that value, an opportunity we see to redefine loyalty in a way that is very unique to us at Hyatt, commercializing well-being and ancillary offerings and revenue for our owners, reimagining sales meetings and events to meet the demands of our customers today and elevating our digital and technology platforms as well. So let's dive a little deeper into these. We'll start with harnessing the value from our recent growth. Hyatt's acquisitions and alliances have thoughtfully been with companies that share a common strategy of increasing share of wallet from high-end customer segments, multiplying the network effect of having come together. If I illustrate this in Europe, I think, is one of the best examples, we added ALG last year, which you know, gaining a heavy presence in the Canary and Balearic Islands in Spain. The Lindner deal, which we -- which happened this year, certainly now gives us a strong presence, especially in Germany, but it also represents the largest feeder market to the Canary and Balearic Islands in Spain, therefore, helping our ALG resorts as well. Now as you've heard, we will be adding Mr & Mrs Smith, which upon closing, gives us access to a new high-end guest base, predominantly in the U.K. which expands our network for our World of Hyatt members. With ALG, we have seen the power of leveraging an effective distribution platform in a complementary segment, and we'll be looking to replicate that approach with Mr & Mrs Smith's European-focused boutique luxury portfolio to harness the value of growth for the entire Hyatt system. In addition to meeting many new guests, this growth also allows us to form relationships with hundreds of new owners as well. And it's clearly working. Since integrating World of Hyatt into the Americas ALG Inclusive Collection resorts, Mark shared this, we've already grown to 21% loyalty penetration in just 1 year. We're also strengthening the ALG membership program of UVC by giving UVC member status in the World of Hyatt, now creating reasons for them to stay within the World of Hyatt portfolio for all of their travel needs. Additionally, some World of Hyatt members are also buying UVC memberships. Similar to being highly valuable guests, they are also highly valuable members. They pay 45% more than other nonmembers who are prospected from other agencies. All of these, we think, are great examples and clear ways we are strengthening the entire network effect of our combined growth. Now let's spend a minute on our opportunity to redefine the loyalty space. I think we're winning in the loyalty space today. I truly do. We are being recognized as a leader both in the press, but much more importantly, by our guests. And we have great momentum, as you've heard. World of Hyatt growing from $10 million in '17 to $36 million today represents growth that is more than twice that of our next highest competitor. Our members stay more, they spend more and at the highest level, they are 40x more valuable than nonmembers. We're redefining loyalty in two very specific ways. The first is to create differentiation with our strategic alliances. I think the best example of this is our alliance with American Airlines, the largest airline in the world, which gives our valued members the opportunity to earn dual currency and elite benefit sharing. This has been great for our members and their overall travel experience. Thinking of them holistically outside of just the hotel travel experience. And it also delivers great value for our owners. Hundreds of thousands of World of Hyatt members have linked their accounts and consumed over 2 million room nights across our brands and portfolios -- portfolio this last year alone. Strategic alliances like American help us shift share with high-value travelers when they now fly American and stay Hyatt. Secondly, an opportunity to redefine loyalty exists by building deeper relationships. And this is one that I'm particularly excited for. We are working to extend care to our guests and customers by expanding our Guest of Honor program benefit within World of Hyatt. For those of you who may be unfamiliar, Guest of Honor is a benefit that allows our most valuable World of Hyatt members to episodically bestow the same benefits they've earned to someone close to them when they are traveling. And we continue to hear from our guests, our most loyal guests, our travel advisers, our corporate accounts about how much they value this benefit. It is unique in this industry. Let's hear from a couple of our members on how they've experienced the evolution of our Guest of Honor benefit within World of Hyatt. [Presentation]

I think it's simply a better and pure definition of loyalty. For me, if a company that I'm loyal to does something for those closest to me, it's actually much more valuable than just recognizing and taking care of me. Think about parents' milestone anniversaries or your spouse or significant other who travels alone. What a great opportunity to expand and redefine what it means to truly have a loyal relationship in this industry. On to the next area, commercializing our well-being and ancillary offerings. As you'll recall from our key insights just a minute ago, COVID fundamentally shifted the importance of well-being, not just the physical aspect, but guests and customers now wanting to be more mindful, more present, more connected, searching for experiences over products and certainly willing to pay for them. Our position of strength to harness this opportunity really stems from our purchase of Miraval back in 2017, which is undoubtedly one of the leading wellness brands in all of travel. Miraval helps us in many ways, but one good example is the deeper relationship it has allowed us to create with one of our largest corporate customers, PwC. PwC now rewards their newly promoted leaders, first-time leaders, to a full week at Miraval with unique programming for themselves and their significant other. That programming in that week focuses on the importance of finding and keeping, over your career, work-life balance, mindful practices, the importance of intention setting for a day or going into a busy period, well-being skills that these colleagues can take back with them as they embark on their respective career paths. This relationship alone delivers 2,500 room nights per quarter to Miraval, but more importantly, for us, it deepens our relationship with -- between PwC and their colleagues and as a result, between PwC and us. We're also offering over 150 well-being experiences globally to our guests with exclusive collaborations like Headspace; infusing into our meetings and events programming our FIND platform, which is our World of Hyatt experiences platform. And in this space, looking forward, we really have an opportunity to commercialize these experiences at scale. Let's hear from a couple of our guests and colleagues on our new signature well-being experiences currently being delivered at many of our resorts today and the impact it's having on them. [Presentation]

