Company Overview - As of March 31, 2025, Hilton operates 8,602 properties with a total of 1,282,192 rooms across 139 countries, and has 218 million members in its Hilton Honors loyalty program, reflecting a 16% increase from the previous year[65]. - The Americas region accounted for 65% of Hilton's system-wide hotel rooms as of March 31, 2025[67]. Growth and Development - The company reported 186 hotel openings and 155 net additions during the three months ended March 31, 2025, resulting in a net unit growth of 7.2%[70]. - The development pipeline includes 270 additions expected to add 32,600 rooms, with a total of 3,600 hotels and 503,400 rooms projected in the pipeline[70]. - The company faces challenges in executing its growth strategy due to elevated inflation and interest rates, which may lead to delays in openings and new developments[69]. Financial Performance - Adjusted EBITDA for the three months ended March 31, 2025, was $795 million, up from $750 million in the prior year[87]. - Ownership revenues decreased by 8.2% to $234 million, impacted by unfavorable foreign currency fluctuations[88]. - Net cash provided by operating activities increased by 30.6% to $452 million for the three months ended March 31, 2025, compared to $346 million in the same period of 2024[111]. - Net cash used in investing activities rose by 85.2% to $50 million for the three months ended March 31, 2025, compared to $27 million in the same period of 2024[111]. - The decrease in net cash provided by financing activities was primarily due to a $1.0 billion cash inflow from the March 2024 Senior Notes issuance, along with a $209 million increase in cash outflows for share repurchases[114]. Revenue Metrics - Revenue per Available Room (RevPAR) is a significant performance indicator, calculated by dividing hotel room revenue by total available room nights[75]. - System-wide RevPAR increased by 2.5% to $103.59, supported by improvements in ADR and occupancy across all regions[82]. - Franchise and licensing fees rose by 9.5% to $625 million, driven by a 1.5% increase in RevPAR at comparable franchised hotels[84]. - The company experienced a 5.2% increase in RevPAR at comparable managed hotels, contributing to a currency neutral increase in management fees[86]. Cash Management - Total cash and cash equivalents as of March 31, 2025, were $807 million, including $76 million of restricted cash[102]. - The company plans to issue $500 million under the Revolving Credit Facility in April 2025 to repay the May 2025 Senior Notes at maturity[116]. - Cash management policy objectives include maintaining liquidity availability and minimizing operational costs[109]. - The company may pre-sell Hilton Honors points through strategic partnerships as a source of liquidity[108]. Segment Performance - Hilton's management and franchise segment generates revenue from management and franchise fees, while the ownership segment derives revenue from hotel room sales and services[66]. - Management and franchise segment included 833 managed and 7,722 franchised properties, totaling 1,266,586 rooms as of March 31, 2025[100]. Operational Metrics - The occupancy rate is a key metric for Hilton, measuring the total number of room nights sold against available room nights, which helps determine pricing levels[73]. - The increase in interest expense was primarily due to $30 million from the issuance of $1.0 billion Senior Notes[96]. - General and administrative expenses decreased by 9.6% to $94 million, mainly due to reduced payroll costs[93]. Market Risks - The company has exposure to market risks from changes in one-month SOFR and foreign currency exchange rates, which may affect future income and cash flows[119]. - The company emphasizes the importance of evaluating the economic viability of new hotels based on geographic location and credit quality of third-party owners[69]. Accounting and Estimates - There were no material changes to critical accounting estimates during the three months ended March 31, 2025, compared to previous disclosures[118].

