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The ongoing global COVID-19 pandemic has negatively affected and will continue to negatively affect our business, financial condition and results of operations.
−Removed: The COVID-19 pandemic has significantly affected the global economy and strained the hospitality industry due to travel restrictions and stay-at-home directives that have resulted in cancellations and reduced travel around the world, as well as complete and partial suspensions of certain hotel operations for an indeterminate duration.
−Removed: Although there are effective vaccines for COVID-19 that have been approved for use, distribution of the vaccines did not begin until late 2020, and a majority of the public will likely not have access to a vaccination until sometime in 2021.
−Removed: In addition, new strains of the virus appear to have increased transmissibility, which could complicate treatment and vaccination programs.
−Removed: As such, the COVID-19 pandemic has had a material negative impact on our results for the year ended December 31, 2020, and will continue to negatively affect future results.
+Added: The COVID-19 pandemic has significantly affected the global economy and strained the hospitality industry due to travel restrictions and advisories, stay-at-home directives, limitations on public gatherings and modified work arrangements, all of which have resulted in cancellations and reduced travel around the world, as well as complete and partial suspensions of certain hotel operations.
+Added: Although distribution of approved vaccines for COVID-19 began in late 2020 and continued throughout 2021, access to and acceptance of vaccines has varied across regions and within individual countries.
+Added: In addition, new strains of the virus have had increased transmissibility, complicating treatment and vaccination programs.
+Added: As such, the COVID-19 pandemic had a material negative impact on our results for the year ended December 31, 2021 and will continue to negatively affect future results.
+Added: The long-term effects of the COVID-19 pandemic on our business and the travel industry at large remain uncertain and will depend on future developments, including, but not limited to, the duration and severity of increases in serious illnesses, if any, the availability and public acceptance of vaccinations and other treatments to combat COVID-19 and the length of time it takes for demand and pricing to stabilize and normal economic and operating conditions to resume.
The current and uncertain future impact of the COVID-19 pandemic, including its effect on the ability or desire of people to travel and use our hotel properties for lodging, food and beverage and other services, is expected to continue to negatively affect our results, operations, outlook, plans, growth, cash flows and liquidity.
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and other national and local governments have imposed travel restrictions at various times and, in some countries and U.S.
−Removed: states, re-imposed such restrictions, and a number of our hotels have fully or partially suspended operations.
−Removed: We have been and expect to continue to be negatively affected by additional governmental regulations and travel advisories to fight the pandemic, including recommendations by the U.S.
−Removed: Department of State, the Centers for Disease Control and Prevention and the World Health Organization.
−Removed: We cannot predict when any of our hotels that have completely or partially suspended operations will be able to fully reopen, the conditions upon which a full reopening may occur or the effects of any such conditions.
−Removed: We also cannot predict if any of our hotels that are currently operational will have to completely or partially suspend operations in the future.
−Removed: Moreover, even where travel advisories and restrictions have been lifted, travel demand has been and is likely to remain weak for a significant length of time and we cannot predict if or when our properties will return to pre-pandemic demand or pricing.
−Removed: Although we have implemented new hygiene and cleaning standards, we cannot fully predict their impact on people believing it is safe to travel.
−Removed: Adverse changes in the perceived or actual economic climate, including higher unemployment rates, declines in income levels and loss of personal wealth resulting from the impact of the COVID-19 pandemic, will also negatively affect travel demand.
−Removed: The steps we have taken to reduce operating costs, including temporarily reducing compensation, reducing our workforce and furloughing a substantial number of our employees, and further steps we may take in the future to reduce costs for us or our third-party hotel owners, may negatively affect our brand reputation and ability to attract and retain employees.
−Removed: If our furloughed employees do not return to work with us when the COVID-19 pandemic subsides, including because they find new jobs during the furlough, we may face operational challenges that could negatively affect hotel results, guest experience and loyalty.
−Removed: We also may face demands or requests from labor unions that represent employees at our hotels for additional compensation, healthcare benefits or other terms, including making payments to underfunded multi-employer pension plans for covered union employees, as a result of the pandemic that could increase costs, and we could experience labor issues as we implement our mitigation plans.
+Added: states, re-imposed such restrictions, and a number of our hotels fully or partially suspended operations, primarily during 2020, but also during 2021.
+Added: We have been and expect to continue to be negatively affected by additional governmental regulations and travel restrictions or advisories to fight the pandemic, including recommendations by the U.S.
+Added: Department of State, the Centers for Disease Control and Prevention and the World Health Organization, along with other governmental and health and safety authorities.
+Added: Although nearly all of our hotels that completely or partially suspended operations at some point during 2020 and 2021 have fully reopened, we cannot predict if any of our hotels will have to completely or partially suspend operations in the future.
+Added: Moreover, even where travel advisories and restrictions have been lifted, travel demand has been weak for periods of time, and we cannot predict if or when our hotels and resorts will return to pre-pandemic demand or pricing.
+Added: Although we have implemented enhanced hygiene and cleaning standards and other protocols to protect our guests and employees, we cannot fully predict their impact on public perception regarding travel-related COVID-19 risks.
+Added: Adverse changes in the perceived or actual economic climate, including higher unemployment rates, inflation, declines in income levels and loss of personal wealth resulting from the impact of the COVID-19 pandemic, may also negatively affect travel demand.
+Added: Conversely, rapid increases in demand also could pose challenges due to labor shortages.
+Added: The steps we took in 2020 to reduce operating costs, including temporarily reducing compensation, reducing our workforce and furloughing a substantial number of our employees, and further steps we may take in the future to reduce costs for us or our third-party hotel owners may negatively affect our brand reputation and ability to attract and retain employees.
+Added: Some hotels have faced challenges restaffing to pre-pandemic levels, which may negatively affect hotel results, guest experience and loyalty.
+Added: We also may face demands or requests from labor unions that represent employees at our hotels for additional compensation, healthcare benefits or other terms, including making payments to underfunded multi-employer pension plans for covered union employees, as a result of the pandemic that could increase costs, and we could experience labor issues if we have to implement further mitigation plans.
Even after the COVID-19 pandemic subsides, we could still experience long-term impacts on our operating costs as a result of attempts to counteract future outbreaks of COVID-19 or other viruses through, for example, enhanced health and hygiene requirements or other such measures in one or more regions.
−Removed: We cannot predict the full impact that the COVID-19 pandemic will have on our partners, such as third-party owners of our properties, third-party service providers, travel agencies, suppliers and other vendors.
−Removed: In particular, if third-party owners of our hotels are unable to maintain their hotels and service indebtedness secured by their hotels, our results of operations and reputation could suffer.
−Removed: Third-party owners of our hotels have experienced financing difficulties and significant declines in revenues, thereby making it more likely that they could declare bankruptcy or face other difficulties with their lenders or other creditors.
−Removed: Bankruptcies, sales or foreclosures involving our hotels could, in some cases, result in the termination of our management or franchise contracts and eliminate our anticipated income and cash flows, including amounts currently due to us under existing agreements, which would negatively affect our results of operations.
−Removed: Hotel owners with financial difficulties have been and may continue to be unable or unwilling to pay us amounts that we are entitled to under our existing contracts on
−Removed: a timely basis or at all.
−Removed: Current and ongoing economic conditions also could affect our ability to enter into management and franchise contracts with potential third-party owners of our hotels, who may be unable to obtain financing or face other delays in developing hotel projects.
−Removed: As a result, some properties in our development pipeline may not enter our system when we anticipated, or at all, and new hotels may enter our pipeline at a slower rate than in the past, thereby negatively affecting our overall growth.
+Added: The COVID-19 pandemic has had a negative impact on our partners, including third-party owners of our properties, third-party service providers, travel agencies, suppliers and other vendors.
+Added: In particular, third-party owners of our hotels have experienced financing difficulties and significant declines in revenues, thereby making it more difficult for them to maintain their hotels and service their indebtedness.
+Added: This in turn makes it more likely that they could declare bankruptcy or face other difficulties with their lenders or other creditors.
+Added: Bankruptcies, sales or foreclosures involving our hotels could, in some cases,
+Added: result in the termination of our management or franchise contracts and eliminate our anticipated income and cash flows, including amounts currently due to us under existing agreements, which would negatively affect our results of operations.
+Added: Hotel owners with financial difficulties have been and may continue to be unable or unwilling to pay us amounts that we are entitled to under our existing contracts on a timely basis or at all.
+Added: Current and ongoing economic conditions also could affect our ability to enter into management and franchise contracts with potential third-party owners of our hotels, who may be unable to obtain financing or face other delays or cost pressures in developing hotel projects.
+Added: As a result, some properties in our development pipeline have entered our system later than we anticipated, and new hotels may enter our pipeline at a slower rate than in the past, thereby negatively affecting our overall growth.
Likewise, if we or our hotel owners or franchisees are unable to access capital to make physical improvements to our hotels, the quality of our hotels may suffer, which may negatively impact our reputation and guest loyalty, and our market share may suffer as a result.
