All right. Good morning, everybody. I think that video nicely captures the excitement we have to be with you all today. Welcome everyone, and thank you for joining us at Hyatt's 2023 Investor Day at the beautiful Moxché Resort in Playa del Carmen. We're thrilled to have you all in addition to all of you who are live streaming the event. As you may have seen from the press release we sent out this morning, we have a lot of exciting information to cover. Before I get started, I would like to remind everyone that our presentation and comments today will include forward-looking statements under federal securities laws. These statements are subject to numerous risks and uncertainties as described on the slide and in our SEC filings.
These risks could cause our actual results to material differently from those expressed in or implied by our presentation and comments. Forward-looking statements in today's presentation are made only as of today and will not be updated as actual events unfold. I'd also like to remind everyone that we filed an 8-K this morning, which includes the full presentation, along with definitions and reconciliations of non-GAAP measures. We have posted the presentation, and we'll post this video recording on our investor relations website later today as well. We have an exciting agenda today. Mark Hoplamazian will kick us off discussing our transformation. We'll then take a deep dive into ALG with Rodrigo de la Peña and Ray Snisky, two great leaders from ALG joining Mark for this section. Then Mark Vondrasek will cover all the great things we're doing on the commercial services front.
We'll then dive into growth with Mark Hoplamazian. Next, Margaret Egan will take us through exciting progress we're making with World of Care. Joan Bottarini will explain what it all means with respect to our financial results. We'll then hear from Hyatt's Executive Chairman, Tom Pritzker, who will reflect on 65 years with Hyatt, and we'll end the presentation with a Q&A session with our speakers. We've got a great lineup, and we're excited. For those of you who want to send in questions, you can email them throughout the presentation to investorrelations@hyatt.com, and we'll spend time taking questions at the end of the event. To set the stage for my introduction to Mark, I want to start with Hyatt's global footprint in 2009. It's common when I talk to prospective investors, this is the Hyatt that they think of.
The one that was 399 hotels, heavily dependent on owned and leased performance, and with a presence largely in key gateway cities around the world. With a relatively modest pipeline, producing modest growth. 120,000 rooms, 270 sub-markets in a pipeline of 27,000 rooms. As we fast-forward to today, what may not be fully appreciated is the significance of our growth. In the short period of time being public, our hotel portfolio has tripled, and our pipeline has more than quadrupled. We truly are a transformed company with significant global distribution, a portfolio that is highly differentiated from our peers, and we're intently focused on serving the high-end customer in each segment that we're in.
At the end of 2022, we reached 304,000 rooms, over 700 sub-markets, and have impressively built our pipeline to 117,000 rooms. Now to tell us more about the new Hyatt, fee-based, resilient, and asset light, I'm very, very proud to welcome to the stage our President and CEO, Mark Hoplamazian.
Thank you, Noah. Welcome, everybody. I'm thrilled to see so many of you here in person. To all of you streaming in, welcome to you too. As Noah mentioned, we're here at this beautiful resort, Secrets Moxché Playa del Carmen here in Playa del Carmen. A hotel that actually in and of itself is sort of a great example of the intentional evolution and of our portfolio and also our positioning. Now, today, we're gonna be spending a lot of time talking about what's changed. We're gonna be talking about the new Hyatt. The powerful transformation that has taken place includes the momentum that we're building and the exciting implications it has for our future, we're gonna cover that in great detail.
In fact, during my tenure as CEO, I can say without question, I've never been more excited, more energized, and more confident about our momentum and our future. First, it's critical, before we take a deep dive into those topics, that I spend a few minutes to tell you what's not changed. First, our purpose as a company: to care for people so they can be their best, remains at the center of everything that we do. Advancing and scaling care is the superpower of the Hyatt family. It is what defines our culture, the Hyatt family, as well as with our guests, our customers, and very importantly, with our hotel owners. What also hasn't changed is the overarching strategy of driving preference.
The most simple statement of the outcome that we seek from our strategy is that each one of our stakeholders chooses Hyatt more over time, and that they consider it the most preferred hospitality brand, serving guests at the high end of each segment in which we participate. This results from how we deliver valued experiences for each of our stakeholders, our colleagues, our guests, our customers, and our owners through caring for people so they can be their best. It's anchored in our purpose. It's about being the most preferred brand for all of our stakeholders, including investors. Our path to achieving preference has and remains and will remain embedded in purpose and care. This focus is what has guided our transformation and will continue to guide us as we embark on a very exciting future.
Of critical importance, our purpose allowed us not just to survive the pandemic, but to come out of that period stronger, better and faster as a company, with relationships across the Hyatt family that have never been closer. Even in the face of the unimaginable challenges during the pandemic, we applied care in every way possible every day. This included, for example, creating the Hyatt Care Fund, funded through our foundation that distributed over $18 million to individual colleagues in need. It included a new app-based digital community that we built to allow Hyatt colleagues to stay connected with each other and with the whole Hyatt family.
It included our Hyatt concierges staying in touch with our top-tier World of Hyatt members, providing them with reminders and care packages relating to their last trips and letting them know that we would be there when they were ready to travel again. We also stayed in very close contact with the senior leadership of our top customers to understand how we could support them as they managed their way through the pandemic, even when they were not traveling at all. These actions are examples of the threads that have held strong and woven the fabric of a company that I'm deeply honored to be a part of and of which I could not be more proud. With that as the backdrop of what hasn't changed and what won't change, now let me tell you about what has changed, and let's dive into our evolution.
We've been on a transformative journey for a number of years, over which time we've built a bigger, more capable, and more value additive enterprise for all of our stakeholders, including our investors. Our evolution has been very deliberate and highly intentional. At the time of going public, we were 37% asset light in our earnings base, with approximately $60 million of free cash flow and roughly 400 hotels. We are at a very different point today as a company. Our earnings mix has more than doubled from 37% - 75%, driven by our fee revenue growing from about $220 million in 2009 to over $800 million in 2022, and approaching $1 billion in 2023.
From a significant reduction in our owned and leased portfolio over that same period of time. For reference, we owned over 100 hotels in 2009 compared to only 34 hotels today. The implications of this evolution are clearly reflected in our free cash flow progression, which now benefits from a heavier mix of higher margin fee revenue with a much lower level of capital intensity. The path and the power of our trajectory is clear, but what does that mean for the Hyatt of tomorrow? It represents a further acceleration in our momentum. In 2025, we believe our industry-leading growth will propel us to have a system of over 1,500 hotels, driving more than $1.2 billion in fee revenue with an asset-light earnings mix in excess of 80%.
This, in conjunction with a further reduction of capital expenditures, leads to free cash flow of approximately $750 million. It's a powerful continuation of the momentum that we've clearly demonstrated through our transformation to date. Our transformation, as I said, has been very intentional, it is clearly unlocking value. Some of you have been covering Hyatt and aware of our transformation since the beginning of my tenure as CEO, sometimes I get the question, "Mark, you've been the CEO for of Hyatt for a long time. Why didn't you pursue this strategy earlier?" The answer to this question is really straightforward, sorry to disappoint those of you who expected a complicated answer.
I knew after a matter of only months as CEO back in early 2007, that we needed to become an asset-lighter enterprise as an important component, not the only component, but an important component of an integrated strategy to drive the ultimate outcome that I described earlier, which is to be the most preferred brand for colleagues, guests, customers, owners and shareholders. However, the truth is that we first needed to lay the groundwork to make sure that this transition was successful. Along the way, we also, by the way, had to manage through the two worst downturns in our industry's history. Of course, we also went public. A little context. Where did we start this journey? The answer is with almost no pipeline and without a globally coordinated development effort.
During what we call phase one between 2007, to focus on three things. First, we needed to build our pipeline and elevate our net rooms growth in order to significantly increase the rate of growth of our fee base. We wanted to have a growing fee base in order to replace earnings from owned hotels that were to be sold, which would allow us to maintain our financial capacity and our ability to make investments in further growth. This required a much larger development team focused on growth. Second, we needed to launch or acquire more brands that would allow us to enter more markets and provide a wider variety of experiences for our guests. Third, we needed to allow more time for our owned real estate values to recover following the 2008 financial crisis.
This would allow us to realize what I would describe as appropriate valuations for our hotel assets when we started the permanent sell-down of assets. By the way, this is exactly what we did. Over this very important period, we quadrupled our pipeline, representing about 23% of our existing base in 2009 to 37% in 2016 while opening 60,000 rooms over that period of time. We launched Hyatt Place, Hyatt House, Andaz, Hyatt Centric, The Unbound Collection by Hyatt, Hyatt Ziva , and Hyatt Zilara. We leveraged our balance sheet to recycle our owned assets to more quickly reach critical mass of our new brands and expand our presence in very high barrier to entry markets where our guests were traveling.
In other words, we laid the foundation for our asset-light evolution during this critical period and have been demonstrating the benefits of that over this past five-year period. It's no coincidence that in 2017 that when we announced our plans to start to permanently sell down assets, we started to lead the industry in growth at the same time. It's also no coincidence that over $4 billion in owned real estate assets that we've sold since 2017 have been at a multiple of over 16 times, a level that clearly validates that we're getting full and fair value for the assets that we're bringing to market. As you can see, we've been busy over this stretch of time. We've grown significantly, both organically and through acquisitions, using our asset base as a means to accelerate our transformation.
Importantly, we've been very intentional in how we have grown and what we've acquired. We've always kept preference and differentiation at the forefront of our strategy, and we prioritized innovation with very bold actions to stay ahead of trends. I'll give you some examples. First, our entry into the all-inclusive resort space in 2013 with the launch of Hyatt Ziva and Hyatt Zilara. This represented an early move into the space by a major brand company. Second, our acquisition of Miraval in 2017, which is the foundation of our robust well-being offerings. Again, one of the first brand companies to invest significantly behind well-being. Third, our entry into the lifestyle space in 2007 with the launch of Andaz, along with the subsequent acquisitions of Two Roads Hospitality and Dream Hotel Group. This has positioned us as the leader in the luxury lifestyle space.
Finally, our acquisition of Apple Leisure Group, which vastly expanded our resort offerings and positioned Hyatt as the largest luxury all-inclusive resort company in the world. During all this, we made major investments in our loyalty program, in data and digital capabilities, and that all underpins the execution of our strategy. We relaunched our loyalty program with World of Hyatt in 2017. We prioritized the use of data to unlock insights, and we invested heavily in digital capabilities to drive direct bookings and improve the guest and colleague experience. All of these moves are driving our transformation, and you'll hear a lot more about this from Mark Vondrasek in a few minutes. Let's be clear about one thing. This kind of work is not easy. Acquiring the right companies at the right valuation, that's only the first step, and actually not even the most important step.
Integrating them, both in terms of systems and most importantly, culture, is absolutely critical. Ensuring that each of the brands that we launch or acquire has the right market fit to be successful for our colleagues, our guests, our customers, and our owners takes a significant amount of effort and expertise. We did all these things while maintaining the highest level of support for existing guests, customers, and owners, consistent with our history and culture that's deeply rooted in care, which means we've had to work very differently. Our agile way of working was a necessity during COVID-19, and we've carried that mindset forward. We've built back differently, and we are working very differently today. Our mindset and our leadership behaviors are focused on agility and speed. We are providing autonomy by pushing down decisions, promoting experimentation, and working in a much more cross-functional way.
This allows us to do more with less resources because we're working more efficiently in how we do our work. Our agile way of working has unlocked possibilities. That is allowing us to move with great speed. I'll give you some examples a bit later. The end result of all that I've just covered is a fundamentally different company today.
The compounding impact of our industry-leading growth and successful acquisition activity, coupled with our strategic investments with a special focus on data and digital and loyalty, all supported by a culture that is adept at moving with speed and agility, equals a transformed company that is creating durable and growing value, one that is differentiated and driving preference in a way that is materially stronger and at a faster pace than it was just several years ago. Hyatt's transformation to a more fee-based, a more asset-light, a more cash flow generative, and a more resilient business is driving value to shareholders, with 2022 serving as just the first year in which our results truly begin to reflect our performance as a different company. It was a record year on multiple dimensions, and for those of you who are shareholders, you've also been rewarded with outperformance in our stock.
We're not just delivering strong results, we're doing so at a rate that is outpacing the competition. Excuse me. Whether you measure it by our performance by rooms growth, fee revenue, pipeline expansion, or loyalty membership, we're nearly double, and in some cases, triple the rate of growth of our next closest competitor. Our relative performance clearly supports how we are moving with agility and growing more quickly, both organically and inorganically, which is helping to drive significant outperformance in the growth of fees and loyalty membership. The simplest way to think about this is that our value creation wheel is spinning much faster than our competitors. We continue to be optimistic about the future and feel optimally positioned.
We commented last week that we continue to see very strong demand trends, and we feel very confident in achieving mid to high single-digit RevPAR growth through the back half of 2023. As we look to 2024 and beyond, we're also optimistic in our outlook for that period. It's important to remember that even in our most recent quarter, our system-wide occupancy was still 450 basis points below 2019 levels. This has primarily been an ADR recovery so far, but that's changing. It's changing because group continues to strengthen, cross-border travel is recovering, Asia-Pacific is finding its footing and showing momentum, and business transient continues to move upward and gain momentum. As we look at the long term, we've seen multiple reasons for secular tailwinds, and we're not the only ones.
For example, Smith Travel Research, excuse me, is projecting 8% growth for 2024 for luxury and upper upscale. It is critical to remember that the rate of new supply remains extremely low, especially in the chain scales where our inventory is most concentrated. We also remain optimistic about the resilience of leisure and the high-end customer. Bookings, survey data, the broader structural and demographic data that we have supports that we are very well positioned to benefit from the growth in this area for years to come. We've seen no signs of this slowing. This has been the strongest area of ADR gains compared to pre-COVID-19 levels. Demand remains incredibly robust for our differentiated portfolio. We're very excited about what we're seeing with respect to group bookings and the acceleration of further recovery in Asia-Pacific. To provide context for group.
Group pace in 2024 is 3% of of last year. It's notable that just 3 months ago, it was actually pacing 2% behind last year. Excuse me. What this means is that we're booking into 2024 at a faster velocity, and our lead volume is running significantly ahead of last year for future year bookings. For Asia-Pacific, we're seeing powerful trends. In April, Asia-Pacific was already 8% ahead of 2019 levels, that's still with a significant constraint in international flight capacity. We're confident that this will continue to serve as a strong tailwind into next year.
Our acquisition of ALG, which we will talk about in a lot more detail shortly, could not have been better timed to take advantage of the growing popularity and attractiveness of this segment, as well as the broader shift of extended weekends and prioritizing well-being, connection, and experiences. Apple Leisure Group's portfolio continues to benefit from airlift that is significantly ahead of 2019 levels into our key destinations, we feel this will continue to propel strong demand into our all-inclusive resorts. This, combined with continued adoption of ALG Resorts by our World of Hyatt members, as well as the overall increase in popularity of all-inclusive more broadly, leaves us very optimistic about the future of all-inclusive and Hyatt's leadership position in this segment. We're also optimistic about our growth profile, we see conversions as an important part of our industry-leading growth.
