Hilton CEO: Flat Quarter, ‘Green Shoots,’ More Brands to Come
Hilton anticipates improvement in the fourth quarter, partly driven by easier year-over-year comparisons with last year’s dampened demand from the U.S. presidential election.
Hilton reported “positive momentum” in corporate lead volumes and said group bookings for 2026 and 2027 were up in the high single digits.
A Softening in Hotel Openings?
While Hilton’s hotel development pipeline hit a record high (510,000 rooms), the pace of openings has slackened. Excluding hotels acquired through recent deals, Hilton’s net room growth was up only 5.4% year-over-year.
“[Hilton] will need a record second half to even hit the bottom end of the 6% to 7% guidance for the year,” noted Richard Clarke in a flash report for Bernstein Research.
Executives said Monday they “remain confident” in the company’s “ability to deliver net unit growth between 6-7% for the next several years.”
“However, we expect questions on how this organic growth rate can be achieved in 2026,” wrote Truist Securities analyst C. Patrick Scholes in a flash report. “The pipeline only grew 4% year-over-year, versus the 7.2% growth rate in the first quarter, fourth quarter 2024’s +8%, and the +15% in the same quarter a year ago.
Nassetta insisted the company will hit its target range for hotel development.
“I’ve been saying we will be in the 6% to 7% range, and I’m a little bit more emphatic,” Nassetta said.
The CEO noted that the company’s starts on hotel projects “are going to be up 16% to 17% this year, and once they start, almost 100% of the time, they finish.”
More Brands to Come
The CEO teased that the group would add more brands to its current 24.
“We’re going to have 2 or 3 more brands,” Nassetta said, noting they’ll likely be in the “upscale or upscale plus areas of lifestyle.”
One of these may be a soft brand. “We’re putting the finishing touches on another collection brand in lifestyle that is sort of in the Tapestry zone, but just for more unique assets.”
Strong Second Quarter
Despite the weakness in RevPAR, Hilton generated a net income of $442 million on $1.3 billion in revenue (after reimbursing money to hotel owners) in the quarter. Adjusted EBITDA grew 10% to $1 billion.
“Hilton Honors continues to perform extraordinarily well with more than 226 million members, up 16% year-over-year, with membership now evenly split between the U.S. and international travelers,” Nassetta said.
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