We may be required to raise additional capital in the future, and our access to and cost of financing will depend on, among other things, global economic conditions, conditions in the global financing markets, the availability of sufficient amounts of financing, our prospects and our credit ratings.
−Removed: Certain of our credit ratings have been downgraded or placed on credit watch, and if our credit ratings were to be further downgraded, or general market conditions were to ascribe higher risk to our rating levels, our industry or us, our access to capital and the cost of any debt financing would be negatively affected.
+Added: Certain of our credit ratings have been downgraded or placed on credit watch, and if our credit ratings were to be further downgraded, or general market conditions were to ascribe higher risk to our credit rating levels, our industry or us, our access to capital and the cost of any debt financing would be negatively affected.
In addition, the terms of future debt agreements could include more restrictive covenants, or require incremental collateral, which may further restrict our business operations.
There is no guarantee that debt financings will be available in the future to fund our obligations, or that they will be available on terms consistent with our expectations.
−Removed: In addition, because of reduced travel demand, certain of our leased properties will not generate revenue sufficient to meet operating expenses, which may include rent due to the landlords of those properties.
−Removed: If or when we determine the value of our leased properties or the carrying value of other assets has significantly declined, we have recognized, and may in the future recognize, significant non-cash impairment charges to our results of operations.
+Added: In addition, because of reduced travel demand, certain of our leased properties have or may not generate revenue sufficient to meet operating expenses, which may include rent due to the landlords of those properties.
+Added: If or when we determine the value of our leased properties or the carrying value of other assets has significantly declined, we may recognize, as we did in 2020, significant non-cash impairment charges in our results of operations.
Further, to the extent the COVID-19 pandemic significantly impacts spending patterns of Hilton Honors co-branded credit cardholders or the acquisition of new cardholders, we will receive lower license fees under our co-branded credit card arrangements.
−Removed: The COVID-19 pandemic has significantly increased economic and demand uncertainty and could cause a global recession, which would have a further adverse impact on our financial condition and operations.
−Removed: The significant increase in unemployment in the U.S.
−Removed: and other regions due to the adoption of social distancing and other policies to slow the spread of COVID-19 continues to have a sustained negative impact on travel demand.
−Removed: The extent of the effects of the COVID-19 pandemic on our business and the travel industry at large remains highly uncertain and will ultimately depend on future developments, including, but not limited to, the duration and severity of the outbreak, the timing and availability of vaccinations and other treatments to combat COVID-19 and the length of time it takes for demand and pricing to stabilize and normal economic and operating conditions to resume.
−Removed: Given the uncertainty as to the extent and timing of the potential future spread or mitigation of COVID-19 and the imposition or relaxation of protective measures, we are presently unable to estimate the full impact to our future results of operations, cash flows or financial condition.
−Removed: Additionally, the COVID-19 pandemic could negatively affect our internal controls over financial reporting as we have reduced our workforce and placed many of our employees on temporary furlough.
−Removed: Our remaining employees have been required to work from home and, therefore, new processes, procedures and controls could be required to respond to changes in our business environment.
−Removed: Further, should any key employees become ill from COVID-19 and unable to work, the attention of our management team could be diverted.
−Removed: The potential effects of the COVID-19 pandemic also could intensify or otherwise affect many of our other risk factors described below, including, but not limited to, risks inherent to the hospitality industry, macroeconomic factors beyond our control, competition for hotel guests and management and franchise contracts, risks related to doing business with third-party hotel owners, performance of our information technology systems, growth of reservation channels outside of our system, risks of doing business outside of the U.S.
+Added: The potential effects of the COVID-19 pandemic also could intensify or otherwise affect many of our other risk factors described below, including, but not limited to, risks inherent to the hospitality industry, macroeconomic factors beyond our control, such as challenges due to labor shortages and supply chain disruptions, competition for hotel guests and management and franchise contracts, risks related to doing business with third-party hotel owners, performance of our information technology systems, growth of reservation channels outside of our system, risks of doing business outside of the U.S.
and risks related to our indebtedness.
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• changes in operating costs, including employee compensation and benefits, energy, insurance and food and beverage;
−Removed: • increases in costs due to inflation or other factors that may not be fully offset by increases in revenues in our business;
+Added: • increases in costs due to inflation or other factors that may not be fully offset by increases in revenues in our business, as well as increases in overall prices and the prices of our offerings due to inflation, which could weaken consumer demand for travel and the other products we offer and adversely affect our revenues;
• changes in taxes and governmental regulations that influence or set wages, prices, interest rates or construction and maintenance procedures and costs;
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• changes in the supply and demand for hotel services, including rooms, food and beverage and other products and services;
+Added: • the costs required for climate change initiatives, including those resulting from regulatory changes or stakeholder or customer expectations.
Any of these factors could increase our costs or limit or reduce the prices we are able to charge for hospitality products and services, or otherwise affect our ability to maintain existing properties or develop new properties.
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These factors include, but are not limited to:
−Removed: • changes in general economic conditions, including low consumer confidence, increases in unemployment levels and depressed real estate prices resulting from the severity and duration of any downturn in the U.S.
−Removed: or global economy;
+Added: • changes in general economic conditions, including inflation, supply chain disruptions, low consumer confidence, increases in unemployment levels and depressed real estate prices resulting from the severity and duration of any downturn in the U.S.
+Added: or global economy and financial markets;
• conditions that negatively shape public perception of travel or result in temporary closures or other disruption at our hotel properties, including travel-related accidents, outbreaks of pandemic or contagious diseases, such as COVID-19, Ebola, Zika, avian flu, severe acute respiratory syndrome ("SARS"), H1N1 (swine flu) and Middle East Respiratory Syndrome ("MERS");
−Removed: • geo-political activity, political unrest, and governmental action and uncertainty resulting from U.S.
−Removed: and global political trends and policies, including potential barriers to travel, trade and immigration;
−Removed: • war, political instability or civil unrest, terrorist activities or threats and heightened travel security measures instituted in response to these events;
+Added: • geo-political activity, political and social unrest and governmental action and uncertainty resulting from U.S.
+Added: and global political and social trends and policies, including potential barriers to travel, trade and immigration;
+Added: • war, political instability or civil unrest, terrorist activities or threats and resulting heightened travel security measures, any of which may foreclose travel to certain locales or decrease the appeal of travel among the general population;
• decreased corporate or government travel-related budgets and spending, as well as cancellations, deferrals or renegotiations of group business, such as industry conventions;
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• cyber-attacks;
−Removed: • climate change or availability of natural resources;
+Added: • the impact of climate change or availability of natural resources;
• natural, climate-related or man-made disasters and extreme weather conditions, including earthquakes, tsunamis, tornadoes, hurricanes, typhoons, floods, wildfires, volcanic eruptions, oil spills and nuclear incidents;
+Added: • labor shortages, which could restrict our ability to efficiently operate or grow our business and/or increase our costs;
• organized labor activities, which could cause a diversion of business from hotels involved in labor negotiations and loss of business for our hotels generally as a result of certain labor tactics;
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The periods during which our properties experience higher revenues vary from property to property, depending principally upon their location, type of property and competitive mix within the specific location and may change with changes in overall availability of lodging and hospitality options within a local market.
−Removed: Based on historical results, we generally expect our revenues to be lower in the first quarter of each year than in each of the three subsequent quarters.
−Removed: However, the timing and effects of the COVID-19 pandemic resulted in the first quarter of 2020 being the strongest quarter in the year, as the remainder of the year was more significantly impacted by reduced occupancy due to travel restrictions, safety concerns and the complete and partial suspensions of hotel operations.
+Added: Based on historical results, we generally expect our revenues to be lower in the first quarter of each year than in each of the three subsequent quarters, and this was the case in 2021, as our recovery from the effects of the COVID-19 pandemic progressed through the year as vaccines and treatments became more widely available.
In addition, the hospitality industry is cyclical and demand generally follows the general economy on a lagged basis.
−Removed: We and our hotel owners experienced a
−Removed: downturn in the current industry cycle driven by the COVID-19 pandemic.
−Removed: We expect to enter into a recovery phase in our industry cycle as vaccines and treatments become more widely available.
The seasonality and cyclicality of our industry may contribute to fluctuations in our results of operations and financial condition.
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Our ability to compete effectively is based primarily on the value and quality of our management services, brand name recognition and reputation, our access to and willingness to invest capital, availability of suitable properties in certain geographic areas, the overall economic terms of our contracts and the economic advantages to the property owner of retaining our management services and/or using our brands.
−Removed: If the properties that we manage or franchise perform less successfully than those of our competitors, if we are unable to offer terms as favorable as those offered by our competitors or if the availability of suitable properties is limited, we may not be able to compete effectively for new management or franchise contracts could be reduced.
+Added: If the properties that we manage or franchise perform less successfully than those of our competitors, if we are unable to offer terms as favorable as those offered by our competitors or if the availability of suitable properties is limited, we may not be able to compete effectively for new management or franchise contracts.
Any deterioration in the quality or reputation of our brands could have an adverse effect on our reputation, business, financial condition or results of operations.