The power of our system and momentum in our brands is leading to increased preference for owners. There's a vast opportunity for conversions of independent hotels. For all these reasons, we remain very optimistic, we are confident in our outlook and ability to maintain our momentum and deliver strong results. Our portfolio is uniquely positioned to benefit from these current trends. The significant concentration of our earnings mix comes from leisure transient and group. We're looking at this data in a different way by hotel type. You can see a large majority of our earnings is driven by luxury, lifestyle, resorts, and group or convention hotels. Making a similar point, we serve a high-end customer base, one that has proven durable through cycles.
We believe that group and convention business will be a content, especially from corporations, and expect this growth to continue. What's really interesting and frankly astounding meeting space being built in the United States at this time. According to Smith Travel Research, there are just over 10 luxury and upper ups in the United States that are larger than 400 rooms. In other words, not only is there low supply growth over supply growth in hotels that can serve larger groups. Where do we stand? Well, when you think about Hyatt, we have 76 hotels in the United States that are over 400 rooms. These hotels include nearly 4 million sq ft of meeting space and account for a large percentage of group earnings that you see represented on this page. We see a really bright future ahead for this segment.
We feel great about our positioning, and you will hear how we've differentially performed in the group segment from Mark Vondrasek in a few minutes. This provides us confidence that we'll be able to capture the tailwind from industry trends and strategic investments that will carry us well beyond 2023. The trends are in our favor and of highest importance, we have the culture and the strategy to capitalize on those trends. The House of Hyatt, as we affectionately call it, which is a summary of our strategic approach, has remained consistent over the past six years. We will continue to focus our strategy to create value for all of our stakeholders and are confident in our plan to execute with our purpose to care for people so they can be their best, serving as the foundation to our approach. Excuse me.
We've clearly established how we transformed, but let's dive a little deeper into our capital strategy and how that's been a powerful way to accelerate our progression to an asset-light enterprise, vastly improving our free cash flow generation in a very short amount of time, and driving increased preference for our guests, customers, and owners. The execution of our capital strategy has been remarkable. Over the past five years, we have realized proceeds of about $3.8 billion from the sale of owned hotel real estate, net of acquisitions. We invested approximately $3.6 billion to acquire three platforms, Miraval, Two Roads Hospitality, and Apple Leisure Group. We closed on the Dream Hotel Group acquisition in 2023, and that's not included in this figure because we're looking at 2022 data.
The earnings contribution in 2022 from our acquisitions was nearly double the earnings that we lost from our asset dispositions. I'll say that one more time. The earnings from our acquisitions was nearly double the earnings that we lost from our asset dispositions. More specifically, the implied Adjusted EBITDA multiple from the $3.8 billion of net real estate that was sold was over 16 times. From the platforms that we acquired are than the assets that we sold. For example, we estimate that the owned real estate that we sold since 2017 would have required $130 million in CapEx per year on a run rate basis.
By comparison, the platforms that we acquired collectively needed only $40 million in CapEx in 2022, compared to an average of over $320 million invested each year between 2017 and 2019. Execution of our capital strategy has led to a transformed free cash flow profile. In 2022, free cash flow was $473 million, over 50% better. We are more fee-based, more asset light, more cash flow generative and resilient, and our journey is not complete. We're only just.
Looking ahead, we're now providing full guidance for 2023, which Joan will cover in more detail, and expect our free cash flow to expand further to approximately $500 million and approximately $750 million in free cash flow in 2025 after taking into account a decline of $100 million in earnings execute between now and the end of 2024. This again highlights how profound our transformation has been and the pace of change that we're driving. Been a key lever to drive preference and unlock value. We're committed to continuing down this path. In the near term, we remain focused on complete our commitment by the end of 2024. Beyond 2024, we have significant capacity to continue down this path.
Our owned hotel Adjusted EBITDA is approximately $300 million when adjusting for the expected stabilized performance of the Hyatt Regency Irvine, which will reopen. This implies a value of approximately $2.6 billion-$3.2 billion that remains after the completion of our sell-down commitment. In other words, we have a clear path forward to further transform our business by selling down our owned hotel assets and unlocking more value for our. As we've maintained in the past, our first priority is to utilize capital to propel growth that is meaningful and valuable, and that's to area disciplined approach. We're committed to creating value for our shareholders, and we will continue to prioritize investments that are accretive to our earnings.
Investment strategy will be based on five key factors that are listed on this slide. These are the same factors that we have applied consistently and have served. They will continue to inform our activity going forward. Let's dive a little deeper into our acquisitions and why they've been so successful. As we've covered, these four acquisitions that we've made in the last five years have been transformative to our portfolio, leading to increased guest preference, enhanced loyalty, and compelling financial results. First, let's look at our Miraval acquisition. We acquired this brand in 2017. Miraval, it's a world-renowned destination spa and well-being platform with luxury clientele who seek luxury experiences. The strategic merits were clear, and they've been validated. We expect that these three properties will generate $35 million in Adjusted EBITDA for Hyatt this year.
Hotels run a 45% World of Hyatt room night contribution while generating over $900 in total revenue per available room average. This illustrates the strength of our World of Hyatt customer base and the value that the Miraval acquisition has brought to our members, as it's have informed offerings to guests and group customers across our portfolio that's made a meaningful difference in our momentum. Next, 6 times the purchase price. The question naturally arises, how was this acquired at such an attractive valuation? The truth is... Let me give you some data. In total, in just over 4 years, 2 of which were, during the depths of the Power of the World of Hyatt program. It drove 43% of room nights to these brands in 2022, with further growth continuing into 2023.
I think you understand the truth of our system has unlocked significant value through great execution. Then there's Apple Leisure Group, which made us the largest all-inclusive hotel company in the world by a very wide margin. The success of our acquisition is well known, that has enabled the acceleration of results and will do so into the future. We'll cover this in more detail in the next segment, we're thrilled with how It's notable that after less than 1 year, in fact, it's just about 10 months, World of Hyatt members already account for 21% of room nights at ALG Americas resorts. That position. This fits perfectly with prior acquisitions. It broadens Hyatt's lifestyle reach while providing a new experience for our World of Hyatt members. Shaded from anything in our portfolio and different from offerings by our competitors.
It also happened to expand our brand presence in New York City by 30%. We're excited to get it plugged into the World of Hyatt system and let our members enjoy a myriad of new experiences across the globe and to have our system. What's the total impact of all this acquisition activity? Well, we already talked about how it's transformed our earnings profile. However, what may not be fully appreciated is how it's transformed and differentiated our portfolio. As a result of these acquisitions, thousand rooms associated with these brands. Further, the value that we've unlocked is very significant.
At 9:25. Once again, a 15-minute break. Thank you.
Please welcome back Mark Hoplamazian.
First of all, I hope you enjoyed your break, and secondly, if you were paying attention to the video, it should whet your appetite to become a UVC member. As I am super excited to be here to tell you a lot more about ALG. The addition of ALG, as you know, doubled our resorts, significantly accelerated our migration towards an asset light earnings mix. The financial results from ALG have been remarkable, and Their growth. Furthermore, we see a lot of further growth potential in the all-inclusive segment overall, which is rapidly growing in popularity and preference. Two of our very talented ALG leaders, Rodrigo Laguno, Group President Is airlift to markets that are all-inclusive focused. 2023 scheduled airlift to ALG's key destinations is at record levels. It's also notable that airlift to key all-inclusive markets has been recession resilient.
As you can see, following the 2008 financial crisis. With another record year expected in 2023. Remember, Mexico and the Dominican Republic never shut down. Trend is notably stronger than non-all-inclusive oriented resort markets in the United States, which have not seen a similar pace of growth or resilience. Simply put, guests love it. They love it for the benefits of convenience, simplicity, and value. We wanna stay with hotel brands that we trust and that we know well. Leisure travelers also appreciate paying an all-in upfront cost. Our all-inclusive hotels offer a seamless, high touch, and high-end guest experience. Yet, the average cost of an ALG vacation. High-end alternatives.
Guests pay 13% less per night when they stay at an ALG all-inclusive resort as compared to our Service, as I hope you all agree and experienced last night, fantastic accommodations, and at least in our case, a very elevated. All-inclusive guests follow a very predictable pattern. They book well in advance, and they have very low levels of last-minute cancellations. Importantly, food and beverage costs. That predictability is critical. ALG owners enjoy the vertically integrated model Distribution benefits of ALG Vacations and The Unlimited Vacation Club. For these reasons, ALG all-inclusive resorts have very strong financial returns. In fact, our ALG owners are generating 34% more profit per available room with GOP margins that are than our non-all-inclusive comparative set.
This strong level of outperformance is why Clear demonstration and indicator of both owner satisfaction and a willingness to commit capital behind our brands. The benefits Evident, and it helps explain why so much of the market is gravitating towards this model. Nearly 80% of the rooms added to the all-inclusive Have been luxury or upper upscale, which clearly illustrates the growing preference for a high-end all-inclusive experience. I'd like to go a layer deeper on ALG and why its footprint, combined with its end-to-end solutions, provide a unique platform for durability and Quality properties and receiving the best possible care. ALG Vacations. Vacations is differentiated by its resort packages, which take care of every piece of the guest vacation, from when they board their flight to the moment when they return home.
The Unlimited Vacation Club is a membership program that provides exclusive offerings at ALG's all-inclusive luxury resorts. UVC. This membership club provides members with discounts, free nights, upgrades, and special access to areas on property.This vertically integrated- personalized experiences to guests. It also allows ALG to better control the quality and experience of the full vacation journey, which drives. Each of these offerings also fuels performance for owners. ALG Vacations drives strong year-round demand and high margins, as we mentioned. Membership revenue is shared with owners. With this vertically integrated platform, guests win and owners win. While ALG's three businesses generate revenue in different ways, they are all asset light, and they are all durable, resulting in significant revenue and fee-based earnings. Hotel owners who pay for management and marketing services. Unlimited Vacation Club generates membership revenues from the sale of membership contracts.
Its distribution and destination management revenues from reservations booked through its platform. ALG has been a pioneer in luxury all-inclusive. Its leadership in the space, combined with the unique competitive advantages through its end-to-end solutions, have propelled it to industry-leading growth. ALG's in 2007 to 111 properties in 2022. It has grown at a remarkable 16% compound annual. Durability even through very difficult economic environments. As we'll cover shortly, we're set for another year, another record year. See growth like this elsewhere in our industry. Let's do a deeper dive on each of these offerings that have propelled ALG's growth, and I'll begin with the Inclusive Collection.
With ALG and Hyatt, together, we form the Inclusive Collection, which is comprised of 9 all-inclusive brands across 121 resorts, 38,000 rooms, and approximately $3 billion in total systems revenue generated in 2022. We continue to expand our portfolio in new markets and destinations, we see a significant opportunity to expand across the world. We just opened 2 luxury all-inclusive hotels on the Black Sea in Bulgaria just a couple of weeks ago. Our unwavering commitment to delivering exceptional experiences to our guests ensures continued growth, durability, and success while delivering exceptional value to owners. All of the Inclusive Collection in perspective, it is by far the largest luxury all-inclusive platform in the world with 33% bigger than the next 3 competitors combined. We are the undeniable leaders in this space.
I now invite into this conversation our Unlimited Vacation Club Group President, Rodrigo Laguno. Rodrigo?
Thanks, Mark, and hello everyone. I'm excited to talk about the unique benefits of our UVC members' experience and-
Thank you. Just tell us a little bit at the, you know, high level, what differentiates UVC from other offerings?
Well, UVC is very different from a standard- Looks on average, a membership fee in the range of $10,000-$15,000 plus a small annual fee. In return, they get a certain number of free nights. They can choose to travel to any resource location that is part of- The higher your membership tier, the- To owners through faster ramp-up and a durable source of demand.
Well-
Rent for the UVC space on property use to sell memberships. You commented earlier on ALG Resorts having a much stronger GOP per room than competitor hotels. The UVC pulls more room growth.
Effectively, it's a program where guests win, and owners win, and Hyatt wins. It's like a platform, which is fantastic.
Yeah.
Tell us a little bit about what membership looks like going forward.
At the end of 2022, we had 131,000 active members. Quarter, our membership grew to 134,000 members. In terms of interesting trends, one area we've been very pleased is with the strong interest from World of Hyatt members. Our average membership at a higher frequency than non-members and purchasing higher tiered memberships. In terms of overall growth of UVC members, the rate has been very reliable because as I. Signed contracts, which demonstrates the high satisfaction of value that our members place on the program. UVC members were the first guests to return to our resorts after the. Payments, and our mix of occupied rooms from members increased because of their loyalty.
Well, you know, the low cancellation rate really speaks to the durability. Let's talk a little bit about the way in which we can start thinking about future growth for UVC membership.
We can see a very close correlation between the number of new contracts signed and the system size. This relationship has remained consistent since the program inception. You can see that as the system Leading to record contract signing as we have more inventory. It's also notable that even in 2020, during the pandemic, the number of new contracts moved in a very predictable way relative to the rooms available that year due to some of the hotels being closed.
Well, I suspect that there are at least a few people in the audience who've taken statistics. That is one of the closest and tightest lines of fit I've ever seen through every statistic class I've ever taken. That's pretty remarkable. Foundation to weather any economic cycle because it's remained durable and steadfast through even through the pandemic. I was really struck by the fact that UVC members continued to make payments all the way through.
Definitely.
preserving their membership is really important. There's only one other thing I wanted to mention. The average, for the UVC memberships is between $10,000-$15,000. The actual range is quite broad.
Exactly.
with many more benefits. you basically have segmented the market and have products for many different types of customers.
Definitely. That's the case. That's a good point.
I think that where you're opting for higher tiers.
As well.
That demonstrates the match of the demographic profile. I think what's important is that the complementary customer base that we talked about acquisitions, this is a demonstration that there's a complementary customer base.
That's right. That's good.
I think that the benefit to owners that where Riu Gourmet Club is unique and really provides a competitive advantage because it is directly contributing to higher GOP margins for the owners even while delivering great value. Now let's move to ALG Vacations, which is a powerful distribution and destination management platform-based leisure travel to Mexico and the Caribbean. To do that and explain the power of the platform, I bring you the very powerful Ray Snisky, our Group President for ALG Vacations. Thanks for joining us today. I think we should assume that people are generally familiar with ALG Vacations, but maybe not specifically understanding what it is. Let's start from some basics about what ALG Vacations is and how it's differentiated.
Sounds great. After last night, I think everyone in the room is completely aware of.
Oh, okay.
ALG Vacations is. It is the leading online marketplace platform that provides personalized support to travel advisors and customers. We do this via a seamless booking experience with top-tier customers. The market-facing product with 8 different and distinct vacation brands. We offer dynamic packaging and multi-channel merchandising to airlines and hotels through both B2B and B2C. That's powered by our Trisept technology platform. We have a diverse resort portfolio, including obviously all of our ALG all-inclusive properties, a destination management company that allows us to create that emotional connection with customers during those excursions. It's a complete end-to-end experience. We've optimized this distribution platform over decades with a heavy dose of business transformation during the last 30 months. We were able to create a silver lining through Covid.
We improved business processes, we deployed automation and technology solutions, and we've taken steps to lower the risk profile of the business in any economic environment. The improvements have resulted in durable and sustainable roaring back.
You mentioned it's B2B and B2C, and I know you're trying to drive preference among both of those groups.
