管理層發言
Good morning, and welcome to the Hilton Second Quarter 2026 Earnings Conference Call. All participants will be in a listen-only mode. Please signal a conference specialist by pressing the star key followed by 0. After today's prepared remarks, there will be a question-and-answer session. To ask a question, you may press star then one. And to remove your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mr. Charlie Ruehr, Vice President, Corporate Finance and Investor Relations. You may begin.
Thank you, Chuck. Welcome to Hilton's second quarter 2026 earnings call. Before we begin, we would like to remind you that our discussion this morning will include forward-looking statements. Actual results could differ materially from those indicated in the forward-looking statements. And forward-looking statements made today speak only to our expectations as of today. We undertake no obligation to update or revise these statements. For a discussion of some of the factors that could cause actual results to differ, please see the Risk Factors section of our most recently filed Form 10-K. In addition, we will refer to certain non-GAAP financial measures on this call. You can find reconciliations of non-GAAP to GAAP financial measures discussed in today's call in our earnings press release and on our website at ir.hilton.com. This morning, Christopher J. Nassetta, our President and Chief Executive Officer will provide an overview of the current operating environment and the company's outlook. Kevin J. Jacobs, our Executive Vice President and Chief Financial Officer, will then review our second quarter results and discuss our expectations for the third quarter and full year. Following the remarks, we will be happy to take your questions. With that, I am pleased to turn the call over to Christopher.
Thanks, Charlie, and good morning, everyone. We are excited to report strong second quarter results with RevPAR, adjusted EBITDA and EPS exceeding our expectations. The continued improvement in travel demand across chain scales and segments supported both our top-line and bottom-line. We continue to execute on our disciplined development strategy, achieving one of the best quarters in our history for signings, further growing our record pipeline. Our strong portfolio of brands, powerful commercial engines and disciplined execution continue to support meaningful free cash flow generation. We remain on track to return $3.5 billion to shareholders for the full year. For the second quarter, system-wide RevPAR increased 3.9% year-over-year. Driven by underlying demand recovery in the U.S., where business transient and group both exceeded expectations, and a strong World Cup. Business transient RevPAR was up 5.7%, a three-point step up globally and a four-point step up in the U.S. versus the first quarter, driven by midweek demand from small- to medium-sized businesses. Leisure transient RevPAR was up 1.6%, supported by World Cup demand exceeding expectations, but offset by unfavorable holiday shifts and pressure from the conflict in the Middle East. Group RevPAR was up 3.7% driven by growth in company meeting demand and favorable event calendar shifts. As we look to the second half of the year, we expect underlying RevPAR growth to remain strong across chain scales and segments. We expect U.S. RevPAR to continue to benefit from macro tailwinds including supportive tax and regulatory policy, increased private sector investment in the AI complex, and ongoing public infrastructure spending, which should benefit the middle and lower income consumer and drive broader demand growth across our system, and will be coupled with historically low levels of supply growth at less than 0.5%. We expect the business transient segment to lead as its recovery continues to strengthen into the third quarter. Given this momentum, we are raising our full-year system-wide RevPAR growth expectations to 3% to 3.5% with third quarter above our full-year range benefiting from the World Cup and holiday shifts and fourth quarter a bit below due to calendar shifts and midterm elections. Turning to development, we had a strong quarter opening more than 200 hotels totaling over 24,000 rooms, up 50% from the first quarter. More than 20% of total openings were in lifestyle hotels, including the opening of Conrad Athens, which marked the debut of our Conrad brand in Greece. We celebrated reaching 500 lifestyle hotels with openings across 12 countries, including the brand debut of Curio in India. Additionally, we surpassed 100,000 rooms globally for Home2 Suites and announced the brand's debut in Germany, another key European market for us. Conversions represented 36% of openings for the quarter across 12 brands in nearly 30 countries, including conversions in Saudi Arabia, Germany, and the U.K. Across our portfolio, the 20 new brands that we have launched over the last two decades have been powerful engines of our unit growth and we expect them to continue driving more than half of our net unit growth in the years ahead. We believe our ability to identify white space, develop the right brands in partnership with our owners and launch them with discipline remains a real competitive advantage for us. Building