Very unique, very powerful experiences. We didn't just buy Miraval to do incredibly well at a handful of assets. We bought Miraval to learn from that unique capability and pull it across the entire Hyatt network. These experiences give our guests and our customers reasons to come back to us time and time again, and the feedback has been incredible. The work we're doing digitally to commercialize our well-being experiences is also essential to build a platform that we can leverage to sell other ancillary experiences as well: spa appointments, golf, tea times, room upgrades. And we've learned a lot from ALG in this space, how to thoughtfully sell these experiences and offerings in the booking path is something that they have done incredibly well. For our owners, this unlocks additional revenue. For our guests and customers, it delivers experiences that they're looking for and willing to pay for. To do all of this, we're leveraging our machine learning engine, proactively offering guests these options at various digital touch points. Well-being is not just top of mind for our guests, our customer accounts are also keen for innovation. This leads me to my next focus area, reimagining sales and meetings and events. Again, and perhaps surprisingly, at the pace we've seen here, we are building from a position of strength in this segment. If you double-click into the tremendous market share growth shown here, what it reveals is that we have taken share with over 90% of our top corporate customer accounts. This has a lot to do with the relationships we invested in during the pandemic. And our global luxury sales program called Hyatt Privé also continues to accelerate its contribution. Looking forward in this space, we're continuing to invest heavily in our platforms and products for the entire group segment. We're redesigning hyattmeetings.com. We're strengthening both Privé and our business travel loyalty program we call Hyatt Leverage. We're also extending World of Hyatt benefits to our customers, including Guest of Honor, which I just talked about. Lastly, we are strengthening our meetings and events platform. During the pandemic, we built a team, a cross-functional team, dedicated to addressing the evolving needs of meeting planners. With their input, we developed a new program and platform named Together by Hyatt, a new events offering designed to meet customers where they were on their journey back to returning to events whether that was hybrid, whether it was remote, whether it was in person or some combination, with attendee well-being and connections built in and infused as our top priority, Together by Hyatt integrates Miraval's intention setting activities to meetings now, guided stretching, curated head space breathing exercises, focused music and leverages Hyatt's long-standing excellence in food and beverage. We're changing what it means to attend a meeting. And the feedback we're getting from our customers has been tremendous in this space. From '22 to just to now, Together by Hyatt has delivered $800 million in actualized revenue. One more look, a bit closer at the difference Together by Hyatt is making to some of our customers and our colleagues as well. [Presentation]

Last but not least, we are working to elevate our digital and technology platforms in ways that help us to drive more direct revenue and reduce costs for our owners. Digitally, we're building on some great momentum here as well. As we've shared, and as you've seen, our global direct booking metric is up 310 basis points since 2019. And we've just surpassed 20 months of direct digital growing faster than the OTAs. And as we roll out our new property page designs, we're seeing a 5% higher click to book rate and a 40% lower bounce rate than our prior designs. There's certainly a lot of work going on in our digital space, but I'll just share a couple of focus areas with you here. I mentioned that our new property page platform is doing very well. We call it [ Canvas ]. [ Canvas ] delivers branded property experiences, and this platform is showing great initial results. What you're seeing build behind me is an example of a new Andaz-branded property page. We're continuing to integrate AI by serving personalized recommendations across multiple integrations, both in web and e-mail. We're also actively prototyping and launching experiments in digital with AI. One of the best examples in this space is the work we're doing in discovery search now giving our guests personalized search results based on the attributes we know about their profiles, their search history and their past stays. No two search results need ever look the same because each person can get a unique, tailored experience now. In technology, we're making big investments to elevate our system capabilities. First, our revenue management system. We are rolling out the IDeaS revenue management system globally and retiring our legacy PRIO system starting this year. IDeaS allows us to further elevate our pricing decisions by recalculating pricing multiple times a day and with a focus on profit optimization in an efficient and data-driven way. Additional features we'll get from IDeaS and their product is their enhanced group pricing and ancillary pricing capability to unlock the strategy I just shared. We're also completing an extensive RFP process for our central reservation system, and we'll be announcing a new alliance in that space very shortly. This transformation allows us to do three important things. It elevates our capabilities with specialist technology alliances that help free up our internal resources to focus on the things that really differentiate and customize for our guests and customers. It also reduces costs for our owners, reduce training times, reduced fees. And it will improve our speed to integrate acquisitions going forward. I'll just close with this by saying that while the world has changed, our point of difference to be big enough to compete but personalized enough to never forget the importance of listening has served us well. We've transformed in many ways, but we remain sharply focused on helping our owners attract high-quality revenue, lower their distribution expenses and together form deeper and stronger relationships by redefining loyalty with the people that really drive our business. Thank you for your time today. With that, I'm going to welcome back to the stage our leader of all and a mentor of many that we all greatly respect, Mark, to share about how all these pieces are coming together as we grow with intent.