Financial Data and Key Metrics Changes - The company reported system-wide RevPAR growth of 2.5% year over year, driven by strong momentum from the end of the previous year [6] - Adjusted EBITDA was $795 million in the first quarter, up 6% year over year, exceeding the high end of guidance [15] - Diluted earnings per share adjusted for special items was $1.72 [16] Business Line Data and Key Metrics Changes - Group RevPAR increased more than 6% year over year, supported by growth in urban markets and company meetings [6] - Business transient RevPAR increased 2%, primarily from small and medium-sized businesses, which make up roughly 85% of the business transient mix [6] - Leisure transient RevPAR increased 1%, with robust performance in January followed by softening demand patterns [6] Market Data and Key Metrics Changes - In the Americas outside the U.S., first quarter RevPAR increased 7% year over year, driven by key events in Mexico and Brazil [17] - In Europe, RevPAR grew 2.6% year over year, with strong rate and occupancy growth in Continental Europe [18] - In the Asia Pacific region, first quarter RevPAR was flat year over year, with China experiencing a decline of 3.1% [19] Company Strategy and Development Direction - The company continues to expand its development pipeline, ending the quarter with more than 503,000 rooms, representing a 7% year-over-year increase [10] - The luxury and lifestyle categories accounted for 30% of all hotel openings in the quarter, with these portfolios approaching 1,000 hotels globally [9] - The company aims to deliver net unit growth of 6% to 7% in 2025, with nearly half of its pipeline under construction [12] Management's Comments on Operating Environment and Future Outlook - Management noted that broader macro uncertainty intensified in March, impacting demand, particularly in leisure [6] - The company expects second quarter RevPAR to be approximately flat versus the prior year quarter, with full-year expectations of flat to up 2% [7] - Management expressed optimism about long-term opportunities supported by a capital-light business model and favorable megatrends in travel [13] Other Important Information - The company was named the number one best company to work for in the U.S. by Great Place to Work and Fortune for the second consecutive year [13] - A cash dividend of $0.15 per share was paid during the first quarter, with a total expected return of approximately $3.3 billion to shareholders for the year [21][22] Q&A Session Summary Question: Concerns about recessionary environment - Management acknowledged the uncertainty in the market but expressed confidence in the stability of demand patterns and the potential for positive outcomes in the second half of the year [30][36] Question: Development environment amidst uncertainty - Management indicated that while developers are cautious, there has not been a significant impact on current projects, and they remain optimistic about future growth [44][50] Question: Impact of economic downturn on business - Management highlighted the resilience of the business model, emphasizing low leverage and strong access to liquidity, preparing for any potential downturn [56][58] Question: Economic intensity of deals in APAC and China - Management noted that the business in China continues to grow, with a focus on joint ventures and franchising, which allows for capital-light expansion [63][66] Question: Group performance outlook - Management remains optimistic about group performance leading the pack, despite some short-term booking softness due to uncertainty [72][76]

Core Viewpoint - Hilton Worldwide Holdings Inc. reported quarterly earnings of $1.72 per share, exceeding the Zacks Consensus Estimate of $1.61 per share, and showing an increase from $1.53 per share a year ago, indicating a positive earnings surprise of 6.83% [1] Financial Performance - The company posted revenues of $2.7 billion for the quarter ended March 2025, slightly missing the Zacks Consensus Estimate by 0.45%, but up from $2.57 billion year-over-year [2] - Over the last four quarters, Hilton has surpassed consensus EPS estimates four times and topped revenue estimates twice [2] Stock Performance - Hilton Worldwide shares have declined approximately 10.3% since the beginning of the year, compared to a 6% decline in the S&P 500 [3] - The current Zacks Rank for Hilton is 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $2.13 on revenues of $3.19 billion, and for the current fiscal year, it is $7.86 on revenues of $12.09 billion [7] - The estimate revisions trend for Hilton Worldwide is mixed, which may change following the recent earnings report [6] Industry Context - The Hotels and Motels industry is currently ranked in