Two consumer discretionary companies with a dominant presence in regards to hotel operations are of course Marriott International (MAR)  and Hilton Worldwide (HLT) . Now may be a good time to see if investing in these hotel giants in 2024 is ideal with both reporting their Q4 results for fiscal 2023 within the last week.Let’s take a look at Marriott and Hilton’s quarterly reviews along with their growth projections to see if it’s time to buy.Marriott Q4 Review Reporting its Q4 results on Tuesday, Marriott w ...

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.It also includes access to the Zacks Style Scores.What are the Zacks Style Scores?Developed a ...

Investment Thesis - Hilton Worldwide Holdings is viewed as a long-term buy due to continued RevPAR growth despite concerns over slowing demand and potential for further revenue growth through hotel expansion [1] - The stock price has risen to $192.47, but there are concerns following a recent earnings miss [1] Performance Overview - Q4 2023 total revenues increased by 6.7% year-over-year, while operating income decreased from $504 million to $400 million due to a nearly 14% rise in total expenses [2] - Total revenues for Q4 2023 were $2.609 billion compared to $2.444 billion in Q4 2022, with significant contributions from franchise and licensing fees, management fees, and owned hotels [3] Revenue and Expenses Breakdown - Franchise and licensing fees rose to $601 million in Q4 2023 from $537 million in Q4 2022, while total expenses increased to $2.209 billion from $1.940 billion [3] - Operating income for the year ended December 31, 2023, was $2.225 billion, up from $2.094 billion in 2022 [3] RevPAR and Room Growth - RevPAR for Hilton Hotels & Resorts increased by 8% year-over-year, with an average daily rate (ADR) of $187.14 in Q4 2023 [4][7] - Room growth was noted, with Hilton Hotels & Resorts reaching 226,015 rooms, up from 224,370 in the previous year [6] Financial Health - The net debt to adjusted EBITDA ratio improved to 2.7x from 2.9x year-over-year, indicating a positive trend in financial health despite an increase in net debt [8][14] - Adjusted EBITDA for Q4 2023 was $3.089 billion, an 18% increase from the prior year quarter [15] Future Outlook - Hilton forecasts adjusted profit for 2024 to be between $6.80 and $6.94 per share, a decrease from previous expectations of $7.07, but still a significant increase from $4.33 in 2023 [14] - System-wide RevPAR is expected to rise by 2% to 4% in 2024, down from 12.6% growth in 2023 [15] Market Position and Strategy - The company continues to expand its hotel portfolio, including the opening of its 150th Curio Collection by Hilton and its 600th hotel in China, which supports overall revenue growth [20] - Despite potential normalization of RevPAR growth, the ongoing hotel openings and brand expansion are expected to bolster revenue [20] Conclusion - Hilton Worldwide Holdings has shown growth in RevPAR but faces rising costs and concerns over future growth moderation [21] - The company is positioned for long-term growth due to strategic hotel expansion, although short to medium-term consolidation may occur due to slower RevPAR growth expectations [21]

Hilton Worldwide Holdings Inc. (NYSE:HLT) Q4 2023 Results Conference Call February 7, 2024 9:00 AM ET Company Participants Jill Chapman - Senior Vice President, Investor Relations and Corporate Development Chris Nassetta - President and Chief Executive Officer Kevin Jacobs - Chief Financial Officer and President of Global Development Conference Call Participants Joe Greff - JP Morgan Carlo Santarelli - Deutsche Bank Shaun Kelley - Bank of America David Katz - Jefferies Smedes Rose - Citi Brandt Montour - Ba ...

Hilton Worldwide Holdings Inc. (HLT) reported impressive fourth-quarter 2023 results, wherein earnings and total revenues topped the Zacks Consensus Estimate and increased on a year-over-year basis. The company's quarterly results notably benefited from solid improvement in revenue per available room (RevPAR) on the back of increased occupancy rates and average daily rate (ADR). Furthermore, during the quarter, HLT witnessed a record number of openings, which encouraged the uptrend to a great extent. The co ...

For the quarter ended December 2023, Hilton Worldwide Holdings Inc. (HLT) reported revenue of $2.61 billion, up 6.8% over the same period last year. EPS came in at $1.68, compared to $1.59 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $2.57 billion, representing a surprise of +1.52%. The company delivered an EPS surprise of +7.69%, with the consensus EPS estimate being $1.56.While investors closely watch year-over-year changes in headline numbers -- revenue and ear ...