on that strength, in the quarter, we launched Undergraduate by Hilton, a new upper-midscale brand created to serve a broader range of college and university markets. Undergraduate expands Hilton's collegiate hospitality strategy with a flexible development model that supports both new-build and conversion opportunities. Undergraduate complements our existing Graduate brand for a different addressable market with long-term expansion potential of more than 400 hotels. In the quarter, we signed approximately 43,000 rooms representing the second largest quarterly signings in our history, increasing 50% from the first quarter and growing year-over-year above our five-year average historical growth rate. Of total signings, 35% were in luxury and lifestyle with notable announced signings including the Waldorf Astoria Miami Beach, and our first Curio in the Bahamas. More than 70% of our signings were in international markets driven by strong momentum across Europe and Asia Pacific outside of China where we currently only have 21% market share of supply. In CALA, a fast growing region where we have only 3% market share of supply, signings grew 20% year-over-year with growth across all chain scales. Despite the conflict in the Middle East in the quarter, Middle East signings were up low-single digits year-over-year. Our pipeline now stands at a record 541,000 rooms spanning more than 130 countries. Almost half of the pipeline is under construction positioning Hilton for sustained 6% to 7% net unit growth as we continue to capture a bigger slice of a growing global pie. In the quarter, we saw new development construction starts continue to grow led by the U.S., which was up over 40% versus the same quarter last year. On conversions, we continue to take well more than our fair share of quality rooms and expect conversion openings to be up in all regions for the year comprising approximately 40% of total openings. Both new development and conversion growth are driven by continued developer preference for Hilton brands due to industry-leading RevPAR premiums, which further increased in the second quarter. We know our development success is built on strong partnerships with owners, which is why we evaluate every decision through the lens of owner profitability. Over the past year, we have taken several concrete steps to help owners lower costs, strengthen hotel profitability and improve their returns. First, on fees, reflecting the continued growth in scale and efficiency of Hilton Honors, we reduced loyalty fees for most hotels globally. We also launched Hilton RISE, a program that provides program fee discounts when hotels consistently deliver an excellent guest experience. Second, we are taking a more flexible and tailored approach to renovations, balancing owner investment with guest expectations and hotel performance. Most recently, we initiated an intense cross-functional review of hotel-level P&Ls to identify where Hilton's scale, technology, and enterprise capabilities can drive incremental owner profitability. Through this work, we are exploring system-wide opportunities across workforce innovation, purchasing power, and brand cost discipline to strengthen hotel-level margins, reduce complexity and create even greater long-term value for our owners as well as all stakeholders. These owner profitability initiatives are enabled and accelerated by the power of our proprietary technology platform which allows us to innovate faster, scale more effectively and deliver greater value across our entire network. Earlier this month, we announced an industry-first direct connection with Navan, a travel management company. This integration was made possible by Hilton-developed booking and content APIs that provide direct real-time access to Hilton availability, rate booking, and authoritative property and room content. This direct connection bypasses both intermediary connections and other more expensive distribution channels providing meaningful cost savings for our owners. The same flexible AI-ready technology stack is also enabling the Hilton AI Planner, which launched earlier this year, bringing more personalized, intelligent, and useful planning tools to all of our customers. We will continue to extend our technology advantage and utilize it to drive superior returns for owners, and better experiences for our guests. Our exceptional Hilton team members continue to bring our award-winning culture to life helping Hilton achieve 19 number-one best workplace recognitions globally so far this year, the highest number we have ever achieved. This commitment to delivering reliable and friendly stays also strengthens our industry-leading brands with Hampton, Home2 and Tru recognized for best-in-category by J.D. Power for 2026. Overall, we are pleased with the quarter and remain confident that our powerful network effect, industry-leading RevPAR premiums and fee-based capital-light business model will continue to drive strong operating performance, net unit growth and meaningful cash flow, enabling us to return an increasing amount of capital to shareholders. Now I am going to turn the call over to Kevin with a few more details on the quarter and our expectations for the full year.