the top 31% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Diluted EPS for Q1 2025 was $1.23, with adjusted diluted EPS at $1.72, compared to $1.04 and $1.53 for Q1 2024, respectively [5]. - Net income for Q1 2025 was $300 million, an increase from $268 million in Q1 2024 [5]. - Adjusted EBITDA for Q1 2025 was $795 million, up from $750 million in Q1 2024 [5]. - Full year 2025 net income is projected to be between $1,707 million and $1,749 million [17]. - Full year 2025 Adjusted EBITDA is projected to be between $3,650 million and $3,710 million [17]. - Total revenues reported for Q1 2025 were $2,695 million, up from $2,573 million in Q1 2024, marking a growth of 4.7% [40]. - The net income margin improved to 11.1% in Q1 2025 from 10.4% in Q1 2024 [40]. - For the three months ending June 30, 2025, net income is projected to be between $454 million and $468 million, with diluted EPS expected to range from $1.88 to $1.94 [44]. - The company anticipates net income for the year ending December 31, 2025, to be between $1,702 million and $1,744 million, with diluted EPS ranging from $7.04 to $7.22 [44]. Operational Metrics - System-wide comparable RevPAR increased by 2.5% on a currency neutral basis for Q1 2025 compared to Q1 2024 [2]. - System-wide occupancy rate for Q1 2025 was 66.8%, an increase of 0.4 percentage points compared to Q1 2024 [28]. - Average Daily Rate (ADR) for Q1 2025 was $155.07, reflecting a 1.8% increase from Q1 2024 [28]. - Revenue Per Available Room (RevPAR) for Q1 2025 reached $103.59, up 2.5% year-over-year [28]. - The Middle East & Africa region had the highest occupancy rate at 70.8%, an increase of 2.1 percentage points year-over-year [28]. Development and Expansion - The development pipeline reached 503,400 rooms as of March 31, 2025, representing a 7% growth from the previous year [2]. - A total of 32,600 new rooms were approved for development in Q1 2025, with 186 hotels opened, resulting in 14,000 net room additions [6][7]. - The company has a pipeline of rooms under construction, indicating ongoing expansion efforts in its hotel portfolio [66]. Cash and Debt Management - As of March 31, 2025, total cash and cash equivalents were $807 million, including $76 million of restricted cash [8]. - The company’s net debt as of March 31, 2025, was $10,427 million, compared to $9,860 million at the end of 2024 [42]. - The long-term debt to net income ratio stood at 7.1 as of March 31, 2025 [42]. - Net debt is calculated as long-term debt minus cash and cash equivalents, providing insights into the company's indebtedness and financial leverage [59]. Cost Management - The company reported a decrease in contract acquisition costs, net of refunds, to $30 million in Q1 2025 from $37 million in Q1 2024, a decline of 18.9% [34]. - Total capital expenditures for Q1 2025 amounted to $40 million, a 17.6% increase from $34 million in Q1 2024 [34]. - Special items for the year ending December 31, 2025, include cost reimbursement revenues of $(1,630) million and reimbursed expenses of $1,759 million [44]. Performance Evaluation Metrics - Adjusted EBITDA and Adjusted EBITDA margin are key performance measures used by the company to evaluate operating performance and make decisions, excluding items like interest expense and depreciation that can vary widely across companies [56]. - Occupancy is a critical metric for the company, representing the total number of room nights sold divided by available room nights, which helps gauge demand and determine achievable Average Daily Rate (ADR) pricing levels [62]. - ADR, calculated as hotel room revenue divided by total room nights sold, provides insights into pricing levels and customer base, influencing overall revenues and profitability [63]. - Revenue per Available Room (RevPAR) is a significant performance indicator, calculated by dividing hotel room revenue by total available room nights, correlating with occupancy and ADR [64]. - The company excludes reimbursed revenues and expenses from its operating performance evaluation, as they do not impact net income in the reporting period [57]. - The long-term debt to net income (loss) ratio and net debt to Adjusted EBITDA ratio are non-GAAP measures used to assess financial leverage and are not substitutes for GAAP measures [60].

HLT's earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 5.1%. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.) Trend in Estimate Revision of HLT The Zacks Consensus Estimate for first-quarter earnings per share (EPS) is pegged at $1.61, indicating growth of 5.2% from the $1.53 reported in the year-ago quarter. For revenues, the consensus mark is pegged at $2.71 billion, suggesting growth of 5.2% from the prior-year quarter's re ...