Exactly right. It drives preference, and that's why we have 173,000 travel advisors on our platform. Collectively, they're driving 3,575 properties worldwide. Travel advisors are critical for many consumers booking a vacation. The decline in relevance of travel advisors has been predicted for many years. $1,000 on a vacation, you wanna get it right. The travel advisors make sure that this happens. The B2B channel is very strong for us. It's actually booming right now. They actually have a 27 over our B2C business. They book higher-rated hotels and higher room categories for longer lengths of stay. Travel advisors who book through ALG Vacations are using C and high customer satisfaction to pull more and more customers to properties.
Additionally, our travel advisors and guests appreciate that we handle transportation and these high emotionally connected experiences, as evidenced by our very high conversion rate of guests opting for transportation experience at time of booking. Over 80% of all services through Amstar as part of their booked package. It's all part of the same company with the same great reputation, which provides added confidence and a seamless booking experience that captures all parts of the vacation journey. Being able to provide all of these services as one company drives value and is the reason we perform so well. A favorite stat of mine is our market share. We drive major market share in the areas that we play.
It's estimated that ALG Vacations accounts for an astounding 12% of all passengers who travel from the United States into the largest all-inclusive markets in Mexico and Caribbean, driving strong market share for our owners. If you just compare us in the segment in which we operate, we operate 100% in the leisure segment, that percentage of market share increases significantly. Our demand generation for ALG Resorts is unique. It's a value added for owners and further highlights the power of the ALG platform, which provides owners access to resources and support to help them optimize their performance. In fact, in owner surveys, our distribution capability is consistently mentioned as a leading driver in hotel management selection.
I just, I wanna just note two things. First, going back, you mentioned you have 173,000 travel advisors on the platform. That's a proprietary platform, right? That's our proprietary platform.
That is absolutely correct. Mm-hmm.
Second, having achieved nearly 1,400 basis points of higher occupancy, okay? 1,400 basis points of higher occupancy versus non-all inclusive comp set, a non-inclusive comp set of similar quality properties is incredible. It's amazing how our ALG resorts are able to keep a strong and stable occupancy throughout the year, which is starkly different than non-all inclusive than hotels in the non-all inclusive...
Absolutely right, Mark. Similar to what Rodrigo covered the night with the UVC program, this really is a big win for the guests, a win for the owner, and a win for Hyatt. The end result is a terrific while delivering a distinct competitive advantage for our owners.
Well, thanks, Ray. Keep it up.
Thank you.
I hope that covering UVC and ALG Vacations specifically helps give you a much better understanding of the vertical approach that we take in serving our owners and our guests in the all-inclusive segment. Now let's turn to growth, one of my favorite topics. Growth of the Inclusive Collection through the World of Hyatt loyalty program. As a reminder, UVC membership is exclusive to ALG properties. Since integrating ALG Resorts into the World of Hyatt loyalty program a year ago, we've seen the number of World of Hyatt members staying at ALG from 0 to over 20% as of the Q1 of 2023. More than 500,000 guests ALG Resorts since the program went live in May of 2022. One year. A powerful validation driving a very strong network.
Further, this achievement demonstrates the exceptional value proposition that World of Hyatt provides to its members in this segment. World of Hyatt members are driving value for our owners as they spend 30% more than non-members while on property at ALG Resorts. Meaning the opportunities we're bringing to World of Hyatt members by leveraging the power of the program. We're so pleased with these results and are excited to continue growing this segment. New resorts in 2023, adding 5,000 rooms on a gross basis and expect net rooms growth to be in the low double digits. These new resorts in four different countries, expanding the collection's global reach and providing even more opportunities for guests and owners. Further, we continue to-- outside of the ALG network, are increasingly attracted to the unique value drivers the platform offers.
Remember, as we grow our room count, this just translate into more management fees. It drives more membership for UVC and more ALG Vacations bookings as well, as you just learned. Across the world for many years to come. Lastly, as we bring it all together, the financial success of ALG has been incredible. ALG's asset-light platform has consistently outperformed our expectations, resulting in significant earnings and free cash flow generation. It's underappreciated how unique the attributes of the platform are and how they're driving long-term growth and financial outperformance. It's a model that is extremely difficult to replicate, and the broad growth and preference for all-inclusive suggests that we have significant room for further growth. The platform generated a cash flow conversion of approximately 75%.
This strong cash flow generation has played a crucial role in Hyatt's overall transformation into a much stronger free cash flow enterprise. In summary, the growth potential of the ALG platform is significant, and we are investing behind it. We're working closely with our owners because as they grow, we grow. As they win, we win. Owners love that UVC and ALG Vacations drive demand generation, resulting in increased awareness and strong returns. They're benefiting from even more from the integration of ALG Resorts into the World of Hyatt loyalty program, providing global brand recognition, innovative technology, and increased resources. We're excited about the future of ALG. We believe that we're only just getting started with unlocking the full potential of this platform, and we look forward to continuing to build on the success well into the future.
I hope that was very helpful in giving you a lot more detail around the ALG platform and how it operates. Now it gives me great pleasure to welcome Mark Vondrasek, our Chief Commercial Officer, to the stage to tell you a lot more about how we are personalizing the guest and customer experience.
Morning, everyone. It is great to be here with you today. I know a lot has changed since we were last together in 2019, That's certainly true from a commercial perspective as well. I think you only need to look at our brand bar to see how clearly our new Inclusive Collection has contributed to our growth. We've also added a few new brands since we were last together. Caption by Hyatt, UrCove, Dream Hotels, and now, which we're very excited about, Hyatt Studios. We've entered nearly 200 new sub-markets globally since we were last together as well, I think this is particularly exciting for our World of Hyatt members, who've always told us they look for more luxury in more destinations. We now truly have an answer for every stay occasion, We're excited.
As you've heard from Mark, our World of Hyatt member base has risen from 10 million to 36 million members just five short years ago. We are at an all-time program high for loyalty room night penetration and direct channel contribution, and we're winning share globally. As we've grown, so has our managed fee cost base. With increased strength and scale, there is now over $22 billion in revenue that flows into our system, up from $16 billion in 2019, generating 44% more spend out of system funds, excluding World of Hyatt and ALG. What this has allowed us to do is to invest over $120 million annually in digital to help us drive direct business. We've also built a team of over 35 colleagues in data and analytics. They help us better understand what our guests and customers respond to.
We're also making significant investments in our core technology platforms, such as revenue management and our central reservation systems to support our growth. I'll share a little bit more about that with you in just a few minutes. Where we spend these incremental funds is largely driven by key insights that we learn from staying very close to our guests, customers, and our owners , and I think we did this more than ever during the pandemic, even when many of them had no business to give us. What I'd like to do is share just a few key macro and stakeholder insights that drive our work today commercially. First, remote working has increased the blur between leisure and business travel, heightened the demand to create a capability for hybrid meetings, and recognizing the value of now traveling to build personal connections even more than ever.
In 2022, AHLA State of the Industry Report highlighted that 89% of participants wanted to include some level of vacation time tagged on to their next corporate trip. Another COVID long tail insight we believe we can build from, particularly here at Hyatt, is that people around the world seem to have a heightened focus on taking care of those closest to them. As I think about this personally, I think the line between being okay and not okay got a lot thinner and a lot closer than any of us would care to admit over the last few years. We see this as an opportunity to even better connect with our guests and customers.
Our Guest of Honor benefit, which is a World of Hyatt program benefit, is not just a relationship between me and you, the guest who shows us frequency at our hotels, but it recognizes if someone is important to you as our valued guest, then they should be equally important to us. To be honest, most loyalty programs don't think about loyalty this way. We believe we can evolve this benefit, which has been with us a long time, to an even greater differentiator to match the insight I just shared. Well-being. You heard Mark talk a little bit about this. Well-being, both mental and physical, was always on our guests and customers minds, certainly pre-pandemic, but even more so now. We're seeing our guests and customers focusing on experiences over products, stopping and enjoying more experientially while with us today than ever before.
A recent American Express global study found that 76% of global travelers want more from travel that improves their well-being. Well over half of them are willing to pay extra for that opportunity and those services. Lastly, as an insight, guests, customers, colleagues, and owners expect flexible and secure technology solutions that are truly familiar to them. It's those insights that shape our areas of focus commercially, the things that we're working on that I want to step you through today. I'm going to focus on 5 areas that are critical to our success commercially. First, harnessing the value from our exciting growth that Mark just shared with you. Our opportunity to unlock that value. An opportunity we see to redefine loyalty in a way that is very unique to us at Hyatt.
Commercializing well-being and ancillary offerings and revenue for our owners, reimagining sales meetings and events to meet the demands of our customers today, and elevating our digital and technology platforms as well. Let's dive a little deeper into these. We'll start with harnessing the value from our recent growth. Hyatt's acquisitions and alliances have thoughtfully been with companies that share a common strategy of increasing share of wallet from high-end customer segments, multiplying the network effect of having come together. If I illustrate this in Europe, I think as one of the best examples, we added ALG last year, which you know, gaining a heavy presence in the Canary and Balearic Islands in Spain.
The Lindner deal, which happened this year, certainly now gives us a strong presence, especially in Germany, but it also represents the largest feeder market to the Canary and Balearic Islands in Spain, therefore helping our ALG resorts as well. Now, as you've heard, we will be adding Mr & Mrs Smith, which upon closing gives us access to a new high-end guest base, predominantly in the UK, which expands our network for our World of Hyatt members. With ALG, we have seen the power of leveraging an effective distribution platform in a complimentary segment, and we'll be looking to replicate that approach with Mr & Mrs Smith's European-focused boutique luxury portfolio to harness the value of growth for the entire Hyatt system. In addition to meeting many new guests, this growth also allows us to form relationships with hundreds of new owners as well.
It's clearly working. Since integrating World of Hyatt into the Americas ALG Inclusive Collection Resorts, Mark shared this, we've already grown to 21% loyalty penetration in just 1 year. We're also strengthening the ALG membership program of UVC by giving UVC members status in the World of Hyatt, creating reasons for them to stay within the World of Hyatt portfolio for all of their travel needs. Additionally, some World of Hyatt members are also buying UVC memberships. Similar to being highly valuable guests, they are also highly valuable members. They pay 45% more than other non-members who are prospected from other agencies. All of these, we think, are great examples and clear ways we are strengthening the entire network effect of our combined growth. Let's spend a minute on our opportunity to redefine the loyalty space.
I think we're winning in the loyalty space today. I truly do. We are being recognized as a leader, both in the press, but much more importantly, by our guests. We have great momentum, as you've heard. World of Hyatt growing from 10 million in 2017 to 36 million today represents growth that is more than twice that of our next highest competitor. Our members stay more, they spend more, and at the highest level, they are 40 times more valuable than non-members. We're redefining loyalty in two very specific ways. The first is to create differentiation with our strategic alliances. I think the best example of this is our alliance with American Airlines, the largest airline in the world, which gives our valued members the opportunity to earn dual currency and elite benefit sharing.
This has been great for our members and their overall travel experience, thinking of them holistically outside of just the hotel travel experience. It also delivers great value for our owners. Hundreds of thousands of World of Hyatt members have linked their accounts and consumed over 2 million room nights across our brands and portfolios this last year alone. Strategic alliances like American help us shift share with high-value travelers when they now fly American and stay Hyatt. Secondly, an opportunity to redefine loyalty exists by building deeper relationships. This is one that I'm particularly excited for. We are working to extend care to our guests and customers by expanding our Guest of Honor program benefit within World of Hyatt.
For those of you who may be unfamiliar, Guest of Honor is a benefit that allows our most valuable World of Hyatt members to episodically bestow the same benefits they've earned to someone close to them when they are traveling. We continue to hear from our guests, our most loyal guests, our travel advisors, our corporate accounts, about how much they value this benefit. It is unique in this industry. Let's hear from a couple of our members on how they've experienced the evolution of our Guest of Honor benefit within World of Hyatt.
One night at the Park Hyatt Tokyo, they knew we were landing closer to 9:00, 10:00 P.M. We wouldn't get in until late. They had some food in the room ready for us, pajamas for my wife and I, and my kids. It's that proactive attention to detail which I've only found at the Hyatt hotels that I stayed at. My wife was in Zurich last week. I was able to book her a room using some hotel points. She said it was a double upgrade. It just makes me feel good to know that as a Guest of Honor, she's being taken care of when I'm not there.
Having the Guest of Honor benefit allows me to be able to give a gift that is worth more than I would ordinarily spend on a gift. It makes me feel good to be able to give them that experience and doesn't really cost me that much either. That's kind of a win-win for everyone.
Easily hands down favorite benefit is Guest of Honor. There's not a single program where I can go out there and extend my benefits, my hard work to friends and family.
It really does set Hyatt apart. That's the joy of life, being able to share those great experiences and times with your loved ones.
I think it's simply a better and pure definition of loyalty. For me, if a company that I'm loyal to does something for those closest to me, it's actually much more valuable than just recognizing and taking care of me. Think about parents milestones, milestone anniversaries or your spouse or significant other who travels alone. What a great opportunity to expand and redefine what it means to truly have a loyal relationship in this industry. On to the next area, commercializing our wellbeing and ancillary offerings. As you'll recall from our key insights just a minute ago, COVID fundamentally shifted the importance of wellbeing. Not just the physical aspect, but guests and customers now wanting to be more mindful, more present, more connected, searching for experiences over products, and certainly willing to pay for them.
Our position of strength to harness this opportunity really stems from our purchase of Miraval back in 2017, which is undoubtedly one of the leading wellness brands in all of travel. Miraval helps us in many ways, but one good example is the deeper relationship it has allowed us to create with one of our largest corporate customers, PwC. PwC now rewards their newly promoted leaders, first-time leaders, to a full week at Miraval with unique programming for themselves and their significant other. That programming in that week focuses on the importance of finding and keeping over your career work-life balance, mindful practices, the importance of intention setting for a day or going into a busy period. Wellbeing skills that these colleagues can take back with them as they embark on their respective career paths.
This relationship alone delivers 2,500 room nights per quarter to Miraval, but more importantly for us, it deepens the relationship between PwC and their colleagues, and as a result, between PwC and us. We're also offering over 150 wellbeing experiences globally to our guests with exclusive collaborations like Headspace, infusing into our meetings and events programming our FIND platform, which is our World of Hyatt experiences platform. In this space looking forward, we really have an opportunity to commercialize these experiences at scale. The impact it's having on them.
When else do you get to do-- and have monkeys up in the trees and really be in the moment as a family?
One of the things I've realized is how connected well-being and music really are.
One, two, three, four.
It's the universal language everybody speaks. We want all the guests to experience that and make that a part of their lives.
My goal is like for my guests to reconnect with their essence or just feel more happy.
This is our second day here, and we've already done three different activities, each one so different from the last but all so powerful.
I love hearing that Hyatt is really focusing on well-being across all of their properties. It would certainly make me more likely to book with Hyatt when going on other vacations.
Oh, that's perfect. Thompson Denver has been able to benefit with these well-being offerings. We've landed sales groups. Our hotel guest satisfaction scores have increased.
Not only are you able to take advantage of a, you know, a wonderful property, you also get to take away a piece via a seminar like this or learning something that you can carry on through the rest of your trip here or the rest of your life.
