Hilton Worldwide Holdings Inc. reported net income of $148 million for the fourth quarter of 2021, ended Dec. 31, and $407 million for the full year.
“We were pleased to see continued recovery throughout 2021, with our fourth quarter showing strong results versus 2019,” said Christopher J. Nassetta, president/CEO, Hilton. “Although new variants of the virus have had some short-term impact, we are optimistic about the acceleration of recovery across all segments during 2022. We remain confident in the future of our business and our ability to continue to drive strong net unit growth and free cash flow, fueled by higher margins.”
Key highlights:
- Diluted EPS was $0.52 for the fourth quarter and $1.46 for the full year, and diluted EPS, adjusted for special items, was $0.72 for the fourth quarter and $2.08 for the full year.
- Adjusted EBITDA was $512 million for the fourth quarter and $1.63 billion for the full year.
- System-wide comparable RevPAR increased 104.2% and 60.4%, on a currency-neutral basis, for the fourth quarter and full year, respectively, from the same periods in 2020.
- System-wide comparable RevPAR was down 13.5% and 30.0%, on a currency-neutral basis, for the fourth quarter and full year, respectively, compared to the same periods in 2019.
- Approved 26,000 new rooms for development during the fourth quarter, bringing Hilton’s development pipeline to 408,000 rooms as of Dec. 31, 2021.
- Added 16,100 rooms to Hilton’s system in the fourth quarter, contributing to 55,100 net additional rooms in Hilton’s system for the full year, which represented 5.6% net unit growth from Dec. 31, 2020.
- Full-year 2022 net unit growth is expected to be approximately 5%.
Overview
During the three months and year ended Dec. 31, 2021, while the COVID-19 pandemic continued to negatively impact Hilton’s business and hotel operating statistics, Hilton experienced significant improvement in its results compared to 2020 attributable to increased travel and tourism. As a result of the pandemic, certain hotels suspended operations at various times throughout 2020, but the majority of those hotels were reopened by the beginning of 2021. In line with the recovery, although some hotels did suspend operations during the year, reopenings significantly outpaced suspensions. As such, the operations of only approximately 360 hotels, primarily located in the U.S. and Europe, were suspended for some period of time during the year, as compared to approximately 1,280 hotels during the year ended Dec. 31, 2020. Nearly all of the hotels that suspended operations at some point since the start of the pandemic had reopened as of Dec. 31, 2021.
For the three months and year ended Dec. 31, 2021, system-wide comparable RevPAR increased 104.2% and 60.4%, respectively, compared to the same periods in 2020, due to increases in both occupancy and ADR. For the three months and year ended Dec. 31, 2021, fee revenues increased 91% and 60%, respectively, compared to the same periods in 2020. For comparison to pre-pandemic results, system-wide comparable RevPAR for the three months and year ended Dec. 31, 2021, were down 13.5% and 30%, respectively, compared to the three months and year ended Dec. 31, 2019.
For the fourth quarter, diluted EPS was $0.52 and diluted EPS, adjusted for special items, was $0.72 compared to losses of $0.81 and $0.10, respectively, for the same period last year. Net income (loss) and adjusted EBITDA were $148 million and $512 million, respectively, for the three months ended Dec. 31, 2021, compared to $(225) million and $204 million, respectively, for the three months ended Dec. 31, 2020.
For the year ended Dec. 31, 2021, diluted EPS was $1.46 and diluted EPS, adjusted for special items, was $2.08 compared to a loss of $2.58 and $0.10, respectively, for the year ended Dec. 31, 2020. Net income (loss) and adjusted EBITDA were $407 million and $1.63 billion, respectively, for the year ended Dec. 31, 2021, compared to $(720) million and $842 million, respectively, for the year ended Dec. 31, 2020.
Development
In the fourth quarter of 2021, Hilton opened 94 new hotels totaling 16,100 rooms and achieved net unit growth of 13,100 rooms. During the full-year 2021, Hilton opened 414 new hotels totaling 67,100 rooms and achieved net unit growth of 55,100 rooms. During the quarter, Hilton continued the expansion of its luxury portfolio with the openings of the Conrad Tulum Riviera Maya in Mexico and the Conrad Jiuzhaigou in China (shown above), and also opened the Hilton Cancun in Mexico, the latest addition to Hilton’s expanding portfolio of all-inclusive properties. Further, Hilton continues to see growth in its focused-service brands, with Hampton by Hilton opening more than 30 hotels representing 4,300 rooms during the fourth quarter.
As of Dec. 31, 2021, Hilton’s development pipeline totaled nearly 2,670 hotels representing nearly 408,000 rooms throughout 115 countries and territories, including 28 countries and territories where Hilton does not currently have any existing hotels. Additionally, of the rooms in the development pipeline, 198,000 of the rooms were under construction and 249,600 of the rooms were located outside the U.S.
Balance sheet and liquidity
As of Dec. 31, 2021, Hilton had $8.9 billion of long-term debt outstanding, excluding deferred financing costs and discounts, with a weighted average interest rate of 3.99%. Excluding finance lease liabilities and other debt of Hilton’s consolidated variable interest entities, Hilton had $8.6 billion of long-term debt outstanding with a weighted average interest rate of 3.95% and no scheduled maturities until 2025. No amounts were outstanding under Hilton’s $1.75 billion senior secured revolving credit facility as of Dec. 31, 2021, which had an available borrowing capacity of $1.69 billion after considering $60 million of outstanding letters of credit. Total cash and cash equivalents were $1.51 billion as of Dec. 31, 2021, including $85 million of restricted cash and cash equivalents.
