HLTHilton Worldwide

System-wide RevPAR increased during the year ended December 31, 2024 2025, supported by improvements an improvement in system-wide ADR, which included the impact of inflation, and an increase inflation. In the U.S., RevPAR was impacted by a decrease in occupancy inbound international travel, as well as macroeconomic uncertainty which led to a decline in all regions, which was driven by an increase in group demand, with leisure and business demand also improving modestly. travel. The increase in RevPAR in the U.S. was driven by an increase in bookings due to an increase in weekday travel, primarily for groups, with consistent growth in business demand. The Americas region, excluding the U.S., continued was attributable to see improvement resulting from an increase increases in inbound leisure travel to Mexico and the Caribbean group travel. The increase in RevPAR in Europe was primarily driven by increases in leisure and Latin America. group travel. The RevPAR increase in Europe was driven by continued growth in inbound international leisure travel, which increased in several major cities that held large popular sporting events, as well as steady business demand. The RevPAR improvement in MEA was primarily driven by increased demand from leisure travel, mostly attributable to special regional events as well as more relaxed travel policies. The increase events, and increases in group and business demand. RevPAR in Asia Pacific was increased due to growth in countries and territories outside of China across the region, driven by increased holiday travel, less restrictive tourism policies China, specifically in leisure and special events in the region, group demand, partially offset by tougher year-over-year comparisons a decrease in China, after the reacceleration RevPAR in the prior year as China due to a result of the removal of cross-border travel restrictions. decline in group and business travel.

Depending on the individual agreement, our operating leases may require: (i) fixed lease payments as contractually stated in the lease agreement; (ii) variable lease payments, which, for our hotels, are generally based on a percentage of the hotel's revenues or profits or result from changes in inflationary indices; or (iii) lease payments equal to the greater of the fixed or variable lease payments. In addition, during the term of our hotel leases, we may be required to pay some, or all, of the capital costs for FF&E and leasehold improvements in the hotel property. For operating leases, lease expense relating to fixed payments is recognized on a straight-line basis over the lease term, and lease expense related to variable payments is expensed as incurred, with amounts recognized in owned and leased hotels ownership expenses, general and administrative expenses and other reimbursed expenses from managed and franchised properties in our consolidated statement of operations. For operating leases for which the ROU asset has been impaired, the periodic lease expense is determined as the sum of (i) the amortization of any remaining ROU asset on a straight-line basis over the remaining term of the lease and (ii) the accretion of the lease liability based on the discount rate applied to the lease liability. For finance leases, the amortization of the ROU asset is recognized over the shorter of the lease term or useful life of the underlying asset within depreciation and amortization expenses and other expenses from managed and franchised properties in our consolidated statement of operations. The interest expense related to finance leases, including any variable lease payments, is recognized in interest expense in our consolidated statement of operations.

If we fail to keep pace with rapidly evolving technological developments in artificial intelligence, our competitive position and business results may suffer. The introduction of these AI technologies, particularly generative and agentic AI, into new or existing offerings may also result in new or expanded risks and liabilities, including due to enhanced governmental or regulatory scrutiny, litigation, copyright infringement, compliance issues, ethical concerns, security risks relating to private and/or confidential information, as well as other factors that could adversely affect our business, reputation, and financial results. In addition, it is possible that artificial intelligence and machine learning-technology could, unbeknownst to us, be improperly utilized by employees while carrying out their responsibilities. The use of artificial intelligence can lead to unintended consequences, including generating content that appears correct but is factually inaccurate, misleading or otherwise flawed, or that results in unintended biases and discriminatory outcomes, which could harm our reputation and business and expose us to risks related to inaccuracies or errors in the output of such technologies.

Although we our management contracts may include performance clauses in certain of our management contracts, clauses, most of these clauses do not require us to fund shortfalls but instead allow the owner to terminate the contract if specified operating performance levels are not achieved. In limited cases, we have provided performance guarantees that obligate us to fund these shortfalls. As of December 31, 2025, we had performance guarantees with expirations ranging from 2026 to 2043 and possible cash outlays totaling $22 million.