Very unique, very powerful experiences. We didn't just buy Miraval to do incredibly well at a handful of assets. We bought Miraval to learn from that unique capability and pull it across the entire Hyatt network. These experiences give our guests and our customers reasons to come back to us time and time again. The feedback has been incredible. The work we're doing digitally to commercialize our well-being experiences is also essential to build a platform that we can leverage to sell other ancillary experiences as well: spa appointments, golf tee times, room upgrades. We've learned a lot from ALG in this space. How to thoughtfully sell these experiences and offerings in the booking path is something that they have done incredibly well. For our owners, this unlocks additional revenue.
For our guests and customers, it delivers experiences that they're looking for and willing to pay for. To do all of this, we're leveraging our machine learning engine, proactively offering guests these options at various digital touchpoints. Well-being is not just top of mind for our guests. Our customer accounts are also keen for innovation. This leads me to my next focus area: reimagining sales and meetings and events. Perhaps surprisingly at the pace we've seen here, we are building from a position of strength in this segment. If you double-click into the tremendous market share growth shown here, what it reveals is that we have taken share with over 90% of our top corporate customer accounts. This has a lot to do with the relationships we invested in during the pandemic. Our global luxury sales program, called Hyatt Privé, also continues to accelerate its contribution.
Looking forward in this space, we're continuing to invest heavily in our platforms and products for the entire group segment. We're redesigning hyattmeetings.com. We're strengthening both Privé and our business travel loyalty program we call Hyatt Leverage. We're also extending World of Hyatt benefits to our customers, including Guest of Honor, which I just talked about. Lastly, we are strengthening our meetings and events platform. During the pandemic, we built a team, a cross-functional team, dedicated to addressing the evolving needs of meeting planners. With their input, we developed a new program and platform named Together by Hyatt, a new events offering designed to meet customers where they were on their journey back to returning to events, whether that was hybrid, whether it was remote, whether it was in person or some combination, with attendee well-being and connections built in and infused as our top priority.
Together by Hyatt integrates Miraval's intention-setting activities to meetings now, guided stretching, curated Headspace breathing exercises, focused music, and leverages Hyatt's longstanding excellence in food and beverage. We're changing what it means to attend a meeting, and the feedback we're getting from our customers has been tremendous in this space. From 2022 to now, Together by Hyatt has delivered $800 million in actualized revenue. One more look a bit closer at the difference Together by Hyatt is making to some of our customers and our colleagues as well.
Together by Hyatt is a team of experts in technology, well-being, and F&B who are available to you as you plan your meeting, as you execute your meeting.
Together by Hyatt is a game changer and will certainly elevate the needs of our clients, our attendees, and our organization going forward.
I can count on Hyatt to be a leader in initiatives that benefit myself and my clients. I know well-being is at the top of most people's lists as they try to balance life. To have someone who's an expert in that field give me advice, provide initiatives that we can implement, I think it's a good thing.
As I think of our client needs, of our attendee needs, we're building in time for them and space in between sessions to relax and get their thoughts together and make connections. Hyatt is providing the Miraval videos that we share with our attendees to just allow them to step away and just feel this is their time. Even though there's a conference going on, Hyatt cares for them when they are on site at their meetings and is really generally concerned with well-being, and we weave that into our programs.
Last but not least, we are working to elevate our digital and technology platforms in ways that help us to drive more direct revenue and reduce costs for our owners. Digitally, we're building on some great momentum here as well. As we've shared and as you've seen, our global direct booking metric is up 310 basis points since 2019, and we've just surpassed 20 months of direct digital growing faster than the OTAs. As we roll out our new property page designs, we're seeing a 5% higher click-to-book rate and a 40% lower bounce rate than our prior designs. There's certainly a lot of work going on in our digital space, I'll just share a couple of focus areas with you here. I mentioned that our new property page platform is doing very well. We call it Canvas.
Canvas delivers branded property experiences, and this platform is showing great initial results. What you're seeing build behind me is an example of a new Andaz branded property page. We're continuing to integrate AI by serving personalized recommendations across multiple integrations, both in web and email. We're also actively prototyping and launching experiments in digital with AI. One of the best examples in this space is the work we're doing in Discovery Search. Now giving our guests personalized search results based on the attributes we know about their profiles, their search history, and their past stays. No two search results need ever look the same because each person can get a unique, tailored experience now. In technology, we're making big investments to elevate our system capabilities. First, our revenue management system. We are rolling out the IDeaS revenue management system globally and retiring our legacy PRIO system starting this year.
IDeaS allows us to further elevate our pricing decisions by recalculating pricing multiple times a day and with a focus on profit optimization in an efficient and data-driven way. Additional features we'll get from IDeaS and their product is their enhanced group pricing and ancillary pricing capability to unlock the strategy I just shared. We're also completing an extensive RFP process for our central reservation system, and we'll be announcing a new alliance in that space very shortly. This transformation allows us to do three important things. It elevates our capabilities with specialist technology alliances that help free up our internal resources to focus on the things that really differentiate and customize for our guests and customers. It also reduces costs for our owners, reduce training times, reduced fees, and it will improve our speed to integrate acquisitions going forward.
I'll just close with this by saying that while the world has changed, our point of difference to be big enough to compete but personalized enough to never forget the importance of listening has served us well. We've transformed in many ways, but we remain sharply focused on helping our owners attract high-quality revenue, lower their distribution expenses, and together form deeper and stronger relationships by redefining loyalty with the people that really drive our business. Thank you for your time today. With that, I'm gonna welcome back to the stage our leader of all and a mentor of many that we all greatly respect, Mark, to share about how all these pieces are coming together as we grow with intent.
Okay. Before I get started, I just wanted to make an observation about Mark's presentation that is embedded, implied, but not stated, but I think I'll state it because I wanna make it explicit. What's the common thread across everything that you heard? The answer is the extension of care. Every single program, initiative, investment is all about caring for our guests, caring for our customers, and caring for our colleagues. We've taken a lot of time and effort to make sure that we're fulfilling our purpose and that that has meaningful impact on our business. You know you have a great and powerful purpose if it links directly and it animates your performance as a company.
In a gesture of care for all of you right now, I'm gonna ask that the house lights be brought up for just one second so nobody injures themselves. Can we elevate the house lights? Perfect. Can everyone just stand up? You've been sitting for a while, like, this is, like, the third in a row. Just take a deep breath. I know many people are hunched over their computers. Take a moment and just rotate your shoulders back once and then look to your right, look to your left, look up together, and then look down. Okay, I hope that felt better. Now you can sit down again. Really important that everyone's limber because we're about to talk about growth. We have had a lot of growth, so hang on. Buckle up.
As I mentioned earlier, this has been a key area of focus for us from the beginning. We've made amazing progress in our growth profile and our pipeline, not just since going public in 2009, but back to when I started at Hyatt in 2006. In 2017, when we announced a permanent sell-down of our owned and leased assets, we did so knowing that we had laid all the groundwork to lead the industry in growth, and we've done that exact thing over the last six years straight. The numbers on this slide represent the rate of net rooms growth along with our competitors. The number below the net rooms growth represents the growth premium compared to our next closest competitor, and note that the gap was 200 basis points in 2022.
That's the widest it's ever been. Additionally, this growth does not include the impact of our acquisitions of Two Roads Hospitality and ALG. When you add these 2 in, we've grown our room count by 64% in five years, a rate that's more than double our closest competitor. We exercise intense care for our owners, and they're increasingly entrusting Hyatt more frequently than ever before. It's also important to note the profile of our growth. The change in net rooms growth added to our system has been very high quality. Nearly 40% of the rooms that we added were luxury, and nearly 30% were in the upper upscale segment.
This is a far different approach than our peers, and as you can see, we not only have a higher rate of growth, but we have a disproportionate amount of growth within the higher fee per key segments of luxury and upper upscale. The result has been a portfolio transformation. Our evolution has been profound and highly value accretive. Not only was our growth predominantly in high-end segments, it also heavily focused on properties that truly differentiate our portfolio in the segments serving higher-end travelers. We've been intentional about our evolution. We recognize that while we do not have the same total portfolio size as our peers, we have relevant scale within segments that drive preference. That has been our focus. We've extended that differentiation meaningfully with 76,000 luxury lifestyle and resort rooms added to our portfolio over the past five years.
As you see on the slide, 44% of our portfolio is now comprised of luxury lifestyle and resort rooms, a very meaningful increase in mix from only 32% five years ago. The quality of our portfolio results in guests staying with us who have higher household incomes, which ultimately results in durability across varied economic conditions. To put the magnitude of our portfolio transformation into context, in only five years, we've doubled the number of luxury rooms, we've tripled the number of resort rooms, and we have quadrupled the number of lifestyle rooms. Not only that, we vastly expanded our brand presence, entering 18 new countries, 224 new markets, and added 13 brands. This is the new Hyatt, a very dynamic portfolio that is differentiated from the rest.
When we talk growth, I know many are very quick to point out, "Well, you know, it's growth from a relatively smaller room space, so these growth rates are maybe not so impressive." However, we've cultivated significant relevant scale in areas where we are strategically differentiated. Let me demonstrate it through some numbers. The net change in luxury rooms added over this 5-year stretch for Hyatt, purely in terms of rooms, gross rooms, not percentages, is more than the aggregate of our three closest competitors combined. That has nothing to do with our relative scale. That's absolute numbers of rooms. As you look at the new Hyatt, you see a portfolio that is different, and it's built to appeal to our World of Hyatt customer base. Very importantly, our loyalty members crave aspirational properties.
It's these properties that really drive value for our World of Hyatt program. At the very top of the list of aspirational properties is the type of hotel we are at today, a luxury hotel in a resort location. Our portfolio represents 18% of the worldwide market of luxury branded rooms in resort locations. We are the largest in the world, period. As Mark just covered, this is critical in driving differentiation for our World of Hyatt members and a key reason why our loyalty programs is growing faster than any other in the world. We just added 2 million members, 2 million new members in the Q1 alone this year. Amazing momentum.
The evolution of our portfolio and the way we serve the high-end customer is clearly evident in our average rate, which leads the industry by a significant margin, again, illustrating the quality and the strength of our high-end portfolio. We provided detail on how we've evolved and driven portfolio differentiation and quality. Let's talk about our outlook and what lies ahead. We're very confident in our ability to maintain our industry-leading growth position and expect growth of 6% in 2023, followed by 6%-7% in 2024 and 2025. We're confident in reaching this level of growth because of the strength of our pipeline. It's currently at a record level with approximately 40% of rooms under construction. Also note the diverse mix of our pipeline geographically and by chain scale.
We've achieved very significant growth in our pipeline over the past decade and now lead the industry in this metric as a percentage of existing rooms. Our pipeline has fueled our industry-leading net rooms growth, and we remain encouraged by the positive momentum with respect to signings and overall traction of our brands. Very importantly, one of the big areas of differentiation that we have is vast areas of white space for growth. I cannot emphasize enough the size of this opportunity. In the markets in which our brands are present, in which Hyatt brands are present, we, Hyatt, average four hotels per market. Our competitors average 14. Further, there are over 650 markets around the world, and our brands are only present in half of them. Now, you're all very good at doing math.
I'm sure you can start to quickly understand and size the vast opportunity that we have looking forward. As we think about expanding our breadth across more markets and depth in the markets in which we are already represented, although underrepresented, we're confident in the opportunity because our brands continue to punch significantly above their weight. What does that mean? Our recognition is right on par with the largest competitors in the industry. We have the history and tradition and track record of delivering quality experiences, but most still perceive us as much larger than our actual size. This awareness is driven by the quality of our brands, our highly visible brand presence in nearly every gateway city around the world, and the high-quality reputation we enjoy among guests, customers, travel advisors, and other intermediaries.
In a brand awareness study that we conducted, we inquired about our name recognition and found that our awareness was right on par with our peers and above the broader competitor average. People know us, and our loyalty members tell us that they want us to be in more places. We looked deeper into this particular topic, and through our data-driven approach, we were able to validate a new opportunity. When looking at guests who have previously stayed at Hyatt but opted to stay with a competing brand, the vast majority of the time it was for two reasons. First, there was no Hyatt Hotel within five miles. Second, they opted to stay at a lower chain scale property.
This tells us that our customer base has a clear desire for us to be in more locations and has staycations in lower chain scales where we currently don't compete. We intend to address this opportunity in a big way, and we wanna be in more locations and start by taking advantage of the considerable white space where we currently have no brand presence at all. To address this need, I'm very pleased with our announcement of Hyatt Studios. We announced it about three weeks ago, on this at this property, at our owners' conference. Our first upper midscale brand in the Americas designed to fill a need for both guests and developers. The brand was created by listening carefully to the needs of owners across different market types, and it also serves the needs of our World of Hyatt members.
As a result, the Hyatt Studios brand is an upper midscale brand with built-in flexibility to work in primary, suburban, secondary, and tertiary markets alike. The Hyatt Studios brand is the key to significantly expanding the number of markets we serve and introducing a new price point for more choice for our guests and our members. As you saw in the white space, we have a wide-open marketplace, as substantially all of our initial target markets for launch are markets in which we have no Hyatt hotels whatsoever. This strategic growth effort will materially expand the incidence of World of Hyatt members staying within the system and expand our share of wallet with them. The combination of having a highly desirable leisure portfolio adds to the attractiveness of staying at a Hyatt Studios hotel as we roll it out across the Americas and eventually the world.
All Hyatt brands, now and in the future, operate at the higher end of each segment that we serve. What's unique about this brand is that we chose to break the traditional mode of brand creation, and we took an outside-in approach through leveraging people with deep experience in this space. We didn't just keep the developers in mind through this design. Developers collaborated with us. They were at the table with us from the very beginning, and that came to life through a few different attributes of the brand. First, a simple design that keeps construction and maintenance costs low. Second, flexible brand standards in guest rooms, food and beverage offerings, and programming that allows adjustments to meet the needs of the market being served.
Third, through an operating model designed to be efficient with a focused outcome of exceeding guest expectations and generating outsized returns for owners at the same time. This agile and collaborative approach allowed us to move from initial concept to announcement in less than five months. It's a great example of the speed and agility with which we are acting. The approach has resonated. We're really proud to support the brand's announcement with signed letters of interest for more than 100 Hyatt Studios hotels, with construction expected to begin in 2023, and the first Hyatt Studios hotels expected to open in 2024.
We're excited about the white space this brand will address, which will lead to more staycations within our system. We've enjoyed this network effect benefit with Hyatt Place and Hyatt House, now having approximately 550 hotels to drive the strong growth in our loyalty program that we have discussed. As we scale Hyatt Studios, we expect to enjoy the same network effect benefit about this brand too. The map on this slide outlines markets of initial interests. What's particularly compelling for our partners is that we have next to zero overlap with existing brands in our portfolio in the sub-market they are looking to build. A very different dynamic than our competitors. Our launch partners are primarily comprised of multi-property developers with whom we have worked over many years, and we're thrilled to have their buy-in as we embark on this journey together.
