Q124 HLT earnings

earnings summary

Earnings Results: • Q1 system-wide RevPAR increased 2% year-over-year, at low end of guidance range • Adjusted EBITDA of $750 million, up 17% year-over-year, exceeded high end of guidance • Diluted EPS of $1.53, adjusted for special items • Management and franchise fees grew 14% year-over-year

Future Guidance: • Expects full year 2024 RevPAR growth of 2-4%, with U.S. at low end of range • Q2 RevPAR growth expected at 2-4% year-over-year • Q2 adjusted EBITDA guidance of $890-910 million, Q2 adjusted EPS of $1.80-1.86 • Full year adjusted EBITDA forecast of $3.375-3.425 billion • Full year diluted EPS forecast of $6.89-7.03, adjusted for special items • Expects net unit growth of 6-6.5% for full year, excluding Graduate Hotels acquisition

Hilton reported strong Q1 results that exceeded expectations, demonstrating the resilience of their business model. RevPAR growth of 2% was at the low end of guidance, impacted by renovations, weather, and holiday shifts. However, adjusted EBITDA and EPS meaningfully beat the high end of guidance. Management struck an optimistic tone, expecting continued recovery across segments, especially in group and business transient. Leisure transient demand is normalizing but expected to remain relatively strong.

Development momentum is building, with a record pipeline of 472,000 rooms. Hilton is expanding into lifestyle and luxury segments through partnerships and tuck-in acquisitions like Sydell Group’s NoMad brand, Graduate Hotels, and AutoCamp. These moves enhance Hilton’s network effect and growth prospects in attractive markets.

The company maintained its full year RevPAR growth outlook of 2-4%, assuming the broader economy remains resilient with a soft landing. Hilton expects to return $3 billion to shareholders in 2024 through buybacks and dividends.

Notable quotes: “We are pleased to report strong first quarter results, which continue to demonstrate the power of our business model and the strength of our development story.” - Chris Nassetta, CEO

”For the full year, group position is up 13% versus last year.” - Chris Nassetta

”System-wide construction starts also outperformed expectations, up roughly 45% versus last year, with all major regions meaningfully higher.” - Chris Nassetta