Core Insights - The high-end accommodation market in Qingdao is expanding rapidly, with over 20 five-star standard hotels established in the last five years, including several international brands making their debut in Shandong [1][2][3] - Major international hotel groups are increasingly opening their first locations in Qingdao, with eight out of the top ten global high-end hotel management groups choosing to establish their first hotels in the city [3][4] Group 1: Market Dynamics - Qingdao's hotel market is experiencing a surge in demand, with hotel order volumes increasing by 28% year-on-year, driven by the upcoming May Day holiday and a growing "holiday economy" [2] - The Marriott International Group has significantly expanded its presence in Qingdao, with multiple brands including St. Regis, Westin, and Le Meridien already operational, and new projects like the dual-brand Qingdao Jinmao hotels set to open soon [2][3] - The InterContinental Hotels Group has also announced the opening of its first Indigo hotel in Qingdao, emphasizing local cultural integration and unique guest experiences [3][4] Group 2: Economic and Tourism Potential - Qingdao is recognized as a city with international tourism appeal, supported by its strong economic foundation, including being one of China's major foreign trade ports and home to significant enterprises like Haier and Tsingtao Brewery [6][7] - The city is actively pursuing new industries and has been approved as a pilot city for asset investment companies, indicating a robust economic growth trajectory with a projected GDP of 16,719.46 billion yuan in 2024, reflecting a 5.7% increase from the previous year [8][9] Group 3: Challenges and Opportunities - Despite the influx of international hotel brands, Qingdao's hotel market still faces challenges, with 80% of its hotels being low-end, and only 2% classified as high-end, indicating a significant imbalance in accommodation quality [10][11] - The seasonal nature of tourism in Qingdao leads to high vacancy rates during off-peak months, with summer accounting for 60% of annual tourist traffic, highlighting the need for improved year-round demand [11][12] - The local economy's reliance on traditional industries and the lack of strong private enterprises contribute to insufficient business travel demand, which is crucial for sustaining high-end hotel occupancy [12][13] Group 4: Investment Strategies - The high vacancy rate in Qingdao's office buildings, currently at 35%, presents an opportunity for converting these properties into mid-to-high-end hotels, leveraging their prime locations and existing infrastructure [14][15] - Upgrading low-efficiency assets, particularly older hotels with good locations, could meet the rising demand for quality accommodations and enhance the overall hotel market [15][16] - Redefining hotel experiences to incorporate local culture and community engagement could attract both tourists and local residents, creating a unique destination within Qingdao [16][17]

Core Insights - Analysts project Hilton Worldwide Holdings Inc. (HLT) will report quarterly earnings of $1.61 per share, reflecting a year-over-year increase of 5.2% [1] - Revenue is expected to reach $2.71 billion, also representing a 5.2% increase from the same quarter last year [1] Earnings Estimates - Over the past 30 days, the consensus EPS estimate has been adjusted upward by 0.1%, indicating a reassessment by covering analysts [2] - Changes in earnings estimates are crucial for predicting investor reactions, with empirical studies showing a strong correlation between earnings estimate revisions and short-term stock performance [3] Revenue Breakdown - Analysts estimate 'Revenues- Other revenues from managed and franchised properties' at $1.61 billion, a 5.8% increase year-over-year [5] - 'Revenues- Owned and leased hotels' are projected at $258.21 million, indicating a 1.3% increase from the prior year [5] - 'Revenues- Other revenues' are expected to reach $55.03 million, reflecting a 10.1% increase year-over-year [6] - 'Revenues- Franchise and licensing fees' are forecasted at $629.00 million, suggesting a 10.2% increase [6] - 'Revenues- Incentive management fees' are estimated at $67.81 million, showing a year-over-year decrease of 3.1% [7] - 'Revenues- Base and other management fees' are