Skift Take
This summer, Hilton opened more hotels than they’ve ever opened in a three-month period. When you subtract the hotels they lost, it grew its hotel count by 7.8%, also a record.
Hilton reported record hotel openings and development activity in the third quarter.
The McLean, Virginia-based company said Wednesday it had opened 531 hotels, totaling over 6,000 rooms — the highest quarterly room additions in its history. Its net room growth reached an all-time high of 7.8%.
“Our market share is the highest it’s ever been,” said president and CEO Christopher Nassetta. “It’s significantly higher than any of our competitors.”
The Acceleration
- Hilton’s pipeline reached 492,000 rooms — up 8% year-over-year.
- The pace of growth is set to stay high. Hilton projects it will achieve between 7% and 7.5% net room growth for the full year 2024 and between 6% and 7% growth next year (excluding loyalty licensing partnerships and any possible acquisitions).
- Nearly half of Hilton’s pipeline represents projects already in the works. The rest are signings.
- About 60% of planned rooms are outside the U.S., as Hilton seeks to diversify globally. “In Asia, we’re shifting our business to APAC outside of China,” Nassetta said. “So a lot of growth opportunities there, a lot of growth opportunities in a lot of growth opportunities in India, the Middle East.”
- Executives said one of every five hotels under construction worldwide is a Hilton deal.
The Drivers of Deal Growth
- Conversions. Hilton has been stepping up its efforts to lure competitors’ hotels and independent hotels to its brands. The company expects so-called conversions, as opposed to new construction, to represent about one-third of its growth next year.
- Hustle. CEO Chris Nassetta emphasized the company’s “scrappy” approach to winning deals: “We get our hustle on.”
- Lower interest rates. “The development environment is starting to thaw,” said Kevin Jacobs, chief financial officer. He cited increased transaction activity in the past 30 days, which he said may signal a higher pace of signings next year.
- Effectiveness at driving gross profit for owners. “Why are we winning half the deals even though we’re at 6% of the global market?” Nassetta asked rhetorically. “It ultimately comes down to our ability over a long period of time to be able to deliver performance for owners.”
Accommodations Sector Stock Index Performance Year-to-Date
What am I looking at? The performance of hotels and short-term rental sector stocks within the ST200. The index includes companies publicly traded across global markets, including international and regional hotel brands, hotel REITs, hotel management companies, alternative accommodations, and timeshares.
The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. See more hotels and short-term rental financial sector performance.
Read the full methodology behind the Skift Travel 200.