Hilton Worldwide Holdings Inc. (HLT) came out with quarterly earnings of $1.68 per share, beating the Zacks Consensus Estimate of $1.56 per share. This compares to earnings of $1.59 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 7.69%. A quarter ago, it was expected that this company would post earnings of $1.67 per share when it actually produced earnings of $1.67, delivering no surprise.Over the last four quarters, the comp ...

Hilton Worldwide Holdings Inc.’s stock HLT, +0.49% fell 2.2% early Wednesday, after the hotel operator’s fourth-quarter revenue only managed to match consensus and its guidance for 2024 came up short. The company posted net income of $148 million, or 57 cents a share, for the quarter, down from $328 million, or $1.21 a share, in the year-earlier period. Adjusted per-share earnings came to $1.68, ahead of the $1.57 FactSet consensus. Revenue rose to $2.609 billion from $2.444 billion a year ago, matching th ...

Hilton (NYSE: HLT) and Small Luxury Hotels of the World (SLH) today announced an exclusive strategic partnership that will welcome Hilton guests to hundreds of independently minded luxury hotels in the most sought-after destinations around the world. (Photo: Hilton)Hilton (NYSE: HLT) and Small Luxury Hotels of the World (SLH) today announced an exclusive strategic partnership that will welcome Hilton guests to hundreds of independently minded luxury hotels in the most sought-after destinations around the wo ...

