Hilton Worldwide Holdings Inc. reported system-wide comparable RevPAR increased 5.7% and 12.6%, on a currency-neutral basis, for 2023’s fourth quarter and full year, respectively, compared to the same periods in 2022.
“We delivered another year of strong top- and bottom-line results and continued to deliver on our robust development story,” said Christopher J. Nassetta, president/CEO, Hilton. “Positive momentum in openings continued throughout the year, with more openings in the fourth quarter than any other quarter in the company’s history. We also achieved record signings for the year, meaningfully ahead of pre-pandemic levels. We expect this momentum to continue into 2024 and net unit growth to accelerate to the high end of our guidance range of 5.5% to 6.0%, with the opportunity for further upside of 25 to 50 basis points from our exclusive partnership with Small Luxury Hotels of the World. Adding this extraordinary portfolio over the coming months to our strong and growing luxury offerings will further enhance our already powerful network effect and give all of Hilton’s customers, including our Hilton Honors members, even more opportunities to dream, book and earn and redeem points. Powered by an award-winning culture that was recently recognized as the No. 1 World’s Best Workplace, our Hilton team is well positioned to continue driving innovation and growth in the year ahead.”
Fourth-quarter and full-year 2023 highlights include:
- System-wide comparable RevPAR increased 13.5% and 10.7%, on a currency-neutral basis, for the fourth-quarter and full-year 2023, respectively, compared to the same periods in 2019
- Net income was $150 million for the fourth quarter and $1.151 billion for the full year
- Adjusted EBITDA was $803 million for the fourth quarter and $3.089 billion for the full year
- Diluted EPS was $0.57 for the fourth quarter and $4.33 for the full year
- Diluted EPS, adjusted for special items, was $1.68 for the fourth quarter and $6.21 for the full year
- Approved 33,800 new rooms for development during the fourth quarter, bringing Hilton’s development pipeline to a record 462,400 rooms as of Dec. 31, 2023, representing growth of 11% from Dec. 31, 2022
- Added a record 24,000 rooms to Hilton’s system in the fourth quarter, resulting in 62,900 room openings for the full year, contributing to net unit growth of 4.9%
- Full-year 2024 system-wide RevPAR is projected to increase between 2% and 4% on a comparable and currency-neutral basis compared to 2023; full-year net income is projected to be between $1.694 billion and $1.729 billion; full-year adjusted EBITDA is projected to be between $3.330 billion and $3.380 billion
\Full-year 2024 capital return is projected to be approximately $3.0 billion
Overview
For the three months ended Dec. 31, 2023, system-wide comparable RevPAR increased 5.7% compared to the same period in 2022 due to increases in both occupancy and ADR, and management and franchise fee revenues increased 12.2% compared to the same period in 2022. For comparison to pre-pandemic results, system-wide comparable RevPAR for the three months ended Dec, 31, 2023 increased 13.5% compared to the same period in 2019, and management and franchise fee revenues increased 38.5% from the same period in 2019.
For the year ended Dec. 31, 2023, system-wide comparable RevPAR increased 12.6% compared to the same period in 2022 due to increases in both occupancy and ADR, and management and franchise fee revenues increased 16.7% compared to the same period in 2022. For comparison to pre-pandemic results, system-wide comparable RevPAR for the year ended Dec. 31, 2023 increased 10.7% compared to the same period in 2019, and management and franchise fee revenues increased 33.1% from the same period in 2019.
Development
In the fourth quarter of 2023, Hilton achieved a record number of room openings, totaling 24,000 rooms, and achieved net unit growth of 22,300 rooms. During the quarter, Hilton achieved several growth milestones, opening the 150th Curio Collection by Hilton, the 250th Tru by Hilton and the 1,000th Hilton Garden Inn. Additionally, Hilton celebrated the openings of its 600th hotel in Greater China, as well as the Signia by Hilton Atlanta, which marked the brand’s first new-build property.
Hilton added 33,800 rooms to the development pipeline during the fourth quarter, contributing to 130,200 rooms added for the full year, which was approximately a 45% increase from the prior year. As of Dec. 31, 2023, Hilton’s development pipeline totaled approximately 3,270 hotels representing 462,400 rooms throughout 118 countries and territories, including 30 countries and territories where Hilton had no existing hotels. Additionally, of the rooms in the development pipeline, 216,600 were under construction and 259,800 were located outside of the U.S.
Outlook
Full-year 2024
- System-wide comparable RevPAR, on a currency-neutral basis, is projected to increase between 2.0% and 4.0% compared to 2023.
- Diluted EPS is projected to be between $6.57 and $6.71.
- Diluted EPS, adjusted for special items, is projected to be between $6.80 and $6.94.
- Net income is projected to be between $1.694 billion and $1,729 billion.
- Adjusted EBITDA is projected to be between $3330 billion and $3.380 billion.
- Contract acquisition costs and capital expenditures, excluding amounts reimbursed by third parties, are projected to be between $250 million and $300 million.
- Capital return is projected to be approximately $3.0 billion.
- General and administrative expenses are projected to be between $415 million and $430 million.
- Net unit growth is projected to be between 5.5% and 6.0%.
First-quarter 2024
- System-wide comparable RevPAR, on a currency-neutral basis, is projected to increase between 2.0% and 4.0% compared to the first quarter of 2023.
- Diluted EPS is projected to be between $1.32 and $1.40.
- Diluted EPS, adjusted for special items, is projected to be between $1.36 and $1.44.
- Net income is projected to be between $340 million and $359 million.
- Adjusted EBITDA is projected to be between $690 million and $710 million.
Small Luxury Hotels of the World partnership
Hilton and Small Luxury Hotels of the World (SLH) have formed an exclusive strategic partnership that will expand the luxury experiences offered by Hilton as SLH properties join the hotels of the Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts and LXR Hotels & Resorts brands.
Through this exclusive partnership, which will ramp up in the months ahead, all of Hilton’s customers, including the more than 180 million members of Hilton Honors, will soon be able to book and earn and redeem points for stays at participating properties in the SLH community of 560 luxury boutique hotels spanning 90 countries.
“Hilton guests are among the most sophisticated travelers in the world, and we are always looking for amazing new experiences to share with them,” said Chris Silcock, president, global brands and commercial services, Hilton. “This relationship with Small Luxury Hotels of the World will grant Hilton customers and Hilton Honors members access to a community of high-end boutique hotels in exciting new luxury travel destinations, giving them more ways to dream, book, and earn and redeem points with Hilton.”
Participating SLH hotels will be bookable on all Hilton channels, giving the hotels exposure to a broad audience while allowing them to retain the independent spirit that makes each property unique.
“We’re thrilled to begin this win-win relationship with Hilton as it brings exciting possibilities for both brands,” said Shaun Leleu, chairman, Small Luxury Hotels of the World. “Hilton customers, including Hilton Honors members, gain access to our unrivaled collection of exceptional boutique hotels, while our properties enjoy amplified reach to a loyal and discerning audience. It’s a game changer for independently owned hotels on a global scale.”
More details of this new relationship will be announced soon.