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If our brands become obsolete or consumers view them as unfashionable, unsustainable or lacking in consistency and quality, we may be unable to attract guests to our hotels, and may further be unable to attract or retain our hotel owners.
−Removed: Changes in ownership or management practices, perceptions of our environmental, social or governance practices, perception of guest or employee health or safety, the occurrence of accidents or injuries, cyber-attacks, security breaches, natural disasters, crime, failure of suppliers, franchisees or business partners to comply with relevant requirements (including environmental, human rights and labor requirements), individual guest, owner or employee notoriety or similar events at our hotels and resorts can harm our reputation, create adverse publicity and cause a loss of consumer confidence in our business.
+Added: Changes in ownership or management practices, perceptions of our ESG practices, perception of guest or employee health or safety, the occurrence of accidents or injuries, cyber-attacks, security breaches, natural disasters, crime, failure of suppliers, franchisees or business partners to comply with relevant requirements (including environmental, human rights and labor requirements), individual guest, owner or employee notoriety or similar events at our hotels and resorts can harm our reputation, create adverse publicity and cause a loss of consumer confidence in our business.
Because of the global nature of our brands and the broad expanse of our business and hotel locations, events occurring in one location could negatively affect the reputation and operations of otherwise successful individual locations.
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Such an incident also could subject us to legal actions, including litigation, governmental investigations or penalties, along with the resulting additional adverse publicity.
−Removed: decline in the quality of our brands or damage to our reputation could adversely affect our business, financial condition and results of operations.
+Added: A perceived decline in the quality of our brands or damage to our reputation could adversely affect our business, financial condition and results of operations.
Our business is subject to risks related to doing business with third-party property owners that could adversely affect our reputation, operational results or prospects for growth.
−Removed: Unless we maintain good relationships with third-party hotel owners and renew or enter into new management and franchise contracts, we may be unable to expand our presence and our business, financial condition and results of operations may suffer.
+Added: Unless we maintain good relationships with third-party hotel owners and renew or enter into new management and franchise contracts, we may be unable to maintain or expand our presence and our business, financial condition and results of operations may suffer.
Our business depends on our ability to:
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Our ability to meet these financial and performance criteria is subject to, among other things, risks common to the overall hospitality industry, including factors outside of our control.
−Removed: In addition, negative management and franchise pricing trends could adversely affect our ability to negotiate with hotel owners.
+Added: In addition, negative management and franchise pricing trends in the industry more broadly could adversely affect our ability to negotiate with hotel owners.
If we fail to maintain and renew existing management and franchise contracts or enter into new contracts on favorable terms, we may be unable to expand our presence and our business, and our financial condition and results of operations may suffer.
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Growth of our business is affected, and may potentially be limited, by factors influencing real estate development generally, including site availability, financing, planning, zoning and other local approvals.
−Removed: In addition, market factors such as projected room occupancy, changes in growth in demand for customers compared to projected supply, geographic area restrictions in management and franchise contracts, costs of construction and anticipated room rate structure, if not managed effectively by our third-party owners could adversely affect the growth of our management and franchise business.
+Added: In addition, market factors such as projected room occupancy, changes in growth in demand for customers compared to projected supply, geographic area restrictions in management and franchise contracts, costs and availability of construction labor and materials and anticipated room rate structure, if not managed effectively by our third-party owners could adversely affect the growth of our management and franchise business.
If our third-party property owners are unable to repay or refinance loans secured by properties, or to obtain financing adequate to fund current operations or growth plans, our revenues, profits and capital resources could be reduced and our business could be harmed.
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In addition, the owners of managed and franchised hotels depend on financing to develop or buy and improve hotels and in some cases, fund operations during down cycles.
−Removed: Our hotel owners’ inability to obtain adequate funding could materially adversely affect the maintenance and improvement plans of existing hotels, result in the delay or stoppage of the development of our existing development pipeline and limit additional development to further expand our hotel portfolio.
+Added: Our hotel owners’ inability to obtain adequate funding could materially adversely affect the operation, maintenance and improvement plans of existing hotels, result in the delay or stoppage of the development of our existing development pipeline and limit additional development to further expand our hotel portfolio.
If our third-party property owners fail to make investments necessary to maintain or improve their properties, guest preference for Hilton brands, Hilton's reputation and performance results could suffer.
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In addition, if third-party property owners fail to observe standards or meet their contractual requirements, we may elect to exercise our termination rights, which would eliminate revenues from these properties and cause us to incur expenses related to terminating these contracts.
−Removed: We may be unable to find suitable or offsetting replacements for any terminated relationships.
−Removed: Contractual and other disagreements with third-party property owners could make us liable to them or result in litigation costs or other expenses.
+Added: We may be unable to find suitable or offsetting replacements for any individually terminated hotels or broader third-party owner relationships.
+Added: Contractual and other disagreements with third-party property owners could make us liable to them or result in litigation costs or other expenses or termination of existing management or franchise contracts.
Our management and franchise contracts require us and our hotel owners to comply with operational and performance conditions that are subject to interpretation and could result in disagreements.
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Some of our existing development pipeline may not be developed into new hotels, which could materially adversely affect our growth prospects.
−Removed: As of December 31, 2020, we had nearly 2,570 hotels in our development pipeline, which we define as hotels under construction or approved for development under one of our brands.
+Added: As of December 31, 2021, we had 2,668 hotels in our development pipeline, which we define as hotels under construction or approved for development under one of our brands.
The commitments of owners and developers with whom we have contracts are subject to numerous conditions, and the eventual development and construction of our development pipeline, in particular for hotels not currently under construction, is subject to numerous risks, including, in certain cases, the owner's or developer's ability to obtain adequate financing and governmental or regulatory approvals.
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• governmental regulations relating to real estate ownership or operations, including tax, environmental, zoning and eminent domain laws;
−Removed: • fluctuations or loss in value of real estate or potential impairments in the value of our assets due to changes in market conditions in the area in which real estate or assets are located;
+Added: • fluctuations or loss in value of real estate or potential impairments in the value of our assets, such as that which occurred in 2020 as a result of the COVID-19 pandemic, due to changes in market conditions in the area in which real estate or assets are located;
• increased potential civil liability for accidents or other occurrences on owned or leased properties;
−Removed: • the ongoing need for capital improvements and expenditures funded by us to maintain or upgrade properties and contractual requirements to deliver properties back to landlords in a particular state of repair and condition at the end of a lease term;
+Added: • the ongoing need for capital improvements and expenditures funded by us to maintain or upgrade properties, some of which were constructed many years ago, and contractual requirements to deliver properties back to landlords in a particular state of repair and condition at the end of a lease term;
+Added: • construction delays, lack of availability of required construction materials or cost overruns (including labor and materials) related to necessary capital improvements of owned and leased properties;
• periodic total or partial closures due to renovations and facility improvements;
• risks associated with any mortgage debt, including the possibility of default, fluctuating interest rate levels and uncertainties in the availability of replacement financing;
+Added: • the inability to rebuild a property that has been damaged or destroyed by casualty, including a climate-related weather event, as a result of governmental regulations;
+Added: • the inability to renew our leases on favorable terms or at all;
+Added: • our limited ability to influence the decisions and operations of joint ventures in which we have a minority interest;
+Added: • force majeure events, including earthquakes, tornadoes, hurricanes, wildfires, floods, tsunamis, climate-related weather events, outbreaks of pandemic or contagious diseases or acts of terrorism;
• contingent liabilities that exist after we have exited a property;
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• the relative illiquidity of real estate compared to some other assets.
−Removed: The negative effect on profitability and cash flow from declines in revenues is more pronounced in owned and leased properties because we, as the owner or lessee, bear the risk of the fixed-cost structure required to own and operate a hotel.
+Added: The negative effect on profitability and cash flow from declines in revenues is more pronounced in owned and leased properties because we, as the owner or lessee, bear the risk of the costs required to own and operate a hotel.
Further, during times of economic distress, declining demand and declining earnings often result in declining asset values, and we may not be able to sell properties or exit leasing arrangements on favorable terms or at all.
Accordingly, we may not be able to adjust our owned and leased property portfolio promptly in response to changes in economic or other conditions.
−Removed: Our efforts to develop, redevelop or renovate our owned and leased properties could be delayed or become more expensive than anticipated.
−Removed: Certain of our owned and leased properties were constructed many years ago.
−Removed: The condition of aging properties could negatively affect our ability to attract guests or result in higher operating and capital costs, either of which could reduce revenues or profits from these properties.
−Removed: There can be no assurance that our planned replacements and repairs will occur, or even if completed, will result in improved performance.
−Removed: In addition, these efforts are subject to a number of risks, including:
−Removed: • construction delays or cost overruns (including labor and materials);
−Removed: • obtaining zoning, occupancy and other required permits or authorizations;
−Removed: • changes in economic conditions that may result in weakened or lack of demand for improvements that we make or negative project returns;
−Removed: • governmental restrictions on the size or kind of development;
−Removed: • volatility in the debt and capital markets that may limit our ability to raise capital for projects or improvements;
−Removed: • lack of availability of rooms or meeting spaces for revenue-generating activities during construction, modernization or renovation projects;
−Removed: • force majeure events, including earthquakes, tornadoes, hurricanes, wildfires, floods or tsunamis, or acts of terrorism;
−Removed: • design defects that could increase costs.
