Hilton Reports First Quarter Results
MCLEAN, Va.--(BUSINESS WIRE)--April 24, 2024--
Hilton Worldwide Holdings Inc. (“Hilton,” “the Company,” “we,” “us” or “our”) (NYSE: HLT) today reported its first quarter 2024 results. Highlights include:
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-- Diluted EPS was $1.04 for the first quarter, and diluted EPS, adjusted
for special items, was $1.53
-- Net income was $268 million for the first quarter
-- Adjusted EBITDA was $750 million for the first quarter
-- System-wide comparable RevPAR increased 2.0 percent, on a currency
neutral basis, for the first quarter compared to the same period in 2023
-- Approved 29,800 new rooms for development during the first quarter,
bringing Hilton's development pipeline to a record 472,300 rooms as of
March 31, 2024, representing growth of 10 percent from March 31, 2023
-- Added 16,800 rooms to Hilton's system in the first quarter, resulting
in 14,200 net additional rooms for the first quarter, contributing to net
unit growth of 5.6 percent from March 31, 2023
-- Repurchased 3.4 million shares of Hilton common stock during the first
quarter; total capital return, including dividends, was $701 million for
the quarter and $908 million year to date through April
-- Announced the planned acquisition of the Graduate Hotels brand,
including the expected addition of approximately 35 franchised hotels to
our portfolio in the second quarter
-- In April 2024, acquired a controlling financial interest in the Sydell
Group, which owns the NoMad brand, marking Hilton's debut in the luxury
lifestyle space and providing further luxury expansion opportunities
-- In March 2024, issued $1.0 billion of senior notes consisting of: (i)
$550 million aggregate principal amount of 5.875% Senior Notes due 2029
and (ii) $450 million aggregate principal amount of 6.125% Senior Notes
due 2032
-- Full year 2024 system-wide RevPAR is projected to increase between 2.0
percent and 4.0 percent on a comparable and currency neutral basis
compared to 2023; full year net income is projected to be between $1,586
million and $1,621 million; full year Adjusted EBITDA is projected to be
between $3,375 million and $3,425 million
-- Full year 2024 capital return is projected to be approximately $3.0
billion
Overview
Christopher J. Nassetta, President & Chief Executive Officer of Hilton, said, “We are pleased to report a strong first quarter with bottom line results meaningfully exceeding our expectations, further demonstrating the power of our resilient, fee-based business model and strong development story. During the first quarter, system-wide RevPAR increased 2.0 percent as renovations, inclement weather and unfavorable holiday shifts weighed on performance more than anticipated. On the development side, we continued to see great momentum across signings, starts and openings. As a result of our record pipeline and the growth pace we’ve seen to-date, we expect net unit growth of 6.0 percent to 6.5 percent for the full year, excluding the planned acquisition of the Graduate Hotels brand.”
For the three months ended March 31, 2024, system-wide comparable RevPAR increased 2.0 percent compared to the same period in 2023 due to increases in both occupancy and ADR, and management and franchise fee revenues increased 14.4 percent compared to the same period in 2023.
For the three months ended March 31, 2024, diluted EPS was $1.04 and diluted EPS, adjusted for special items, was $1.53 compared to $0.77 and $1.24, respectively, for the three months ended March 31, 2023. Net income and Adjusted EBITDA were $268 million and $750 million, respectively, for the three months ended March 31, 2024, compared to $209 million and $641 million, respectively, for the three months ended March 31, 2023.
Development
In the first quarter of 2024, Hilton opened 106 hotels, totaling 16,800 rooms, resulting in 14,200 net room additions. During the quarter, Hilton celebrated a number of significant luxury and lifestyle openings including: the grand opening of the Conrad Orlando in Florida, the debut of LXR Hotels & Resorts in Hawaii and the introduction of the Waldorf Astoria and Canopy by Hilton brands to the Seychelles. Furthermore, Hilton debuted the Curio Collection by Hilton brand in Kenya and Motto by Hilton brand in Peru and entered into partnerships with AutoCamp and Small Luxury Hotels of the World (“SLH”), which will provide new elevated lodging experiences to Hilton guests. Hilton also announced the Waldorf Astoria Residences Dubai Downtown, which will be the Company’s first standalone residential property outside of the United States. Additionally, during the quarter, Hampton by Hilton celebrated the opening of its 3,000th hotel globally, kicking off a year of milestones and achievements for the brand including its 40th anniversary, entry into its 40th country and its expected groundbreaking entry into its fifth continent, Africa, later this year.
