But they’re going to – I would say, given we think it will probably be in the low to mid-single-digits, they’re going to converge a little bit more. And now the world because China is open, is all — you’re getting out of sort of these COVID comp issues and you’re getting almost to sort of a normalized world where you have comps where everybody was open from COVID other than, as I say, the first part of the year in China, the first part of 2024 comparability issue.
Operator: The next question comes from Chad Beynon with Macquarie. Please go ahead.
Chad Beynon: Good morning. Thanks for taking my question. Just in terms of occupancy versus rate discussion, I guess, more focused on occupancy. Chris, can you talk about how we should think about occupancy exiting 2023 as a percentage or decline versus 2019? And then more importantly, is there still a day of the week that just hasn’t come back? Should occupancy permanently be a couple of hundred basis points off? Just trying to think about this in the medium term? Thanks.
Chris Nassetta: Yes. I mean, I said in the prepared comments that in Q3, we actually were only 200 basis points off. And in September, we were only 100. So I think we’re going to exit this year getting closer and closer to prior levels of occupancy for the industry, but at least for Hilton. I think as we get into next year, particularly as we’re able to build the group base, which is if you really look at what’s happening and you’re getting midweek business back, leisure is obviously still strong, weekends are still stronger than they were. What’s really happened, particularly in a lot of the big cities in the US is you don’t have the group base back. Well, you’ve seen recovery, you don’t have that big group base to leverage the rest of the business off of.
And as already commented, we think you’re going to have a really robust group year just given where bookings are right now that then is, I think, sort of the last leg of the stool allowing you to get back to occupancy levels comparable to 2019. So, I suspect next year, we will — as that — as you go through the year and you get that group base back, I think the rest of the segments feel very good. I mean, I know everybody wants to say, nobody is going to travel for business, but that’s just that people are traveling like crazy, look around and the makeup of there’s some industries technology and financial services that haven’t rebounded as much and have issues like over hiring and then reduction in workforce and all that. But again, the bulk of it is driven by SMEs and they’re traveling more than they were.
And most of the corporates and even those corporates the people they still do have are traveling more. So I don’t — I do not — I do believe we will get back to prior levels of occupancy. I think it will happen next year. I think we’re getting — we’re not quite there, but we’re getting close. I think next year, as you think about the split between rate and occupancy, it’s a little early, but I would say it’s probably a pretty balanced equation as between the two next year. I mean, certainly, it’s early look.
Operator: The next question comes from Michael Bellisario with Baird. Please go ahead.
Michael Bellisario: Thanks. Good morning, everyone. Just wanted to ask on luxury. Maybe just remind us where is the white space today as you see it? And then maybe more importantly, what are your customers still asking for as you think about investing key money dollars at the higher end price point?
Kevin Jacobs: Yes, I think that the white space for us is luxury lifestyle. We’ve talked about it a bunch. We are doing a bunch of work in the space right now. I think next year, we will come out — we will have a product in the market next year. So we’ve done a lot of work over many years, but we sort of cranked up that engine once we got Spark launched in H3 out there. That’s sort of next. I think our customers, listen, I think our customers love what we have. I mean, as reflected in the fact that loyalty is amongst the largest and is certainly the fastest growing. And I think we — I know we still represent the highest level of engagement in the sense of Honors occupancy being higher than anybody in the industry. So, I think our customers are saying to us the ecosystem that you’ve created, both how you do loyalty, the products you have, the geography, what we talk about frequently, the network effect that we’ve built combined with Honors and experiences related to Honors and how they engage with Honors is really working well.
So, I don’t think there is anything that if I’m being really blunt that our customers are screaming out, I just sat in 12 hours of focus groups with customers because we’re going through a strategic planning process for over two nights with every segment of customers, people are loyal to us, not loyal to us, et cetera, et cetera. There was — I mean there’s a lot to unpack there. I’m not going to do it on this call, but there was nothing that our customers were saying like, gosh, you need this and you need that. Look, what we do know is that having more on the high end creates even more of a halo effect. We believe we have a significant amount already in the luxury space, in the resort space. And given our scale and breadth and depth geographically, we think it’s very pleasing to our Honors members.
But on the margin, having more of it, we think, is beneficial, which is why we spend the time doing it. It’s why we want to do luxury lifestyle. The other reason really not only do we want our customers to have more opportunities at the high end, but we’re just giving away, if I’m being honest, we’re just giving away development opportunities. I’m looking at Kevin, who runs development, too. It’s like I travel all over the world. We have owners that are super loyal to us, and many of them want to build a luxury lifestyle hotel, and we don’t really have a product for them. And so literally, they’re doing it with other people just because we don’t have a product, and that makes me crazy, so that I think that it will obviously enhance our growth rate.
Now, luxury lifestyle is not like H3 or Spark or Tempo or Home2 — it’s not — not — it’s a very bespoke thing. You’re not going to have thousands of these. You’re not even going to have hundreds of these. I mean, look at people who have been at it for a long, long time. You’ll be fortunate to have dozens of them. But every room counts and having more really high-quality products in the right locations, we think continues to build our network effect. And so I’ve said this many times to many investors, I sort of love where we are which is we have a — we have a network effect that works. We have 173 by end of the year, beginning of next year, we’ll have 200 million Honors members that are very loyal to us. They love Honors. They love the network that we’ve created.
They love the brand diversification, the geographic diversification. And so there is really doing luxury lifestyle is fabulous, doing more luxury deals with Waldorf, Conrad and LXR, we’ll keep doing that. Those will add to growth, but there is — the ecosystem works. I think point in case is the success that Honors is having vis-à-vis the competition. So, I look at these as all like incremental halo incrementally. Obviously, we can always make it better. And we can always add — want to add products that add to our growth rate. And we think luxury lifestyle will.
