BRAD SMITH: Chris, take us further into that demand rebound that you're seeing right now, and especially as it relates to the corporate travel. This is a cohort of consumers that really accounts for so much of the profit margins for leisure and hospitality businesses. So when you're re-engaging with them, you know, what have you been able to track to say, in your forecasts, going even into next year, that this is going to continue to return, especially as they're looking across some of their own travel and expense policies? And that's tightening a little bit right now.

CHRIS NASSETTA: Yeah, well, I mean, yeah, clearly, that is-- and we expect it to continue. Having said that, there's a huge amount of pent-up demand, Brad, that is being released for all sorts of business travel. When you back up and look at the core of our business travel population, even pre-COVID, it was 80% small and medium-sized businesses. That's probably about 85, maybe even a little bit higher today.

And what we found during COVID certainly and recovery is that they're a lot more resilient. And the reason is that they're running their businesses they have to get out and travel. They have to meet their partners. Their salespeople have to get out. They have to go to their other offices. And so they don't have as much of the luxury of saying that they're not going to travel.

And so what we've seen is the big corporate business transient has been-- is recovered nicely and is recovering in a very strong way now, but is still not back to historic levels where small and medium businesses are above 2019 historical high watermarks. And I think it has a lot to do, as I said, with just people going for an extended period of time without doing the basic things that they needed to do to run their business.

And I think it was a really neat idea to think that you could do everything virtually and everything on Zoom. And you could do all your culture building and all your innovation and all your sales and all the partner and relationship work in a very efficient format. But the real truth is, you can't. And I think that was proven. And so I think what we're seeing is sort of the other side of that, where people certainly are going to use technology-- I'm not going to be silly about it-- in different ways.

And the technology, as it advances, will take certain trip occasions and change them. But they're just being replaced with higher value trip occasions because people realize they have to be out and meeting one-on-one or in groups with people. And so I feel very good about where things are going. And, you know, clearly, the macro environment is more challenging.

There's no question that here in the US and in much of the world, with inflation where it is, that central banks, including the Fed here at home, are going to do what they have to do to slow demand in order to get inflation under control. I think that's a given. I think it would be crazy to say that that's not happening and going to continue to happen.

But what's happening in our business is, as you said, we were not a beneficiary of COVID. We got beaten up quite badly. And we're seeing sort of the unwinding of a lot of that that gives us quite a bit of wind in our sails, I think for a reasonably extended period of time.

What are those things that are being released? Well, people are changing their spending patterns, right? They are spending. During COVID, they spent all their time online buying things, OK, whatever that was-- cars, washers, dryers, microwaves, things, phones, technology. Now they're shifting their spending patterns back to what they had been doing pre-COVID, which has been a multi-decade trend towards spending on experiences. Well, we're experiences. So we have this big secular shift back to experiences.

The other thing we have going on is international travel. The world is-- almost all of the world is open up. There are parts that are still not, probably China being the most notable, certain parts of Asia, although Japan is opening up. And as that occurs, you're starting to get all of that international travel that occurred prior to 2019 sort of back and going. We have a long way to go to get back where we were, but it is starting to happen.

And then as I already mentioned, just pent-up demand. Just people had had 2 and 1/2 years of not doing things they needed to do, whether that was for leisure or business or meetings and events. And that is being released. So in the face of some macro headwinds, we have some pretty nice tailwinds that are propelling our recovery forward still.

And you can look at the industry data. We haven't reported, so I'm not going to talk about our data. But you can look at all the industry data through last week. And you're not seeing signs in any of the segments of our business that suggest that the consumer is-- that things are weakening. They continue to sort of power up and continue to recover in a positive way.

BRIAN SOZZI: Well, Chris, just some food for thought. I stayed at a Hilton recently, and I did a Zoom call. So just to give you a little insight into how I'm the new face--

CHRIS NASSETTA: I love that.

BRIAN SOZZI: I am the new face of business travel. But--

CHRIS NASSETTA: Hey, Brian.

BRIAN SOZZI: Yeah.

CHRIS NASSETTA: But here's the thing. Mobility is-- you're making my case to a degree that we didn't talk about today, but I've talked about many times. The world is getting more mobile. Technology is enabling that. You had a lot of other things that enabled it-- low cost airlines and other things-- over the last 20 or 30 years. But technology is connecting the world, speeding the world up, and making people more mobile.