[Part I](index=4&type=section&id=PART%20I) [Business](index=5&type=section&id=Item%201.%20Business) Hilton operates a global, capital-light hospitality business focused on brand expansion and its loyalty program Company Scale and Development Pipeline as of Dec 31, 2023 | Metric | Properties | Rooms (approx.) | | :--- | :--- | :--- | | **Total System** | 7,530 | 1,182,937 | | **Hilton Honors Members** | N/A | 180 million | | **2023 Net Unit Growth** | 353 | 53,100 (4.9%) | | **Development Pipeline** | 3,274 | 462,400 | - The business operates through two primary segments: Management and Franchise, which earns fees from managing and licensing brands to third-party owners, and an Ownership segment, which derives revenue from its consolidated owned and leased hotels[12](index=12&type=chunk) - Hilton's brand portfolio spans multiple market segments, from luxury (Waldorf Astoria, Conrad) to focused service (Hampton, Tru) and extended stay (Homewood Suites, Home2 Suites)[18](index=18&type=chunk) - The company's ESG strategy, 'Travel with Purpose,' focuses on environmental goals (net-zero future), social initiatives (career opportunities, community support), and robust governance[52](index=52&type=chunk)[53](index=53&type=chunk) [Our Brand Portfolio](index=7&type=section&id=1.1%20Our%20Brand%20Portfolio) The company's portfolio features a diverse range of brands across multiple market segments, led by Hampton by Hilton Largest Brands by Room Count (Dec 31, 2023) | Brand | Properties | Rooms | % of Total Rooms | | :--- | :--- | :--- | :--- | | Hampton by Hilton | 2,971 | 327,690 | 27.7% | | Hilton Hotels & Resorts | 613 | 226,015 | 19.1% | | DoubleTree by Hilton | 677 | 154,708 | 13.1% | | Hilton Garden Inn | 1,010 | 149,130 | 12.6% | - The company launched Spark by Hilton, a premium economy brand, in 2023, which already has over **140 properties in the development pipeline**[31](index=31&type=chunk) [Our Business Segments](index=11&type=section&id=1.2%20Our%20Business%20Segments) The company's operations are divided into a capital-light Management and Franchise segment and an Ownership segment System Composition by Type (Dec 31, 2023) | Type | Properties | Rooms | | :--- | :--- | :--- | | **Managed** | 800 | 250,472 | | **Franchised** | 6,679 | 914,974 | | **Owned / Leased** | 51 | 17,491 | | **Total System** | **7,530** | **1,182,937** | - Management contracts typically have initial terms of **20-30 years**, with fees based on a percentage of revenue and, in some cases, operating profits[44](index=44&type=chunk)[45](index=45&type=chunk) - Franchise contracts typically have initial terms of approximately **20 years** for new hotels, with franchisees paying royalty and program fees[48](index=48&type=chunk)[49](index=49&type=chunk) [Environmental, Social and Governance (ESG)](index=14&type=section&id=1.3%20Environmental%2C%20Social%20and%20Governance%20(ESG)) The 'Travel with Purpose' ESG strategy sets ambitious environmental targets and focuses on social and human capital initiatives - Hilton was the first global hospitality company to set science-based targets validated by SBTi in 2018 and set more ambitious targets in 2022 aiming for a **1.5°C pathway**[57](index=57&type=chunk) Environmental Impact Reductions (2008-2023) | Metric | Reduction Since 2008 | | :--- | :--- | | Carbon dioxide emissions per sq. meter | 45% | | Landfilled waste per sq. meter | 64% | | Water consumption per sq. meter | 26% | | Energy consumption per sq. meter | 33% | - As of December 31, 2023, the company employed or managed approximately **178,000 individuals**, with a global workforce that was **43% women** and a U.S. workforce that was **72% ethnically diverse**[70](index=70&type=chunk)[76](index=76&type=chunk) [Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from macroeconomic conditions, competition, cybersecurity threats, and reliance on third-party owners - Key risks include macroeconomic conditions (inflation, interest rates), geopolitical activity, and public health concerns that can reduce demand for hospitality services[98](index=98&type=chunk) - The business is subject to significant IT and cybersecurity risks, including system failures, cyber-attacks, and costs associated with protecting personal data and incorporating AI[125](index=125&type=chunk)[130](index=130&type=chunk)[132](index=132&type=chunk) - A substantial amount of indebtedness (approx. **$9.3 billion** as of Dec 31, 2023) could adversely affect financial condition and limit flexibility[179](index=179&type=chunk) - The company relies on maintaining good relationships with third-party hotel owners; any deterioration could harm growth and financial results[110](index=110&type=chunk)[111](index=111&type=chunk) [Cybersecurity](index=39&type=section&id=Item%201C.%20Cybersecurity) Cybersecurity governance is managed by a dedicated team and the Audit Committee, utilizing a formal incident response plan - A dedicated Global Information Security (GIS) team, led by the CISO, is responsible for managing cybersecurity risks[193](index=193&type=chunk) - The Audit Committee assists the board in monitoring cybersecurity risk, receiving at least quarterly reports from the CIO and CISO[194](index=194&type=chunk) - The company utilizes a Global Cybersecurity Incident Response Plan (CIRP) to manage and escalate potential incidents and a GRC platform to monitor risks[195](index=195&type=chunk)[196](index=196&type=chunk) [Properties](index=41&type=section&id=Item%202.