This immediate interest is testament to our outcome-driven approach. In summary, as we assess the growth landscape overall, we're really confident in our ability to continue to lead the industry in growth. We have a robust number of rooms under construction, and we continue to see very encouraging momentum with conversions. Lastly, our brands are resonating and our growth in upper midscale in the Americas will become a meaningful contributor that will be incremental to our estimated growth rates as the first Hyatt Studios hotels open in late 2024. We have an amazing opportunity ahead and significant white space where we can grow for many years to come at what we are confident will continue to be industry-leading growth rates. Thank you.
We will now take a 20-minute break. 20 minutes. We do ask that everyone please return in 20 minutes. Thank you.
Convening in two minutes. Thank you.
Climate change, water conservation, waste and circular wellbeing, and opportunity for all. That's why we rolled out one of the most comprehensive training programs in the hospitality industry, which is mandatory for wellbeing for our colleagues through initiatives such as our Global Wellbeing Week and our mental health assessment tool, Hyatt Well-Check. We've created a responsible business to create ethical and transparent business practices within and beyond Hyatt. We've increased communication and accountability for goals that are tied to executive compensation. Right now, more than ever, care is needed everywhere. Join us in.
Now please welcome Executive Vice President and General Counsel and World of Care Executive Sponsor, Margaret.
Good morning. Thank you. Since 2023 Investor Day. Our themes today have been around Hyatt's growth in building a stronger, more capable, and more value additive. Part of that story. At Hyatt, we lead with our purpose to care for people so they can be their best. Over almost seven decades, Hyatt launched World of Care in 2021 as a way to bring Hyatt's purpose of care to life through our actions in advancing care for the planet, for people. Was designed through listening to our stakeholders, our colleagues, guests, customers, owners, and investors. A demonstration of one of our core values, empathy. We took the time to connect with each stakeholder group to better understand what resonated with them and where we could bring value and have the greatest impact in local areas of environmental and social responsibility.
World of Care captures reporting in those areas and others across our organization, all of which are intended to demonstrate as well as to be clear where we believe we still have work to do. Our 2030 environmental goals address climate change and water conservation, sourcing, and thriving destinations. These are the right focus areas given our business, they're aligned with UN Sustainable Development Goals. How will we get to accelerate efficiency measures and increase reliance on renewable energy and to drive sustainable-minded growth? This collaboration is critical to me, which include reducing absolute scope one and scope two emissions by 27.5% from a 2019 baseline. We're really encouraged Hotel owners have in helping us drive impact here.
Just a few weeks ago, we held an America's Owners Conference, where World of Care was a key topic. That intentionality with our owner groups advances knowledge and alignment on what we need to do collectively to drive value for hotel owners as well as for our guests to understand and meet our customers' sustainability needs. Our own corporate customers and asked them what they were looking for from us in regard to sustainability. Following that deep dive, we're better informed and enabled to focus our activities on high-value initiatives, principally providing standardized sustainable meeting offerings and communicating to customers each property's unique sustainability initiatives through our providing meeting planners and corporate customers with hotel-specific data and offerings that help those customers meet their own sustainability goals.
Owners and communities, we're dedicated to advancing a culture of opportunity for all, with a focus on cultivating an environment where our colleagues can be their true selves. This is achieved through efforts focused on colleague wellbeing, a really unique differentiator for Hyatt, talent development, human rights. Joan Bottarini serves as the co-chair for the No Room for Trafficking Advisory Council, working alongside the AHLA Foundation and leaders in the hotel and lodging industry. Resources. Engage and educate key stakeholders in the fight against trafficking. We're also committed to ensuring diversity, equity, and inclusion is reflected across our actions and behaviors, our policies and procedures, our workplace environment, and our culture. We know that more diverse viewpoints make us stronger, more competitive, and better positioned to drive the best value to stakeholders.
As part of our DE&I journey, we set aggressive goals through our Change Starts Here initiative in 2020, including commitments that span who we employ, develop, and advance, who we support, and who we buy from and partner with. For who we employ, we set a 2025 goal to double the representation of women and people of color in leadership positions. We are well on our way toward this goal. For those who we support, our RiseHY program has been a tremendous point of pride for Hyatt. RiseHY is a global program providing career pathways for young people aged 16 to 24 who are disconnected from the economy, either by not working or not going to school. In 10,000 opportunity youth through that program by 2025, we're bringing real value to people's lives and directly supporting the vibrancy of the communities.
The Hyatt Hotels Foundation is committed to investing $1 million to organizations that support youth and diverse-owned businesses. As part of who we buy from and work with, we're seeking ways to expand our commercial relationships with diverse-owned businesses. Here we found that one of the most powerful ways to do this is to support our hotel teams in finding innovative solutions within their own communities. Since 2020, we've increased our supply of Black-owned businesses by 500, a number that grows every month. Embraced Change Starts Here and its commitments, and tell us how much it's mattered to them that we're taking real action. Not just expressing good intentions, but driving for meaningful results. For responsible business, we remain, again, with purpose as our guide, committed to fair and ethical business practices.
Our code of conduct continues to be our guiding principle for how we do business, how we care for our people, our communities, and our planet, how we demonstrate integrity in our business dealings, and how we communicate honestly. Our growth is in part dependent on our ability to build strong relationships with hotel owners in long-term management and franchise agreements. How we do business with purpose and transparency is essential to build those long-term relationships. It should almost go without saying, but I do just want to mention how important integrity is at Hyatt. Sure, organizational alignment and appropriate oversight. World of Care runs through our board of directors. The Nominating and Corporate Governance Committee of the Board directly oversees World of Care strategy. I mean, that's also comprised of our CFO and our chief human resources officer.
We work together and with Mark and the rest of the executive team to ensure that this work is connected. Many comprised of subject matter experts. Those colleagues help us set global strategies and also ensure that we action those strategies throughout the entire company. Colleagues need the ability to meet the unique needs of their properties and geographies. The key for success here is to ensure those on the ground responsible for actioning these goals, regional leadership teams, understand our strategy, have the opportunity to influence the goals we set against that strategy, and further have the freedom to structure their own action plans for achievement of those goals. Transparency is fundamental in our approach, we continue to develop our well understood by our constituents. We issue a GRI Index annually, and we'll be doing so again this year.
While we previously published a corporate social responsibility highlight report, beginning in 2021, we brought that through World of Care. In 2022, we published our World of Care highlights, which included information related to our actions across for people and for responsible business. In 2021, we also published our first annual DEI report, which was reissued in 2022 with an update on our progress. In that report, we also included EEO-1 data for our US employee population, and we've committed to updating that report annually. Of course, we'll be in a position to report as needed under the to-be-confirmed SEC guidelines. Through listening to our colleagues, guests, customers, owners, and investors, we've aligned our reporting to explain who we are, what matters to us, and what we know they want to know from us.
How Hyatt advances care matters and has value to its stakeholders. While we recognize that advancing care for the planet, people, and responsible business is the right thing to do, it also has to tie to value. The third-party recognition and media coverage you see here is a reflection that World of Care is making a difference to colleagues, guests, customers, owners, and investors. I couldn't begin to count the number of stories of care throughout Hyatt. We are going to share one in particular as I close. This is about the Alila Villas Uluwatu in Bali. The video you're about to see beautifully captures what World of Care means and how our colleagues are bringing that to life every day.
Creating a World of Care for me means reconnecting with ourselves, with the environment, and with the people around us. We at Alila Villas Uluwatu believe that we are at a turning point where we need to reconciliate, we need to restore, we need to heal.
For me, care means taking care of the planet. We saw the need and the possibility of, you know, doing something very different and take the ethos of the Alila brand, which is so deep-rooted in sustainability, and take it a notch higher. This hotel is spread out in 14 and a half hectares. We decided to take a portion of the hotel and convert it into a beautiful, sustainable lab.
When Hemal invited me to work at Alila, I was very happy. He presented me with this wonderful challenge that was, "Let's make this program Zero Waste to Landfill a success.
From there, this journey started.
Sometimes it's not necessary for you to change that. Shredded plastic is put into the bean bags that we have in our sustainability lab. What we are doing here, I always say if we planted that seed in your head, we are already successful. Every day, I feel that we are making an impact. Even if our step is small, makes me very proud.
I absolutely love that video. It's just one example of how our hotels around the world are bringing World of Care to life every day. I'm very proud to be a member of the steering committee that is under Margaret's leadership for World of Care. First, I'd like to remind everyone that our presentation and comments today will include forward-looking statements under federal securities laws. These statements are subject to numerous risks and uncertainties, as described on this slide and in our SEC filings. These results could cause our actual results to differ materially from those expressed in or implied by our presentation and comments. Forward-looking statements in today's presentation are made only as of today and will not be updated as actual events unfold.
Okay, let's get started by summarizing a number of key points from our morning's presentations, highlighting the progress we've made on our transformation, and then I'll review our plans to drive further shareholder value. Over the course of the morning, you heard about how excellent operational and commercial execution are leading to record performance in free cash flow. Our leadership teams globally are delivering, and our differentiated approach to integration of acquisitions is maximizing value creation. We have a strong outlook supported by both our optimal positioning and our focused investment and capabilities. The resiliency of our differentiated business model and the macro backdrop sets us up excellently for continued growth. Industry-leading growth is driven by a powerful and strengthening network effect and brand preference. We've delivered six years of industry-leading growth, underpinned by strong results driving value for owners. Our capital allocation strategy has delivered returns for shareholders.
We've not only realized strong valuations on asset sales, we've achieved healthy returns on acquisitions and returned significant capital to shareholders. Fundamentally, we're an asset-light company with a track record of unlocking value. We've delivered above expectations on our commitments and have confidence we'll continue to deliver. Okay, let's recap very quickly. Earnings exceeded our expectations over 40% higher than 2019, with Legacy Hyatt results excluding transactions up 5%. We offered levels of free cash flow of $473 million, over 50% larger than any previous year. Net asset sale or asset sale commitment by 2024. We reduced debt, returning to leverage ratios of approximately 3 times and repurchased $369 million of shares.
Q1 was an exceptionally strong quarter, with RevPAR up 6% above 2019. The momentum continued with April RevPAR at 8% above 2019. The last region to see recovery has been Asia-Pacific. Further room to grow. With airlift capacity growing in momentum for outbound and inbound recovery. Momentum continues to grow, reinforcing our confidence. At the end of March, our forward indicators are strong. Group pace for the full year has expanded. Net Package RevPAR is pacing up 15% over last year. Now we have confidence we can share full year active vacations. Total Adjusted EBITDA plus net deferrals and net finance contracts expected to be $1.225 billion, driven by RevPAR and Net Package RevPAR expanding significantly over 2022.
Second, 3% growth from sustained momentum from fees earned from new hotels added to our portfolio. Our owned and leased earnings growth expectations are significant. We also continue to expect owned and leased margins to be within the 100 to 300 basis point range above pre-pandemic levels we've previously provided. We've also made strategic capital investments over time, targeting to drive returns in this portfolio. Finally, we're planning a slight increase, new upper midscale extended stay brands, Hyatt Studios. We shared our increased RevPAR expectations and reaffirmed our net rooms growth guidance last week on our earnings call. Our Adjusted EBITDA guidance, $2.5 billion at the midpoint, leading to $225 million of estimated net income and $550 million of free cash. Provide our long-term expectations, which reflect three things.
First, the midpoint of this range represents incrementally growing demand for travel back to stabilized occupancies. Patients suggest we'll exit 2023 with occupancy approximately 300-400 basis points behind 2019. Second, we expect rates to grow slightly, reflecting 3.5% compounded growth rates over 2019. In other words, not a remarkable compounded growth rate over this period of time. Third, group bookings have continued steady momentum 2024, driven by longer booking windows and increasing association bookings. External factors include three items as well: is in the segments and most of the geographies we operate. There's continued upside anticipated from international flight capacity expansion. The high-end consumer continues to value experiences, including travel, especially at the high-end of each segment that we serve.
Recent projections from STR continue to anticipate mid-to-high single-digit growth for luxury and upper upscale in the U.S. for 2024. Moving to net rooms growth. We expect 2024 to 2025 to be in the range of 6%-7%. Our pipeline under construction remains healthy, and we continue to see opportunities in the marketplace for conversions. Our new upper midscale extended stay Hyatt Studios brand will begin to contribute meaningfully to 2025. Next, I want to provide a perspective on ALG Vacations departures and UVC signed contracts. You can see here in this note that departures directionally track RevPAR growth and UVC signed contracts directionally track net rooms growth. Departures for ALG Vacations reflect broad leisure demand with the total ALG Vacations departures broken down into the following components. 20% of departures represent Hyatt All-Inclusive Collection nights.
45% represent departures for all-inclusive markets in Mexico and the Caribbean into other brands in the same destinations where Hyatt brands have a presence. The remaining 35% of departures primarily represent other resort markets in the U.S., including Hawaii. Signed contracts for UVC, as Mark mentioned earlier, reflects a strong correlation between the number of rooms open and the growth rate of new contracts signed. In the ALG section, we highlighted the exciting new openings for ALG and expect this will help to fuel the continued UVC membership contract growth. Finally, additional assumptions for 2025 include our commitment to realizing our remaining goal of net proceeds from our asset sell down commitment, which depends on timing and will impact Adjusted EBITDA. We anticipate that the asset sales will further reduce our run rate capital expenditures to approximately $100 million by 2025.
Inflationary growth is estimated to meet the needs of our core business with a continued discipline on reallocation of resources. We believe these estimates are reasonable to assume for today for 2025. All of these assumptions lead to a 12% compounded growth rate through 2025, a very strong growth rate for an asset-light businesses with expanding operating leverage. The midpoint of our expectations for 2025 is $1.4 billion in Adjusted EBITDA plus net deferrals plus net finance contracts. Asset-light businesses over the next 2 years are expected to contribute 85% of our total growth, expanding our asset-light mix. Now, all of these assumptions are based on the internal and external assumptions I outlined earlier.
Remember, shown here on this slide, this is after our assumed $100 million of reduced earnings as a result of fulfilling our remaining asset sell down commitment. To bring this all together, we've completely updated our earnings growth model, reflecting the asset-light growth in our business. For a 1-point change in RevPAR and Net Package RevPAR, our EBITDA range reflects solid fees per key, driven by our full service managed portfolio mix. The impact of our owned and leased portfolio Adjusted EBITDA is lessening as a percentage of our range as the owned and leased Adjusted EBITDA is replaced by steady fee-based business. The range for ALG Vacations departures and UVC signed contracts will add incrementally to the per-point contribution.
If RevPAR and net package RevPAR assumptions change from the ranges I just provided, each one point annual change reflects a $15 million-$25 million change in earnings. You might recall our previous range of one point of RevPAR reflected a $10 million-$15 million change in earnings, and that actually hasn't changed on our core legacy business. The increase to the range by $5 million-$10 million per point is primarily driven by the acquisition of ALG. The range here for net rooms growth reflects healthy fees per key with a larger mix of full service managed hotels in the pipeline. A one-point change in corporate reflects $2 million of EBITDA. In summary, this model can be referenced for future assumptions relative to 2023. Any updated growth rates in RevPAR, net package RevPAR, and net rooms growth.
Now I know this growth model is new, so let me refer back to the previous slide where we had the 12% compounded growth rate in 2025 through 2025 and illustrate how this model would play out. First, RevPAR growth is 5% at the midpoint. 5 points of RevPAR multiplied by the midpoint of the earnings range of $20 million leads to $100 million in earnings on average in each of the next two years. Second, 6.5 points of net rooms growth at the midpoint times $7 million at the midpoint of the earnings range is about $45 million on average in each of the next two years. The corporate segment earnings at roughly inflationary levels is approximately $7.5 million per year.