−Removed: If our owned and leased properties are not updated to meet guest preferences, if properties under development or renovation are delayed in opening as scheduled or if renovation investments adversely affect or fail to improve performance, our operations and financial results could be negatively affected.
−Removed: Our properties may not be permitted to be rebuilt if destroyed.
−Removed: Certain of our properties may qualify as legally-permissible nonconforming uses and improvements.
−Removed: If a substantial portion of any such property were to be destroyed by fire or other casualty, including climate-related events, we might not be permitted to rebuild that property as it now exists or at all, regardless of the availability of insurance proceeds.
−Removed: Any loss of this nature, whether insured or not, could materially adversely affect our results of operations and prospects.
−Removed: We have investments in joint venture projects, which limits our ability to manage third-party risks associated with these projects.
−Removed: In most cases, we are minority participants and do not control the decisions of the joint ventures in which we are involved.
−Removed: Therefore, joint venture investments may involve risks such as the possibility that a co-venturer in an investment might become bankrupt, be unable to meet its capital contribution obligations, have economic or business interests or goals that are inconsistent with our business interests or goals or take actions that are contrary to our instructions or to applicable laws and regulations.
−Removed: In addition, we may be unable to take action without the approval of our joint venture partners, or our joint venture
−Removed: partners could take actions binding on the joint venture without our consent.
−Removed: Consequently, actions by a co-venturer or other third party could expose us to claims for damages, financial penalties and reputational harm, any of which could adversely affect our business and operations.
−Removed: In addition, we may agree to guarantee indebtedness incurred by a joint venture or co-venturer or provide standard indemnifications to lenders for loss liability or damage occurring as a result of our actions or actions of the joint venture or other co-venturers.
−Removed: Such a guarantee or indemnity may be on a joint and several basis with a co-venturer, in which case we may be liable in the event that our co-venturer defaults on its guarantee obligation.
−Removed: The non-performance of a co-venturer's obligations may cause losses to us in excess of the capital we initially may have invested or committed.
−Removed: Although our joint ventures may generate positive cash flow, in some cases they may be unable to distribute that cash to us or the other joint venture partners.
−Removed: Additionally, in some cases our joint venture partners control distributions and may choose to leave capital in the joint venture rather than distribute it.
−Removed: Because our ability to generate liquidity from our joint ventures depends in part on their ability to distribute capital to us, our failure to receive distributions from our joint venture partners could reduce our cash flow return on these investments.
−Removed: Failures in, material damage to or interruptions in our information technology systems, software or websites and difficulties in updating our existing software or developing or implementing new software could have a material adverse effect on our business or results of operations.
+Added: Failures in, material damage to or interruptions in our information technology systems, software or websites, including as a result of cyber-attacks on our systems or systems operated by third parties that provide operational and technical services to us, costs associated with protecting the integrity and security of personal data and other sensitive information and difficulties in updating our existing software or developing or implementing new software could have a material adverse effect on our business or results of operations.
We depend heavily upon our information technology systems in the conduct of our business.
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The inability of these developers or us to continue to maintain and upgrade these information systems and software programs would disrupt or reduce the efficiency of our operations if we were unable to convert to alternate systems in an efficient and timely manner.
−Removed: We are vulnerable to various risks and uncertainties associated with our websites and mobile applications, including changes in required technology interfaces, website and mobile application downtime and other technical failures, costs and issues as we upgrade our website software and mobile applications.
+Added: We are vulnerable to various risks and uncertainties associated with our websites and mobile applications, including changes in required technology interfaces, website and mobile application downtime and other technical failures, unexpected costs and changes and issues as we upgrade our website software and mobile applications.
Additional risks include computer malware, changes in applicable federal, state and international regulations, security breaches, legal claims related to our website operations and e-commerce fulfillment and other consumer privacy concerns.
6 unchanged sentences
The sophistication of efforts by hackers to gain unauthorized access to information systems has continued to increase in recent years and may continue to do so.
−Removed: Breaches, thefts, losses or fraudulent uses of customer, employee or company data could cause consumers to lose confidence in the security of our websites, mobile applications, point of sale systems and other information technology systems and choose not to purchase from us.
−Removed: Such security breaches also could expose us to risks of data loss, business disruption, litigation and other costs or liabilities, any of which could adversely affect our business.
−Removed: We are exposed to risks and costs associated with protecting the integrity and security of our guests’ personal data and other sensitive information.
−Removed: We are subject to various risks and costs associated with the collection, handling, storage and transmission of sensitive information, including those related to compliance with U.S.
−Removed: and foreign data collection and privacy laws and other contractual obligations, as well as those associated with the compromise of our systems collecting such information.
−Removed: Many jurisdictions, including the E.U., California and Nevada, have passed laws that require companies to meet specific requirements regarding the handling of personal data.
+Added: Breaches, thefts, losses or fraudulent uses of customer, employee or company data could cause consumers to lose confidence in the security of our websites, mobile applications, point of sale systems and other information technology systems and, as a result of this loss in confidence, choose not to purchase from us.
+Added: Such security breaches also could expose us to risks of data loss, business disruption, litigation, fines, regulatory charges and other costs or liabilities, any of which could adversely affect our business.
+Added: We are exposed to risks and costs associated with protecting the integrity and security of personal data and other sensitive information.
+Added: We are subject to various risks and costs associated with the collection, handling, storage and transmission of sensitive information, including costs related to compliance with U.S.
+Added: and foreign data collection and privacy laws and other contractual obligations, as well as risks associated with the compromise of our systems collecting such information.
+Added: Many jurisdictions, including the European Union ("E.U."), California and Nevada, have passed laws that require companies to meet specific requirements regarding the handling of personal data.
We collect internal and customer data, including credit card numbers and other personally identifiable information for a variety of important business purposes, including managing our workforce, providing requested products and services and maintaining guest preferences to enhance customer service and for marketing and promotion purposes.
−Removed: We could be exposed to fines, penalties, restrictions, litigation, reputational harm or other expenses, or other adverse effects on our business, due to failure to protect our guests' personal data and other sensitive information or failure to maintain compliance with the various U.S.
+Added: We could be exposed to fines, penalties, restrictions, litigation, reputational harm or other expenses, or other adverse effects on our business, due to failure to protect personal data and other sensitive information or failure to maintain compliance with the various U.S.
and foreign data collection and privacy laws or with credit card industry standards or other applicable data security standards.
9 unchanged sentences
In some cases, hotel owners may refuse to upgrade systems or deploy new technology to replace aging or end-of-life software and/or hardware.
−Removed: As a result, we may not achieve the benefits we may have been anticipating from any new technology or system.
+Added: As a result, our business operations could be disrupted and our competitive position could decline, adversely affecting our financial performance, or we may not achieve the benefits we may have been anticipating from any new technology or system.
Because third parties provide us with a number of operational and technical services, third-party security incidents could expose us to liability, harm our reputation, damage our competitiveness and adversely affect our financial performance.
2 unchanged sentences
Any third-party security incident could compromise the integrity or availability of or result in the theft of confidential or otherwise sensitive data, which could negatively impact our operations.
−Removed: Unauthorized access to data and other confidential or proprietary information may be
−Removed: obtained through break-ins, network breaches by unauthorized parties, employee theft or misuse, or other misconduct.
+Added: Unauthorized access to data and other confidential or proprietary information may be obtained through break-ins, network breaches by unauthorized parties, employee theft or misuse, or other misconduct.
We rely on the internal processes and controls of third-party software and application vendors to maintain the security of all software code provided to or used by Hilton.
2 unchanged sentences
Delays in service from third-party service providers could expose us to liability, harm our reputation, damage our competitiveness and adversely affect our financial performance.
−Removed: From time to time, we may rely on a single or limited number of suppliers for the provision of various services that we use in the operation of our business.
+Added: From time to time, we may rely on a single or limited number of suppliers for the provision of various goods or services that we use in the operation of our business.
The inability of such third parties to satisfy our or our guests' requirements could disrupt our business operations or make it more difficult for us to implement our business strategy.
3 unchanged sentences
We may consider strategic and complementary acquisitions of and investments in other hotel or hospitality brands, businesses, properties or other assets.
−Removed: Furthermore, we may pursue these opportunities in alliance with existing or prospective owners of managed or franchised properties.
+Added: Furthermore, we may pursue these opportunities in alliance with existing or prospective owners of managed or franchised hotels.
In many cases, we could be competing for these opportunities with third parties that may have substantially greater financial resources than us.
−Removed: Acquisitions or investments in brands, businesses, properties or assets as well as third-party alliances are subject to risks that could affect our business, including risks related to:
−Removed: • issuing shares of stock that could dilute the interests of our existing stockholders;
−Removed: • spending cash and incurring debt;
−Removed: • assuming contingent liabilities;
−Removed: • creating additional expenses.