Okay. Before I get started, I just wanted to make an observation about Mark's presentation that is embedded, implied, but not stated, but I think I'll state it because I want to make it explicit. What's the common thread across everything that you heard? The answer is the extension of care. Every single program initiative, investment is all about caring for our guests, caring for our customers and caring for our colleagues. So we've taken a lot of time and effort to make sure that we're fulfilling our purpose and that, that has meaningful impact on our business. You know you have a great and powerful purpose if it links directly and it animates your performance as a company. So in a gesture of care for all of you right now, I mean, I ask that the houselights be brought up for just 1 second, so nobody injures themselves. Can we elevate the houselights? Perfect. Could everyone just stand up? You've been sitting for a while, like this is like the third in a row. And just take a deep breath. I know many people are hunched over their computers. Take a moment and just rotate your shoulders back once and then look to your right. look to your left, look up together and then look down. Okay. I hope that felt better. Now you can sit down again. Really important that everyone is limber because we're about to talk about growth. And we have had a lot of growth. So hang on, buckle up. As I mentioned earlier, this has been a key area of focus for us from the beginning. And we've made amazing progress in our growth profile and our pipeline, not just since going public in 2009, but back to when I started at Hyatt in 2006. In 2017, when we announced a permanent sell-down of our owned and leased assets, we did so knowing that we had laid all the groundwork to lead the industry in growth, and we've done that exact thing over the last 6 years straight. The numbers on this slide represent the rate of net rooms growth along with our competitors. The number below the net rooms growth represents the growth premium compared to our next closest competitor, and note that the gap was 200 basis points in 2022. That's the widest it's ever been. Additionally, this growth does not include the impact of our acquisitions of Two Roads Hospitality and ALG. When you add these two in, we've grown our room count by 64% in 5 years, a rate that's more than double our closest competitor. We exercise intense care for our owners, and they're increasingly entrusting Hyatt more frequently than ever before. It's also important to note the profile of our growth. The change in net rooms growth added to our system has been very high quality. Nearly 40% of the rooms that we added were luxury and nearly 30% were in the upper upscale segment. This is a far different approach than our peers. And as you can see, we not only have a higher rate of growth, but we have a disproportionate amount of growth within the higher fee per key segments of luxury and upper upscale. The result has been a portfolio transformation. Our evolution has been profound and highly value accretive. Not only was our growth predominantly in high-end segments, it also heavily focused on properties that truly differentiate our portfolio in the segments, serving higher-end travelers. We've been intentional about our evolution. We recognize that while we do not have the same total portfolio size as our peers, we have relevant scale within segments that drive preference. That has been our focus. We've differentiated -- we've extended that differentiation meaningfully with 76,000 luxury lifestyle and resort rooms added to our portfolio over the past 5 years. And as you see on the slide, 44% of our portfolio is now comprised of luxury, lifestyle and resort rooms, a very meaningful increase in mix from only 32% 5 years ago. The quality of our portfolio results in guests staying with us who have higher household incomes, which ultimately results in durability across varied economic conditions. To put the magnitude of our portfolio transformation into context, in only 5 years, we've doubled the number of luxury rooms, we've tripled the number of resort rooms, and we have quadrupled the number of lifestyle rooms. Not only that, we vastly expanded our brand presence, entering 18 new countries, 224 new markets and added 13 brands. This is the new Hyatt, a very dynamic portfolio that is differentiated from the rest. And when we talk growth, I know many are very quick to point out, well, it's growth from a relatively smaller room space. So these growth rates are maybe not so impressive. However, we've cultivated significant, relevant scale in areas where we were strategically differentiated. Let me demonstrate it through some numbers. The net change in luxury rooms added over this 5-year stretch for Hyatt, purely in terms of rooms, gross rooms, not percentages, is more than the aggregate of our 3 closest competitors combined. That has nothing to do with our relative scale. That's absolute numbers of rooms. So as you look at the new Hyatt, you see a portfolio that is different, and it's built to appeal to our World of Hyatt customer base. Very importantly, our loyalty members create aspirational properties. It's these properties that really drive value to our -- for our World of Hyatt program. At the very top of the list of aspirational properties is the type of hotel we are at today, a luxury hotel in a resort location. Our portfolio represents 18% of the worldwide market of luxury-branded rooms in resort locations. We are the largest in the world period. As Mark just covered, this is critical in driving differentiation for our World of Hyatt members and a key reason why our loyalty programs is growing faster than any other in the world. And we just added 2 million members, 2 million new members in the first quarter alone this year, amazing momentum. The evolution of our portfolio and the way we serve the high-end customer is clearly evident in our average rate, which leads the industry by a significant margin, again, illustrating the quality and the strength of our high-end portfolio. So we provided detail on how we've evolved and driven portfolio differentiation and quality, but let's talk about our outlook and what lies ahead. We're very confident in our ability to maintain our industry-leading growth position and expect growth of 6% in 2023, followed by 6% to 7% in 2024 and 2025. We're confident in reaching this level of growth because of the strength of our pipeline. It's currently at a record level, with approximately 40% of rooms under construction. Also note the diverse mix of our pipeline geographically and by chain scale. We've achieved very significant growth in our pipeline over the past decade and now lead the industry in this metric as a percentage of existing rooms. Our pipeline has fueled our industry-leading net rooms growth, and we remain encouraged by the positive momentum with respect to signings and overall traction of our brands. Very importantly, one of the big areas of differentiation that we have is vast areas of white space for growth. I cannot emphasize enough the size of this opportunity in the markets in which our brands are present, in which Hyatt brands are present. We, Hyatt, average 4 hotels per market. Our competitors average 14. Further, there are over 650 markets around the world, and our brands are only present in half of them. Now you're all very good at doing math. I'm sure you can start to quickly understand and size the vast opportunity that we have looking forward. Further, as we think about expanding our breadth across more markets and depth, in the markets in which we are already represented, although underrepresented, we're confident in the opportunity because our brands continue to punch significantly above their weight. What does that mean? Our recognition is right on par with the largest competitors in the industry. We have the history and tradition and track record of delivering quality experiences, but most still perceive us -- and most still perceives us as much larger than our actual size. This awareness is driven by the quality of our brands, our highly visible brand presence in nearly every gateway city around the world and the high-quality reputation we enjoy among guests, customers, travel advisers and other intermediaries. In a brand awareness study that we conducted, we inquired about our name recognition and found that our awareness is right on par with our peers and above the broader competitor average. People know us, and our loyalty members tell us that they want us to be in more places. So we looked deeper into this particular topic. And through our data-driven approach, we were able to validate a new opportunity. When looking at guests who have previously stayed at Hyatt but opted to stay with a competing brand, the vast majority of the time it was for 2 reasons. First, there was no Hyatt Hotel within 5 miles. And second, they opted to stay at a lower chain scale property. This tells us that our customer base has a clear desire for us to be in more locations and has stay occasions in lower chain scales where we currently don't compete. We intend to address this opportunity in a big way. And we want to be in more locations and start by taking advantage of the considerable white space where we currently have no brand presence at all. To address this need, I'm very pleased with our announcement of Hyatt Studios. We announced it about 3 weeks ago on this -- at this property at our earnings conference. Our first upper mid-scale brand in the Americas designed to fill a need for both guests and developers. The brand was created by listening carefully to the needs of owners across different market types, and it also serves the needs of our World of Hyatt members. As a result, the Hyatt Studios brand is an upper mid-scale brand with built-in flexibility to work in primary, suburban, secondary and tertiary markets alike. The Hyatt Studios brand is the key to significantly expanding the number of markets we serve and introducing a new price point for more choice for our guests and our members. And as you saw in the white space, we have a wide-open marketplace as substantially all of our initial target markets for launch are markets in which we have no Hyatt hotels whatsoever. This strategic growth effort will materially expand the incidence of World of Hyatt members staying within the system and expand our share of wallet with them. The combination of having a highly desirable leisure portfolio adds to the attractiveness of staying at a Hyatt Studios hotel as we roll it out across the Americas and eventually the world. All Hyatt brands, now and in the future, operate at the higher end of each segment that we serve. What's unique about this brand is that we chose to break the traditional mode of brand creation. And we took an outside-in approach through leveraging people with deep experience in this space. We didn't just keep the developers in mind through this design. Developers collaborated with us. They were at the table with us from the very beginning. And that came through -- came to life through a few different attributes of the brand. First, a simple design that keeps construction and maintenance costs low. Second, flexible brand standards in guest rooms, food and beverage offerings and programming that allows adjustments to meet the needs of the market being served. And third, through an operating model designed to be efficient with a focused outcome of exceeding guest expectations and generating outsized returns for owners at the same time. This agile and collaborative approach allowed us to move from initial concept to announcement in less than 5 months. It's a great example of the speed and agility with which we are acting. The approach has resonated. We're really proud to support the brand's announcement with signed letters of interest for more than 100 Hyatt Studios hotels with construction expected to begin in 2023, and the first Hyatt Studios hotels expected to open in 2024. We're excited about the white space this brand will address, which will lead to more stay occasions within our system. We've enjoyed this network effect benefit with Hyatt Place and Hyatt House, now having approximately 550 hotels across those 2 brands, helping to drive the strong growth in our loyalty program that we have discussed. As we scale Hyatt Studios, we expect to enjoy the same network effect benefit. Our launch partners are excited about this brand, too. The map on this slide outlines markets of initial interest. What's particularly compelling for our partners is that we have next to zero overlap with existing brands in our portfolio in the submarket they are looking to build, a very different dynamic than our competitors. Our launch partners are primarily comprised of multi-property developers with whom we have worked over many years, and we're thrilled to have their buy-in as we embark on this journey together. In summary, as we assess the growth landscape overall, we're really confident in our ability to continue to lead the industry in growth. We have a robust number of rooms under construction, and we continue to see very encouraging momentum with conversions. Lastly, our brands are resonating and our growth in upper mid-scale in the Americas will become a meaningful contributor that will be incremental to our estimated growth rates as the first Hyatt Studios hotels open in late 2024. We have an amazing opportunity ahead and significant white space where we can grow for many years to come at what we are confident will continue to be industry-leading growth rates. Thank you.