In summary, if you add those numbers up, you arrive at $275 million of greater Adjusted EBITDA plus net deferrals plus net finance contracts. That is $200 million from RevPAR and net package RevPAR, $90 million from net rooms growth, less $15 million of corporate segment incremental costs, bringing us to the midpoint of $1.4 billion in 2025. A very powerful illustration of how our asset-light mix is expected to lead to a 12% compounded growth rate, with 85% of that growth coming from asset-light businesses. Remember, this is after approximately $100 million less in earnings from our remaining asset sell down commitment. You all know the benefits of an asset-light business model. Predictable earnings stream with durable contracts and high operating leverage.
Low capital required, leading to higher cash flow, increasing our ability to invest in additional growth opportunities or returning capital to shareholders. The composition of our asset-light mix is on the right-hand side and has evolved since 2019 with our acquisition of ALG. First and foremost are fee-based and managed and franchised businesses with top-line fees estimated to grow by $1.2 billion by 2025. Second, the UVC Membership Club business. How is this asset-light? It's durable. History clearly demonstrates our ability to sign new contract sales relative to our system side. It has a resilient customer base. 20% of sales are upgrades, and defaults have been minimal even through Covid, and there's virtually zero capital required for this business. Third, ALG Vacations Distribution and Destination Management. How is this business asset-light? It's durable.
The activity base represents resilient leisure demand through cycles, and we are the largest package provider to travel agents B2B in the U.S. There is minimal capital needs for our technology investments in our proprietary systems. While our asset-light earnings mix drives an anticipated result of $1.4 billion of Adjusted EBITDA plus net deferrals and net finance contracts estimated at the midpoint in 2025. Run rate capital expenditures are declining to $100 million by 2025, a $200 million reduction from 2017. These two factors drive a greater than 33-point increase in our asset-light earnings mix in 2025, and of course, are leading to expanded free cash flow.
Cash flow conversion is calculated as the simple math of free cash flow in each year, shown here in blue, divided by Adjusted EBITDA plus net deferrals and net finance contracts, shown here in gray in each year. We anticipate that under these assumptions, our free cash flow will grow to $750 million by 2025, expanding our free cash flow conversion by 17 points to 54%. The strong improvement in free cash flow conversion clearly demonstrates the trajectory and the power of our transformation. On a cumulative basis over the next three years, this asset-lighter model is leading to significant earnings base.
$3.8 billion at the midpoint of our range from 2023 to 2025 in Adjusted EBITDA plus net deferrals plus net finance contracts is leading to cumulative free cash flow of $1.9 billion at the midpoint of our range. We expect to generate significant value when considering free cash flow of $1.9 billion in addition to the post-tax proceeds we expect to realize from the remaining asset sale commitment of $1.1 billion, leading to approximately $3 billion of estimated cash available over the next three years. Our capital allocation priorities have not changed. We continue to plan to invest in the growth of Hyatt, we'll prioritize opportunities that are value accretive and strengthen our network effect, while at the same time returning cash to shareholders.
Our record of identifying, negotiating, and integrating acquisitions has created significant shareholder value. We've executed on $3.7 billion of acquisitions ahead of underwriting targets, creating significant value at 8x 2022 earnings on the total purchase price of these acquisitions. Key characteristics remaining core to our decision-making, investments for growth that have these attributes on the slide that Mark reviewed earlier. As we evaluate excess cash to be returned to shareholders, I'm excited to announce we're resuming a cash dividend at $0.15 per share on a quarterly basis. We have increased our share repurchase authorization to a total of $1.5 billion. This total authorization provides additional capacity as we consider the allocation of the estimated $3 billion of cash that we expect to generate through a combination of free cash flow and asset sale proceeds after tax.
Next, I want to spend a minute to cover our commitment to being investment-grade. Our credit ratings reflect an investment-grade profile, and we believe we have ample liquidity and availability under our revolver. Regarding our upcoming maturity in the Q4 of this year, we anticipate meeting this commitment through a combination of paying down a portion of this debt and refinancing depending on market conditions and the pace of our asset sales. Speaking of asset sales and our disposition commitment, for the last few minutes, I want to review our asset disposition progress that has allowed us to accelerate our asset-light transformation, provided the capital we've utilized to grow in addition to returning capital to shareholders.
In the last five years, we've realized $4.3 billion of proceeds across the sale of a wide variety of asset classes in our own portfolio at a 16x multiple. At the same time, we have also acquired four strategic assets to secure or expand our distribution in key markets for a total of $500 million. In the last five years, two of these four acquisitions have already been sold at higher valuations than we purchased them. Each owned asset that we have sold since we were a public company in 2009 was sold subject to a long-term management or franchise contract. The run rate of the fees we retain for these 20 assets is $40 million per year. Again, this value is in addition to the 16x multiple we've earned on the dispositions.
As we consider our options in the future and our remaining approximate $1.3 billion asset sell-down commitment, we have great flexibility because of the premier locations and key markets of our assets and diversity of our asset base, especially now that group bookings are increasing in momentum. As Mark mentioned earlier, under the anticipated valuation range we've been using of 13 to 15 times, our portfolio would be valued at approximately $3.9 billion-$4.5 billion. Our portfolio quality and diversity not only leads to confidence in our options to complete our existing commitment, but provides a significant amount of optionality going forward as we consider the future unlock of the value of this real estate to continue to grow the company beyond 2025. I just want to provide a little color on the composition of our current asset base.
We own 5 luxury assets in world-class urban destinations. These properties retain value through cycles and have a very unique owner profile. Room rates and valuations are robust for these assets. We have 4 high-end resorts, including 3 well-being focused Miraval properties. These Miraval properties, as Mark covered earlier, have differentiated economics and are successful because of the well-being experiences valued by our guests, leading to total revenue per room unlike any other luxury resort. What's also notable about these properties is the expansive acreage of these resorts, which make them incredibly unique destinations. We have 7 group and convention hotels, with several of these hotels in Southern and West Coast markets. What's unique about these markets is the year-round attractiveness, not just for groups, but for leisure guests as well. The amount of meeting space also provides flexibility to maximize on the growing group demand that we're seeing.
The pace of our asset sales has led to maximizing valuations and providing capital to be used for investments. We are confident this approach will continue to unlock future value for Hyatt. Our asset-light transformation has created exceptional value. In 2017, five years ago, we were below 50% asset-light earnings mix at 47%. By 2022, we unlocked significant value from our real estate through asset sales and invested in asset-light acquisitions while at the same time delivering industry-leading net rooms growth. We expanded to 75% asset-light earnings mix and have paved a clear path to reach over 80% by 2025. Organic net rooms growth is expected to continue to incrementally add 100 basis point mix, even excluding further asset sales or asset-light investments. We have transformed our earnings profile, and our journey has only just begun.
Now I'm going to end where I started and the key points that we reviewed today. Operational and commercial record performance and free cash flow. Our strong outlook is supported by optimal positioning and our focused investment and capabilities. Our industry-leading growth is driven by a powerful network effect and brand presence. Our capital allocation strategy is delivering returns for shareholders. We are a fundamentally asset-light company with a remarkable track record of unlocking value. Thank you for your time this morning. Up next, to provide a retrospective context on where we've come from and where we're headed, I'm pleased to welcome to the stage our Executive Chairman, Tom Pritzker, and welcome back to the stage our President and CEO, Mark Hoplamazian.
Well, hello again, everybody. You know, we celebrated a really important milestone this past year, celebrating our 65th anniversary. I thought it would be an appropriate moment to take with Tom here, to provide a bit of a retrospective. Tom, thank you so much for being here.
Great. Thank you, Mark. Thank all of you who came here, down here personally, and for those of you who are live streaming this event, thank you for joining us. What I do wanna say is, you need to come down here and experience not only this hotel but a high-end, all-inclusive experience. It's a different experience. It's a great experience. I'm gonna take this moment to encourage you to come down, to this wonderful Moxché Resort.
I think most people in the audience didn't realize that you were part of the sales team. Thanks for the pitch. Look, you've been with Hyatt since forever. Maybe we can just start anecdotally with some memories that you've got that really stand out.
Okay. Yes, I've been around long enough. I could go through tons of war stories for you. I could go through the purchase of Hyatt Regency Atlanta. I could go through recruiting a guy named Peter Fulton to start our international hotel company. Pete was an interesting character. He was a professional hockey goalie before they had masks. You can imagine the personality that was reflected in Pete's face. What I really would say is that having lived through our history has given me a wonderful context for looking at our future. Understanding our history is really why I'm so excited about all the material that you've heard here today and where we're going in the next several years.
One of the key things that we've talked about pretty much throughout the meeting is asset ownership and asset light. As I reflect on the history of the company, the company started with an asset acquisition. The company deployed significant capital building hotels and buying hotels over the years. You've seen it all. Maybe you can give us a little bit of perspective on that topic because, you know, we've evolved a lot over time.
What I'd say is we've never been ideological about bricks and mortar. In our business, you do not wanna fall in love with bricks and mortar. That hasn't happened. We've used it to get ourselves to the point that we're at now. We now have the opportunity to be asset-light because of our fee-based earnings that you've heard about from Joan and others. We're not looking back. We've made the decision. It's clearly the right decision, and now it's just a question of executing on that decision.
As I think back, you know, we've gone through a number of phases of how we treated assets and how they were a part of the equation in terms of our growth and extension of our brands and so forth. Maybe you could just amplify on that a little bit by reference to history specifically.
Yep. As Mark mentioned, we started in 1957. We bought a motel, then we built a couple of them. 10 years later, 1967, I think we were the first public hospitality company to go asset light before any of the others that we're all aware of. What we did is we spun out the real estate from Hyatt, the publicly traded company, in order to get asset light. If I then take you through to the end of the sixties, 'cause there were some other transactions in there, what we looked like was, the family owned about 1/3 of Hyatt Domestic. I don't remember how much we owned of Hyatt International, both being publicly traded asset light management companies. Then we had taken that real estate company that we spun off private. We owned 100% of that real estate.
That's the snapshot at the end of the 60s. Move us to 1980, we took Hyatt private. We took all of it private. We took Hyatt Domestic Management Company private, Hyatt International Management Company private, we already had the real estate that was 100% family-owned. The important thing to know is, I'm gonna come back to this later, for 25 years, Hyatt was run as a private company, it was really run as a private company inside of a larger family enterprise. Let me just give you a snapshot of over those 25 years, what the family enterprise looked like, 'cause it gives you context to how Hyatt was run and why we are where we are, why we have the opportunity that we have today.
We own somewhere between 50 and 100 privately held different businesses. This ran across the whole spectrum, from natural resources to manufacturing to healthcare to information systems. Our business was basically acquiring and building companies. Hyatt was inside of that, and it was one of those businesses. Now let me go to 2005. 2005, we're in the middle of a big family food fight. We knew that we wanted to take Hyatt public as part of the strategy for resolving that problem. In order to do that, what we did is we created a single hospitality company. We poured all of our hospitality assets into that company, and importantly, that included all of the hotel real estate that we had owned, frankly, forever. All of that went into that, the company that you now know as Hyatt.
Why did we pour the real estate in? We didn't want to have the perceived conflict of Hyatt running hotels that were owned by Pritzker. That made sense to us for that moment. We always understood that asset light has more attractive cash flow characteristics, but at that moment in the evolution of where we are, it made sense to us. That's 2005. If we go to 2017, at that point, we had the brands, and we had the scale to commit to an asset-light strategy. We adopted a very methodical and intentional way of executing against this commitment, and we continue to execute against that plan today. 2021, we bought ALG.
There were a number of drivers in the acquisition of ALG, but one of the drivers was to increase our fee base and our scale, and that allowed us to accelerate our asset-light mix, as well as doubling our resort presentation for our guests. Like asset light, the ALG acquisition was thought through, it was strategic, it was economically driven.
One thing that, you know, strikes me is that the rate of growth of Hyatt during the time that it was a private enterprise and part of the family enterprise, was lower than its principal competitors at that time. Can you maybe just explain what happened during that period of time and why that was the case?
Yeah. It's a great question because it will help illustrate why we're so excited and why the opportunity is there that you've seen in the earlier presentations. We ran Hyatt in the 80s, not just the 80s, over that 25 years, our goal as a family was to build net worth. Our goal for Hyatt was to build a great brand, and we had the management talent to be able to do that. Enterprise-wise, net worth is our goal. Hyatt-wise, strong brand is our goal. We had the brand strength. That's what we wanted, but we didn't have aspirations to build scale. That's how we operated from an enterprise perspective. Our focus was building net worth through investments across all of these different types of businesses. You could go back and look, we built a huge container leasing company.
We created a biotech company. We had a fleet of rail cars. We were building net worth, and we were using some of Hyatt's cash to do that. As long as we were building a strong brand for Hyatt, we felt do it, we had the right mix.
If you fast-forward to today, there are consequences to that, you know, that period of time where we actually did not grow and expand into a lot of markets. How do you think about that?
Yep. Consequences were we grew more slowly in the hotel business than our competitors did. That creates the opportunity that we see today. Mark has referred to it as white space. It's really undeveloped or underdeveloped markets that are available to us. For fun, preparing for this, I went on Google, and I looked up Peoria, Illinois. Peoria, Illinois, is a city of about 110,000 people. One of our competitors has seven hotels in that market. Another one of our competitors has eight hotels in that market, and our closest hotel is 30 miles away. There is zillion of these types of markets, and that's what we're talking about when we say white space or underdeveloped markets. That comes out of the slow growth that we had over those 25 years.
Having been around at the time that AmeriSuites was acquired, and then we launched Hyatt Place. Actually, under my tenure, we launched Hyatt Place, and then we bought Summerfield Suites and launched Hyatt Summerfield Suites, which became Hyatt House. I know that you were actually putting back pressure to get those deals done because you saw an opportunity to expand into new markets. As you think forward now, and maybe with reference to Hyatt Studios, what excites you about where we stand currently and looking ahead?
Right. The AmeriSuites acquisition, creation of Hyatt Place was a reflection of we were gonna go public, and we then needed to be a standalone hospitality company that had growth. If you wanna drive growth, you clearly needed to enter other segments, and we needed a franchise capability. Our strategy now is what excites me the most because it's transforming Hyatt. You've referred to it as the new Hyatt. It really is that. The new Hyatt, I would say, is gonna be, the way it's being structured, is gonna benefit our owners, our guests, our shareholders, and our colleagues. Let's look at each of those. If we start with owners, look at the launch of Hyatt Studios with 100 LOIs. I talked about white space or undeveloped territory. Think about it from the perspective of a franchisee developer.
This is the white space that they're seeking. It's the white space that's gonna drive their returns. If they see opportunities for superior returns, they're coming to us because it's a natural relationship. Our white space going back to those 25 years creates opportunities for those franchise developers. If I go to guests, we're transforming the Hyatt system, that's gonna drive our loyalty program. Just looking at the two examples that we've talked about, Hyatt Studios will keep our guests within the Hyatt system, ALG will give them even more attractive vacation opportunities. When you look at that, if you think of it from the point of view of our colleagues.
