So we think this is great. Customers, we think, based on all the work we did, are going to really love it, and we’re excited to start ramping up including them in all our channels. In terms of the economics, we feel really good about it. As I said, we want to be really straightforward. I mean the license fees that we’re getting are very similar sort of in the zone of what we would typically get in all of our — with our direct brands. One difference in this case, as I said in my comments, we’ll get paid on the business we generate, which we think will be significant. I mean it will take time to ramp that up, it will be significant. And that there’s real economics in this for us as well. So we think sort of like, as I said, moons and stars, fabulous for the network effect, fabulous for our customers, and we think really good for shareholders in the sense that we’ll be generating meaningful fees, and we are investing nothing, it’s fully capital light.
Shaun Kelley: And just as a follow-up there, Chris. Just any thoughts on, again, sort of future opportunities that could look like sort of leverage the platform…
Chris Nassetta: I think there are always — I mean we’re looking at lots of different things all the time. I mean since the IPO road show, we have talked a lot about network effect. I mean, very consistently trying to build that out to create an ecosystem that brings customers in and builds loyalty. And so we’re always looking at other opportunities. And so I think there are possibilities in that regard. But nothing — I would say, right now, we’re focused on this. This is a lot of effort and work to get these built into the system. And we’ll see, we’ll see, anything that we think we can do to keep building — bringing new customers in and giving them and our existing customers more products that resonate with them, that builds more loyalty and that we can commercialize in the sense of being paid for the effort we’re interested in. But nothing more to report at this point beyond SLH.
Operator: The next question is from David Katz with Jefferies.
David Katz: Just to follow on the same theme. Is there a case or a strategy or thought around whether SLH could either naturally or strategically transition into a business use as well? I admit I’ve not stayed one. Is there any particular barrier to that as business people tend to choose smaller and smaller hotels, more unique properties over time?
Chris Nassetta: Listen, absolutely no barrier. I mean I emphasize the resort, because if you look at it as a percentage of their rooms and a number of hotels, a lot of them are in resort locations. By the way, there’s over 500 hotels and growing. By the way, it’s not like it’s static, it’s growing and we think we’re going to help them grow at a much faster pace by being in our system. So we think this will continue to be 500, 600, 700 and continue to grow. There are plenty that are in urban locations around the world that are small luxury boutique hotels, just percentage wise, it’s more resorts. But there’s a very good representation in urban environments around the world and some really interesting urban environments that we don’t have luxury exposure to.
And so we absolutely believe that this is also crosses over into business transient. It will also drive some group business, but prototypically these hotels have very limited meeting space just by the very nature of what they are. I mean they have some boardrooms and small meeting spaces. So it will drive some meetings and events business, but I think it will be a lot of leisure and then — first and foremost, and then business transient. But I think business transient will be a meaningful component of it, particularly in those hotels in the right locations.
David Katz: If I can just ask about the locations geographically, what kinds of cities are in it now and where would they like to be, please?
Chris Nassetta: I think if you looked at the map, I mean, you can go on rather than me describing it, you can go on their Web site. I mean right now, it’s sort of like 60% of it is in Europe, 20% in the US, 20% in APAC. The major cities in those markets, they have — pretty much all of them have some representation. What you’ll find if you went and then double clicked on that is that locations within those cities are pretty unique just because of what they are and where they are. So they’re in niche super hard to duplicate locations within most of those major cities.
Operator: The next question comes from Smedes Rose with Citi.
Smedes Rose: I just had a quick question again, on the SLH. To reach the higher — above the 6% unit growth that you said you’re comfortable with, what sort of penetration would you need to reach within the SLH portfolio, I guess, in year one to get to the 6.25% or 6.5% growth that you mentioned with this potential — with this partnership?
Chris Nassetta: We ultimately think the majority of SLH hotels are going to join our system and feel confident in that. The question is just going to be with all the technology and — I mean all of which is being worked on because we’ve been — we signed it recently, we’ve been working with them for quite some time. So the range of 25 to 50, which we feel comfortable, just has to do with how quickly we can get all — execute against all of the technology requirements and the like. So again, as I said, we feel good about the high end of 5.5% to 6% without any of those. The quarter [indiscernible] will depend on just the speed of execution. And so next call, we’ll try and give you — we just signed the deal, teams are working hot and heavy on it. On the next call, we can probably try and refine it a bit, we’ll have a better set.
Smedes Rose: And just, Kevin, could you just share with us what the year-end share count was?
Kevin Jacobs: I actually don’t have the actual share count in front of me right now, Smedes. We’ll follow up with you.
Operator: The next question comes from Brandt Montour with Barclays.
Brandt Montour: Just one more on SLH.
Chris Nassetta: We’re excited about it, too. So happy to [Multiple Speakers]…
Brandt Montour: I mean, I guess the question is, when you think about those hotels coming in the system, and it sounds like they’re all — you think that they might all come at some point. But do they have to opt in? And sort of what is — those individual hotel owners, what does the mechanism look like? I guess I would have thought of them all…
Chris Nassetta: They have to opt in and we and the team at SLH have already started the process of communicating with them in that process, but they have the option to opt in. Now we think as does SLH, at least the owners that we’ve discussed with that it’s a compelling value proposition for them to be opting in, which is why we have confidence that the majority of the system ultimately will come in. But they have the option to opt in or not.
Brandt Montour: And so just to quickly follow-up on that. So these are hotels that went to SLH originally, because they wanted to keep their sort of whole specific brand, their own name and be very independent and you’re basically allowing them to do that same thing by going [Multiple Speakers]…
Chris Nassetta: We’re allowing them to keep all of that, they’re not branding with us. The SLH brand is maintained. So it’s the same branding they’ve had. We’re just giving them access to hundreds of millions of customers, a loyalty program all of our sort of commercial booking channels and the like, which obviously has proven to be, given the market share we drive in our system, quite a compelling value proposition. So we feel good about it for the same reasons we feel good about all of our development progress.
Operator: The next question comes from Robin Farley with UBS.
Robin Farley: So looking at your pipeline, your rooms under construction looks like it’s back almost to pre-pandemic levels pretty much. So I guess I’m just wondering what percent of your 2024 unit growth are you expecting to come from conversions?
Kevin Jacobs: We think we did 30%, as Chris mentioned in his prepared remarks this year. We think it will be a little bit higher than that, sort of in the mid-30s for the year this year.
Robin Farley: And I know you’re not guiding to anything next year yet. But is that something you expect to accelerate as a percent of your unit growth over time or do you think that we’re seeing that sort of mid-30% range this year will be kind of the most, and then it will return to more normal additional supply under construction?