We will now take a 20-minute break, 20 minutes. We do ask that everyone please return in 20 minutes. Thank you. [Break]

Convening in 2 minutes. Thank you. [Presentation]

And now, please welcome the Executive Vice President and General Counsel and World of Care Executive Sponsor, Margaret Egan.

Good morning. Thank you so much for being here today at Hyatt's 2023 Investor Day. Our themes today have been around Hyatt's growth in building a stronger, more capable and more value additive enterprise and I'm really thrilled to share with you how World of Care is part of that story. At Hyatt, we lead with our purpose to care for people so they can be their best. Over almost 7 decades, Hyatt colleagues had been advancing care and making a difference in the communities in which we operate around the world. With that purpose of care in mind and with ESG framing as backdrop, Hyatt launched World of Care in 2021 as a way to bring Hyatt's purpose of care to life, through our actions in advancing care for the planet, for people and for responsible business. World of Care was designed through listening to our stakeholders, our colleagues, guests, customers, owners and investors, a demonstration of one of our core values, empathy. We took the time to connect with each stakeholder group to better understand what resonated with them and where we could bring value and have the greatest impact in local and global communities around the world, now and into the future. Prior to World of Care, we've reported our goals and actions in the areas of environmental and social responsibility. Now World of Care captures reporting in those areas and others across our organization, all of which are intended to demonstrate how we're advancing care across the planet, people and responsible business. As well as, to be clear, where we believe we still have work to do. Our 2030 environmental goals address climate change and water conservation, waste and circularity, responsible sourcing and thriving destinations. These are the right focus areas given our business and they're aligned with UN's sustainable development goals. How will we get there? We're collaboration closely with the owners of our hotels to accelerate efficiency measures and increase reliance on renewable energy and to drive sustainable minded of growth. This collaboration is critical to meeting our 2030 science-based targets, which include reducing absolute Scope 1 and Scope 2 emissions by 27.5% from a 2019 baseline. And we're really encouraged by the interest in energy our hotel owners have in helping us drive impact here. Just a few weeks ago, we held an Americas Owners Conference, where World of Care was a key topic, and we featured 2 hotel groups that are really moving the needle in sustainability, Host Hotels & Resorts and Highgate Hotels. That intentionality with our owner groups advances knowledge and alignment on what we need to do collectively to drive value for hotel owners as well as for our guests and customers. In that vein, we see tremendous opportunity to understand and meet our customers' sustainability needs. According to Global Business Travel Association's 2022 State of Sustainability report, 76% of business travelers already incorporate or in the near-term will be incorporating sustainable practices in their travel guides, and 55% measure the environmental impact of their company's business travel. We looked to our own corporate customers and asked them what they were looking for from us in regard to sustainability. Following that deep dive, we're better informed and enable to focus our activities on high-value initiatives, principally providing standardized sustainable meeting offerings and communicating to customers each property's unique sustainability initiatives. Through our Together by Hyatt platform, we're providing meeting planners and corporate customers with hotel-specific data and offerings that help those customers meet their own sustainability goals. At Hyatt, we care for the wellbeing of our colleagues, guests, customers, owners and communities, and we're dedicated to advancing a culture of opportunity for all with the focus on cultivating an environment where our colleagues can be their true selves and flourish both personally and professionally. This is achieved through efforts focused on colleague wellbeing, a really unique differentiator for Hyatt, talent development, human rights, volunteerism and DE&I. The hospitality industry needs to stand firm in support of human rights and combating human trafficking. Hyatt was one of the first hotel companies to sign the ECPAT Code of Conduct to fight human trafficking, and we've made human trafficking training mandatory for all colleagues in every office and hotel across our system. In addition, our CFO, Joan Bottarini, serves as the Co-Chair for the No Room for Trafficking Advisory Council, working alongside the HLA Foundation and leaders in the hotel and lodging industry. What they're doing is to support human trafficking survivors with critical resources and engage and educate key stakeholders in the fight against trafficking. We're also committed to ensuring diversity, equity and inclusion. It is reflected across our actions and behaviors, our policies and procedures, our workplace environment and our culture. We know that more diverse viewpoints make us stronger, more competitive and better positioned to drive the best value to stakeholders. As part of our DE&I journey, we set aggressive goals through our Change Starts Here initiative in 2020, including commitments that span who we employ, develop in advance, who we support and who we buy from and partner with. For who we employ, we set a 2025 goal to double the representation of women and people of color in leadership positions, and we are well on our way toward this goal. For those who we support, our RiseHy program has been a tremendous point of pride for Hyatt. RiseHY is a global program providing career pathways for young people aged 16 to 24 who are disconnected from the economy, either by not working or not going to school. As we progress on our goal of hiring 10,000 opportunity youths through that program by 2025, we're bringing real value to people's lives and directly supporting the vibrancy of the communities in which we operate. In addition to our investments through RiseHY, the Hyatt Hotels Foundation is committed to investing $1 million to organizations that support youth and diverse-owned businesses. As part of who we buy from and work with, we're seeking ways to expand our commercial relationships with diverse-owned businesses. And here, we found that one of the most powerful ways to do this is to support our hotel teams in finding innovative solutions within their own communities. Since 2020, we've increased our supply of black-owned businesses by 500, a number that grows every month. And what's incredibly exciting is that our colleagues have really embraced Change Starts Here in its commitments and tell us how much it's mattered to them that we're taking real action, not just expressing good intentions, but driving for meaningful results. In caring for responsible business, we remain, again, with purpose as our guide, committed to fair and ethical business practices. Our Code of Conduct continues to be our guiding principle for how we do business, how we care for our people, our communities and our planet, how we demonstrate integrity in our business dealings and how we communicate honestly and transparently. Our growth is in part dependent on our ability to build strong relationships with hotel owners in long-term management and franchise agreements. How we do business with purpose and transparency is essential to build those long-term relationships. And it should almost go without saying, but I do just want to mention how important integrity is at Hyatt. To ensure organizational alignment and appropriate oversight, World of Care runs through our Board of Directors. The Nominating and Corporate Governance Committee of the Board directly overseas World of Care strategy and reporting. At the Board level and through senior leadership, we recognize what World of Care can do to further our purpose and drive value. I'm the Executive Sponsor and part of World of Care leadership team that's also comprised of our CFO and our Chief Human Resources Officer. We work together and with Mark and the rest of the executive team to ensure that this work is connected effectively across the entire organization. We further collaborate with a cross-functional, company-wide committee comprised of subject matter experts. Those colleagues help us set global strategies and also ensure that we action those strategies throughout the entire company. And given that we operate in over 75 countries around the world, our colleagues need the ability to meet the unique needs of their properties and geographies. The key for success here is to ensure those on the ground responsible for actioning these goals, our amazing hotel operators and regional leadership teams, understand our strategy, have the opportunity to influence the goals we set against that strategy and further have the freedom to structure their own action plans for achievement of those goals. Transparency is fundamental in our approach, and we continue to develop are reporting framework to ensure that our strategy and areas of focus are well understood by our constituents. We issue a GRI index annually, and we'll be doing so again this year. And while we previously published a corporate social responsibility highlight report, beginning in 2021, we brought that through World of Care. And in 2022, we published our World of Care highlights, which included information related to our actions across the 3 pillars: caring for the planet, for people and for responsible business. In 2021, we also published our first annual DE&I report, which was reissued in 2022 with an update on our progress on our Change Starts Here goals. In that report, we also included EEO-1 data for our U.S. employee population, and we've committed to updating that report annually. And of course, we'll be in a position to report as needed under the to-be-confirmed SEC guidelines. Through listening to our colleagues, guests, customers, owners and investors, we've aligned our reporting to explain who we are, what matters to us and what we know they want to know from us. How Hyatt advances care matters and has value to its stakeholders. While we recognize that advancing care for the planet, people and responsible business is the right thing to do, it also has to tie to value. We hear all the time from our stakeholders about how what we're doing resonates with them and why they choose Hyatt because of who we are and what we care about. The third-party recognition and media coverage you see here is a reflection that World of Care is making a difference to colleagues, guests, customers, owners and investors. I couldn't begin to count the number of stories of care throughout Hyatt. They happen every day in big and small ways, but we are going to share one in particular as I close. This is about the Alila Villas Uluwatu in Bali. The video you're about to see beautifully captures what World of Care means and how our colleagues are bringing that to life every day. [Presentation]

