Hilton(HLT)2024-10-23 16:45Financial Data and Key Metrics Changes - Third quarter adjusted EBITDA was 1.92, reflecting strong bottom line performance despite softer RevPAR [4][12] - System-wide RevPAR increased 1.4% year-over-year, below guidance due to various factors including weather impacts and labor disputes [5][12] Business Line Data and Key Metrics Changes - Business transient RevPAR increased by 2%, with growth across large corporates and small to medium-sized businesses [5] - Group RevPAR grew more than 5% year-over-year, driven by strong demand for corporate and social meetings [5] - Leisure transient RevPAR increased nearly 2%, primarily due to solid trends in Continental Europe [6] Market Data and Key Metrics Changes - Comparable US RevPAR was up 1%, driven by strong group performance [12] - In the Americas outside the US, RevPAR increased 4% year-over-year, particularly in urban markets like Mexico [12] - Europe saw a 7% increase in RevPAR, aided by key summer events [13] - Asia-Pacific region experienced a 3% decline in RevPAR, with China specifically down 9% due to various disruptions [13] Company Strategy and Development Direction - The company opened a record 531 hotels in the quarter, achieving the highest net unit growth in history at 7.8% [7] - The development pipeline expanded to over 492,000 rooms, up 8% year-over-year, with approximately half under construction [10][12] - The company continues to focus on expanding its lifestyle portfolio and luxury offerings, including the introduction of new brands in various international markets [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business model, expecting RevPAR growth in line with the third quarter for the fourth quarter [6][7] - The outlook for 2025 suggests a similar performance to 2024, with expectations of continued growth in group and business transient segments [20][24] - Management noted that the macroeconomic environment remains strong, with low recession risks and positive growth anticipated [19][20] Other Important Information - The company paid a cash dividend of 37 million, and expects to return approximately $3 billion to shareholders for the full year [15] - The company achieved a milestone of 200 million Hilton Honors members, enhancing guest loyalty [5] Q&A Session All Questions and Answers Question: What is the difference in expectations for 2025 compared to earlier guidance? - Management indicated that it is early to provide specific guidance for 2025 but expressed a strong view of positive economic growth and similar performance to 2024 [18][20] Question: Can you elaborate on the development expectations for next year? - Management feels confident about the 6% to 7% net unit growth, with a significant portion expected from conversions [28][30] Question: How does the pipeline of construction compare to existing fee-per-room mix? - There has been no significant change in the fee-per-room mix, and the development environment is starting to improve [32][33] Question: What is driving the continued strength in group bookings? - The strength is attributed to a mix of citywide conventions, social group business, and corporate meetings, all showing strong demand [50][51] Question: How is the early traction for Small Luxury Hotels of the World (SLH)? - Early data indicates strong engagement and healthy redemption rates for SLH properties, with expectations for growth as the relationship matures [57]