Full year 2023 capital return is projected to be between $2.4 billion and $2.6 billion.
MCLEAN, VA – Hilton Worldwide Holdings Inc. reported its second quarter 2023 results. Highlights include:
- Diluted EPS was $1.55 for the second quarter, and diluted EPS, adjusted for special items, was $1.63, both exceeding the high end of guidance
- Net income was $413 million for the second quarter, exceeding the high end of guidance
- Adjusted EBITDA was $811 million for the second quarter, exceeding the high end of guidance
- System-wide comparable RevPAR increased 12.1 percent, on a currency neutral basis, for the second quarter compared to the same period in 2022
- System-wide comparable RevPAR increased 9.3 percent, on a currency neutral basis, for the second quarter compared to the same period in 2019
- Approved 36,000 new rooms for development during the second quarter, bringing Hilton’s development pipeline to 440,900 rooms as of June 30, 2023, representing growth of 7 percent from June 30, 2022
- Added 14,000 rooms to Hilton’s system in the second quarter, resulting in 11,200 net additional rooms in Hilton’s system during the period
- Repurchased 3.3 million shares of Hilton common stock during the second quarter, bringing total capital return, including dividends, to $510 million for the quarter and $1,123 million year to date through July
- Launched a new extended-stay brand with the working title Project H3 in May 2023
- Full year 2023 system-wide RevPAR is expected to increase between 10 percent and 12 percent on a comparable and currency neutral basis compared to 2022; full year net income is projected to be between $1,387 million and $1,422 million; full year – Adjusted EBITDA is projected to be between $2,975 million and $3,025 million
- Full year 2023 capital return is projected to be between $2.4 billion and $2.6 billion
Christopher J. Nassetta, President & Chief Executive Officer of Hilton, said, “System-wide comparable RevPAR continued to expand throughout the quarter, experiencing growth across all of our customer segments and regions, driven by strong preference for our brands. Our top line performance yielded meaningful bottom line results, as we exceeded the high end of our guidance for Adjusted EBITDA and diluted EPS, adjusted for special items. We continue to drive long-term growth of our global network through the launch of strategic, new brands and have already added over 60,000 rooms to our development pipeline during 2023.”
“For the three months ended June 30, 2023, system-wide comparable RevPAR increased 12.1 percent compared to the same period in 2022 due to increases in both occupancy and ADR, and management and franchise fee revenues increased 16.1 percent compared to the same period in 2022. For comparison to pre-pandemic results, system-wide comparable RevPAR for the three months ended June 30, 2023 increased 9.3 percent compared to the same period in 2019, and management and franchise fee revenues increased 30.8 percent from the same period in 2019.
For the six months ended June 30, 2023, system-wide comparable RevPAR increased 19.7 percent compared to the same period in 2022 due to increases in both occupancy and ADR, and management and franchise fee revenues increased 22.1 percent compared to the same period in 2022. For comparison to pre-pandemic results, system-wide comparable RevPAR for the six months ended June 30, 2023 increased 8.8 percent compared to the same period in 2019, and management and franchise fee revenues increased 28.7 percent from the same period in 2019.
For the three months ended June 30, 2023, diluted EPS was $1.55 and diluted EPS, adjusted for special items, was $1.63 compared to $1.32 and $1.29, respectively, for the three months ended June 30, 2022. Net income and Adjusted EBITDA were $413 million and $811 million, respectively, for the three months ended June 30, 2023, compared to $367 million and $679 million, respectively, for the three months ended June 30, 2022.
For the six months ended June 30, 2023, diluted EPS was $2.31 and diluted EPS, adjusted for special items, was $2.86 compared to $2.07 and $2.00, respectively, for the six months ended June 30, 2022. Net income and Adjusted EBITDA were $622 million and $1,452 million, respectively, for the six months ended June 30, 2023, compared to $578 million and $1,127 million, respectively, for the six months ended June 30, 2022.
Development
In the second quarter of 2023, Hilton opened 92 new hotels totaling 14,000 rooms and achieved net unit growth of 11,200 rooms. During the quarter, Hilton opened the Conrad Shenzhen, Hilton’s first luxury property in China’s technology hub, and surpassed 150,000 hotel rooms in the Asia Pacific region, which included nearly 50,000 Hampton by Hilton rooms in China. Additionally, continuing to demonstrate the value of our all-suites category, Hilton opened the 600th Home2 Suites by Hilton, one of the fastest growing brands in the industry.
Hilton added over 36,000 rooms to the development pipeline during the second quarter, and, as of June 30, 2023, Hilton’s development pipeline totaled approximately 3,060 hotels representing 440,900 rooms throughout 116 countries and territories, including 29 countries and territories where Hilton did not have any existing hotels. Additionally, of the rooms in the development pipeline, 217,000 of the rooms were under construction and 250,100 of the rooms were located outside of the U.S.
Spark by Hilton, our new premium economy brand launched in January 2023, had approximately 60 hotels in the development pipeline as of June 30, 2023. In May 2023, Hilton launched a new brand in the U.S. under the working title Project H3, an inventive, new apartment-style extended-stay brand positioned to serve the unique needs of the long-stay traveler, including the rapidly expanding workforce travel market.
In June 2023, Hilton paid a quarterly cash dividend of $0.15 per share of common stock, for a total of $40 million, bringing total dividend payments for the year to $81 million. In July 2023, Hilton’s board of directors authorized a regular quarterly cash dividend of $0.15 per share of common stock to be paid on or before September 29, 2023 to holders of record of its common stock as of the close of business on August 25, 2023. Outlook Share-based metrics in Hilton’s outlook include actual share repurchases to date, but do not include the effect of potential share repurchases hereafter.”
Full Year 2023
- System-wide comparable RevPAR, on a currency neutral basis, is expected to increase between 10 percent and 12 percent compared to 2022.
- Diluted EPS is projected to be between $5.18 and $5.31.
- Diluted EPS, adjusted for special items, is projected to be between $5.93 and $6.06.
- Net income is projected to be between $1,387 million and $1,422 million.
- Adjusted EBITDA is projected to be between $2,975 million and $3,025 million.
- Contract acquisition costs and capital expenditures, excluding amounts reimbursed by third parties, are expected to be approximately $300 million. •Capital return is projected to be between $2.4 billion and $2.6 billion.
- General and administrative expenses are projected to be between $390 million and $410 million.
- Net unit growth is expected to be approximately 5 percent. Third Quarter 2023
- System-wide comparable RevPAR, on a currency neutral basis, is expected to increase between 4 percent and 6 percent compared to the third quarter of 2022.
- Diluted EPS is projected to be between $1.49 and $1.54.
- Diluted EPS, adjusted for special items, is projected to be between $1.60 and $1.65.
- Net income is projected to be between $395 million and $409 million.
- Adjusted EBITDA is projected to be between $790 million and $810 million.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
