Chad Beynon: Great. And then secondly, just in terms of FX, the dollar has weakened a little bit against kind of the basket of the non-U.S. currencies. How are you thinking about an operational impact from that? And then also, as that kind of feeds into guidance, is there a translational impact with just a slightly weaker dollar versus what you saw in €˜22?
Kevin Jacobs: Operationally, obviously, it has effects in each individual market where your pricing labor in those currencies. It’s a very small headwind single-digit millions of dollars headwind in this year’s numbers.
Operator: The next question is from Bill Crow from Raymond James. Please go ahead.
Bill Crow: You talked about the strength of leisure in the fourth quarter and all of last year. But when you think about leisure demand this year, how would your RevPAR 4% to 8% growth for the year, how would that — would leisure be in that range, or there’s a lot of concern that it’s going to be significantly below that?
Chris Nassetta: Yes. I think we do think it would be within that range. We continue to see strength. We do expect like all the segments that you will see some plateauing as a result of a slower macro environment in the second half of the year. But we still feel very good about it. The demand trends here and now are really strong. And while there’s a lot of noise out there, if you go back — just went back and looked at the number, consumers still have incremental savings in the U.S. relative to the month before COVID of $1.5 trillion. Now — so that peaked at like $2.7 trillion. It’s down to $1.5 trillion. So, they are spending it, and they’re probably reading the papers and watching the news and getting more nervous. And so, that would be a behavior set that would say that maybe they pull back a little bit.
But the reality is we’re not seeing it. And I think part of the reason we’re not seeing it, okay, and time will tell, is because of the phenomena that I described earlier in the call, which is they’re shifting their spending. So not only do they still have incremental savings in their pockets and feel reasonably good, but they’re spending a lot more of it at bars and restaurants and travel as a percentage of their overall spend. And so, we have anticipated, like all segments, there’ll be a little bit of a headwind in the second half of the year, but we do expect leisure to be in those ranges.
Bill Crow: If I could address my follow-up question on Spark, which is really an intriguing product. Does it kind of take care of two problems that are out there for the industry? And one is obviously a lot of deferred CapEx over the last several years. But the other one is the age of select service hotels Hampton and what started in €˜84 or €˜85. So, we’re dealing with hotels coming up on 40 years old. So, is there a — is that part of the thought process is that you’ve got a lot of hotels that could ultimately fit within that brand?
Chris Nassetta: Listen, it is an ancillary benefit on the margin, meaning if we do have older Hamptons like other third-party products that we think aren’t fitting for Hampton, as you know, we’ve been quite disciplined in keeping the Hampton brand, the strongest brand in lodging, in my opinion, by pushing properties out that are past their prime and don’t make sense in the system. There — I think over the next 10 years, there is some percentage of those that we will certainly look at keeping in the system. I think in the end, Bill, it will be a very small percentage of the overall system. And if I look at the deals that we have in-house right now, 98% of the deals we are processing right now are third-party brands. So, there are a few Hamptons in there.
But there’s no other Hilton brands in there, but there are a few Hamptons. But I would say it’s an ancillary benefit on the margin. A lot of those hotels, frankly, over time, are going to exit the system as we’ve been doing for time and eternity.
Operator: The next question is from Patrick Scholes from Truist Securities. Please go ahead.
UnidentifiedAnalyst:
Chris Nassetta: Hey Greg, can you hear us? Your — we can’t understand what you’re saying. Your connection is super garbled.
Operator: I apologize. So, we’ll have to move on to our next question. And the next question is from Brandt Montour with Barclays. Thank you.
Brandt Montour: Actually, just one from me, Chris and Kevin. So, in terms of development and more medium to longer term sort of net unit growth, and your comments were well taken, Chris, on a couple of years. The world seems to have gotten a bit better for you, though, right, since three months ago, right, in terms of the speed at which China is reopening now, the excitement over Spark and then U.S. starts continuing to get a little bit better. So I guess, the question is, do you feel a little bit better about getting back to the 6 to 7 NUG than you did three months ago? And are we potentially even playing for maybe hitting that run rate in late €˜24?
Kevin Jacobs: Look, I think we said what we said for a reason, Brandt, not to be sort of cagey about it, but there’s a lot can go one way or the other in the world. We still feel great about getting back to 6% to 7%. I don’t — Chris may have a different view. I don’t feel differently today than I did three months ago about that. I think the world is coming our way a little bit. But we don’t expect — none of these things stay constant, right? I mean, these trends will change, and we always think the world is going to come our way. So, I don’t feel that much better in three months from now.
