During Hilton Worldwide Holdings’ fourth-quarter and full-year 2024 earnings call with investors, CEO Christopher Nassetta said Hilton’s team feels “incrementally a bit better” than a quarter ago. Following the election in November, he explained, “people think that the opportunity for economic growth, in the short to intermediate term, will be better.”
While acknowledging a lot of “noise” surrounding the change in administration, Nassetta said he expects international trade deals “that will not involve major tariffs.” Following the worst of the COVID-19 pandemic, he added, the company “diversified [its] supply chains in a very aggressive way” to minimize disruptions. “It's a really good idea to have various places in the world where we can get various products,” he said during the call. As an example, the company sources terry cloth from numerous markets around the world rather than from just one. “That would create risk that, if you had a problem with tariffs in that particular location, could cause a ripple effect.”
Nassetta also said that Hilton is “super engaged” in how it uses “tools and technology, including AI,” to support the guest experience. While he did not share specific details, he said the company was using AI, “from a data and analytics point of view, to understand in great granular detail what individual customers want, and then to mass-customize the experience, both ahead of the stay but particularly [during the] stay. We have some really, really interesting things going on.”
By the Numbers
For the fourth quarter, system-wide comparable revenue per available room increased 3.5 percent compared to the same period in 2023 due to increases in both occupancy and average daily rate. Management and franchise fee revenues increased 4.8 percent compared to the same period in 2023.
For the year, system-wide comparable RevPAR increased 2.7 percent compared to the same period in 2023 due to increases in both occupancy and ADR. Management and franchise fee revenues increased 9.1 percent compared to the same period in 2023.
Both the quarterly and full-year RevPAR increases exceeded the high end of the company’s guidance.
For the quarter, net income and adjusted earnings before interest, taxes, depreciation and amortization were $505 million and $858 million, respectively, for the quarter, compared to $150 million and $803 million, respectively, for the three months ended Dec. 31, 2023.
For the year, net income and adjusted EBITDA were $1.54 billion and $3.43 billion, respectively, compared to $1.15 billion and $3.09 billion, respectively, for 2023.
As with RevPAR, both net income and adjusted EBITDA exceeded the high end of guidance.
In the quarter, leisure occupancy remained five points higher than pre pandemic levels, while business transient RevPAR increased more than 3 percent. Nassetta credited this to “continued recovery” in large corporates, with big tech and big banks “meaningfully outperforming.” Group RevPAR rose 3 percent year over year as demand for company meetings and social events remained strong, he added.
Development
In 2024, Nassetta said, Hilton opened more rooms than in any other year in its history and signed a record number of new rooms to its development pipeline.
Hilton approved 34,200 new rooms for development during the fourth quarter, bringing the company’s development pipeline to 498,600 rooms as of Dec. 31, representing growth of 8 percent from the same day a year prior.
In the fourth quarter of 2024, Hilton opened 171 hotels, totaling 22,600 rooms, resulting in 17,200 net room additions. For the full year, the company opened 98,400 rooms, contributing to net unit growth of 7.3 percent from Dec. 31, 2023
Conversions, Nassetta noted, accounted for roughly 45 percent of room openings in the year, driven by the addition of Small Luxury Hotels properties and what he described as “continued momentum” from the Spark, DoubleTree and lifestyle brands.
During the quarter, the company continued to expand its portfolio in the Asia Pacific market, surpassing 1,000 hotels in the region. Hilton opened its first hotels in Bonaire and Paraguay and now have properties in 140 countries and territories.
The company also added several luxury hotels to its pipeline in the Middle East and Africa region during the quarter and now has more than 500 luxury hotels worldwide and is set to reopen the Waldorf Astoria New York and open the Waldorf Astoria Costa Rica Punta Cacique, Waldorf Astoria Shanghai Qiantan, Waldorf Astoria Osaka, Waldorf Astoria Morocco Rabat Sale, Conrad Hamburg and Conrad Athens. “We are getting a ton of traction in luxury,” CFO Kevin Jacobs said during the call, noting that a good portion of Hilton’s luxury growth last year came from the SLH partnership—“which was completely capital, zero contribution on our part,” Jacobs added.
Hilton added 34,200 rooms to its development pipeline during the fourth quarter, and, as of Dec. 31, the development pipeline totaled 3,578 hotels with 498,600 rooms throughout 118 countries and territories, including 25 countries and territories where Hilton had no existing hotels. Of the rooms in the development pipeline, nearly half were under construction and more than half were located outside of the U.S.
“We finished the year with nearly a quarter million rooms under construction, which is more than any other hotel company,” Nassetta said. “This represents more than 20 percent of industry share of rooms under construction, and nearly four times our existing share of supply.”
Looking Ahead
For the first quarter of 2025, Hilton expects its systemwide comparable RevPAR, on a currency-neutral basis, to increase between 2.5 percent and 3.5 percent compared to the first quarter of 2024. Net income is projected to be between $373 million and $388 million and adjusted EBITDA is projected to be between $770 million and $790 million.
For 2025 as a whole, Hilton expects its systemwide comparable RevPAR, on a currency-neutral basis, to increase between 2 percent and 3 percent compared to 2024. Net income is projected to be between $1.83 billion and $1.86 billion, while adjusted EBITDA is projected to be between $3.7 billion and $3.74 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 $3.3 billion. General and administrative expenses are projected to be between $420 million and $430 million. Net unit growth is projected to be between 6 percent and 7 percent.