And the reality is COVID accelerated that process where the office environment is changing. How you work, how I work, how everybody works is changing in a way that I think people are going to be on the road more. People being on the road more and being more mobile is very good for our business.

BRIAN SOZZI: Chris, my back of the envelope math right now has you being the CEO of a public company for 22 years, of course, first with Host, now with Hilton. You've seen some economic cycles. Does it feel like what the Federal Reserve is doing is going to slow the economy down markedly? Does this feel like we're headed into recessions of recessions past?

CHRIS NASSETTA: Well, it's really hard to know, and I'm not an economist, so I'll leave that to others you're going to have on that are smarter than I am on those matters. I do believe that what the Fed is doing is going to slow the economy down. I mean, they've stated it. That is their intention. That is what they need to do. And so I think that they will do it.

I am certainly hopeful that as a result of the actions that they're taking, along with some of the natural things that are going on that have pushed inflation so high, sort of working their way through the system-- some of the supply chain issues around the world, as those loosen up; some of the labor issues around the world, particularly in the West, as some of those free up; some of the commodities issues that have been so difficult, which already have started to sort of ease-- not just oil, but other commodities.

I think as you-- the combination of the natural process of those things sort of working their way through the system, along with what the Fed is doing, will slow the economy, will help bring inflation down. And the hope is, allows the Fed, at some point over the next six or 12 months, to sort of stabilize, having done their job, with inflation more under control, and allow the economy to get its footing again and start a process of reacceleration. That is my hope.

You know, what are the odds? I don't know. My own view is that there's a reasonably good chance that we will get a reasonable landing, you know, which is sort of soft to bumpy-ish landing with the economy. And as I said, it'll be what it'll be.

In the case of our business and industry, I think that the tailwinds that we have are going to take us for a while, just because there's some natural structural things I already described that are happening that are wind in our sails, that are going to get us through a decent period of time. Depends how long and how deep any slowdown is to know what the impact will be. And obviously, macro impact is going to have impact on us ultimately.

But our business is in fabulous shape. Our balance sheet's in incredible shape. Our margins are higher than they've ever been. One in five rooms under construction in the world have Hilton brands on them. We're opening more than a hotel a day.

BRAD SMITH: Let's talk about that construction, though.

CHRIS NASSETTA: And we're performing-- we're performing at the highest levels broadly, if you look through Q2 from a margin and profitability point of view, than we ever have.

BRAD SMITH: Chris, let's talk about that room development, because as I look across the number of rooms that you have in development, at least as of the end of the most recent quarter, it's in surplus of 400,000 rooms that are in development right now. And so--

CHRIS NASSETTA: It is.

BRAD SMITH: --as you think through the development pipeline and when those come online, how long does it typically take for the property to be accretive to the business? And has some of the more short-term homestays that the trends in the market are clearly pointing to from consumers, has that changed the type of developments that you bring online?

CHRIS NASSETTA: That really hasn't. So the gestation period, once it's under construction, in about half of those 400 plus 1,000 rooms that are under construction-- it depends on where in the world you are, but I'd say it's 24 to 30 months, sort of on average, maybe 18 to 30 months, depending on where you are in the world. But things have gotten a little bit longer, given all the supply chain issues. So 24 to 30 months before-- once it starts before it's open and it's generating fees.

What we have seen is, certainly, the extended stay business that of which we are a huge participant with Homewood Suites and Home2 Suites by Hilton have been the best performers throughout COVID and they continue to perform well. And so given more mobility, I think those sorts of products have been somewhat favored, but not to the exclusion of the others. All of our brands at this point, all 18 are growing at a healthy pace, are driving the highest levels of market share that we've ever seen.

And the reality is the demand patterns, while they're not exactly what they were pre-COVID-- and I do think there'll be a bit of a shift when we get fully to the other side and get stabilized-- it's a lot more like it was pre-COVID than you would think. And so people are going back to their normal sort of travel habits, by and large.

Again, a little bit more leisure, a little bit more bleisure, sort of the blend of the business and the leisure sort of put together, a little bit more extended stay, so longer stay, which favors some of the extended stay brands, we have a little bit more. But nothing off the charts that suggests that any of the brands that we have in our family of brands today isn't really appealing to customers.