And now, please welcome our Chief Financial Officer, Joan Bottarini.

I absolutely love that video. And it's just one example of how our hotels around the world are bringing World of Care to life every day. And I'm very proud to be a member of the Steering Committee that is under Margaret's leadership for World of Care. So first, I'd like to remind everyone that our presentation and comments today will include forward-looking statements under federal securities laws. These statements are subject to numerous risks and uncertainties as described on this slide and in our SEC filings. These results could cause our actual results to differ materially from those expressed in or implied by our presentation and comments. Forward-looking statements in today's presentation are made only as of today and will not be updated as actual events unfold. Okay. Let's get started by summarizing a number of key points from our morning's presentations, highlighting the progress we've made on our transformation and then I'll review our plans to drive further shareholder value. Over the course of the morning, you heard about how excellent operational and commercial execution are leading to record performance and free cash flow. Our leadership teams globally are delivering and our differentiated approach to integration of acquisitions is maximizing value creation. We have a strong outlook, supported by both our optimal positioning and our focused investment and capabilities. The resiliency of our differentiated business model and the macro backdrop sets us up excellently for continued growth. Industry-leading growth is driven by a powerful and strengthening network effect and brand preference. We've delivered 6 years of industry-leading growth, underpinned by strong results, driving value for owners. Our capital allocation strategy has delivered returns for shareholders. We've not only realized strong valuations on asset sales, we've achieved healthy returns on acquisitions and returned significant capital to shareholders. Fundamentally, we're an asset-light company with a track record of unlocking value. We've delivered above expectations on our commitments and have confidence we'll continue to deliver. Okay. So let's recap very quickly 2022. Earnings exceeded our expectations, over 40% higher than 2019 with legacy Hyatt results, excluding transactions, up 5%. We reported a 6th consecutive year of industry-leading net rooms growth, and in addition, reached a record number of rooms in our pipeline. We achieved record levels of free cash flow of $473 million, approaching over 50% larger than any previous year. Net asset sale proceeds of $717 million, approaching 40% progress towards our $2 billion asset sale commitment by 2024. We reduced debt, returning to leverage ratios of approximately 3x and repurchased $369 million of shares. Q1 was an exceptionally strong quarter with RevPAR up 6% above 2019 compared with 2.4% in the fourth quarter, and March RevPAR was 8% over 2019 with business transient at 90% of 2019 levels. The momentum continued with April RevPAR at 8% above 2019. The last region to see recovery has been Asia Pacific and their surge in the first quarter has been outstanding. And there's further room to grow with airlift capacity growing in momentum for outbound and inbound recovery. And as we look out into the remainder of the year beyond the first quarter, momentum continues to grow, reinforcing our confidence. At the end of March, our forward indicators are strong, group pace for the full year has expanded to now up 24% over last year and our net package RevPAR is pacing up 15% over last year. So now we have confidence we can share full year expectations for 2023. We expect 23% growth in adjusted EBITDA plus net deferrals and net finance contracts for 2023 over 2022 after adjusting for the impact of transactions and onetime credits from ALG Vacations. Total adjusted EBITDA plus net deferrals and net finance contracts expected to be $1.225 billion, at the midpoint of our range. The composition of asset-light businesses represents 75% of total growth and is made up of 3 components. First, 10% growth from fees earned from open and operating hotels driven by RevPAR and net package RevPAR expanding significantly over 2022. Second, 3% growth from sustained momentum in ALG asset-light businesses, ALG Vacations departures and UVC membership sales. And third, 4% net rooms growth from fees earned from new hotels added to our portfolio. Our owned and leased earnings growth expectations are significant at 6%. The performance of this portfolio remains very strong given our premium assets in healthy markets. We also continue to expect owned and leased margins to be within the 100 to 300 basis point range above prepandemic levels we've previously provided. We've also made strategic capital investments over time, targeting to drive returns in this portfolio. And finally, we're planning a slight increase in corporate costs, given strategic investments, including our new upper mid-scale, extended-stay brands, Hyatt Studios, a very strong result, 23% growth expected this year and driven by 75% contribution from asset-light businesses. Our full year 2023 outlook is strong and reflects our unique positioning and mix at this point in the recovery and our relative opportunity for continued industry-leading net rooms growth. We shared our increased RevPAR expectations and reaffirmed our net rooms growth guidance last week on our earnings call. Our adjusted EBITDA guidance plus net deferrals and net finance contracts is $1.2 billion to $1.25 billion with $1.225 billion at the midpoint, leading to $225 million of estimated net income and $550 million of free cash, growing over $75 million over 2022. Now I'd like to take a moment to provide our long-term expectations for 2025, given data and forward indicators available to us today. In terms of our long-term illustrative 2024 and 2025 outlook, we could anticipate RevPAR and net package RevPAR to grow between 3% to 7%, and there are both internal and external factors provide confidence in the 3% to 7% range at this time. The internal factors reflect 3 things. First, the midpoint of this range represents incrementally growing demand for travel back to stabilized occupancies. Our expectations suggest we'll exit 2023 with occupancy approximately 300 to 400 basis points behind 2019. Second, we expect rates to grow slightly, reflecting 3.5% compounded growth rates over 2019. And in other words, not a remarkable compounded growth rate over this period of time. And third, group bookings have continued steady momentum with pace now positive for 2024, driven by longer booking windows and increasing association bookings. External factors include 3 items as well. Supply growth continues to be well below long-term averages in the segments and most of the geographies we operate. There's continued upside anticipated from international flight capacity expansion and the high-end consumer continues to value experiences, including travel, especially at the high end of each segment that we serve. Recent projections from Smith Travel continue to anticipate mid- to high single-digit growth for luxury and upper -- upscale in the U.S. for 2024. Moving to net rooms growth. We expect 2024 to 2025 to be in the range of 6% to 7%. Our pipeline under construction remains healthy, and we continue to see opportunities in the marketplace for conversions. And our new upper mid-scale extended stay Hyatt Studios brand will begin to contribute meaningfully to 2025. Next, I want to provide a perspective on ALG Vacations, departures and UVC-signed contracts. You can see here in this note that departures directionally track RevPAR growth and UVC-signed contracts directionally track net rooms growth. Departures for ALG Vacations reflect broad leisure demand with the total ALG Vacations departures broken down into the following components. 