Operator: Thank you. The next question comes from Smedes Rose with Citi. Please go ahead.
Smedes Rose: Hi, thanks. I just noticed that the percent of the pipeline under construction just ticked up a little bit from fourth quarter and first quarter. I was just wondering, is that concentrated in the U.S. and could you just maybe talk a little bit about what developers are seeing in terms of getting properties out of the ground on the financing front or getting the supplies of the workers they need. Just any color along there?
Kevin Jacobs: Yes, sure. I mean I think the percentage under construction is from both. I don’t have the breakdown right in front of me, but it’s definitely from both and then somewhat driven by slightly higher. We’ve been talking about a slightly higher percentage of conversions. So those go under construction more quickly. And so as you do those, it moves the percentage of the pipeline that’s under construction a little bit. I think in terms of the atmospherics, I think, look, you hear – we all hear from a lot of developers, you probably talk to developers. It’s still challenging the labor cost side of it and the raw materials cost side of it, those dramatic increases that we saw during COVID have leveled off. So that’s a good news story.
Capital remains more expensive, although I think important to note that it’s a little bit less expensive than it would have been sort of end of last year or over the course of last year. So I think you’re still seeing or better developers and the better projects are getting financed. It’s a good new story broadly across the industry, fewer things are coming out of the ground, but we’re taking share. So we have higher quality brands that are more easily financeable. So more of our projects are getting done and coming out of the ground. It’s just sort of at a slightly slower rate. But like as we said in our prepared remarks, and Chris mentioned in some of the Q&A, we think our starts are going to eclipse prior peaks this year, they’re going to be obviously up year-over-year.
And so we’re getting enough done to keep momentum, but it’s still a little bit tough out there in terms of financing.
Smedes Rose: Thank you.
Operator: Thank you. The next question comes from Brandt Montour with Barclays. Please go ahead.
Brandt Montour: Thanks. Good morning, everybody. And maybe for Kevin. Kevin, you mentioned timing items. If you could just elaborate on that and sort of what and where and when we should expect any of that to reverse, please?
Kevin Jacobs: Yes. I mean timing will be – it will largely reverse in the second quarter. It’s not huge. It’s sort of $5 million to $10 million of timing items in the first quarter. And then to sort of just finish the story at the risk of doing modeling live on the call, but we do – we did increase our guidance at the midpoint by $45 million, but that has a headwind, an incremental headwind of about $10 million to $15 million, closer to $15 million of FX over the course of the year. So, we did in fact, carry through a little bit more than the beat in terms of our outlook for the year.
Operator: Thank you. The next question comes from Chad Beynon with Macquarie. Please go ahead.
Chad Beynon: Good morning. Thanks for taking my questions. I wanted to ask about group beyond ‘24. Is this continuing to build in terms of multiyear commitments? Maybe just kind of a stat in terms of what you are seeing on the books for ‘25 at this point versus what you historically have seen during these periods? Thanks.
Chris Nassetta: Yes. I don’t have the data point in my head, but I do know this. Yes, it’s building for ‘25, ‘26. I believe both years are sort of high single, low-double digit increases relative to where we have been in the past. So, yes, I mean there they are putting the data in front of me. So, my memory is right, 13% and 15% up in ‘25 and ‘26.
Operator: Thank you. The next question comes from Patrick Scholes with Truist. Please go ahead.
Patrick Scholes: Hi. Good morning. On the NoMad news, that’s a pretty small change at the moment. What are your plans for that? Where do you see that brand going in the next 5 years? Thank you.
Kevin Jacobs: Yes. We think – look, we think it will – it is a very strong brand. There is a reason why we wanted to partner with them/taking a controlling interest in that company. It is small today, but it’s been a little bit bigger over time, such a well-known brand in the community. And we think that brand will compete really effectively combined with our engines and the strength of our system, compete really effectively with the other luxury lifestyle brands that are out there, and we think it can be upwards of 100 hotels over time. And so most of those will be – there will be some conversions, but a lot of them will be new build. So, it will be a little bit longer burn, and it’s a little bit smaller segment than some of our other scale brands, but we think it’s it will fit in nicely and contribute positively to our NUG over time.
Chris Nassetta: And what we really love about it is we did as I have talked about, it seems like time and internity, luxury lifestyle. We did a huge amount of work because one of the options was to do this on our own, which you know we are pretty good at and like to do historically. And as we did the work over the last bunch of years, sort of like because this is always benefit in the skunk works. And I am not exaggerating, this is sort of the ethos of what Andrew Zobler and his team have created a sort of bull’s eye for what we think is modern luxury lifestyle today and going forward in terms of what customers are looking for. And so it was a very efficient way for us to get in the space, accelerate our entry in the space, meaning take – let’s be honest, multiple years because they already have a pipeline, let alone what we are adding to it.
And importantly, with Andrew and his team be able to effectively acquire a really talented team of people that are very steeped and what in the luxury lifestyle space. So, we think it was sort of the trifecta. It was – it hit every button for us in terms of making sense. But yes, it’s very small. But hey, the good news is, it’s very small. We didn’t pay a whole lot for it and that means great organic growth going forward.