I was sitting over with Ray earlier, he leaned over, he said, "You must be unbelievably excited about where we're going." I said, "Yeah, I am." He said, "I've only been here a year, my feet are wiggling because I'm so excited about this." That creates the opportunity for our colleagues. That's critically important 'cause our colleagues are really delivering our product. They are delivering the care that we keep talking about. If I go to shareholders, you've heard it here, and I'm a deep believer in it. Going asset-light is gonna transform our financial profile. As Joan described, more fee income, more cash flow, less obligation for investments to maintain hotels, that's gonna completely change the financial profile of Hyatt.
It's gonna rebalance our system to fit the needs of our guests, our owners, and our shareholders over a long time in front of us. That's what has me excited about what you and your team are doing.
Well, thanks. I've been at Hyatt a lot less time than you have. I've been around Hyatt for maybe, close to half the time that you've been at Hyatt 'cause I've been around for a while. I share that excitement 'cause I've never been more excited about it either. We've got Tom for just a few more minutes, and I want to make sure that we take an opportunity to take some questions. If we could turn on the house lights, and I'm inviting questions, if you will, from the floor, for Tom. Joe?
Thank you for. Can you hear me? Thank you for taking my question and, yeah, thanks for hosting this here at this property as opposed to in New York at the Grand Hyatt in November in a windowless conference room. It's great to be at an ALG property and experience it. It's also great to hear both of you and your team about your what we would describe as maybe an incrementally larger or firmer commitment to selling down the real estate. One, is that a correct characterization of what I just said? Tom?
Yeah.
Yeah. The question is commitment.
Yeah. Flat answer is yes, we're completely committed. Mark and I talked about this earlier. We have not had a single conversation about that decision since 2017. We're fully committed. It makes sense. When you listen to where we're going, there really is a pot of gold at the end of this rainbow. I'm a major shareholder. This is where we wanna go. Really, the only question that's left is how quickly we can execute.
Since 2017, the net proceeds from asset sales have almost matched exactly the capital you put into M&A. From here, are the timing of asset sales tied to M&A opportunity? If that's not the case, then what do you plan to do with the net proceeds? Obviously, you have a dividend and buyback authorization. Both of those are pretty sizable.
Yeah. First of all, the decisions that we make with respect to asset dispositions are dependent on the market for asset dispositions. They are largely disconnected from, you know, commitments that we make with respect to acquisitions. The M&A cycle and the asset disposition cycle, there's no connectivity between the two. The times at which different opportunities get created or come up are different. The capital market dynamics will be different. Even if we tried to time it, we would not be able to really rely on that. The answer is, they will operate in parallel, but in different time frames. Our capital commitment or capital allocation framework hasn't changed since we were public.
We bought back shares for the first time in 2013, four years after we went public. We introduced a dividend, someone will help me for the year that we did that. Several years ago. Five years ago, maybe. I'm sorry?
2018.
2018. Thank you. About 5 years ago. What we've said is our first priority is to apply capital to opportunities to grow the company. In the last 5 years, that has largely manifested in the context of acquisitions. Secondly, we will return capital to shareholders. Naturally, what will end up happening if we don't have a use for the capital is we will continue to pay a dividend, we will buy back shares. That's the answer.
One final question on this whole topic of asset recycling or asset dispositions. You referenced this concept of potentially providing seller financing in asset transactions on the most recent earnings call. Can you talk about that a little bit? Is that a theoretical, or is that something that you are, you know, contemplating using? Under what scenarios, you know, would you provide seller financing to get a transaction done?
Yeah. You know that we are always in the market with respect to looking at properties that become available and also, talking to potential buyers of our properties, many of whom we've done deals with over many years. We are actively engaged in our in the group of actors who are in the financial markets or in the hotel asset markets. We pay attention to what we are hearing from them and what we see. We've seen other REITs that have provided seller financing.
We've actually heard from some potential buyers that having the opportunity to talk about seller financing could make a difference in their interest in doing something during this period of time when capital availability from regional and local banks especially is very tight. We're aware of all of that. I was asked on the most recent call if it's something that we would consider. The answer is yes, for the right deal. We're not gonna do it for the sake of it because we wanna realize the liquidity. Now, in most cases, you're providing seller financing, and the equity that's coming into the property acquisition is below you. It's safe.
It's a safe investment from that perspective, and something that we have a lot of experience doing because we've done many structured deals over the years. We have confidence we know how to underwrite it, and we would do it to facilitate it. The other thing I would say is I can't think of a time when, you know, the credit markets have gone through a cycle that didn't ultimately revert to an equilibrium where capital was available again. It just hasn't happened. Like, if you look at the capital markets in the United States, they've never shut down for an extended period of time. You know, whatever we provide in terms of financing, we will get back.
If it takes a year or two or three, it's not a federal case, as long as it's not a significant chunk of capital. That's, that's my answer. I just wanna make one. I think we have time for maybe one or two more questions, but if we could actually focus on any questions you have for Tom specifically, because I'm gonna invite Joan up here in a minute after Tom leaves the stage to answer more general questions. Any questions for Tom at this point? Yes, Shaun.
Shaun Kelley from, I'm sorry about that.
That's okay.
Good morning, everybody. Shaun Kelley from Bank of America. Thank you for doing this. Really appreciate the historical perspective that you both provided. I had two, but I'm gonna give this one directly to Tom. May sound a little off the wall to those in the room. I believe this past weekend was actually what was the, you know, annual meeting for Berkshire Hathaway. Tom, you know, I believe the Pritzker family actually sold, you know, some interests in one of your businesses to, you know, Warren Buffett and Charlie Munger.
Maybe in the spirit of that and as you're reevaluating some of the decisions, you know, for the family back in that kinda time period, 2005-2010, you know, kinda curious, did you ever discuss the hotel business with Warren Buffett when you think about the asset light side of how incredible this business model is over time, something that many of us in the room here have learned, you know, through being analysts? Kinda curious if that's ever come up in discussion in, you know, how he might view this business.
Do I have time to tell this story? All right, I'm gonna tell you a quick story about Warren Buffett. My dad was actually sort of the progenitor of leveraged buyouts. That's why we ended up in all these different businesses. It's 1954, my dad is 32 years old, and he was buying a chocolate company.
What had happened is cocoa beans price, because it's a commodity, had spiked, and the stock of this company called Rockwood was flat. He went and took Rockwood private, but he didn't pay cash. What he did is he gave the shareholders warehouse receipts for cocoa beans. There's a guy over there, if you wanna convert your warehouse receipts to cash, he'll convert your warehouse receipts to cash. In effect, bought the company with its own inventory. Gets up at the shareholders' meeting, describes this, and a 24-year-old kid comes up to him and says, "I didn't understand anything you just described." Dad says, "Great. Let's go have a cup of coffee. It's a really cool deal. I'll describe it to you." That 24-year-old was Warren Buffett.
The interesting thing is Warren has watched us, and we have watched Warren for many decades and have very similar views of life. We have not talked to Warren about Hyatt. I think Warren has not been interested in part because of exactly what you're describing. An asset-heavy model from his point of view didn't make sense. We did the Marmon transaction that you're referring to, and the reason we did it with Warren is our colleagues were very important to us, and we wanted it to land in a home that was as similar to us as we could possibly find. We didn't hold an auction. We didn't go through normal process.
We went directly to Warren, basically, he made a decision in 2 and a half hours, and it was largely based on his confidence in our management team and how we would have gone about building Marmon. We've had an interesting relationship with Warren for many, many years.
I think we might have time for one more question for Tom. Anybody? Great. Tom, thank you very-- Ooh, sorry, there is one.
Thank you very much for your time and the opportunity to ask the final question. I was very excited when you mentioned about, you know, the white space and how it is very exciting for all the stakeholders within Hyatt. When you think about the opportunity to sort of go to the other chain scales with the launch of Hyatt Studios, and it sounds like it's a long-term strategy for Hyatt as well. How do you balance, what's the Hyatt approach, I guess, to these new chain scales and how do you balance, how do you make sure that, you know, the quality is there as we go and develop those brands?
Right. It's terrific question. It's how do you balance growth with knowing that we're continuing to serve the Hyatt customer and that we're not going outside of our permissions? Is that a fair way to reframe it? It's a really important thing for us, and I think my short answer to that is, I wanna know that we have a management team that has the depth and the skill set to execute against whether it's an acquisition or a launch of Hyatt Studios. The question that I think about and our board thinks about is, do we have the people and talent to execute against that? Are they sufficiently, I'll call it Hyattized? Are they committed to our purpose? Do they understand that there's only so fast that we can grow without stressing the system?
I talk to our board about this all the time. When we were doing L.A., ALG, I basically called each of the board members and said, "Tell me what I should be thinking about. Tell me what I should be worried about." It was always people, people. That's how I think about it. I think our growth has been coherent. It's been adjacent to other places that we have permission from our guests. It has been strategic for who we are. Now, I do think, going back to this 25 years in the white space, that we have an enormously powerful brand, and I think our brand is sort of bigger than our scale. What we can do with that powerful brand is grow our scale into that brand awareness mark.
You showed some data around our brand awareness. Again, I think it all fits together. We've got the white space that will drive owners' returns. We've got the brand that will enable us to make those owners successful. The strategy makes sense to me and doesn't really threaten the issue of our core purpose or values or brands. Yeah.
Tom, thank you so much for being with us.
Good. Thanks. Thank you all.
Safe travels. Okay. We're gonna turn to Q&A right now, and Joan and I will try to cover the waterfront.
As we parse through what we have coming at us. This actually is from Gregory Miller in the room. Maybe you wanna ask the question out loud.
Sure.
We don't get it misinterpreted from your email.
Hopefully not. Thanks so much for hosting this event. I'm really looking forward to the tours the next couple of days. Let's start off with ALG. Bear with my ignorance here, could you provide more detail on who the ALG owner base is today?
Yes.
How that's evolving, and do we see a similar type of ownership base in other regions of the world?
Sure. The owner base for ALG properties today, if you look at the Americas, are largely families. The vast majority of those families are Mexican, but we also have Spanish families, and we have an American family as well. They're family organizations. Most recently, we have an institutional player, a private equity firm, that formed a pool of capital with one of those families, a preexisting owner of both Hyatt properties and of ALG properties. They owned both sides before we actually bought ALG. They formed a capital base to go and invest further in the segment. That's maybe the first signs of institutional ownership of assets like this in the Americas. In Europe, it's fundamentally different. It's primarily fund, private equity fund-based ownership.
These are European funds or European arms of major U.S. funds. There are some that are owned by individual families, but the vast majority are owned by funds at this point. We have some Spanish families that are diversifying, and they're coming across to own all-inclusive resorts in the Americas, and they are some of the most prolific developers that we have relationships with. We have one family in the Dominican Republic that's also been very prolific. So we have a very, very high. I said it earlier, over 80% of our properties are owned by multi-property owners within the ALG system. The pipelines. The land that they have available and their intention to continue growing with us is very high.
We are in discussions on a daily basis with those owners to basically take the cash flow that they're earning from their existing resorts and invest it into new properties. Or in one case, selling their existing properties, raising the capital for the next subsequent construction projects. That's really the profile.
Thanks, Mark. 1 other question from our end. you like talking about growth, so I'll ask a growth related question as well. focusing on the global market coverage slide, today and how you can grow more similarly to peers. in the middle 200 markets, could you elaborate on where you are specifically under-penetrated and where you see the best avenues of growth, perhaps, chain scale, geographies or other types of avenues that you're willing to share?
Yeah. I think the answer is that, if you look at the gateway markets, the top, the top markets in the world, we have equal representation to all the other major brand families. We don't have as much saturation or we don't have saturation at all. We, you know, we don't have as much brand representation per market. I explained this before. We're 4 on average. They're at 14. Big difference, right? We're not running into ourselves in the major markets, but we are present in the major markets, which is why I think our brand awareness and our brand reputation is where it is.
The principle, when you look at the different types of markets, which we actually showed in that, in that graph that sees a precipitous fall off, is in secondary markets or secondary locations of primary markets or tertiary markets. One of the key reasons is because the economics for Hyatt Place and Hyatt House don't work in a lot of those markets. They are more expensive to build. They provide more amenities and a higher quality or a higher level of experience than you would get for an upper mid-scale property. That's really why Hyatt Studios is so perfectly suited to those markets.
We did a lot of research and that we identified 133 markets that qualified through a screen that we put together for the highest potential markets from a, you know, probability of success perspective for Hyatt Studios. We have no representation in almost the entirety of that 133 markets. When I say market, I don't mean 133 hotels. I mean markets which could have more than one Hyatt Studio. You know, it's pretty stark. A lot of the growth that you will have seen amongst our key competitors, has been in upper mid-scale, mid-scale, and now verging into economy. That's where a lot of their growth has been, and we don't play in that space at all.
For us, this is, you know, wide open territory.
Thank you.
Thank you. Let's see. We have, Alex Ringo from Harris Associates with a question. You're in the room. Do you want to, just ask it live?
Yeah. Thanks for taking my question. With the growing importance of loyalty programs and the network effects you get when you integrate M&A, do you think we'll see more consolidation among the big branded chains in the industry?
You know, I think consolidation amongst big companies is always an interesting question because it's not easy to do. I think from our perspective, we do have a differentiated position right now, relative to the other large brand companies. My view is that, you know, the incidence of that is very unpredictable. I think that while there are some benefits, there is also the question of overlap that you have to consider and whether you're sort of running into the same kind of representation that you got in similar markets.
I would just point out that when you do have that circumstance, the growth equation changes because you basically end up with dramatically higher concentrations in certain markets with similar product types, depending on which companies you're talking about putting together. That can and would likely have an impact on future growth just because you're sort of filling out those markets with a lot of capacity, a lot of inventory, a lot of supply. Duane, you also have a question.
Yeah, thanks. Duane Pfenningwerth, Evercore ISI. First, thanks for putting on this event. It's really helpful to kinda put this in context. On all-inclusive, can you speak a little bit about point of sale for the portfolio and frankly for a resort like this? How much of your demand comes from the U.S., and what would be the next kind of two or three biggest markets after the U.S. for all-inclusive?
Generally speaking, it's the U.S. is the largest by far. You then have Canada and Mexico as the next two, and Europe is probably fourth in line. That changed over the course of the pandemic, where Canadians weren't traveling at all to Mexico and the Caribbean. The degree to which we had American customers went up dramatically. Europeans couldn't fly out in large measure. Over the last year or two, it's been almost entirely American. But that's the mix. We have the incidence of where you're getting demand from also changes by market. Cancun, Puerto Vallarta, Los Cabos, very Americas centric. Dominican Republic has a higher degree of European travelers. There's a lot of air lift into Punta Cana.
That's the answer to the sort of mix.
That's helpful. Thanks. Then, just a couple on ALG. You know, we're just fascinated. I'm not just the only one. We're fascinated by this network of agents. Could you speak a little bit about the % direct versus indirect for ALG? Then just comment on the pipeline, how the pipeline has changed since your acquisition.
pipeline for new hotels, you mean?
For ALG.