Now, as we think about new brands-- and we are, and I'm not going to I'm not going to get ahead of myself. But we're definitely thinking about, on the margin, some of the things that did shift during COVID, do they suggest to us that there may be opportunities in terms of serving a broader customer base? And I do think watch over the next 6 or 12 months. I think you may see some things from us that sort of address that.

BRIAN SOZZI: Chris, real quick, before I let you go, I went back to my notes from 2019 when you were at the All Markets Summit. I didn't ask you this. I'm going to ask you now. What is the secret to longevity? You've been the CEO of Hilton for 15 years. How do you get that done? Give us some secrets.

CHRIS NASSETTA: I don't know. You know what? It's balance. Steady hand on the wheel. Have a great strategy. Build a great culture. Have a great team you can leverage off of. Make sure you have balance in life. And while this is, of course, really important to me, that they're friends and family and other interests that are important. And keep everything in perspective.

But in life, in business, I think my longevity has a lot to do with just having an approach of having steady hands on the wheel. Whether it's my business life, my personal life, have a plan, work the plan. Don't jerk the wheel around. Just steady approach.

BRIAN SOZZI: Well, you, my friend, are timeless. You still look 32. Hilton CEO Chris Nassetta, thanks for joining us again.

CHRIS NASSETTA: I have a few gray-- a few more gray hairs than I did in 2019. But that goes with the territory.

BRIAN SOZZI: You said that, not me. Chris Nassetta, always good to see you. Thanks for spending some time with us. We appreciate it.

CHRIS NASSETTA: Good to see you guys. Thank you.

BRIAN SOZZI: Brad, over to you. The stock market is still open.

BRAD SMITH: Still open, indeed, and in fact, it's about lunchtime, or lunchtime is wrapping up, at least. And you can kind of see that in some of the intraday activity here. We've taken at least a little bit of a tick higher here, most recently over about the past 30 minutes here in this 1:00 PM hour. So taking a look at the Dow Jones Industrial Average, you're seeing that up right now on the day, intraday, by about 2%, 592 points added on today's session.

Let's check in on the NASDAQ composite as well. You're seeing that up by 3%, more than 3% at this point in time, catching a bid to the tune of about 343 points. And the S&P 500, you're also seeing that in the green by about 2.7%. Want to dive into some of the sectors that we're tracking very quickly here. We'll take you on over to a heatmap view.

And taking a look at some of the 11 S&P 500 sectors, well, yeah, they're all in positive territory right now with this face-off type of rally, at least here today, that we're seeing at this moment. We've got, more broadly, the S&P 500 up by about 2.7%, but outpacing some of the move higher. Yeah, you've got consumer discretionary. Keep a close eye on XLY as we move on throughout the rest of today's session. That's up 4%.

Also want to take a look at tech here. You've got that up by about 2.9%. And here's why. Let's get on to another heat map. We heard you like maps, so we've got some more maps for your heat maps out there. The Apple stock, Apple shares, you're seeing that up by about 2.9% here on the day. Some other megacap tech also ripping to the upside here. Amazon, that's up by about 5 and 3/4%. Microsoft, MST, up 3 and 1/2%. Google, Alphabet, Alpha-Google, whatever you're calling them at home, call them up right now. They're up by about 4% there.

You've got some lingering red here in the screen here, of course. You've got Applied Materials. That looks like it's in negative territory right now by about a quarter of a percent. But then even more so, as we get into some of the Dow components as well, you're not going to find too many laggards there. In fact, none. All 30 Dow components are in positive territory right now, being led largely by some of those tech names.

JP Morgan also up by about 4.9%. We've got more earnings that are coming forward over the course of this week. And so keep a close eye still on some of the banks that have yet to report. We'll get into the regionals as well. But even more so, as we get some more of these Dow industrials that start to report, that's exactly where the markets could latch on to what they have to say about their future forecasts. We've got more right after the break.

- Coming up, believe it or not, the holidays are right around the corner. We'll take a look at what's ahead for the retail sector with Target's CEO, Brian Cornell. That's next.

- Right now, the worst place to be is stuck in between. Accelerate your investments or pull back. Change the plan or stay the course. That's why Northern Trust is here, with specialized expertise, a history of success through every economic climate, and proven strategies rooted in data and analytics, giving you more control, clarity, and confidence for now and whatever's next. Northern Trust Wealth Management.