20% of departures represent Hyatt all-inclusive collection nights, 45% represent departures for all inclusive markets in Mexico and the Caribbean into other brands in the same destinations where Hyatt brands have a presence and the remaining 35% of departures primarily represent other resort markets in the U.S., including Hawaii. Signed contracts for UVC, as Mark mentioned earlier, reflects a strong correlation between the number of rooms open and the growth rate of new contracts signed. In the ALG section, we highlighted the exciting new openings for ALG and expect this will help to fuel the continued UVC membership contract growth. And finally, additional assumptions for 2025 include our commitment to realizing our remaining goal of net proceeds from our asset sell-down commitment, which depends on timing and will impact adjusted EBITDA. And we anticipate that the asset sales will further reduce our run rate capital expenditures to approximately $100 million by 2025. And inflationary growth is estimated to meet the needs of our core business with a continued discipline on reallocation of resources. And so we believe these estimates are reasonable to assume for today for 2025. All of these assumptions lead to a 12% compounded growth rate through 2025, a very strong growth rate for asset-light businesses with expanding operating leverage. The midpoint of our expectations for 2025 is $1.4 billion in adjusted EBITDA plus net deferrals plus net finance contracts. Asset-light businesses over the next 2 years are expected to contribute 85% of our total growth, expanding our asset-light mix. Now all of these assumptions are based on the internal and external assumptions I outlined earlier. And remember, shown here on this slide, this is after our assumed $100 million of reduced earnings as a result of fulfilling our remaining asset sell-down commitment. So to bring this all together, we've completely updated our earnings growth model, reflecting the asset-light growth in our business. For a 1-point change in RevPAR and net package RevPAR, our EBITDA range reflects solid fees per key, driven by our full-service managed portfolio mix. The impact of our owned and leased portfolio adjusted EBITDA is lessening as a percentage of our range as the owned and leased adjusted EBITDA is replaced by steady fee-based business. The range for ALG Vacations, departures and UVC-signed contracts will add incrementally to the per point contribution. If RevPAR and net package RevPAR assumptions change from the ranges I just provided, each 1 point annual change reflects a $15 million to $25 million change in earnings. You might recall our previous range of 1 point of RevPAR reflected a $10 million to $15 million change in earnings. And that actually hasn't changed on our core legacy business. The increase to the range by $5 million to $10 million per point is primarily driven by the acquisition of ALG. The range here for net rooms growth reflects healthy fees per key with a larger mix of full-service managed hotels in the pipeline and a 1-point change in corporate reflects $2 million of EBITDA. So in summary, this model can be referenced for future assumptions relative to 2023, updated -- and the updated growth rates in RevPAR and net package RevPAR and net rooms growth. Now I know this growth model is new. So let me refer back to the previous slide where we had the 12% compounded growth rate in 2025 -- through 2025 and illustrate how this model would play out. First, RevPAR growth is 5% at the midpoint. 5 points of RevPAR multiplied by the midpoint of the earnings range of $20 million leads to $100 million in earnings on average in each of the next 2 years. Second, 6.5 points of net rooms growth at the midpoint, times $7 million at the midpoint of the earnings range is about $45 million on average in each of the next 2 years. The Corporate segment earnings at roughly inflationary levels is approximately $7.5 million per year. So in summary, if you add those numbers up, you arrive at $275 million of greater adjusted EBITDA plus net deferrals plus net finance contracts. That is $200 million from RevPAR and net package RevPAR, $90 million from net rooms growth, less $15 million of corporate segment incremental costs, bringing us to the midpoint of $1.4 billion in 2025. A very powerful illustration of how our asset-light mix is expected to lead to a 12% compounded growth rate with 85% of that growth coming from asset-light businesses. And remember, this is after approximately $100 million less in earnings from our remaining asset sell-down commitment. You all know the benefits of an asset-light business model, predictable earnings stream with durable contracts and high operating leverage; low capital required, leading to higher cash flow, increasing our ability to invest in additional growth opportunities or returning capital to shareholders. The composition of our asset-light mix is on the right-hand side and has evolved since 2019 with our acquisition of ALG. First and foremost, our fee-based and managed and franchise businesses with topline fees estimated to grow by $1.2 billion by 2025. Second, the UVC membership club business, how is this asset-light? It's durable. History clearly demonstrates our ability to sign new contract sales relative to our system side. It has a resilient customer base. 20% of sales are upgrades and defaults have been minimal even through COVID, and there's virtually 0 capital required for this business. Third, ALG Vacations, distribution and destination management. How is this business asset-light? It's durable. The activity base represents resilient leisure demand through cycles. And we are the largest package provider to travel agents B2B in the U.S. And there is minimal capital needs for our technology investments in our proprietary systems. While our asset-light earnings mix drives an anticipated result of $1.4 billion of adjusted EBITDA plus net deferrals and net finance contracts estimated at the midpoint in 2025, run rate capital expenditures are declining to $100 million by 2025, a $200 million reduction from 2017. These 2 factors drive a greater than 33-point increase in our asset-light earnings mix in 2025 and, of course, are leading to expanded free cash flow. Cash flow conversion is calculated as the simple math of free cash flow in each