Hilton’s Record Expansion Fuels 2024 Growth Surge

February 14, 2024

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In an era where the hospitality industry faces relentless challenges, Hilton Worldwide Holdings Inc. has not only weathered the storm but emerged more robust, as evidenced by its sensational performance in the fourth quarter of 2023. Today, the company unveiled a set of results that underscore its resilience and strategic foresight in capturing market share and setting a new benchmark in the hotel industry.

The financial highlights from the last quarter of 2023 reflect a company in robust health and on an upward trajectory. Hilton reported a diluted earnings per share (EPS) of $0.57 for the quarter, culminating in a yearly figure of $4.33. When adjusted for special items, these figures rise to $1.68 and $6.21 for the fourth and full year, respectively. The net income stood at a solid $150 million for the quarter, with an annual tally reaching $1,151 million.

More compelling, however, is Hilton’s adjusted EBITDA, which soared to $803 million in the fourth quarter, wrapping up the year at a remarkable $3,089 million. These figures testify to Hilton’s operational efficiency and ability to maximize profitability in a competitive landscape.

A notable highlight from Hilton’s announcement is the system-wide comparable Revenue Per Available Room (RevPAR), which saw a 5.7 percent increase in the fourth quarter and a 12.6 percent rise annually on a currency-neutral basis compared to 2022. This growth not only outpaces industry averages but also signals a strong recovery and demand resurgence compared to pre-pandemic levels in 2019, with increases of 13.5 percent and 10.7 percent for the quarter and full year, respectively.

Hilton’s development strategy is equally ambitious, with the company approving 33,800 new rooms for development in the fourth quarter alone. This strategic move brings Hilton’s development pipeline to 462,400 rooms as of December 31, 2023, marking an 11 percent growth from the previous year. Adding a record 24,000 rooms in the fourth quarter, resulting in 62,900 room openings for the year, underscores Hilton’s aggressive expansion and commitment to growing its global footprint by 4.9 percent.

The company’s shareholder value proposition is also noteworthy. Hilton repurchased 4.6 million shares of its common stock in the fourth quarter, bringing its total capital return, including dividends, to an impressive $784 million for the quarter and $2.5 billion for the year.

Amidst this financial and operational success, Hilton also sets its sights on the luxury hotel market through a new, exclusive partnership with Small Luxury Hotels of the World (“SLH”). This collaboration is poised to ramp up over the coming months, aiming to expand Hilton’s distribution of luxury hotels and cater to the discerning needs of luxury travellers.

Looking forward, Hilton projects a system-wide RevPAR increase between 2.0 percent and 4.0 percent for 2024 on a comparable and currency-neutral basis compared to 2023. The company’s financial outlook is equally optimistic, with net income projected to be between $1,694 million and $1,729 million and an Adjusted EBITDA forecasted to be between $3,330 million and $3,380 million. Furthermore, Hilton anticipates a capital return of approximately $3.0 billion in 2024, reinforcing its commitment to delivering value to its stakeholders.

In sum, Hilton’s strategic initiatives and robust performance in 2023 set a high bar for the hospitality industry, signalling not just recovery but a new era of growth and expansion. As Hilton enters 2024 with its largest-ever pipeline of hotels in the Asia Pacific and a strategic focus on the luxury market, it is poised to redefine hospitality standards globally, offering guests and investors unparalleled value.