Thanks, Christopher, and good morning, everyone. During the quarter, system-wide RevPAR increased 3.9% versus the prior year on a comparable and currency-neutral basis. Growth was driven by underlying demand recovery in the U.S., where business transient and group both exceeded expectations and a strong World Cup. Adjusted EBITDA was $1.054 billion in the second quarter, up 4.6% year-over-year, exceeding the high-end of our guidance range. Growth was affected by one-time and favorable timing items specific to the second quarter of 2025 and significant renovations in the ownership portfolio in 2026. Outperformance was driven by better-than-expected system-wide RevPAR growth and $17 million of non-RevPAR timing items. Management and franchise fees grew 6.4% year-over-year. For the quarter, diluted earnings per share adjusted for special items was $2.29. Turning to our regional performance, U.S. RevPAR increased 5.4% driven by strong demand across all segments with U.S. business travel and group exceeding prior expectations and a strong World Cup. For full-year 2026, we expect U.S. RevPAR growth to be in the mid-single digits. In the Americas outside the U.S., second quarter RevPAR increased 4.6% year-over-year driven by strong group and business travel demand with Canada leading regional gains and continued growth across the Caribbean and South America. For full-year 2026, we expect RevPAR growth to be in the low- to mid-single digits. In Europe, RevPAR grew 4.3% year-over-year led by the U.K. and Ireland and continent-wide strong business and leisure performance. For full-year 2026, we expect RevPAR growth for the region to be in the mid-single digits. In the Middle East and Africa region, RevPAR decreased approximately 30% year-over-year, which was better than prior expectations. However, uncertainty in the recovery remains. For full-year 2026, we now expect RevPAR in the Middle East and Africa to be down in the high-single to low-double digits, supported by a strong start to the year before the conflict and modest assumptions for a continuing recovery. In the Asia Pacific region, second quarter RevPAR was up 6.3% in APAC excluding China, led by strength in business and leisure and overall strength in Japan and Korea. RevPAR in China decreased 2.2% in the quarter driven by a decline in group travel resulting from continued government restrictions. For full-year 2026, we expect RevPAR growth in Asia Pacific to be in the low-single digits with RevPAR down low-single digits in China. Turning to development. As Chris mentioned, for the quarter, we grew net units 6.1% and now have more than 541,000 rooms in our pipeline. We continue to have more rooms under construction than any other hotel company, with approximately one in every five hotel rooms under construction globally slated to join the Hilton portfolio. We expect to deliver between 6% to 7% growth for the full-year, the second half of the year stronger than the first half of the year. Moving to guidance for the third quarter including the impact from the Middle East conflict, we expect system-wide RevPAR growth to be approximately 4%. We expect adjusted EBITDA to be between $1.035 billion and $1.055 billion and diluted EPS adjusted for special items to be between $2.28 and $2.34, both affected by the ongoing conflict in the Middle East and significant renovations in the ownership portfolio and timing items. For the full-year, we expect RevPAR growth of 3% to 3.5% driven by continued broadening of demand growth across our system and strength in the U.S. As a result, we expect adjusted EBITDA of between $4.04 billion and $4.08 billion and diluted EPS adjusted for special items of $8.89 and $9.01. Please note that our guidance ranges do not incorporate future share repurchases. Moving on to capital return, we paid a cash dividend of $0.15 per share during the second quarter for a total of $34 million. Our Board also authorized a quarterly dividend of $0.15 per share for the third quarter. In 2026, we expect to return approximately $3.5 billion to shareholders in the form of buybacks and dividends. Further details on our second quarter results can be found in the earnings release we issued earlier this morning. This completes our prepared remarks.