Yeah. On the ALGV question, the B2B business within ALGV is dramatically larger than the B2C B2C market. I don't know if it's the largest network of travel advisors on a single platform. It is. We have a platform that facilitates. It provides a great deal of booking flow assistance to travel packages. We have a very powerful technology platform called Trisept, which we believe is the most capable packaging, dynamic pricing, embedded packaging platform, packaging software. It's right now much more focused on the travel agent and advisor community. We do have consumer-facing brands, which we are continuing to invest behind and grow. Right now the predominant volume is with B2B. I didn't screw that up, did I?
You're good.
Okay. In terms of the pipeline, we have, as you probably all heard me say on many calls before, an extremely clear and high bar for what we consider pipeline, which is fully signed and fully financed. We have a large number of projects that are under discussion with existing owners. These are people that we've been in business with for 15 or 20 years. They have significant capital base. They understand the company and what they're doing and being able to execute on constructing hotels. We have high confidence that a lot of those conversations will yield true pipeline going forward. The pipeline is evolving and growing. It's growing in 2 dimensions. One is existing owners that continue to expand what they're doing.
In some cases, that's expanding the room count on an existing property. We have 1 owner immediately north of here, that is not just expanding room count, they're actually building 2 new properties, by the way, under our brands. That's not in the pipeline yet because we haven't gotten to final signature. You know, these are examples of things that are imminent that we will then be able to count in the pipeline. The other flavor of opportunities that we've seen and continue to see more of are portfolio deals. These are family-owned businesses, largely, which have gotten through the pandemic, but have recognized that this vertical integrated approach that we provide is pretty powerful and maybe more powerful than what they can deliver. They're looking for ways to tap into that and become a part of the network.
I would call those portfolio deals that we're working on currently. The company has successfully executed on similar deals in the past. There was a family-run organization in Europe called ROC Hotels , R-O-C, that became part of the, excuse me, AMR platform before we acquired the company. We're working on a number of those kinds of things right now. I think you'll see the growth of the ALG portfolio grow with pre-existing owners, some new owners, and by way of, I guess, you would call it conversion, but I refer to it as portfolio deals.
Introducing Hyatt owners to the brand as well.
That's true.
The hotels in Bulgaria that we converted.
Yep.
was an existing Hyatt-
Right.
-legacy owner, they had all-inclusive hotels in Bulgaria.
That's right.
had chosen to convert their hotels once shortly after we acquired the platform.
We've also seen it reverse. We have a pre-existing AMR owner who was developing a hotel in Mexico City and said, "Wait a second. You guys now own AMR or ALG. I'm gonna actually brand this hotel that I'm building in Mexico City with you." It is now the Andaz in Condesa in Mexico City, now open. By the way, a really wonderful property if you get to Mexico City. Smedes Rose. This is not a live question.
It is live.
He's right here.
He's Wait. There you are. Sorry about that. What am I saying? Do you wanna ask live?
Sure.
Okay.
It's Smedes Rose from Citi. My question's about the loyalty program. The World of Hyatt members comprise certainly a lower proportion of system-wide occupancy versus your other larger competitors. I wanted to ask you when you think that might catch up and, you know, to what do you attribute some of the differences?
A couple things, Smedes Rose. First, we have a higher proportion of group business than our competitors. Group business doesn't qualify for World of Hyatt points, therefore, they're not counted as World of Hyatt stays. There's a structural difference between our composition and some of our primary competitors. Secondly, I would look at rate of change equal to just total penetration, you have to look at it by chain scale as well. We have similar. We're probably maybe 5 points below or something like that in the upscale extended stay Hyatt House category. That number at the bottom of the comparative brands is Hyatt Regency, which is primarily due to the group differences that I just mentioned.
We've grown, I wanna say, like 1,000 basis points over the last 6 or 7 years, Mark, in penetration, something like that. We're in the 40s, and I think that we are seeing our way clear to higher and higher penetration levels. Our America's full-service hotels most recently posted, I think this was a first-quarter number, if I'm not mistaken, over 50%. We have continued to grow the penetration levels, and I think that that is that pathway that we continue to see as our future. A lot of the initiatives that Mark Vondrasek talked about are designed to provide more and more reasons for people to be World of Hyatt members and book within the Hyatt system.
I think it's both differentiation in terms of experiences, but it's also network effect and distribution. That's why Hyatt Studios is really important to us. We do see the stats I provided before, members that are not staying with us, but 60% of the time it's because we're not there. That is a specific intentional move to try to capture more in-system stays and elevate the penetration across the entire brand portfolio.
Thank you.
Thanks. Bill Crow.
Thank you. Bill Crow, Raymond James. I've got one question for each of you if that's okay.
Sure.
John, let's start with you. You talked about $3 billion of capital available for value creation over the next couple of years. Could you give us some specifics on how we should, you know, think about share repurchases as a percentage of that? Your peers certainly do offer ranges. Can you give us anything specific to think about?
Yeah. I think the fact is it's gonna depend on the pace of our asset dispositions. We have some debt to pay down and I think asset dispositions, potential acquisitions will yield the answer. We do expect that over time, as we have better visibility to the asset sales, we will be able to give you more specific outlook for expectation for the range of what we're gonna be buying back in given points in time. As you pointed out, we do have enough capital to probably satisfy the M&A needs that we've got but still have a predictable share repurchase program level. Given the capital markets, debt capital markets, it's not as predictable, and therefore, I would say we don't feel comfortable giving you a very hard estimate for this year or into next year.
Maybe by next year, things will have settled out. We'll have a better handle on the timing of our asset dispositions and be able to provide you with more detail on what we expect to be buying back.
Thanks, Mark. The other question was focused really on the new Hyatt Studios brand and why it took so long to roll out a brand at that price point, given all the white space that you talk about and you have. I'm wondering, internally, are you working on additional brand introductions, or should we think about M&A opportunities to add the kind of the feeder brands into your system?
Yeah. I know that this is not the point of your question about how long it took, but I'm not sure that there's ever been a brand that went from initial meeting to announcement with commitments in five months. Just don't think it's ever happened. I would say in terms of the actual micro-analysis of the brand development and announcement, eventual launch, I call launch like the first hotel opening, you know, I'm pretty sure that that's never happened before. We're pretty proud of the fact that we're demonstrating what this agile approach to doing business actually looks like and bringing it to life. As you've seen, we've been extraordinarily busy with the acquisition of a number of platforms.
Every single case, we recognized that the true value creation would come in being able to continue to grow the brands that we were acquiring. We wanted to be very deliberate and very planful about how we did that. In some cases, we fully integrated into existing Hyatt the existing Hyatt structure. In other cases, we continued to operate as a standalone, and then over time, begin to integrate where it made sense to. The former is Two Roads, the latter is ALG. I would say that we've had our attention really focused on making sure that these didn't turn out to be good deals, but phenomenal deals, and I think we've achieved that.
In the context of that, it was more important for us to cement our position in these key markets, and ALG was a very large financial commitment as well. That took a lot of our time and attention. With respect to the upper mid-scale extended stay market, the fact is that we, I guess, along with others, because after we announced Hyatt Studios, we had two announcements. What do they call them? You guys wrote the word like hints or teases, I think, as someone used the word teases. Was that you, Mike? Just checking. Hilton teased and Marriott teased. I guess emulation is the greatest form of flattery. We're very flattered. I guess others paid attention to the same dynamic that we saw over the last couple of years.
The fact is that, you know, we're first to market. We already have 100 LOIs in hand and as we said before, a lot of white space. We always believed. We've been talking about upper midscale for years, we always believed that we wanted to have something that we could start with contiguous with Hyatt Place. We don't believe in having gaps in our portfolio from a network effect perspective. We looked at many other brands, by the way, that came for sale and got sold, and you would have ended up with a, with a dead space between Hyatt Place and that brand, and we passed because then you end up with like a bimodal distribution of members and of propositions. Doesn't make sense to us.
Create the network effect and have that amplify. That's our belief. This just looked like the perfect way to do that, and we can differentiate it. We will... we haven't announced the details, but we will have a differentiated food and beverage experience, but still very efficiently delivered with a really, really tight operating model. With the help of developers who designed this with us, we feel really confident about the future there. Thank you.
Yep. Over here. There's a question.
Please.
Hi. Thank you for taking the time, and thank you for inviting us to this wonderful resort. My husband is certainly enjoying it right now. My questions are kind of ballpark, what percentage of your hotel are owned by high-net-worth individuals or sovereign wealth funds versus institutions? And in your pipeline, what that mix is. And you mentioned fully financed. Does that mean that... Is it just a commitment at market interest rate, or is it like, you're locked in the rate already?
With respect to your first question, are you talking about globally?
Yeah, globally.
I would say sovereign wealth represents a pretty small percentage.
Okay.
-of our total ownership base. The ownership base looks vastly different by market. In the United States, it's mostly merchant developers or large development companies, public REITs, private REITs, and some private equity funds and some individuals. In Europe, it's largely families and funds, and sometimes it's a family-funded fund. Sometimes they mix. In Asia, it's we do have state-owned enterprises in China that represent a large proportion of our hotel ownership base and a large proportion of our pipeline. We also have some privately funded developers that are not state-owned or state controlled. In Japan, it's largely families. It varies so much by market that it's not really easy to generalize. Second question again was?
Yeah. Sorry. Forgot to introduce myself. Weixin Lin from Aristotle. It's just.
My second question is, you know, you guys have been so successful in luxury, and I guess copying is the greatest form of flattery. You see Accor and IHG kind of putting more focus on luxury and lifestyle. Kind of what do you think about that? Is there increased competition? When you go into a market where there's already another hotel, like, how do you know that, you know, you're creating excess supply and the demand doesn't really catch up to it, basically? Both you guys and Accor and IHG, they're all doing this, basically.
Yeah. I would add Hilton and Marriott and keep going. Shangri-La and Mandarin and Peninsula, and I can keep going. Four Seasons. It's a large number of people involved in that market. Luxury to me has a couple of different dimensions and a couple of different expressions. Sometimes it's traditional luxury. We actually don't play in traditional luxury other than through the Unbound Collection. The Unbound Collection has a stunning collection of traditional luxury hotels. The Martinez in Cannes, the Hotel du Louvre in Paris, the Hôtel du Palais that Napoleon III built for the palace that he built for his mistress. I could keep going. It's just a remarkable set of hotels. Very, very high rated, very luxury-focused customer base. Park Hyatt is contemporary luxury. Very, very firmly cemented in that space.
We compete globally. We don't complete a number of deals that other brands actually do complete. That's an active choice as opposed to we weren't in the running. Oftentimes, the brand-building desire by some of the bigger brand organizations is so high that they do deals that we wouldn't be prepared to do financially. They're too thin or negative, net negative. We're pretty disciplined about what we do. Where we have found more traction is in lifestyle, luxury and lifestyle forum. Thompson, Andaz, Alila, super tremendous high growth rates in those brands. That's where the center of gravity is moving. We're thrilled to have a number of brands with shots on goal. This hotel, the Impression brand within the ALG portfolio, it's every bit...
I'll leave it to you to decide, I think this is every bit a luxury hotel, and I would go head-to-head with this product and this service and this food and beverage against any of the brands that I mentioned earlier. Any one of them. To me, this is true luxury. Yes, it's in an all-inclusive format, but last time I checked, some of our competitors are taking their existing European plan luxury brands and slapping on an all-inclusive moniker for selected developments. Let's face it, I think there's some followership going on here, but they don't have the brand portfolio that we do. Or the customer base that we do or the vertically integrated model that we do. That's why I'm so positive and optimistic.
I think we have time for one more question. We have a this is emailed in from our live stream audience. "What are the specific drivers of value that analyst models might not be fully valuing in the nearer and longer term?" Let me read it down here. "In other words, what areas do investors misunderstand that may be core to incorporating either growth or risk?" Boy, it's a long list, I think.
I'll.
I'm sorry.
How about I start on that? you know, we get a lot of questions about the ALG business model. when we acquired the business and did the underwriting, it quickly became evident as we dug in to the model, to the vacations business, to the club, understanding the marketing services business really well, how the power of the network effect of these three asset-light businesses really complement one another, provide us data and information about leisure, generally speaking, through the technology that we have in vacations. We went through today.
The reason why we went through all of what we did around ALG today and what I demonstrated through the asset-light attributes of these businesses, the durability of them, and the growth trajectory that we are confident in into the future. These sorts of questions we've been answering, and today, hopefully, we have brought you all up that learning curve as far as the power of this network and the potential for growth going into the future.
I would add two things. I think you have seen, and we have stated very unequivocally, very clearly, that we are on an inexorable journey towards asset light. By the way, I don't pretend that we're gonna get to zero. I don't think any company in the industry is at zero. If they say they're at zero, that's only because they found inventive ways tucked away in their commitments and other footnotes that you can't tell that they've got massive real estate exposure. I won't name any names, but you can read I'm sure you're all qualified to read financial statements yourselves. It's not zero, but it is a clear path of travel for us, and that's the journey that we're on. That will continue to unlock value.
Second, I have two comments on the two particular businesses. The reason we spent time on UVC today is because it's a business that is not very commonplace in the purview of the kinds of companies that this group here covers. What we demonstrated, I hope you got this, the correlation between what that business is and what its growth looks like in member base and the room count within the network of ALG is in lockstep. Absolute lockstep. It's a completely asset-light platform. UVC and the ALG Hotels business are inextricably linked, and they are interdependent in a complete way. As far as I'm concerned, there's nothing to differentiate the nature and value of the cash flow being generated by that business from the hotel management business. Nothing whatsoever.
The third thing that you will have heard is that Ray and his team at ALG Vacations they've fundamentally transformed the vacations platform from a very low margin business to a high teens margin business. They did that with tremendous focus. Ray said that COVID-19 turned out to be a silver lining moment. The business has produced record levels of earnings, and the cash flow conversion is extraordinarily high. It's got a system. We make investments behind the system platform that we've got to continue to be the leaders, but that business is every bit as durable as the leisure business in our hotel company because that's what it is. They're serving leisure customers.
I hope that, in case any of this was missed or lost on you, that we have demonstrated more clearly why we think that those companies should look and feel from a cash flow perspective and from a valuation perspective like our hotel business. They are tied together, and in UVC and the ALG portfolio, the ALG hotel business, basically inextricably linked. They are tied at the hip in every respect. I think those are some of the things that I hope you all have paid attention to and heard over the course of time. I think we have to wrap up now.
I wanna thank each and every one of you for making the time and taking the effort to be here because there's no substitute for experiencing this to really understand what luxury all-inclusive is all about. Secondly, as Tom invited everyone who's streaming in, please come and visit. Like I said, there's no substitute, and I'm sure many of you need a break. Take a vacation. Book it through ALG Vacations and come and have a great holiday at one of our properties. Finally, I wanna thank the Hyatt family. I wanna thank the Hyatt family members at this hotel. And it's led by Eric, who's in the back there, our general manager.
I wanna thank you all for remarkable hospitality and an incredible meeting experience to our adopted Hyatt family members in Walsh Productions. Most importantly, I wanna thank my team and Tom. We, in my opinion, I've been in this industry for a long time now, witnessed a lot of changes in management teams over time. This is gonna sound very not humble, but I think we have the best team in the industry, period. I certainly feel that way. I feel tremendously supported, and I feel like the luckiest CEO in the business. I wanna say thank you to my team. Thank you all.