−Removed: We may not be able to identify opportunities or complete transactions on commercially reasonable terms or at all or we may not actually realize any anticipated benefits from such acquisitions, investments or alliances.
−Removed: Similarly, we may not be able to obtain financing for acquisitions or investments on attractive terms or at all, or the ability to obtain financing may be restricted by the terms of our indebtedness.
+Added: Acquisitions or investments in brands, businesses, properties or assets as well as third-party alliances may require us to issue additional shares of stock, incur debt, assume liabilities or incur additional expenses.
In addition, the success of any acquisition or investment also will depend, in part, on our ability to integrate the acquisition or investment with our existing operations.
−Removed: We also may divest certain properties or assets, and any such divestments may yield lower than expected returns or otherwise fail to achieve the benefits we expect.
−Removed: In some circumstances, sales of properties or other assets may result in losses.
−Removed: Upon sales of properties or assets, we may become subject to contractual indemnity obligations, incur material tax liabilities or, as a result of required debt repayment, face a shortage of liquidity.
+Added: If we divest properties or assets, such divestments may yield lower than expected returns or otherwise fail to achieve the benefits we expect.
Finally, any acquisitions, investments or dispositions could demand significant attention from management that would otherwise be available for business operations, which could harm our business.
4 unchanged sentences
state laws, new laws or international data protection laws, such as the E.U.
−Removed: GDPR, that govern these activities could adversely affect current or planned marketing activities and cause us to change our marketing strategy.
−Removed: If this occurs, we may not be able to develop adequate alternative marketing strategies, which could affect our ability to maintain relationships with our customers and acquire new customers.
−Removed: We also obtain access to names of potential customers from travel service providers or other
−Removed: companies, and we market to some individuals on these lists directly or through other companies’ marketing materials.
+Added: General Data Protection Regulation ("GDPR"), that govern these activities could adversely affect current or planned marketing activities and cause us to change our marketing strategy.
+Added: occurs, we may not be able to develop adequate alternative marketing strategies, which could affect our ability to maintain relationships with our customers and acquire new customers.
+Added: We also obtain access to names of potential customers from travel service providers or other companies, and we market to some individuals on these lists directly or through other companies’ marketing materials.
If access to these lists were prohibited or otherwise restricted, our ability to develop new customers and introduce them to products could be impaired.
16 unchanged sentences
The cost, speed, efficacy and efficiency of the reservation system are important aspects of our business and are important considerations of hotel owners in choosing to affiliate with our brands.
−Removed: Any failure to maintain or upgrade, and any other disruption to our reservation system may adversely affect our business.
+Added: Any disruption to the continuity of our reservation system, including any failure to maintain or upgrade such system, may adversely affect our ability to serve customers effectively and support reservations at our hotels.
The cessation, reduction or taxation of program benefits of our Hilton Honors guest loyalty program could adversely affect the Hilton brands and guest loyalty.
2 unchanged sentences
The program is an important aspect of our business and of the affiliation value for hotel owners under management and franchise contracts.
−Removed: System hotels, including, without limitation, third-party hotels under management and franchise contracts, contribute a percentage of the loyalty member's charges to the program for each stay of a program member.
−Removed: In addition to the accumulation of points for future hotel stays at our brands, Hilton Honors arranges with third parties, such as airlines, other transportation services, online vendors, retailers and credit card companies, to sell Hilton Honors points for the use of their customers and/or to allow Hilton Honors members to use or exchange points for products or services.
+Added: System hotels, including, without limitation, third-party hotels under management and franchise contracts, contribute a percentage of the charges incurred by members of the loyalty program for each stay of a program member.
+Added: In addition to the accumulation of points for future hotel stays at our brands, Hilton Honors arranges with third parties, such as airlines, other transportation services, online vendors, retailers and credit card companies, to sell Hilton Honors points for the use of their customers and/or to allow Hilton Honors members to use or exchange points for products or services made available to loyalty program members by those third parties.
Currently, the program benefits are not taxed as income to members.
If the program awards and benefits are materially altered, curtailed or taxed such that a material number of Hilton Honors members choose to no longer participate in the program, this could adversely affect our business.
−Removed: Because we derive a portion of our revenues from operations outside the U.S.
−Removed: the risks of doing business internationally could lower our revenues, increase our costs, reduce our profits or disrupt our business.
+Added: Because we derive a portion of our revenues from operations outside the U.S., the risks of doing business internationally could lower our revenues, increase our costs, reduce our profits or disrupt our business.
We currently manage, franchise, own or lease hotels and resorts in 122 countries and territories around the world.
8 unchanged sentences
• changes in foreign currency exchange rates or currency restructurings and hyperinflation or deflation in the countries in which we operate;
−Removed: • the effect of disruptions, including the temporary closure of hotel properties, caused by severe weather or climate-related events, natural disasters, outbreak of disease, such as COVID-19, or other events that make travel to a particular region less attractive or more difficult;
+Added: • the effect of disruptions, including the temporary closure of hotel properties, caused by severe weather or climate-related events, natural disasters (including as a result of climate change), outbreak of disease, such as COVID-19, or other events that make travel to a particular region less attractive or more difficult;
• the presence and acceptance of varying levels of business corruption in international markets and the effect of various anti-corruption and other laws;
5 unchanged sentences
• political, economic and other uncertainty resulting from the U.K.'s exit from the E.U.
−Removed: (commonly known as "Brexit"), the terms of which remain uncertain and could adversely affect our business;
+Added: (commonly known as "Brexit"), the terms of which could adversely affect our business;
• uncertainties as to local laws regarding, and enforcement of, contract and IP rights;
5 unchanged sentences
Our business operations in countries outside the U.S.
−Removed: are subject to a number of laws and regulations, including restrictions imposed by the FCPA, as well as trade sanctions administered by OFAC.
−Removed: Although we have policies in place designed to comply with applicable sanctions, rules and regulations, it is possible that hotels we manage or own in the countries and
−Removed: territories in which we operate may provide services to or receive funds from persons subject to sanctions.
+Added: are subject to a number of laws and regulations, including restrictions imposed by the Foreign Corrupt Practices Act ("FCPA"), as well as trade sanctions administered by the Office of Foreign Assets Control ("OFAC").
+Added: Although we have policies in place designed to comply with applicable sanctions, rules and
+Added: regulations, it is possible that hotels we manage or own in the countries and territories in which we operate may provide services to or receive funds from persons subject to sanctions.
Where we have identified potential violations in the past, we have taken appropriate remedial action including filing voluntary disclosures to OFAC.
5 unchanged sentences
These restrictions could increase costs of operations, reduce profits or cause us to forgo development opportunities that would otherwise support growth.
−Removed: In August 2012, Congress enacted the Iran Threat Reduction and Syria Human Rights Act of 2012 ("ITRSHRA"), which expands the scope of U.S.
−Removed: sanctions against Iran and Syria.
−Removed: In particular, Section 219 of the ITRSHRA amended the Exchange Act to require SEC-reporting companies to disclose in their periodic reports specified dealings or transactions involving Iran or other individuals and entities targeted by certain OFAC sanctions engaged in by the reporting company or any of its affiliates.
−Removed: These companies are required to separately file with the SEC a notice that such activities have been disclosed in the relevant periodic report, and the SEC is required to post this notice of disclosure on its website and send the report to the U.S.
−Removed: President and certain U.S.
−Removed: Congressional committees.
−Removed: President thereafter is required to initiate an investigation and, within 180 days of initiating such an investigation with respect to certain disclosed activities, to determine whether sanctions should be imposed.
+Added: The Iran Threat Reduction and Syria Human Rights Act of 2012 ("ITRSHRA") amended the Exchange Act to require SEC-reporting companies to disclose in their periodic reports specified dealings or transactions involving Iran or other individuals and entities targeted by certain OFAC sanctions engaged in by the reporting company or any of its affiliates.
Under ITRSHRA, we are required to report if we or any of our "affiliates" knowingly engaged in certain specified activities during a period covered by one of our Annual Reports on Form 10-K or Quarterly Reports on Form 10-Q.
3 unchanged sentences
The impact of laws, such as the U.K's Modern Slavery Act 2015, Australia's Modern Slavery Bill 2018, and similar legislation on hotel operations, as well as supply chain, could increase costs of operations and reduce profits.
−Removed: The loss of senior executives could significantly harm our business.
−Removed: Our ability to maintain our competitive position depends somewhat on the efforts and abilities of our senior executives.
−Removed: Finding suitable replacements for senior executives could be difficult.
−Removed: Losing the services of one or more of these senior executives could adversely affect strategic relationships, including relationships with third-party property owners, significant customers, joint venture partners and vendors, and limit our ability to execute our business strategies.
Collective bargaining activity could disrupt our operations, increase our labor costs or interfere with the ability of our management to focus on executing our business strategies.
1 unchanged sentence
If relationships with our employees or employees of our hotel owners or the unions that represent them become adverse, the properties we manage, franchise, own or lease could experience labor disruptions such as strikes, lockouts, boycotts and public demonstrations.