We would now like to open the line for any questions you may have. We would like to speak with as many of you as possible, so we ask that you limit yourself to one question. Chuck, can we have our first question please?
分析師問答
And our first question for today will come from Shaun Kelley with Bank of America. Please go ahead.
Good morning, everyone. Thanks for all the prepared remarks, a lot to cover. Christopher, I'm going to go down a slightly different path. I feel like your section on owner health and some of the initiatives you have taken there is new. I would like to elaborate a little bit specifically, if you could just comment on the reduced loyalty fee you mentioned for owners and maybe elaborate a little bit for those not as familiar with the RISE program and what that may mean, just some of these initiatives you are taking to help out owners and the point there. Thank you.
Yeah. I am happy to do it. We put it in the script for a reason. We have been spending a lot of time on this. If you think about the lead-up to COVID, in 2017, 2018, 2019, conditions in the industry were not great most of those years in the sense that you had very low top-line growth and higher growth in expenses. Margins were sort of going backwards and it made it very challenging, predominantly in the U.S., which is still 75% of the system and where these issues are more extreme. It was a difficult operating environment for owners. Then COVID hit, which was difficult for everybody, us and them, and all of the operating costs and burdens are taken on largely by our ownership community. We did a ton of different things to provide relief during that time. We worked very quickly and thoughtfully to help every way we could and also make sure we survived those times, which we did as did our owners. After COVID, you then got into a period of very high top-line growth with high inflation. That felt good, particularly after the pandemic. But over the last couple of years, owners have been suffering a bit like the pre-COVID times, but more extreme: very low or even negative top-line growth, and expenses growing higher than that with stubborn inflation particularly in insurance, energy, and labor costs. Margins have been going backwards. We listen to these things. I come out of the owner community and have a lot of relationships and friendships there, and we are listening. What we have been trying to do over the last year or two is think broadly about how we can be smarter to help. I do think things are going in a good direction and owners are going to get margin growth. We are growing scale and utilizing AI and process change to get more efficient in every way, not just that affects our P&L, but the broader P&L and the entire system that we manage for the owner community. Last year, we launched reductions in loyalty fees because we can, given the continued scale and efficiencies in that business. Then we put Project RISE in place which is basically a reduction in program costs around efficiencies we can find. We think we still run the system, but do it more efficiently, utilizing better process, AI, and other innovative thinking. The combination of those things is somewhere between 75 and 100 basis points in margin for owners. In RISE, we created a gating system, which we think is good for everybody. During COVID there was a lack of investment in the whole industry. We are going through a big investment cycle and our owners are investing a lot of money, but we want to set it up so that if a hotel delivers a good experience for customers, it gets through the gate and receives benefits. If a hotel does not, they have to work on it to earn the benefits. Those standards move up every year, but roughly half the system right now in the United States is getting the full benefit of both those things, and I believe that will continue to grow. So I think it is good for the ownership community and it incentivizes the right behaviors vis-à-vis delivering the right outcomes for customers, which ultimately helps drive share growth, which is good for the system and for us. The last thing is we are doing another body of work, which I would describe as RISE 2 internally, which is trying to figure out in a very granular way across the entire P&L, across all brand standards, both operating and physical property level standards, whether there are things we can change. That uses a mix of operational effort and technology, including AI, where we are making good progress. We think there is more opportunity to come. That's why I put it in the script. We are spending a huge amount of time on this for all the right reasons and continue to work closely with our ownership community. They are extraordinarily important partners and customers of ours, and it needs to work for the guests in the hotels and for owners for our flywheel to keep flying. Thank you.
The next question will come from Daniel Politzer with JPMorgan. Please go ahead.
Christopher, you talked about broad-based momentum and strengthening of demand trends for the remainder of the year and actually into 2027. Can you talk about what underlies that confidence in line of sight over the course of the next 18 months? And how do we kind of reconcile that with the nuances in your cadence for RevPAR, up 4% in the third quarter, and then implying up low-single digits in the fourth quarter?
