Hilton(US:HLT)2026-02-11 15:04Company Overview - As of December 31, 2025, Hilton operates 9,158 properties with a total of 1,351,351 rooms across 143 countries and territories[19]. - The total number of hotels in the system includes 46 owned, 873 managed, and 8,239 franchised properties[28]. - The U.S. market accounts for 6,211 hotels with 851,582 rooms, representing a significant portion of Hilton's total[28]. - International operations accounted for approximately 36% of the company's system-wide hotel rooms in 2025, indicating significant reliance on global markets[123]. Hilton Honors Loyalty Program - The Hilton Honors loyalty program has 243 million members, reflecting a 15% increase from December 31, 2024[19]. - The Hilton Honors loyalty program is crucial for customer retention, and any changes to its benefits could adversely affect participation[122]. Financial Performance - Adjusted EBITDA for the year ended December 31, 2025, was $3,725 million, up from $3,420 million in 2024[218]. - Net income for 2025 was reported at $1,461 million, compared to $1,530 million in 2024[218]. - The company reported a loss on foreign currency transactions of $11 million for 2025[218]. - The company’s dividend policy may change at any time, and future dividends are at the discretion of the board of directors based on various factors[160]. Development and Growth - The net unit growth for the year ended December 31, 2025, was 6.7%[22]. - The development pipeline includes 1,073 room additions, with a total of 3,703 rooms counted as of period end, representing a significant expansion of the hotel network[197]. - The company is focused on expanding its global hotel network, with nearly half of the rooms under construction located outside the U.S.[22]. - The company evaluates the economic viability of new hotels based on geographic location and credit quality of third-party owners, aiming to increase revenues and free cash flow over time[195]. Employment and Workplace Recognition - Approximately 182,000 individuals were employed or managed at the company's leased and managed hotels and corporate offices as of December 31, 2025[44]. - The company achieved recognition as the 2025 1 World's Best Workplace by Fortune and Great Place to Work, marking the ninth consecutive year as the top hospitality company[45]. - Approximately 25% of employees globally and 45% of employees in the U.S. are covered by collective bargaining agreements as of December 31, 2025[128]. Risks and Challenges - The company faces risks related to substantial indebtedness and evolving corporate governance regulations, which could impact financial conditions[21]. - The hospitality industry is subject to significant competition from various providers, including major hotel chains and independent operators, impacting market positioning[65]. - Economic conditions significantly influence demand for hotel services, with potential declines in revenue during economic downturns due to fixed operational costs[81]. - The company faces risks related to changes in supply and demand for hotel services, which can affect pricing and revenue generation[79]. - The company is subject to ongoing tax audits, particularly for U.S. federal income tax returns from fiscal years 2011 to 2020, which may result in material increases to income tax liability[148]. Environmental and Compliance Issues - The company focuses on reducing emissions, water, and waste intensity at its hotels, implementing utility cost savings measures[55]. - Compliance with various laws and regulations, including those related to health and safety, can impact operational costs and profitability[72]. - Environmental laws and regulations may impose substantial compliance costs and potential liabilities on the company, affecting operations and financial condition[149]. - The company is subject to various laws and regulations regarding modern slavery and human trafficking, which could increase operational costs and reduce profits[127]. Market Trends and Performance Metrics - The hospitality industry experiences seasonality, with revenues typically lower in the first quarter compared to the subsequent three quarters[67]. - System-wide occupancy rate for the year ended December 31, 2025, was 71.5%, a decrease of 0.1 percentage points compared to 2024[216]. - Average Daily Rate (ADR) increased to $159.89, reflecting a 0.5% increase year-over-year[216]. - Revenue per Available Room (RevPAR) rose to $114.39, marking a 0.4% increase from the previous year[216]. - In the U.S., RevPAR decreased to $121.91, a decline of 0.8% year-over-year, influenced by reduced international travel and macroeconomic uncertainty[216]. Cybersecurity and Technology - The company has adopted a Cybersecurity Policy requiring all employees to report potential cybersecurity incidents immediately and certify their understanding of the policy annually[166]. - The Global Information Security team is responsible for managing cybersecurity risks and is organized into five functional areas, including incident response and governance, risk, and compliance[164]. - Cyber-attacks pose a risk to the company, potentially leading to loss of sensitive information and operational disruptions[107]. - The company relies on third parties for significant information technology functions, and disruptions in these services could adversely affect operations[104]. Financial Obligations and Debt - As of December 31, 2025, the company's total indebtedness was approximately $12.5 billion, with long-term debt maturities of $25 million, $619 million, and $12 million for the years ending December 31, 2026, 2027, and 2028, respectively[151]. - The company has a significant amount of indebtedness that could require a substantial portion of cash flow from operations to be dedicated to debt payments, limiting funds available for operations and capital expenditures[150]. - The company is required to maintain a consolidated secured net leverage ratio not to exceed 5.0 to 1.0 as of the last day of any four consecutive quarters[155].