year, shown here in blue, divided by adjusted EBITDA plus net deferrals and net finance contracts, shown here in gray, in each year. We anticipate that under these assumptions, our free cash flow will grow to $750 million by 2025, expanding our free cash flow conversion by 17 points to 54%. The strong improvement in free cash flow conversion clearly demonstrates the trajectory and the power of our transformation. On a cumulative basis, over the next 3 years, this asset-lighter model is leading to significant earnings base. $3.8 billion at the midpoint of our range from 2023 to 2025 in adjusted EBITDA plus net deferrals plus net finance contracts is leading to cumulative free cash flow of $1.9 billion at the midpoint of our range. We expect to generate significant value when considering free cash flow of $1.9 billion in addition to the post-tax proceeds we expect to realize from the remaining asset sale commitment of $1.1 billion, leading to approximately $3 billion of estimated cash available over the next 3 years. And our capital allocation priorities have not changed. We continue to plan to invest in the growth of Hyatt and will prioritize opportunities that are value accretive and strengthen our network effect, while at the same time, returning cash to shareholders. Our record of identifying, negotiating and integrating acquisitions has created significant shareholder value. We've executed on $3.7 billion of acquisitions ahead of underwriting targets, creating significant value at 8x 2022 earnings on the total purchase price of these acquisitions. Key characteristics remaining core to our decision-making, investments for growth that have these attributes on the slide that Mark reviewed earlier. And as we evaluate excess cash to be returned to shareholders, I'm excited to announce we're resuming a cash dividend at $0.15 per share on a quarterly basis. And we have increased our share repurchase authorization to a total of $1.5 billion. This total authorization provides additional capacity as we consider the allocation of the estimated $3 billion of cash that we expect to generate through a combination of free cash flow and asset sale proceeds after tax. Next, I want to spend a minute to cover our commitment to being investment grade. Our credit profile -- our credit ratings reflect an investment-grade profile, and we believe we have ample liquidity and availability under our revolver. Regarding our upcoming maturity, in the fourth quarter of this year, we anticipate meeting this commitment through a combination of paying down a portion of this debt and refinancing depending on market conditions and the pace of our asset sales. So speaking of asset sales and our disposition commitment, I just -- for the last few minutes, I want to review our asset disposition progress that has allowed us to accelerate our asset-light transformation, provided the capital we've utilized to grow in addition to returning capital to shareholders. In the last 5 years, we've realized $4.3 billion of proceeds across the sale of a wide variety of asset classes in our own portfolio at a 16x multiple. At the same time, we have also acquired 4 strategic assets to secure or expand our distribution in key markets for a total of $500 million. In the last 5 years, 2 of these 4 acquisitions have already been sold at higher valuations than we purchased them. And each owned asset that we have sold since we were a public company in 2009 was sold subject to a long-term management franchise contract. The run rate of the fees we retain for these 20 assets is $40 million per year. And again, this value is in addition to the 16x multiple we've earned on the dispositions. As we consider our options in the future and our remaining approximate $1.3 billion asset sell-down commitment, we have great flexibility because of the premier locations and key markets of our assets and diversity of our asset base, especially now that group bookings are increasing in momentum. As Mark mentioned earlier, under the anticipated valuation range we've been using of 13 to 15x, our portfolio would be valued at approximately $3.9 billion to $4.5 billion. Our portfolio quality and diversity not only leads to confidence in our options to complete our existing commitment, but provides a significant amount of optionality going forward as we consider the future unlock of the value of this real estate to continue to grow the company beyond 2025. I just want to provide a little color on the composition of our current asset base. We own 5 luxury assets in world-class urban destinations. These properties retain value through cycles and have a very unique owner profile. Room rates and valuations are robust for these assets. We have 4 high-end resorts, including 3 wellbeing-focused Miraval properties. These Miraval properties, as Mark covered earlier, have differentiated economics and are successful because of the wellbeing experiences valued by our guests, leading to total revenue per room unlike any other luxury resort. What's also notable about these properties is the expansive acreage of these resorts, which make them incredibly unique destinations. We have 7 group and convention hotels with several of these hotels in Southern and West Coast markets. What's unique about these markets is the year-round attractiveness, not just for groups, but for leisure guests as well. And the amount of meeting space also provides flexibility to maximize on the growing group demand that we're seeing. The pace of our asset sales has led to maximizing valuations and providing capital to be used for investments. We are confident this approach will continue to unlock future value for Hyatt. Our asset-light transformation has created exceptional value. In 2017, 5 years ago, we were below 50% asset-light earnings mix at 47%. By 2022, we unlocked significant value from our real estate through asset sales and invested in asset-light acquisitions, while at the same time delivering industry-leading net rooms growth. We expanded to 75% asset-light earnings mix and have paved a clear path to reach over 80% by 2025. Organic net rooms growth is expected to continue to incrementally add a 100 basis point mix even excluding further asset sales or asset-light investments. We have transformed our earnings profile and our journey has only just begun. And so now I'm going to end where I started and the key points that we reviewed today, operational and commercial execution has led to record performance and free cash flow. Our strong outlook is supported by optimal positioning and our focused investment and capabilities, industry-leading growth is driven by a powerful network effect and brand presence and our capital allocation strategy is delivering returns for shareholders. We are a fundamentally asset-light company with a remarkable track record of unlocking value. Thank you for your time this morning. And up next to provide a retrospective context on where we've come from and where we're headed, I'm pleased to welcome to the stage our Executive Chairman, Tom Pritzker, and welcome back to the stage, our President and CEO, Mark Hoplamazian.