At the risk of a lot of data, let me lift up because there is a lot of noise this year. There is some negative noise largely oriented towards the Middle East and a little bit of Mexico, and there is a lot of positive noise between easier comps and World Cup. We spent a huge amount of time getting underneath what is really going on and when you cleanse for that noise, how does it look? In Q2, the U.S. was up 5.4%. Roughly half of that, a little over 2.5 percentage points, was what we say is real run-rate growth. The other roughly 2.7 points were comps and World Cup benefits. Globally, we were at roughly 4% and about 2 points of that were those noise items. The Middle East in the quarter was about a full percentage point impact. So if you take out that noise, the run rate I would say is around 2% to 2.5% when you look at the year. For the full year in the U.S., that implies around 2.5% run rate for the second half. Kevin said third quarter will get a little extra juice from the World Cup and some holiday effects. The fourth quarter has calendar shifts because of midterms. When you look at the full system-wide result after removing noise, it ends up around 2% to 2.5%. As we go into budget season over the next few weeks, we start off a base around that 2% to 2.5% and then consider tailwinds. The biggest difference recently is business transient midweek coming back in a meaningful way, especially from small- and medium-sized businesses. That is driving the greatest improvement. I think the second half of the year looks a lot like the first half when you take out the World Cup and comp effects. Looking into 2027, I view the baseline as roughly 2% to 2.5% in the U.S. and then you add tailwinds: the U.S. economy is getting stronger, supportive tax and regulatory policy, huge investment cycle in AI infrastructure, and broad-based infrastructure spending. These investment cycles create significant demand correlation with hotel rooms. Inbound international travel to the U.S. is an additional opportunity. The Middle East is a drag this year — I estimate it is costing us around 0.5 percentage points in overall growth — but I expect the situation to improve over time. Mexico and China are other factors to watch: China is sputtering but seems to be stabilizing and could be a slight upside over current expectations. Taken together, off the baseline, I believe there are more tailwinds than headwinds and we should have another healthy year of growth in 2027, all things being equal. Thanks so much.
The next question will come from Lizzie Dove with Goldman Sachs. Please go ahead.
I guess maybe expanding on that a little bit. You talked last quarter about the C-shaped economy and the convergence between chain scales, particularly in the U.S. Could you expand on that, how you are seeing that now, how it has evolved through the quarter, and to the extent you believe that could continue to be a tailwind as we move into 2027?
Yes, Lizzie, thanks. We are definitely seeing the C-shaped pattern. That does not mean the top of the C is coming down — luxury continues to do quite well and especially benefited during the World Cup because of inbound high-end international demand in urban markets. But the biggest flip has been in midscale and upper-midscale. Last year those segments were negative and they have turned to positive, with growth moving from roughly minus 2% to plus 4% to 6%, a very big turnaround. The NFI and broader investment numbers support this: the people and projects investing in the AI and infrastructure cycles are more likely to stay in midscale and upper-midscale hotels rather than luxury hotels, and we see that in the data. The biggest single change over the last couple quarters is midweek business transient growth driven by SMBs. That is exactly what we wanted to see: strong SMB growth that outpaces the big corporate segment and is driving midweek rate gains. We continue to see this pickup going into the third quarter and post-World Cup. So I think the C-shaped convergence is alive and well and, personally, I believe it is sustainable based on the underlying economic drivers.
The next question will come from Brandt Montour with Barclays. Please go ahead.
Great. Thanks. Kevin, if you could talk a little bit about the EBITDA guidance — you beat the Q2 guide by a healthy figure and did not flow through all of that to the full-year EBITDA guidance midpoint. Is there anything to call out there or is that just general conservatism?