%20Properties) The property portfolio includes interests in 5 joint venture hotels, 46 leased hotels, and various corporate offices Joint Venture Hotels (as of Dec 31, 2023) | Property | Location | Ownership % | Rooms | | :--- | :--- | :--- | :--- | | Conrad Cairo | Cairo, Egypt | 10% | 614 | | Hilton Tokyo Bay | Urayasu-shi, Japan | 24% | 828 | | Hilton Nagoya | Nagoya, Japan | 24% | 460 | | Hilton Mauritius Resort & Spa | Flic-en-Flac, Mauritius | 20% | 193 | | Hilton Imperial Dubrovnik | Dubrovnik, Croatia | 18% | 149 | - The company leases **46 hotels with 15,247 rooms**, with significant properties including the Rome Cavalieri (370 rooms) and Hilton Tokyo (830 rooms)[203](index=203&type=chunk)[204](index=204&type=chunk) - Corporate headquarters are leased in McLean, VA, with other key offices in Memphis, Glasgow, Dubai, Singapore, Tokyo, Shanghai, and Mexico City[207](index=207&type=chunk) [Legal Proceedings](index=43&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings but does not expect a material adverse financial impact - The company is involved in ordinary course legal proceedings, including tort, employee, and consumer protection claims[208](index=208&type=chunk) - Management believes the ultimate outcome of pending litigation **will not have a material adverse effect** on the company's financial condition[208](index=208&type=chunk) [Part II](index=44&type=section&id=PART%20II) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=44&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's stock trades on the NYSE, and it actively returns capital through dividends and a significant share repurchase program Issuer Purchases of Equity Securities (Q4 2023) | Period | Total Shares Purchased | Average Price Paid | Total Cost (approx.) | | :--- | :--- | :--- | :--- | | Oct 2023 | 1,758,248 | $151.02 | $265.5M | | Nov 2023 | 1,303,034 | $165.08 | $215.1M | | Dec 2023 | 1,503,791 | $176.57 | $265.5M | | **Total Q4** | **4,565,073** | **$163.45** | **$746.1M** | - In November 2023, the board authorized an additional **$3.0 billion** for the stock repurchase program, leaving approximately **$3.8 billion** available for repurchases as of year-end[215](index=215&type=chunk)[278](index=278&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=46&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2023, the company achieved strong RevPAR and revenue growth, maintained robust liquidity, and returned significant capital to shareholders System-Wide Comparable Hotel Operating Statistics (2023 vs. 2022) | Metric | 2023 Value | % Change vs. 2022 | | :--- | :--- | :--- | | **RevPAR** | $113.90 | 12.6% | | **ADR** | $158.62 | 5.4% | | **Occupancy** | 71.8% | 4.6 % pts. | Key Financial Results (in millions) | Metric | 2023 | 2022 | % Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | $10,235 | $8,773 | 16.7% | | **Net Income** | $1,151 | $1,257 | (8.4%) | | **Adjusted EBITDA** | $3,089 | $2,599 | 18.9% | - The company returned significant capital to shareholders in 2023, repurchasing approximately **15.6 million shares for $2.3 billion** and paying **$158 million in dividends**[278](index=278&type=chunk)[287](index=287&type=chunk) [Results of Operations](index=53&type=section&id=7.1%20Results%20of%20Operations) Strong RevPAR growth drove higher fee and hotel revenues, though net income declined due to investment losses and higher taxes - Franchise and licensing fees increased by **14.6% to $2.37 billion**, and total management fees increased by **25.7% to $616 million**, driven by RevPAR growth[260](index=260&type=chunk) - Owned and leased hotel revenues increased by **$168 million (15.6%)**, primarily due to a **36.1% RevPAR increase** at comparable properties[262](index=262&type=chunk)[263](index=263&type=chunk) - A loss of **$92 million** was recognized on an investment in an unconsolidated affiliate, comprising a **$44 million impairment** and **$48 million in credit losses**[271](index=271&type=chunk) - Income tax expense increased to **$541 million** from $477 million, mainly due to higher reserves for uncertain tax positions related to the guest loyalty program[273](index=273&type=chunk) [Liquidity and Capital Resources](index=57&type=section&id=7.2%20Liquidity%20and%20Capital%20Resources) The company maintained a solid liquidity position with strong operating cash flow, which funded significant share repurchases and dividends Summary of Cash Flows (in millions) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash from operating activities | $1,946 | $1,681 | | Net cash used in investing activities | ($305) | ($123) | | Net cash used in financing activities | ($2,040) | ($1,765) | - The increase in operating cash flow was supported by the resumption of cash purchases of Hilton Honors points by American Express[285](index=285&type=chunk) - As of Dec 31, 2023, total indebtedness was approximately **$9.3 billion**, with full availability of its **$2.0 billion Revolving Credit Facility**[288](index=288&type=chunk)[289](index=289&type=chunk) [Critical Accounting Estimates](index=60&type=section&id=7.3%20Critical%20Accounting%20Estimates) Key estimates requiring significant management judgment include impairment testing, loyalty program valuation, and income tax accounting - **Goodwill and Brands**: Impairment is assessed annually or when indicators exist, using qualitative factors or quantitative discounted cash flow models[292](index=292&type=chunk) - **Hilton Honors**: The company engages third-party actuaries to determine the fair value of the future reward redemption obligation, which involves complex estimates[297](index=297&type=chunk) - **Income Taxes**: Significant judgment is used to assess the realization of deferred tax assets and to recognize and measure uncertain tax positions[300](index=300&type=chunk)[302](index=302&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=63&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is primarily exposed to interest rate and foreign currency risks, which it manages through derivatives - The primary interest rate risk exposure is to one-month SOFR on the company's Term Loans[306](index=306&type=chunk) Debt Structure by Rate Type (as of Dec 31, 