Third Quarter 2026 Investor Conference Call - HILTON WORLDWIDE HOLDINGS INC

Explicit Guidance:

• Q4 2026 System-wide RevPAR: Expected to grow 3% to 3.5%, down from Q3 due to election-related calendar shifts and seasonal factors.
• Q4 2026 Adjusted EBITDA: Guidance range of $1.047 billion to $1.067 billion.
• Q4 2026 Adjusted Diluted EPS: Guidance range of $2.32 to $2.38 (correcting transcript typo "$2.038" based on context of guidance ranges and previous Q3 actuals).
• Full Year 2026 System-wide RevPAR: Revised upward guidance of 4% to 4.5%.
• Full Year 2026 Adjusted EBITDA: Range of $4.06 billion to $4.08 billion.
• Full Year 2026 Adjusted Diluted EPS: Range of $9.07 to $9.13.
• Shareholder Returns (2026): On track to return $3.5 billion via buybacks and dividends.
• Q4 2026 Dividend: Authorized at $0.15 per share.
• Net Unit Growth (2026): Ending at midpoint of 6% to 7% range.
• Net Unit Growth Outlook: Expected to continue growing 6% to 7% annually over the next several years.
• RevPAR Regional Outlook 2026: U.S. (mid-single digits), Americas ex-U.S. (mid-single digits), Europe (mid-single digits), Asia-Pacific (low single digits, with China low single-digit decline), Middle East/Africa (low double-digit decline).

Business-Segment Outlook:

• 2027 Global RevPAR: Management expects a global run rate of 3% to 4%, driven by normalization in Mexico/Middle East, stabilization in China, and continued U.S. strength.
• U.S. Business Transient: Projected to drive growth into 2027 with a run rate of ~4% in the U.S.; expected to return to pre-COVID levels within the next couple of quarters.
• Luxury and Lifestyle: Trailing 12-month net unit growth rates of 11% and 20% respectively; expected to drive the majority of new deliveries (45% of deliveries in upper-upscale/above).
• Conversions: Expected to remain a key growth driver, with ~37% of openings this quarter; long-term expectation for conversion share to normalize to mid-30s from current ~40% as new construction ramp-up continues.
• Pipeline: Record 543,000 rooms; approximately 80% of next year's net unit growth is currently on the books (under construction or signed).
• Group Demand: Expected to grow mid-single digits in 2027, fueled by limited new supply and strong economic health.
• Select Service: Expected to continue outperforming in the "C-shaped" recovery, benefiting from middle-class wage growth and NRFI-driven business transient demand.

Market and Competitive Outlook:

• Non-Residential Fixed Investment (NRFI): Currently growing nearly two times faster than the 20-year average; expected to remain elevated for the next couple of years, supporting RevPAR growth.
• Industry Supply: Historically low supply growth expected to continue, creating a favorable backdrop for RevPAR expansion.
• Market Share: Hilton currently holds less than 6% of global supply despite ~20% of rooms being under construction for Hilton.
• Europe Opportunity: Independent non-branded hotels represent ~60% of Europe's supply versus Hilton's ~2% share; significant conversion opportunity expected to accelerate in the Nordics and across the region.
• Technology/ai: Early-stage integration of AI agents (e.g., Muse) expected to drive more direct bookings and lower cost structures over the next several years; Hilton views tech as a primary strategic advantage.

Macro / Industry Outlook:

• U.S. Economy: Described as a "C-shaped economy" with middle-class real wage growth despite inflation; supportive of business and leisure travel.
• Interest Rates: Management anticipates 10-year rates could be lower one year from now, though current higher rates remain a factor in construction costs.
• China: Consumer sentiment remains a headwind; expected to decline low single digits in 2026 with potential for gradual improvement in 2027.
• Middle East: Conflict pressures expected to persist into Q4 2026 causing low double-digit RevPAR decline; outlook for normalization in 2027 is positive but cautious.
• Mexico: Expects normalization in the coming year following challenges in 2026.
• Regulatory/Tax: No specific new regulatory guidance provided other than general reference to "supportive policy" in the U.S. driving infrastructure and private sector investment (including AI).

Strategic Initiatives:

• Leadership Change: Appointment of Jeff Moore as Chief Technology Officer to enhance the proprietary technology platform and direct booking capabilities.
• Exchange Listing: Relocation of stock listing to NASDAQ to align with innovation and growth ambitions.
• New Brand Launches: New lifestyle brand ("Skunk Works") expected to launch early in 2027; expansion of Canopy (50th global), Spark (Italy), and Signia (Florida).
• Development Partnerships: Multi-year agreement with Scandic Hotels Group to expand presence in the Nordics (Sweden, Norway, Denmark, Finland).
• Capex/Key Money: Key money usage to increase only slightly (100-200 bps); no step-change in investment required to push luxury/lifestyle portfolio.
• Ownership Restructuring: Repositioning of owned assets in the Middle East and Mexico to potentially double EBITDA contribution within 2-3 years.
• Franchisee Support: "RISE" fee reduction program launched; "RISE 2" expected to be announced in Q1 2027 focusing on efficiency gains for owners via tech and AI.

Risks and Headwinds to Outlook:

• Geopolitical Conflict: Ongoing conflict in the Middle East impacting RevPAR in the region and increasing energy prices globally; could cause lower than expected Q4 and FY results.
• One-Time Events: Significant renovations in the ownership portfolio and lower-than-expected timeshare license fees impacting current year flow-through and algo growth.
• Currency: Guidance excludes potential FX impacts; currency-neutral basis used for reporting but actual results subject to FX volatility.
• Execution Risk: While 80% of next year's unit growth is on the books, execution risks remain in delivering signed deals and conversions.
• Competition: Higher interest rates and construction costs may slow overall industry new development, though Hilton expects to take disproportionate share of the remaining volume.

Management Tone on the Future:

• Confidence Level: Highly optimistic and "more confident than ever" regarding the ability to deliver aligned growth over the next several years.
• Guidance Change: Full-year RevPAR guidance raised to 4-4.5% (from prior expectations of 2.5-3.5% run rate); confidence in 6-7% unit growth sustained.
• Strategic Outlook: Management views the current macro environment as "unusually strong and durable," citing the close correlation between their performance and non-residential fixed investment.
• Culture: Emphasis on "people-led, tech-powered" strategy; cited "Best Workplace" awards globally as evidence of strong execution capability.

Miscellaneous:

• Share Count: Current share count not explicitly forecasted, but guidance ranges exclude the impact of future share repurchases.
• Dividend Policy: Quarterly dividend maintained at $0.15 per share for Q4 2026.
• Reporting Calendar: 2027 full-year guidance not yet finalized; management provides directional run-rate expectations (3-4% global RevPAR) based on current trends.