Well, hello again, everybody. We celebrated a really important milestone this past year, celebrating our 65th anniversary, and I thought it would be an appropriate moment to take with Tom here to provide a little bit of a retrospective. So Tom, thank you so much for being here.

Great. Thank you, Mark. Thank all of you who came here -- down here personally, and for those of you who are live streaming this event, thank you for joining us. But what I do want to say is you need to come down here and experience not only this hotel, but a high-end all-inclusive experience. It's a different experience. It's a great experience. So I'm going to take this moment to encourage you to come down to this wonderful Moxché resort.

I think most people in the audience didn't realize that you're part of the sales team. So thanks for the pitch. So look, you've been with Hyatt since forever. And so maybe we can just start anecdotally with some memories that you've got that really stand out.

Okay. So yes, I've been around long enough, I could go through tons of war stories for you. I could go through the purchase of Hyatt Regency Atlanta, I could go through recruiting a guy named Pete di Tullio start our international hotel company. Pete was an interesting character. He was a professional hockey goalie before they had masks. So you can imagine the personality that is reflected in Pete's face. What I really would say is that having lived through our history has given me a wonderful context for looking at our future. Understanding our history is really why I'm so excited about all the material that you've heard here today and where we're going in the next several years.

So one of the key things that we've talked about pretty much throughout the meeting is asset ownership and asset-light. And as I reflect on the history of the company. The company started with an asset acquisition, the company deployed significant capital building hotels and buying hotels over the years. So you've seen it all. So maybe you can give us a little bit of perspective on that topic because we've evolved a lot over time.

Yes. So what I'd say is we've never been ideological about bricks and mortar. In our business, you do not want to fall in love with bricks and mortar. That hasn't happened. We've used it to get ourselves to the point that we're at now. We now have the opportunity to be asset-light because of our fee-based earnings that you've heard about from Joan and others. We're not looking back where we've made the decision. It's clearly the right decision and now it's just a question of executing on that decision.

So as I think back, we've gone through a number of phases of how we treated assets and how they were a part of that equation in terms of our growth and extension of our brands and so forth. Maybe you could just amplify on that a little bit by reference to history specifically.

Yes. So as Mark mentioned, we started in 1957. We bought a hotel, then we built a couple of them. 10 years later, 1967, I think we were the first public hospitality company to go asset-light before any of the others that we're all aware of. What we did is we spun out the real estate from Hyatt, the publicly traded company, in order to get asset-light. So if I then take you through to the end of the '60s because there were some other transactions in there, what we looked like was the family owned about 1/3 of Hyatt domestic. I don't remember how much we owned of Hyatt international, both being publicly traded, asset-light management companies. And then we had taken that real estate company that we spun off private, so we owned 100% of that real estate. Now that's the snapshot at the end of the '60s. If I then move us to 1980, we took Hyatt private. We took all of it private. We took Hyatt domestic management company private, Hyatt international management company private, and we already had the real estate that was 100% family-owned. The important thing to know is, and I'm going to come back to this later, for 25 years, Hyatt was run as a private company, but it was really run as a private company inside of a larger family enterprise. Let me just give you a snapshot of over those 25 years, what the family enterprise looked like because it gives you context to how Hyatt was run and why we are where we -- why we have the opportunity that we have today. We own somewhere between 50 and 100 privately held different businesses. This ran across the whole spectrum from natural resources, to manufacturing, to healthcare, to information systems. Our business was basically acquiring and building companies. Hyatt was inside of that, and it was one of those businesses. Now let me go to 2005. So 2005, we're in the middle of a big family food fight. We knew that we wanted to take Hyatt public as part of the strategy for resolving that problem. In order to do that, what we did is we created a single hospitality company. We poured all of our hospitality assets into that company. And importantly, that included all of the hotel real estate that we had owned, frankly, forever. So all of that went into that, the company that you now know is Hyatt. Why did we pour the real estate in? Because we didn't want to have the perceived conflict of Hyatt running hotels that were owned by Pritzker. So that made sense to us for that moment. We always understood that asset-light has more attractive cash flow characteristics. But at that moment in the evolution of where we are, it made sense to us. So that's 2005. Now if we go to 2017, at that point, we had the brands and we had the scale to commit to an asset-light strategy. We adopted a very methodical and intentional way of executing against this commitment, and we continue to execute against that plan today. 2021, we bought ALG. One of the drivers -- there were a number of drivers in the acquisition of ALG, but one of the drivers was to increase our fee base and our scale, and that allowed us to accelerate our asset-light mix as well as doubling our resort presentation for our guests. Like asset light, the ALG acquisition was thought through, it was strategic, it was economically driven.

So one thing that strikes me is that the rate of growth of Hyatt during the time that it was a private enterprise and part of the family enterprise was lower than its principal competitors at that time. So can you maybe just explain what happened during that period of time and why that was the case?

Yes. So it's a great question because it will help illustrate why we're so excited and why the opportunities there that you've seen in the earlier presentations. We ran Hyatt in the 80s in over not just the 80s over that 25 years. Our goal as a family was to build net worth. Our goal for Hyatt was to build a great brand, and we have the management talent to be able to do that. So enterprise-wise, net worth is our goal, Hyatt-wise, strong brand is our goal. We had the brand strength. That's what we wanted, but we didn't have aspirations to build scale. That's how we operated from an enterprise perspective. Our focus was building net worth through investments across all of these different types of businesses. You could go back and look. We built a huge container leasing company. We created a biotech company. We had a fleet of rail cars. We were building net worth, and we were using some of Hyatt's cash to do that. And as long as we were building a strong brand for Hyatt, we felt we were do it, we had the right mix.

So if you fast forward to today, their consequences to that period of time where we actually had -- did not grow and expand into a lot of markets. So how do you think about that?