No, Brandt. We called out in the prepared remarks and the release several items that were timing items, about $17 million in the quarter, which were across the P&L and were smaller items rather than one major item. The rest of the outperformance was driven by RevPAR. If you divide it by four, our rule of thumb holds together — the beat on RevPAR flowed through as expected. The increase in our guidance is flowing through for the full year. What is really going on is that at the midpoint of our guidance, diluted EPS adjusted is close to the prior expectations, but we have some meaningful drags this year: the ownership segment has three major hotels that are either fully closed or under significant renovation — Munich Park and Amsterdam are closed, and Tokyo is under significant renovation and is our largest EBITDA producer in that portfolio. Those are long-term decisions that will drive great performance going forward, but in the near term they are a $20 million to $25 million impact to EBITDA from those three hotels alone. Then the Middle East is another roughly $20 million of impact this year in incentive management fees and base fees. If you add those factors, you are adding $40 million-plus, maybe $50 million of EBITDA headwinds for the year. Adjusting for those, the full-year performance is well ahead of the algorithm and the algorithm is alive and well.
The next question will come from David Katz with Jefferies. Please go ahead.
Good morning, everybody. Thanks for taking my question. Apologies for focusing on just one hotel, but you mentioned it Christopher. I think it is an important hotel and important market, the Waldorf Astoria Miami Beach. Can you talk a bit more about number one, presumption is that there probably was some key money involved there, and two, how you see your presence in that market given some of the other luxury dynamics with other hotels reopening and some other trades and upgrades, etcetera. Thanks.
Yes, it is one hotel but an important one for luxury lifestyle in South Beach and Miami. We have another Waldorf in the broader Miami market, but nothing in the South Beach market at the high end. It is something we have been working on for a very long time. Our partner in London, who will open a spectacular Waldorf Astoria in London later this fall, bought the South Beach hotel a couple years ago. We have a great relationship with them and after many conversations, they are big believers in the Waldorf brand and we were able to make a deal. We do not disclose individual deal economics, but there is definitely key money in a deal like that, particularly in the United States; that is part of the competitive environment. The key money does not change our broader guidance on key money. We are really excited about the transaction. The owner will close the hotel and reinvent it from a beach club point of view, food and beverage, public space and rooms — a thoughtful renovation. Based on our experience with them in London and their track record, we think it will be an exemplary representation in South Beach and will fit the market dynamic well. We are very excited about it.
The next question will come from Steven Pizzella with Deutsche Bank. Please go ahead.
Hey, good morning and thank you for taking our question. On the net unit growth (NUG) outlook, you indicated growth should accelerate in the second half relative to the first half run rate. Can you walk us through the key drivers behind that acceleration? How much visibility do you have into those expectations today? And any early thoughts on the 2027 NUG outlook?
I will take this one, Steven. We have a lot of visibility. The vast majority of what we expect to open this year is already under construction between new-builds and conversions in flight. We said in the prepared remarks and press release that deliveries are back-end loaded this year — that is math. We think we will deliver 6% to 7% for the year and feel good about the midpoint; historically we are back-end loaded in deliveries and this year may be a bit more so, but again we have the visibility into what is in flight. There is still time left in the year for in-the-year conversions, which is why we give a range, but we feel like 6% to 7% is the right way to think about ongoing growth. As we go into next year, the vast majority of what we expect to deliver will again be under construction, so the same logic applies.
The next question will come from Smedes Rose with Citi. Please go ahead.
Hi, thank you. You mentioned that in the quarter, small and medium sized businesses were a big driver of some of that strong business transient you saw at 5.7%. Was it a similar small and medium sized business contribution that were helping to drive group? Could you speak to what you are seeing from larger corporates on the business transient and group side? Is that a source of incremental strength going forward?
Yes. SMB growth in business transient was roughly 7% plus and it was also a driver on the group side. Larger corporate accounts were growing as well but at a lower pace in both business transient and group. If SMB was growing at 7%, corporate was growing around 4.5% to 5%. Both were healthy, but the pickup in SMB is notable. That pickup has been a very strong driver of the midweek business transient tailwind. SMB is leading the recovery and helping on group as well.