projected at $88.41 million, indicating a significant decline of 16.6% from the previous year [7] Property Metrics - Total Owned / Leased Rooms are projected to be 17,109, down from 17,492 in the same quarter last year [8] - Revenue per available room - System-Wide is expected to reach $106.21, compared to $104.16 a year ago [8] - Total Systemwide Rooms are forecasted to be 1,273,692, up from 1,197,329 in the previous year [8] Stock Performance - Over the past month, shares of Hilton Worldwide have returned -5.5%, compared to a -4.8% change in the Zacks S&P 500 composite [9] - Currently, HLT holds a Zacks Rank 3 (Hold), suggesting its performance may align with the overall market in the near future [9]

Company Overview - Hilton Worldwide Holdings Inc. (HLT) shares increased by 8.6% to close at $218.65, following a significant volume of trading, contrasting with a 13.2% loss over the previous four weeks [1] - The surge in share price was attributed to President Trump's announcement to suspend U.S. tariffs for 90 days, which renewed investor optimism [1] Earnings Expectations - Hilton is expected to report quarterly earnings of $1.61 per share, reflecting a year-over-year increase of 5.2% [2] - Revenue projections stand at $2.71 billion, also up 5.2% from the same quarter last year [2] Earnings Estimate Revisions - The consensus EPS estimate for Hilton has been revised 0.6% lower in the last 30 days, indicating a negative trend in earnings estimate revisions, which typically does not lead to price appreciation [3] - The stock currently holds a Zacks Rank of 3 (Hold), suggesting a cautious outlook [3] Industry Context - Hilton operates within the Zacks Hotels and Motels industry, where Civeo (CVEO) also resides, having closed 5.7% higher at $20.91, despite a -10.1% return over the past month [3] - Civeo's consensus EPS estimate has changed by +24.4% to -$0.77, representing a significant decline of -196.2% from the previous year [4]

Core Viewpoint - Hilton Worldwide Holdings Inc. (HLT) is trading at a premium compared to its industry peers and the broader market, indicating strong market confidence in its growth potential and financial performance [1][3][19] Valuation Comparison - HLT has a forward 12-month price-to-earnings (P/E) ratio of 27.60X, higher than the Zacks Hotels and Motels industry average of 21.65X, the S&P 500 index at 20.52X, and the Consumer Discretionary sector at 17.62X [1] - Compared to similar companies, HLT's valuation is also premium, with Choice Hotels International, Inc. (CHH) at 18.75X, Marriott International, Inc. (MAR) at 22.61X, and Hilton Grand Vacations Inc. (HGV) at 10.06X [2] Financial Performance - HLT's stock has increased by 7.1% over the past year, while the industry has seen a decline of 0.3% [3] - The company is experiencing growth in revenue per available room (RevPAR), with a 2.7% year-over-year increase in 2024, driven by a 0.8% rise in occupancy and a 1.6% increase in average daily rate [7] Expansion Efforts - Hilton is focused on expanding its global presence, adding 973 hotels and nearly 100,000 rooms in 2024, marking a net unit growth of 7.3%, the largest in its history [9] - The company anticipates a net unit growth of 6-7% for 2025, supported by strong travel demand and ongoing expansion efforts [10] Growth Prospects - For 2025, Hilton expects RevPAR growth between 2% and 3%, with positive outlooks across all major segments, including corporate travel and conventions [10][11] - Analysts project an 11.1% year-over-year growth in earnings per share (EPS) for 2025, reflecting confidence in the company's performance despite its premium valuation [12] Challenges - Macroeconomic challenges, including rising interest rates and limited capital availability, are impacting business operations and growth [13] - Increased costs have affected profitability, with total expenses as a percentage of revenues rising to 78.8% in 2024, primarily due to higher payroll and procurement costs [15]

Core Insights - Hilton Worldwide Holdings (NYSE: HLT) has achieved a total return of approximately 552% since its IPO in 2013, significantly outperforming the S&P 500, which has delivered a total return of about 295% [1] Company Performance - The impressive performance of HLT is notable considering the challenges faced by the global travel industry [1]