MCLEAN, Virginia—Hilton Worldwide Holdings Inc. reported its third quarter 2024 results. Highlights include:
- Diluted EPS was $1.38 for the third quarter, and diluted EPS, adjusted for special items, was $1.92
- Net income was $344 million for the third quarter
- Adjusted EBITDA was $904 million for the third quarter
- System-wide comparable RevPAR increased 1.4 percent, on a currency-neutral basis, for the third quarter compared to the same period in 2023
- Approved 27,500 new rooms for development during the third quarter, bringing its development pipeline to 492,400 rooms as of September 30, 2024, representing growth of 8 percent from September 30, 2023
- Added a record 36,600 rooms to its system in the third quarter, resulting in 33,600 net additional rooms for the third quarter, contributing to a record net unit growth of 7.8 percent from September 30, 2023
- Repurchased 3.3 million shares of Hilton common stock during the third quarter; bringing total capital return, including dividends, to $764 million for the quarter and $2,422 million year to date through October
- Issued $1.0 billion aggregate principal amount of 5.875 percent Senior Notes due 2033 in September 2024
- Full-year 2024 system-wide RevPAR is projected to increase between 2.0 percent and 2.5 percent on a comparable and currency-neutral basis compared to 2023; full year net income is projected to be between $1,405 million and $1,429 million; full-year Adjusted EBITDA is projected to be between $3,375 million and $3,405 million
- Full-year 2024 capital return is projected to be approximately $3.0 billion
- Net unit growth for 2025 is expected to be between 6.0 percent and 7.0 percent
Overview
Christopher J. Nassetta, president and CEO of Hilton, said, “We were pleased to deliver continued strong bottom line results that exceeded our guidance, despite slower top line growth, which was driven by modestly slower macro trends, weather impacts, and unfavorable calendar shifts. We continued to demonstrate the strength of our model, opening more rooms than any other quarter in our history, surpassing 8,000 hotels and achieving net unit growth of 7.8 percent.”
For the three months ended September 30, 2024, system-wide comparable RevPAR increased 1.4 percent compared to the same period in 2023 due to increases in both occupancy and ADR, and management and franchise fee revenues increased 8.3 percent compared to the same period in 2023.
For the nine months ended September 30, 2024, system-wide comparable RevPAR increased 2.4 percent compared to the same period in 2023 due to increases in both occupancy and ADR, and management and franchise fee revenues increased 10.7 percent compared to the same period in 2023.
For the three months ended September 30, 2024, diluted EPS was $1.38, and diluted EPS, adjusted for special items, was $1.92 compared to $1.44 and $1.67, respectively, for the three months ended September 30, 2023. Net income and Adjusted EBITDA were $344 million and $904 million, respectively, for the three months ended September 30, 2024, compared to $379 million and $834 million, respectively, for the three months ended September 30, 2023.
For the nine months ended September 30, 2024, diluted EPS was $4.09 and diluted EPS, adjusted for special items, was $5.36 compared to $3.74 and $4.53, respectively, for the nine months ended September 30, 2023. Net income and Adjusted EBITDA were $1,034 million and $2,571 million, respectively, for the nine months ended September 30, 2024, compared to $1,001 million and $2,286 million, respectively, for the nine months ended September 30, 2023.
Development
In the third quarter of 2024, Hilton opened 531 hotels, totaling 36,600 rooms, resulting in 33,600 net room additions. During the quarter, NoMad, Graduate by Hilton, and Small Luxury Hotels of the World (SLH) became available for reservations on Hilton’s booking channels. The addition of SLH hotels brings Hilton’s hotel portfolio to 10 additional countries and territories. Hilton continued to expand its portfolio in the Asia Pacific market, surpassing 900 hotels in the region and opening its 700th hotel in China. Additionally, the Spark by Hilton brand continued to grow, with more than 20 hotels opening during the third quarter, including the debut of the first Spark hotel in Canada.
Hilton added 27,500 rooms to the development pipeline during the third quarter, and, as of September 30, 2024, its development pipeline totaled 3,525 hotels representing 492,400 rooms throughout 120 countries and territories, including 28 countries and territories where Hilton had no existing hotels. Additionally, of the rooms in the development pipeline, 235,400 were under construction and 280,700 were located outside of the United States
Balance Sheet and Liquidity
As of September 30, 2024, Hilton had $11.3 billion of debt outstanding, excluding the deduction for deferred financing costs and discounts, with a weighted average interest rate of 4.84 percent. Excluding all finance lease liabilities and other debt of its consolidated variable interest entities, Hilton had $11.1 billion of debt outstanding with a weighted average interest rate of 4.83 percent and no scheduled maturities until 2027, other than $500 million of outstanding Senior Notes due May 2025. Hilton believes that it has sufficient sources of liquidity and access to debt financing to address the Senior Notes due May 2025 at or prior to their maturity date. As of September 30, 2024, no debt amounts were outstanding under its $2.0 billion senior secured revolving credit facility (the Revolving Credit Facility), which had an available borrowing capacity of $1,913 million after considering $87 million of outstanding letters of credit. Total cash and cash equivalents were $1,655 million as of September 30, 2024, including $75 million of restricted cash and cash equivalents.
In September 2024, Hilton issued $1 billion aggregate principal amount of 5.875 percent Senior Notes due 2033. Hilton intends to use the net proceeds from the issuance for general corporate purposes.
In September 2024, Hilton paid a quarterly cash dividend of $0.15 per share of common stock, for a total of $37 million, bringing total dividend payments for the year to $113 million. In October 2024, the board of directors authorized a regular quarterly cash dividend of $0.15 per share of common stock to be paid on December 27, 2024, to holders of record of common stock as of the close of business on November 15, 2024.
During the three months ended September 30, 2024, Hilton repurchased 3.3 million shares of Hilton common stock at an average price per share of $217.15, for a total of $727 million. For the nine months ended September 30, 2024, Hilton repurchased 10.2 million shares of Hilton common stock at an average price per share of $206.29, returning $2,226 million of capital to shareholders, including dividends. Total capital return to shareholders including dividends year-to-date through October was $2,422 million.
The number of shares outstanding as of October 18, 2024, was 243.8 million.
Outlook
Share-based metrics in Hilton’s outlook include actual share repurchases through the third quarter but do not include the effect of potential share repurchases thereafter.
Full Year 2024
- System-wide comparable RevPAR, on a currency-neutral basis, is projected to increase between 2.0 percent and 2.5 percent compared to 2023.
- Diluted EPS is projected to be between $5.58 and $5.68.
- Diluted EPS, adjusted for special items, is projected to be between $6.93 and $7.03.
- Net income is projected to be between $1,405 million and $1,429 million.
- Adjusted EBITDA is projected to be between $3,375 million and $3,405 million.
- Contract acquisition costs and capital expenditures, excluding amounts reimbursed by third parties, are projected to be between $200 million and $250 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 7.0 percent and 7.5 percent.
Fourth Quarter 2024
- System-wide comparable RevPAR, on a currency-neutral basis, is projected to increase between 1.0 percent and 2.0 percent compared to the fourth quarter of 2023.
- Diluted EPS is projected to be between $1.49 and $1.59.
- Diluted EPS, adjusted for special items, is projected to be between $1.57 and $1.67.
- Net income is projected to be between $371 million and $395 million.
- Adjusted EBITDA is projected to be between $804 million and $834 million.