−Removed: A number of our collective bargaining agreements, representing approximately 20 percent of our organized employees, have expired and are in the process of being renegotiated, and we may be required to negotiate additional collective bargaining agreements in the future if more employees become unionized.
+Added: A number of our collective bargaining agreements are in the process of being renegotiated, and, if more employees become unionized, we may be required to negotiate additional collective bargaining agreements in the future.
Labor disputes, which may be more likely when collective bargaining agreements are being negotiated, could harm our relationship with our employees or employees of our hotel owners, result in increased regulatory inquiries and enforcement by governmental authorities and deter guests.
2 unchanged sentences
We do not have the ability to influence the negotiations of collective bargaining agreements covering unionized labor employed by third-party property owners.
−Removed: Increased unionization of our workforce, new labor legislation or changes in
−Removed: regulations could disrupt our operations and our ability to promote services expected by customers, reduce our profitability or interfere with the ability of our management to focus on executing our business strategies.
+Added: Increased unionization of our workforce, new labor legislation or changes in regulations could disrupt our operations and our ability to promote services expected by customers, reduce our profitability or interfere with the ability of our management to focus on executing our business strategies.
Labor shortages could restrict our ability to operate our properties or grow our business or result in increased labor costs that could adversely affect our results of operations.
Our success depends in large part on our ability to attract, retain, train, manage and engage employees.
+Added: The COVID-19 pandemic has negatively affected the labor market for employers.
+Added: Labor shortages have affected the ability of our hotels to hire or re-hire employees during the ongoing recovery from the downturn caused by the pandemic.
+Added: Among the factors causing the labor shortages are the relative reduced appeal of working in the hospitality industry in a downturn, alternatives available in other industries and perceived health and safety concerns.
We employ or manage approximately 142,000 individuals at our managed, owned and leased hotels and corporate offices around the world.
−Removed: If we are unable to attract, retain, train, manage and engage skilled individuals, our ability to staff and manage the hotels that we manage, own and lease could be impaired, which could reduce customer satisfaction.
−Removed: In addition, the inability of our franchisees to attract, retain, train, manage and engage skilled employees for the franchised hotels could adversely affect the reputation of our brands.
+Added: If we are unable to attract, retain, train, manage and engage skilled individuals, our ability to staff and operate the hotels that we manage, own and lease could be diminished, which could reduce customer satisfaction, and our ability to manage our corporate business could be adversely affected.
+Added: the inability of our franchisees to attract, retain, train, manage and engage skilled employees for the franchised hotels could adversely affect the reputation of our brands.
Staffing shortages in various parts of the world also could hinder our ability to grow and expand our businesses.
−Removed: Because payroll costs are a major component of the operating expenses at our hotels and our franchised hotels, a shortage of skilled labor could also require higher wages that would increase labor costs, which could adversely affect our results of operations and the results of hotels that we manage on behalf of third-party owners.
−Removed: Additionally, an increase in minimum wage rates could increase costs and reduce profits for us and our franchisees.
+Added: Because payroll costs are a major component of the operating expenses at our owned, leased and managed hotels, as well as our franchised hotels, a shortage of skilled labor could also require higher wages that would increase labor costs, which could adversely affect our results of operations and the results of hotels that we manage on behalf of third-party owners.
+Added: Additionally, an increase in minimum wage rates could increase costs and reduce profits for us and our franchisees, which could, in turn, lower demand from third-party owners to add hotels to our system.
+Added: We also face challenges with respect to retaining corporate employees.
+Added: If we lost the services of one or more senior executives, this could adversely affect strategic relationships, including relationships with third-party property owners, significant customers, joint venture partners and vendors, and limit our ability to execute our business strategies.
Any failure to protect our trademarks and other IP could reduce the value of the Hilton brands and harm our business.
4 unchanged sentences
We may also fail to obtain and maintain trademark protection for all of our brands in all jurisdictions.
−Removed: For example, in certain jurisdictions, third parties have registered or otherwise have the right to use certain trademarks that are the same as or similar to our trademarks, which could prevent us from registering trademarks and opening hotels in that jurisdiction.
+Added: For example, in certain jurisdictions, third parties have registered or otherwise have the right to use certain trademarks that are the same as or similar to our trademarks, which could prevent us from registering trademarks and opening hotels in those jurisdictions.
Third parties may also challenge our rights to certain trademarks or oppose our trademark applications.
4 unchanged sentences
There are times where we may need to resort to litigation to enforce our IP rights.
−Removed: Litigation of this type could be costly, force us to divert our resources, lead to counterclaims or other claims against us or otherwise harm our business or reputation.
+Added: Litigation of this type could be unsuccessful, costly, force us to divert our resources, lead to counterclaims or other claims against us or otherwise harm our business or reputation.
In addition, we license certain of our trademarks to third parties.
−Removed: For example, we have granted HGV the right to use certain of our marks and IP in its timeshare business and we grant our franchisees a right to use certain of our trademarks in connection with their operation of the applicable property.
+Added: For example, we have granted HGV the right to use certain of our IP in its timeshare business and we grant our franchisees a right to use certain of our IP in connection with their operation of the applicable property.
If HGV, a franchisee or other licensee fails to maintain the quality of the goods and services used in connection with the licensed trademarks, our rights to, and the value of, our trademarks could be harmed.
15 unchanged sentences
Any adverse results associated with third-party IP claims could negatively affect our business.
−Removed: Exchange rate fluctuations and foreign exchange hedging arrangements could result in significant foreign currency gains and losses and affect our business results.
+Added: Exchange rate fluctuations and foreign exchange hedging arrangements could result in significant foreign currency gains and losses that affect our business results.
Conducting business in currencies other than the U.S.
1 unchanged sentence
We earn revenues and incur expenses in foreign currencies as part of our operations outside of the U.S.
−Removed: As a result, fluctuations in currency exchange rates may significantly increase the amount of U.S.
−Removed: dollars required for foreign currency expenses or significantly decrease the U.S.
−Removed: dollars received from foreign currency revenues.
−Removed: We also have exposure to currency translation risk because, generally, the results of our business outside of the U.S.
−Removed: are reported in local currency and then translated to U.S.
−Removed: dollars for inclusion in our consolidated financial statements.
−Removed: As a result, changes between the foreign exchange rates and the U.S.
−Removed: dollar will affect the recorded amounts of our foreign assets, liabilities, revenues and expenses and could have a negative effect on our financial results.
+Added: As a result, fluctuations in currency exchange rates may significantly increase the amount of USD required for foreign currency expenses or significantly decrease the USD received from foreign currency revenues.
+Added: We also have exposure to currency translation risk because, generally, the results of our business outside of the USD are reported in local currency and then translated to USD for inclusion in our consolidated financial statements.
+Added: As a result, changes between the foreign exchange rates and the USD will affect the recorded amounts of our foreign assets, liabilities, revenues and expenses and could have a negative effect on our financial results.
Our exposure to foreign currency exchange rate fluctuations will grow if the relative contribution of our operations outside the U.S.
To mitigate foreign currency exposure, we may enter into foreign exchange derivatives with financial institutions.
−Removed: However, these derivatives may not eliminate foreign currency risk entirely and involve costs and risks of their own in the form of transaction costs, credit requirements and counterparty risk.
+Added: However, these derivatives may not eliminate foreign currency risk entirely and involve costs and risks of their own in the form of transaction costs, credit requirements, interest rate differentials and counterparty risk.
If the insurance that we or our owners carry does not sufficiently cover damage or other potential losses or liabilities to third parties involving properties that we manage, franchise, own or lease, our profits could be reduced.
1 unchanged sentence
We carry, and/or we require our owners to carry, insurance from solvent insurance carriers that we believe is adequate for foreseeable first-party and third-party losses and with terms and conditions that are reasonable and customary.
−Removed: Nevertheless, market forces beyond our control, such as the natural and man-made disasters and infectious diseases that occurred in 2020, could limit the scope of the insurance coverage that we and our owners can obtain or may otherwise restrict our or our owners' ability to buy insurance coverage at reasonable rates.
−Removed: We anticipate increased costs of property and excess liability insurance across the portfolio in 2021 due to the significant losses that insurers suffered globally in 2020 and prior periods.
+Added: Nevertheless, market forces beyond our control, such as the natural, climate-related and man-made disasters and infectious diseases that occurred in 2021, could limit the scope of the insurance coverage that we and our owners can obtain or may otherwise restrict our or our owners' ability to buy insurance coverage at reasonable rates.
+Added: We anticipate increased costs of property, general liability and excess liability insurance across the portfolio in 2022 due to the significant losses that insurers suffered globally in 2021 and prior periods.
In the event of a substantial loss, the insurance coverage that we and/or our owners carry may not be sufficient to pay the full value of our financial obligations, our liabilities or the replacement cost of any lost investment or property.
Additionally, certain types of losses may be uninsurable or prohibitively expensive to insure.
−Removed: In addition, there are other risks that may fall outside the general coverage terms and limits of our policies.
