Joe Greff: And then finally, could you break down the rooms growth between ALG and Hyatt’s non ALG portfolio for ’23, the delta in ’23.
Mark Hoplamazian: In ’23, I think the growth is — ALG is up 12%. Is that right? Okay. So I think ALG will outpace legacy Hyatt growth. The reason why we were debating that here is because we do have assumptions with respect to conversions. Conversions last year represented about 35% of our total growth. I think that the key thing to note, Joe, is that the entirety of the construction profile across the hotels that have been under construction, we have close to 40% of our pipeline under construction has shifted right. We had over 8,400 rooms that we thought we were going to open. This year, they got pushed into ’23. But concurrently, we are taking the view that we will have a significant number that gets pushed into ’24 as well.
So it’s almost like the entirety of the construction profile has shifted right. And what’s making up the difference right now is, first of all, ALG properties are not subject to the same dynamics because of the markets in which they’re being constructed. So we have more durable and more higher visibility to the openings actually and construction being completed on time. So the biggest area where that dynamic is true is China. Things got shifted out to the right significantly and we’ll stay shifted to the right until probably sometime in ’24, because it’s going to take the real estate sector time to catch up. So that’s been a dynamic that’s just a reality that we’re living with, that’s not a long term brand health or growth issue. It’s a short term dynamic with respect to the construction profile of what we’re dealing with.
But we did have significant conversions in ’22. We expect to have a fair number of conversions in ’23 as well, higher than our historic 20% to 25% levels, maybe not as tight as the 35% we posted in ’22, but significant. And so meanwhile, I think the number of opportunities that we’re seeing with respect to ALG growth do include some portfolio transactions on which we’re working. So therein lies the relatively higher growth rate for ALG relative to legacy Hyatt.
Operator: Our next question comes from Shaun Kelley from Bank of America.
Shaun Kelley: I was hoping we could get a little bit more color maybe on the owned and leased margins. You’ve done a great job us kind of bridge with some of the asset sales. I believe you mentioned in the fourth quarter, margins on a comp basis, still up about 330 basis points year over — versus 2019. As we start to get into a much more normalized environment, inflation having been a real cost over a four or five year cumulative period, we’re starting to hear hotel owners out there talking a little bit more about those pressures. So kind of what’s the expectation for holding on to some of those margin gains for ’23 and beyond?
Joan Bottarini: So Shaun, I’d be happy to answer that. The expectation that we have shared consistently is that we expect to be 100 to 300 basis points above pre-COVID levels. And that’s really driven by permanent improvements that our teams in the field have made with respect to digital capabilities and a very, very disciplined focus on productivity. So some of that is helping to minimize the wage inflation, wage rate growth that we’ve seen in the quarter. In the fourth quarter, we had an excellent result of 330 basis points, that’s on a comparable basis. You mentioned a change in the portfolio. So that is the same set of properties to 2019. That is helped by rate right now being up about 11%. And we also have a lower mix of SMB as a proportion of total revenue, which is a bit lower on the margin side. But I would just reiterate that we continue to expect that range of 100 to 300 basis points into the future.