The next question will come from Robin Farley with UBS. Please go ahead.
Great. Thanks. I apologize if you addressed this already. I have three calls going right now at the same time. A lot of commentary about the strong midweek business and group that definitely is a pickup from last quarter. Can you give a little color on what is going on on the leisure side of things?
We did not talk about leisure in great detail, but leisure was strong and ranked third behind business transient and group in the quarter. That sequencing is partly because of holiday timing shifts. We feel good about continued growth in leisure, driven by high-end leisure growth and also by the middle-class returning to travel. If the middle class is traveling more for business, they are also likely to travel more for leisure. That should help weekend and leisure demand as well. On the specifics, leisure RevPAR in the quarter was up 1.6%, and when you neutralize for holiday shift impacts it would have been stronger. Regarding the World Cup, about 1.7 percentage points of the roughly 2.7 points of noise were World Cup and the other roughly 1.0 point was easier comps.
The next question will come from Duane Pfennigwerth with Evercore ISI. Please go ahead.
Hey, good morning. Thank you. Just to revisit the owner profitability initiatives that you highlighted, maybe you could speak to what specifically Hilton is doing that you believe differs from your competitors on this front. And is this more relevant for a specific set of chain scales? In other words, are these efficiency initiatives more relevant for full service versus select service hotels? Thank you.
I cannot speak for competitors, but I am not aware that our competitors are doing similar things at the scale we are. Notably, we are reducing fee load to owners across the board on loyalty and providing program fee discounts through RISE when hotels meet the standards. These initiatives are across the board — loyalty reductions and Project RISE affect program and system fees for hotels in all chain scales. They are not limited to a particular chain scale.
And to add, these discounts we described are in the program fees, in loyalty and in the program versus other fees.
The next question will come from Michael Bellisario with Baird. Please go ahead.
Thanks. Good morning, everyone. On the signings front, one of your best quarters. Is some of that pickup because RevPAR is better and owners and developers are more confident today? And how much of it is just you continuing to capture an outsized share of deal flow?
The first quarter was a bit slower as people were getting engines going. The second quarter benefited from calendar effects. Part of the pickup is a better environment and developers and owners more confident in the forward outlook. Construction starts were up materially in the U.S., which reflects the ability to get deals financed and confidence in the outlook. Some of it is also us continuing to capture a strong share of deal flow given our brand and development strategy. So it is a mix of cyclical improvement, increased confidence, and continued share capture.
The next question will come from Raymond Bowers with Wells Fargo. Please go ahead.
Hey guys, thanks for the question. A lot of my questions have been asked, maybe I will do more of a modeling question. Kevin, you might have addressed it in the $17 million of puts and takes, but looking at franchise and license fees up 8.5% year-over-year, if I look at 7% NUG and 4% RevPAR, is there anything to call out on comparisons of non-RevPAR fee growth in the quarter last year versus this year that would cause that discrepancy?
If you are talking about the full year, it's largely everything except the ownership segment. You do have the Middle East impact and a little bit of Mexico on incentive management fees. In the quarter we had a big one-time item last year that was known. For franchise and license fees specifically, for the year that segment is algorithm or better after adjusting for those items and a bit of FX.
Ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to Mr. Christopher J. Nassetta for any additional or closing remarks. Please go ahead.
Thanks, Chuck, and great to have everybody. We always appreciate you spending time, particularly if you have other calls going on. Hopefully, everybody got a chance to listen in. Obviously, a lot going on in the world and a lot of complexity in terms of Q2 — mostly positive items that helped results. When you distill it down, there are very good things going on. We feel very good about the setup for the rest of this year and, more importantly, the setup for the next year or two. We think we are in a good cycle of same-store growth and continue to pick up momentum on the development side. We feel great about the business, feel great about where we are going, appreciate the time, and we will look forward to talking to you after the third quarter.
This concludes our conference call for today. Thank you for your participation and you may now disconnect.