+Added: In addition, other types of losses or risks that we may face could fall outside of the general coverage terms and limits of our policies.
+Added: Terrorism Risk Insurance Program (the "Program") provides insurance capacity for terrorist acts and is currently authorized through December 31, 2027.
+Added: If the Program is not extended or renewed upon its expiration in 2027, or if there are changes to the Program that would negatively affect insurance carriers, premiums for terrorism insurance coverage will likely increase and/or the terms of such insurance may be materially amended to increase stated exclusions or to otherwise effectively decrease the scope of coverage available, perhaps to the point where it is effectively unavailable.
In some cases, these factors could result in certain losses being completely uninsured.
As a result, we or owners of hotels that we manage or franchise could lose some or all of the capital we have invested in a property, as well as the anticipated future revenues, profits, management fees or franchise fees from the property.
−Removed: Terrorist attacks and military conflicts may adversely affect the hospitality industry.
−Removed: The terrorist attacks on the World Trade Center and the Pentagon on September 11, 2001 underscore the possibility that large public facilities or economically important assets could become the target of terrorist attacks in the future.
−Removed: In particular, properties that are well-known or are located in concentrated business sectors in major cities where our hotels are located may be subject to the risk of terrorist attacks.
−Removed: The occurrence or the possibility of terrorist attacks or military conflicts could:
−Removed: • cause damage to one or more of our properties that may not be fully covered by insurance to the value of the damages;
−Removed: • cause all or portions of affected properties to be shut down for prolonged periods, resulting in a loss of income;
−Removed: • generally reduce travel to affected areas for tourism and business or adversely affect the willingness of customers to stay in or avail themselves of the services of the affected properties;
−Removed: • expose us to a risk of monetary claims arising out of death, injury or damage to property caused by any such attacks;
−Removed: • result in higher costs for security and insurance premiums or diminish the availability of insurance coverage for losses related to terrorist attacks, particularly for properties in target areas, all of which could adversely affect our results.
−Removed: The occurrence of a terrorist attack with respect to one of our properties could directly and materially adversely affect our results of operations.
−Removed: Furthermore, the loss of any of our well-known buildings could indirectly affect the value of our brands, which would in turn adversely affect our business prospects.
−Removed: Terrorism insurance may not be available at commercially reasonable rates or at all.
−Removed: Following the September 11, 2001 terrorist attacks in New York City and the Washington, D.C.
−Removed: area, Congress passed the Terrorism Risk Insurance Act of 2002, which established the Terrorism Risk Insurance Program (the "Program") to provide insurance capacity for terrorist acts.
−Removed: The Program was most recently reauthorized, with some adjustments to its provisions, in December 2019 for seven years through December 31, 2027.
−Removed: We carry, and we require our owners and our franchisees to carry, insurance from solvent insurance carriers to respond to both first-party and third-party liability losses related to terrorism.
−Removed: We purchase our first-party property damage and business interruption insurance from a stand-alone market in place of and to supplement insurance from government run pools.
−Removed: If the Program is not extended or renewed upon its expiration in 2027, or if there are changes to the Program that would negatively affect insurance carriers, premiums for terrorism insurance coverage will likely increase and/or the terms of such insurance may be materially amended to increase stated exclusions or to otherwise effectively decrease the scope of coverage available, perhaps to the point where it is effectively unavailable.
+Added: Legal and Regulatory Risks
+Added: Governmental regulation may adversely affect the operation of our properties.
+Added: In many jurisdictions, the hospitality industry is subject to extensive foreign or U.S.
+Added: federal, state and local governmental regulations, including those relating to the service of alcoholic beverages, the preparation and sale of food and those relating to building and zoning requirements.
+Added: We are also subject to licensing and regulation by foreign or U.S.
+Added: state and local departments relating to health, sanitation, fire and safety standards, and to laws governing our relationships with employees, including minimum wage requirements, overtime, working conditions status and citizenship requirements.
+Added: These requirements are complex and subject to frequent revision, with changes at the U.S.
+Added: federal level often accompanying new U.S.
+Added: presidential administrations.
+Added: We or our third-party owners may be required to expend funds to meet foreign or U.S.
+Added: federal, state and local regulations in connection with the construction, continued operation or remodeling of certain of our properties.
+Added: The failure to
+Added: meet the requirements of applicable regulations and licensing requirements, or publicity resulting from actual or alleged failures, could have an adverse effect on our results of operations.
+Added: For instance, in 2010, we entered into a settlement with the U.S.
+Added: Department of Justice related to compliance with the Americans with Disabilities Act ("ADA").
+Added: Although the bulk of our obligations under this settlement expired in 2015, certain managed and franchised hotels remain under an obligation to remove architectural barriers at their facilities through March 15, 2022.
+Added: We have an obligation to have an independent consultant to monitor those barrier removal efforts during this period.
+Added: If we fail to comply with any of the requirements of the ADA, we could be subject to fines, penalties, injunctive action, reputational harm, guest, advocacy group or employee lawsuits, and other business effects that could materially and negatively affect our performance and results of operations.
Changes in U.S.
8 unchanged sentences
In particular, our consolidated U.S.
−Removed: federal income tax returns for the fiscal years ended December 31, 2005 through December 31, 2018 are under audit by the Internal Revenue Service ("IRS"), and the IRS has proposed adjustments to increase our taxable income based on several assertions involving intercompany loans and our Hilton Honors guest loyalty program.
−Removed: In total, the proposed adjustments sought by the IRS would result in U.S.
−Removed: federal tax owed of approximately $817 million, excluding interest and penalties and potential state income taxes.
−Removed: We disagree with the IRS’s position on each of the assertions and intend to vigorously contest them.
−Removed: "Income Taxes" in our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information.
+Added: federal income tax returns for the fiscal years ended December 31, 2011 through December 31, 2018 are actively under audit by the Internal Revenue Service ("IRS").
+Added: The IRS has previously proposed material increases to our income tax liability related to our Hilton Honors guest loyalty program through the tax year ended December 31, 2013, which we tentatively settled during 2021.
+Added: The taxation of the Hilton Honors program continues to be subject to audit.
+Added: We may in the future be assessed tax on issues similar to those which were resolved during 2021, and the amounts of any such future assessments may be material.
An unfavorable outcome from any tax audit could result in higher tax costs, penalties and interest, thereby adversely affecting our financial condition or results of operations.
−Removed: Changes to accounting rules or regulations may adversely affect our reported financial condition and results of operations.
−Removed: New accounting rules or regulations and varying interpretations of existing accounting rules or regulations have occurred and may occur in the future.
−Removed: A change in accounting rules or regulations may require retrospective application and affect our reporting of transactions completed before the change is effective, and future changes to accounting rules or regulations may adversely affect our reported financial condition and results of operations.
−Removed: Changes to estimates or projections used to assess the fair value of our assets, or operating results that are lower than our current estimates at certain locations, may cause us to incur impairment losses that could adversely affect our results of operations.
−Removed: Our total assets include goodwill, intangible assets with indefinite useful lives, other intangible assets with finite useful lives, as well as long-lived assets, principally property and equipment and operating lease right-of-use ("ROU") assets related to leased hotels.
−Removed: We evaluate our goodwill and intangible assets with indefinite lives for impairment on an annual basis or at other times during the year if indicators of impairment exist.
−Removed: We evaluate our intangible assets with finite useful lives and long-lived assets for impairment when circumstances indicate that the carrying amount may not be recoverable.
−Removed: Our evaluation of impairment requires us to make certain estimates and assumptions including projections of future results.
−Removed: After performing our evaluation for impairment, including an analysis to determine the recoverability of long-lived assets, we will record an impairment loss when the carrying value of the underlying asset, asset group or reporting unit exceeds its estimated fair value.
−Removed: If the estimates or assumptions used in our evaluation of impairment change, we may be required to record additional impairment losses on certain of these assets.
−Removed: If these impairment losses are significant, our results of operations would be adversely affected.
−Removed: Legal and Regulatory Risks
−Removed: Governmental regulation may adversely affect the operation of our properties.
−Removed: In many jurisdictions, the hospitality industry is subject to extensive foreign or U.S.
−Removed: federal, state and local governmental regulations, including those relating to the service of alcoholic beverages, the preparation and sale of food and those relating to building and zoning requirements.
−Removed: These requirements are complex and subject to frequent change, often in connection with changes in the U.S.
−Removed: presidential administration.
−Removed: We are also subject to licensing and regulation by foreign or U.S.
−Removed: state and local departments relating to health, sanitation, fire and safety standards, and to laws governing our relationships with employees, including minimum wage requirements, overtime, working conditions status and citizenship requirements.
−Removed: We or our third-party owners may be required to expend funds to meet foreign or U.S.
−Removed: federal, state and local regulations in connection with the construction, continued operation or remodeling of certain of our properties.
−Removed: The failure to meet the requirements of applicable regulations and licensing requirements, or publicity resulting from actual or alleged failures, could have an adverse effect on our results of operations.
Foreign or U.S.
