Just as Hilton’s Q1 2025 earnings call with investors came to an end, President and CEO Christopher Nassetta dropped a big hint that the company’s recent brand launches—Tempo and Spark among them—are the tip of the proverbial iceberg.
“There are two or three things that that we are working on in terms of new brands that would be done organically—a couple of those in the lifestyle space, potentially a lifestyle collection that would be under Tapestry to [put] unique hotels that we think would be very additive to the system from a customer point of view [and drive] real demand in the owner marketplace,” he said. “We really haven't had a place to put those.”
Similarly, Nassetta hinted at a hard brand in between the Motto and Canopy flags. “We see a big segment of demand that we're not really serving, and an owner community that is looking to do, around the world, a lot more of that.” And beyond these developments, he would like to see Hilton do more in the serviced apartment space. “My expectation is you will see us do something there,” he said. “We’ve got 24 brands. My guess is in the next year or two, we're going to have 27 at least.”
Performance
Hilton’s net income was $300 million for the first quarter, while adjusted earnings before interest, taxes, depreciation and amortization were $795 million.
Systemwide comparable revenue per available room increased 2.5 percent, on a currency-neutral basis, for the first quarter compared to the same period in 2024 due to increases in both occupancy and ADR. Management and franchise fee revenues increased 5.1 percent compared to the same period in 2024.
On the call with investors, Nassetta said that the EBITDA results exceeded the company’s expectations, “even with somewhat weaker macroeconomic conditions that drove systemwide RevPAR to the low end of our guidance range.”
Development
In the first quarter of 2025, Hilton opened 186 hotels with a total of 20,100 rooms, resulting in 14,000 net room additions and net unit growth of 7.2 percent from March 31, 2024.
The company’s luxury & lifestyle portfolios accounted for approximately 30 percent of all hotel openings in the quarter. Notable lifestyle property openings in the quarter included the Tempo by Hilton brand in the U.K.—the brand's first hotel outside of the U.S—as well as the first Tapestry Collection by Hilton and Curio Collection by Hilton hotels in Athens, Greece, and Canopy by Hilton in Utah, representing the brand's first ski destination. Earlier this month, the company opened the Waldorf Astoria Osaka and the Waldorf Astoria Costa Rica Punta Cacique.
Conversions accounted for approximately 40 percent of openings in the quarter, Nassetta noted, driven largely by the company’s DoubleTree and Spark brands.
Hilton added 32,600 rooms to its development pipeline during the first quarter, and, as of March 31, that pipeline totaled 3,600 hotels with 503,400 rooms throughout 123 countries and territories, including 27 countries and territories where the company had no existing hotels. Additionally, of the rooms in the development pipeline, nearly half were under construction and more than half were located outside of the U.S., CFO Kevin Jacobs noted during the call.
The company is poised to reach 1,000 guestrooms in the Europe, Middle East and Africa market by the end of this spring.
Hilton approved 32,600 new rooms for development during the first quarter, bringing its development pipeline to 503,400 rooms as of March 31, representing growth of 7 percent from March 31, 2024.
Looking Ahead
Full-year 2025 systemwide RevPAR is projected to be flat to an increase of 2 percent on a comparable and currency neutral basis compared to 2024. Full-year net income is projected to be between $1.7 billion and $1.74 billion, while full-year adjusted EBITDA is projected to be between $3.65 billion and $3.71 billion. Contract acquisition costs and capital expenditures, excluding amounts reimbursed by third parties, are projected to be between $250 million and $300 million, while general and administrative expenses are projected to be between $420 million and $430 million.
Net unit growth for the year is projected to be between 6 percent and 7 percent.
For the second quarter, Hilton expects systemwide comparable RevPAR, on a currency neutral basis, to be roughly flat compared to the second quarter of 2024. Net income is projected to be between $455 million and $469 million, and adjusted EBITDA is projected to be between $940 million and $960 million.