2023) | Debt Type | Carrying Value (in millions) | Weighted Avg. Interest Rate | | :--- | :--- | :--- | | Fixed-rate long-term debt | $6,000 | 4.37% | | Variable-rate long-term debt | $3,119 | 7.38% | - The company uses forward contracts to hedge against foreign currency exchange rate volatility for certain fees and intercompany balances[311](index=311&type=chunk) [Financial Statements and Supplementary Data](index=65&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements and the auditor's unqualified opinion on financials and internal controls - The independent auditor, Ernst & Young LLP, issued an **unqualified opinion** on the consolidated financial statements and the effectiveness of internal control over financial reporting[321](index=321&type=chunk)[328](index=328&type=chunk) - Critical Audit Matters identified by the auditor were the accounting for the **Hilton Honors loyalty program** and the **accounting for income taxes**[332](index=332&type=chunk) [Consolidated Financial Statements](index=68&type=section&id=Consolidated%20Financial%20Statements) In 2023, the company reported total revenues of $10.24 billion, net income of $1.15 billion, and a total deficit of $2.35 billion Consolidated Balance Sheet Highlights (in millions) | Account | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Assets | $15,401 | $15,512 | | Total Liabilities | $17,748 | $16,610 | | Total Deficit | ($2,347) | ($1,098) | | Long-term Debt | $9,157 | $8,708 | Consolidated Statement of Operations Highlights (in millions) | Account | 2023 | 2022 | | :--- | :--- | :--- | | Total Revenues | $10,235 | $8,773 | | Operating Income | $2,225 | $2,094 | | Net Income | $1,151 | $1,257 | | Diluted EPS | $4.33 | $4.53 | [Notes to Consolidated Financial Statements](index=77&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail key accounting policies, including a $2.73 billion loyalty program liability and a significant increase in unrecognized tax benefits - **Note 9**: In November 2023, the company amended its Term Loans, converting them into new tranches due 2028 and 2030 and increasing the principal by **$500 million**[444](index=444&type=chunk) - **Note 11**: Impairment losses of **$38 million** were recognized on assets associated with certain leased hotels during 2023[454](index=454&type=chunk) - **Note 13**: Unrecognized tax benefits increased significantly to **$555 million**, primarily due to a **$263 million** reserve increase related to the tax treatment of the guest loyalty program[469](index=469&type=chunk) - **Note 15**: Share-based compensation expense was **$169 million** in 2023[489](index=489&type=chunk) [Controls and Procedures](index=109&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of the end of the period[521](index=521&type=chunk) - Management's report and the independent auditor's attestation found that the company maintained **effective internal control over financial reporting** as of December 31, 2023[522](index=522&type=chunk)[317](index=317&type=chunk) [Part III](index=110&type=section&id=PART%20III) This section incorporates by reference information on governance, compensation, and ownership from the 2024 proxy statement [Directors, Executive Officers and Corporate Governance](index=110&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, officers, and governance is incorporated by reference from the 2024 proxy statement - Details regarding directors, executive officers, and corporate governance are not included directly in this report but are **incorporated by reference** from the forthcoming 2024 proxy statement[527](index=527&type=chunk) [Executive Compensation](index=110&type=section&id=Item%2011.%20Executive%20Compensation) Information on executive compensation is incorporated by reference from the 2024 proxy statement - Details regarding executive compensation are not included directly in this report but are **incorporated by reference** from the forthcoming 2024 proxy statement[528](index=528&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=110&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership is incorporated by reference from the 2024 proxy statement - Details regarding security ownership are not included directly in this report but are **incorporated by reference** from the forthcoming 2024 proxy statement[529](index=529&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=110&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related transactions and director independence is incorporated by reference from the 2024 proxy statement - Details regarding related transactions and director independence are not included directly in this report but are **incorporated by reference** from the forthcoming 2024 proxy statement[530](index=530&type=chunk) [Principal Accountant Fees and Services](index=110&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information on accountant fees and services is incorporated by reference from the 2024 proxy statement - Details regarding principal accountant fees and services are not included directly in this report but are **incorporated by reference** from the forthcoming 2024 proxy statement[531](index=531&type=chunk) [Part IV](index=110&type=section&id=PART%20IV) This section lists the financial statements, schedules, and exhibits filed with the annual report [Exhibits and Financial Statement Schedules](index=110&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all documents filed, referencing financial statements in Item 8 and providing a detailed list of exhibits - The financial statements are included under Item 8 of the report[532](index=532&type=chunk) - A comprehensive list of exhibits is provided, including key agreements such as the Credit Agreement and various Senior Note Indentures[533](index=533&type=chunk)[535](index=535&type=chunk)[537](index=537&type=chunk)