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Environmental, health and safety requirements have also become increasingly stringent, and our costs to comply with such requirements may increase as a result.
−Removed: New or revised laws and regulations or new interpretations of existing laws and regulations, such as those related to climate change, could affect the operation of our properties or result in significant additional expense and operating restrictions on us.
−Removed: The cost of compliance with the Americans with Disabilities Act and similar legislation outside of the U.S.
−Removed: may be substantial.
−Removed: We are subject to the Americans with Disabilities Act ("ADA") and similar legislation in certain jurisdictions outside of the U.S.
−Removed: Under the ADA all public accommodations are required to meet certain federal requirements related to access and use by disabled persons.
−Removed: These regulations apply to accommodations first occupied after January 26, 1993;
−Removed: public accommodations
−Removed: built before January 26, 1993 are required to remove architectural barriers to disabled access where such removal is "readily achievable." The regulations also mandate certain operational requirements that hotel operators must observe.
−Removed: The failure of a property to comply with the ADA could result in injunctive relief, fines, an award of damages to private litigants or mandated capital expenditures to remedy such noncompliance.
−Removed: Any imposition of injunctive relief, fines, damage awards or capital expenditures could adversely affect the ability of an owner or franchisee to make payments under the applicable management or franchise contract and negatively affect the reputation of our brands.
−Removed: In November 2010, we entered into a settlement with the U.S.
−Removed: Department of Justice related to compliance with the ADA.
−Removed: Our obligations under this settlement expired in March 2015 except that certain managed and franchised hotels that were required to conduct surveys of their facilities remain under an obligation to remove architectural barriers at their facilities through March 15, 2022 and we have an obligation to have an independent consultant to monitor those barrier removal efforts during this period.
−Removed: If we fail to comply with the requirements of the ADA, we could be subject to fines, penalties, injunctive action, reputational harm and other business effects that could materially and negatively affect our performance and results of operations.
+Added: New or revised laws and regulations or new interpretations of existing laws and regulations, such as those intended to lessen the impact of climate change, could affect the operation of our properties or result in significant additional expense and operating restrictions on us.
We are subject to risks from litigation filed by or against us.
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A number of these lawsuits have resulted in the payment of substantial damages by the defendants.
−Removed: Similar lawsuits have been and may be instituted against us from time to time, and we may incur substantial damages and expenses resulting from lawsuits of this type, which could have a material adverse effect on our business.
+Added: Similar lawsuits have been and may be instituted against us from time to time, and we may incur substantial damages and expenses resulting from lawsuits of this type,
+Added: which could have a material adverse effect on our business.
At any given time, we may be engaged in lawsuits or disputes involving third-party owners of our hotels.
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If the spin-offs and certain related transactions were determined to be taxable, the Company would be subject to a substantial tax liability that would have a material adverse effect on our financial condition, results of operations and cash flows.
−Removed: In addition, if the spin-offs were taxable, each holder of our common stock who received shares of Park and HGV would
−Removed: generally be treated as receiving a taxable distribution of property in an amount equal to the fair market value of the shares received.
−Removed: Park or HGV may fail to perform under various transaction agreements that we have executed as part of the spin-offs.
+Added: In addition, if the spin-offs were taxable, each holder of our common stock who received shares of Park and HGV would generally be treated as receiving a taxable distribution of property in an amount equal to the fair market value of the shares received.
+Added: Park or HGV may fail to perform under various transaction agreements that we executed as part of the spin-offs.
In connection with the spin-offs, we, Park and HGV entered into a distribution agreement and various other agreements, including a tax matters agreement, and, as to Park, management agreements, and, as to HGV, a license agreement.
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In addition, it is possible that a court would disregard the allocation agreed to between us, Park and HGV and require that we assume responsibility for certain obligations allocated to Park and to HGV, particularly if Park or HGV were to refuse or were unable to pay or perform such obligations.
−Removed: The impact of any of these factors is difficult to predict, but one or more of them could cause reputational harm and could have an adverse effect on our financial position, results of operations and/or cash flows.
−Removed: In connection with the spin-offs, each of Park and HGV indemnified us for certain liabilities.
−Removed: These indemnities may not be sufficient to insure us against the full amount of the liabilities assumed by Park and HGV, and Park and HGV may be unable to satisfy their indemnification obligations to us in the future.
In connection with the spin-offs, each of Park and HGV indemnified us with respect to such parties’ assumed or retained liabilities pursuant to the distribution agreement and breaches of the distribution agreement or other agreements related to the spin-offs.
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Each of these risks could negatively affect our business, financial condition, results of operations and cash flows.
−Removed: If we are required to indemnify Park or HGV in connection with the spin-offs, we may need to divert cash to meet those obligations, which could negatively affect our financial results.
−Removed: Pursuant to the distribution agreement entered into in connection with the spin-offs and certain other agreements among Park and HGV and us, we agreed to indemnify each of Park and HGV from certain liabilities.
+Added: In addition, we agreed to indemnify each of Park and HGV from certain liabilities.
Indemnities that we may be required to provide Park and/or HGV may be significant and could negatively affect our business.
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We have a significant amount of indebtedness.
−Removed: As of December 31, 2020, our total indebtedness, excluding unamortized deferred financing costs and discount, was approximately $10.6 billion, and our contractual debt maturities of our long-term debt for the years ending December 31, 2021, 2022 and 2023 were $56 million, $29 million and $23 million, respectively.
+Added: As of December 31, 2021, our total indebtedness, excluding unamortized deferred financing costs and discount, was approximately $8.9 billion, and our contractual debt maturities of our long-term debt for the years ending December 31, 2022, 2023 and 2024 are $54 million, $26 million and $26 million, respectively.
Our substantial debt and other contractual obligations could have important consequences, including:
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In addition, certain of our variable rate indebtedness uses London Interbank Offer Rate ("LIBOR") as a benchmark for establishing the rate of interest and may be hedged with LIBOR-based interest rate derivatives.
−Removed: LIBOR has been the subject of recent national, international and other regulatory guidance and proposals for reform, and it is currently expected that LIBOR will be discontinued after June 2023.
+Added: On March 5, 2021, the U.K.’s Financial Conduct Authority, which regulates LIBOR, announced that all LIBOR settings will either cease to be provided by any administrator or no longer be representative:
+Added: (a) immediately after December 31, 2021, in the case of the one week and two month USD settings;
+Added: and (b) immediately after June 30, 2023, in the case of the remaining USD settings.
+Added: Federal Reserve (the "Federal Reserve") has also advised banks to cease entering into new contracts that use USD LIBOR as a reference rate.
While all of our material financing arrangements indexed to LIBOR provide procedures for determining an alternative base rate in the event that LIBOR is discontinued, there can be no assurances as to whether such alternative base rate will be more or less favorable than LIBOR.
+Added: The Federal Reserve, in conjunction with the Alternative Reference Rate Committee, a committee convened by the Federal Reserve that includes major market participants, has identified the Secured Overnight Financing Rate (“SOFR”), a new index calculated by short-term repurchase agreements, backed by U.S.
+Added: Treasury securities, as its preferred alternative rate for LIBOR.
+Added: At this time, it is not possible to predict how markets will respond to SOFR or other alternative reference rates as the transition away from the LIBOR benchmarks is anticipated in coming years.
We intend to monitor developments with respect to the phasing out of LIBOR and will work to minimize the impact of any LIBOR transition.
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If our subsidiaries are restricted from making distributions to us, that may impair our ability to meet our debt service obligations or otherwise fund our operations.
−Removed: Moreover, there may be restrictions on payments by subsidiaries to their parent companies under applicable laws, including laws that require companies to maintain minimum amounts of capital and to make payments to stockholders only from profits.
+Added: Moreover, there may be restrictions on payments by subsidiaries to their parent companies under applicable laws, including laws that require companies to maintain minimum amounts of capital
+Added: and to make payments to stockholders only from profits.
As a result, although a subsidiary of ours may have cash, we may not be able to obtain that cash to satisfy our obligation to service our outstanding debt or fund our operations.
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The terms of any future indebtedness we may incur could include more restrictive covenants.
−Removed: We may not be able to maintain compliance with these
−Removed: covenants in the future and, if we fail to do so, we may not be able to obtain waivers from the lenders and/or amend the covenants.
+Added: We may not be able to maintain compliance with these covenants in the future and, if we fail to do so, we may not be able to obtain waivers from the lenders and/or amend the covenants.
Our failure to comply with the restrictive covenants described above, as well as other terms of our other indebtedness and/or the terms of any future indebtedness from time to time, could result in an event of default, which, if not cured or waived, could result in our being required to repay these borrowings before their due date.
2 unchanged sentences
Our ability to generate sufficient cash depends on many factors, some of which are not within our control.
−Removed: Our ability to make payments on our indebtedness, to fund planned capital expenditures and to pay dividends to our stockholders will depend on our ability to generate cash in the future.
+Added: Our ability to make payments on our indebtedness, to fund planned capital expenditures and to pay future dividends, if any, to our stockholders will depend on our ability to generate cash in the future.
To a certain extent, this is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.