Dive Brief:
- Hilton posted better-than-expected performance for the fourth quarter and full-year 2024, as well as record unit growth, according to an earnings report released Thursday.
- In the fourth quarter of 2024, system-wide RevPAR rose 3.5% year over year, above the high end of Hilton’s previous guidance. The company also raised its 2025 guidance to project system-wide RevPAR growth between 2% and 3%, according to the report.
- Recent RevPAR growth was driven by “better-than-expected trends in leisure and continued growth in business transient and group,” CEO Chris Nassetta said on a conference call Thursday. Nassetta later added that he is “optimistic” about the company’s 2025 growth following the presidential election.
Dive Insight:
For the fourth quarter and full-year 2024, Hilton’s system-wide RevPAR increased 3.5% and 2.7% year on year, respectively, exceeding the high end of the company’s guidance, per the earnings report.
During the fourth quarter, U.S. RevPAR rose 2.9% year on year, “driven by strong leisure demand and continued improvement across business transient groups,” CFO Kevin Jacobs said on the call. Hilton expects U.S. RevPAR to be at the low end of its system-wide range in 2025.
On the development front, Hilton opened more rooms in 2024 than any other year in history, as well as signed a record number of new rooms to its pipeline. Roughly half of the company’s openings in the year were luxury and lifestyle hotels, Nassetta said.
Conversion properties accounted for roughly 45% of all room openings in the year, driven by Hilton’s addition of Small Luxury Hotels of the World properties and “continued momentum from Spark,” according to Nassetta. Spark, which launched in 2023, recently opened its 100th hotel, he added.
Construction starts for the year were also the highest in Hilton’s history, up 10% over 2023, Nassetta said.
Going forward, Nassetta said that post-election certainty has led to “a broad belief” among business leaders “that the opportunity for economic growth in the short to intermediate term will be better.”
“While there's a lot of noise, you're going to be in a lighter regulatory environment across the board,” he said.
For the full-year 2025, Hilton projects a net unit growth of between 6% and 7%. Last quarter, several hotel CEOs predicted that the “unusual” election season would have a negative impact on Q4 performance.