Hilton added 29,800 rooms to the development pipeline during the first quarter, and, as of March 31, 2024, Hilton’s development pipeline totaled approximately 3,380 hotels representing 472,300 rooms throughout 119 countries and territories, including 31 countries and territories where Hilton had no existing hotels. Additionally, of the rooms in the development pipeline, 229,700 were under construction and 267,900 were located outside of the U.S.
Balance Sheet and Liquidity
As of March 31, 2024, Hilton had $10.3 billion of long-term debt outstanding, excluding the deduction for deferred financing costs and discounts, with a weighted average interest rate of 4.89 percent. Excluding all finance lease liabilities and other debt of Hilton’s consolidated variable interest entities, Hilton had $10.1 billion of long-term debt outstanding with a weighted average interest rate of 4.88 percent and no scheduled maturities until May 2025. As of March 31, 2024, no debt amounts were outstanding under Hilton’s $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 $1,420 million as of March 31, 2024, including $74 million of restricted cash and cash equivalents.
In March 2024, Hilton issued $550 million aggregate principal amount of 5.875% Senior Notes due 2029 and $450 million aggregate principal amount of 6.125% Senior Notes due 2032 and used a portion of the net proceeds from the issuances to repay $200 million borrowed under the Revolving Credit Facility earlier in the first quarter. The remaining proceeds will be used for general corporate purposes, which may include investments and acquisitions.
In March 2024, Hilton paid a quarterly cash dividend of $0.15 per share of common stock, bringing total dividend payments for the quarter to $39 million. In April 2024, Hilton’s board of directors authorized a regular quarterly cash dividend of $0.15 per share of common stock to be paid on June 28, 2024 to holders of record of its common stock as of the close of business on May 17, 2024.
During the three months ended March 31, 2024, Hilton repurchased 3.4 million shares of its common stock at an average price per share of $196.17, for a total of $662 million, returning $701 million of capital to shareholders during the quarter including dividends. The number of shares outstanding as of April 19, 2024 was 250.0 million.
Outlook
Share-based metrics in Hilton’s outlook include actual share repurchases through the first quarter, but do not include the effect of potential share repurchases thereafter. Additionally, Hilton’s outlook does not include the effect of the planned acquisition of Graduate Hotels.
Full Year 2024
-- System-wide comparable RevPAR, on a currency neutral basis, is
projected to increase between 2.0 percent and 4.0 percent compared to
2023.
-- Diluted EPS is projected to be between $6.21 and $6.35.
-- Diluted EPS, adjusted for special items, is projected to be between
$6.89 and $7.03.
-- Net income is projected to be between $1,586 million and $1,621
million.
-- Adjusted EBITDA is projected to be between $3,375 million and $3,425
million.
-- 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 $3.0 billion.
-- General and administrative expenses are projected to be between $415
million and $430 million.
-- Net unit growth, excluding the effect of the planned acquisition of the
Graduate Hotels brand, is projected to be between 6.0 percent and 6.5
percent.
Second Quarter 2024
-- System-wide comparable RevPAR, on a currency neutral basis, is
projected to increase between 2.0 percent and 4.0 percent compared to the
second quarter of 2023.
-- Diluted EPS is projected to be between $1.74 and $1.80.
-- Diluted EPS, adjusted for special items, is projected to be between
$1.80 and $1.86.
-- Net income is projected to be between $443 million and $457 million.
-- Adjusted EBITDA is projected to be between $890 million and $910
million.