Yahoo Finance Hilton Worldwide Holdings Inc (HLT) (Q1 2024) Earnings Call Transcript Highlights: Robust ...
System-wide RevPAR: Increased 2% year-over-year.
Adjusted EBITDA: $750 million, up 17% year-over-year.
Diluted EPS: Adjusted for special items was $1.53.
Net Unit Growth: 5.6% with over 100 hotels opened, totaling approximately 17,000 rooms.
Hotel Pipeline: Signed 30,000 rooms, increasing pipeline to a record 472,000 rooms, up 10% year-over-year.
Full Year Net Unit Growth Forecast: Expected to be 6% to 6.5%, excluding the planned addition of Graduate Hotels.
Full Year RevPAR Growth Forecast: Expected to be 2% to 4%.
Full Year Adjusted EBITDA Forecast: Expected to be between $3.375 billion and $3.425 billion.
Full Year Diluted EPS Forecast: Adjusted for special items expected to be between $6.89 and $7.03.
Dividends: Paid a cash dividend of $0.15 per share during the first quarter, totaling $39 million.
Shareholder Returns: Year-to-date, returned more than $900 million to shareholders through buybacks and dividends; full year expected to return approximately $3 billion.
Release Date: April 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you discuss the guidance for the rest of the year in light of the first quarter's performance, particularly regarding development and RevPAR? A: Christopher J. Nassetta, President, CEO & Director - Despite a slightly softer first quarter in terms of RevPAR, the outlook for the year remains unchanged due to the resilience of the broader economy and strong corporate profits. The company expects continued strength in group business and a steady recovery in business transient, with leisure normalizing. Development momentum is strong, with significant signings and construction starts, particularly in international markets.
Q: How do you view the performance of different segments, particularly full-service versus select service chain scale segments, for the rest of the year? A: Christopher J. Nassetta, President, CEO & Director - Both segments are expected to see positive year-over-year RevPAR growth, albeit modestly for the select service segment. The select service segment faced more significant impacts in the first quarter, which are expected to ease in the second half of the year.
Q: Could you provide an update on Group and business transient performance relative to 2019 levels? A: Christopher J. Nassetta, President, CEO & Director - Both Group and business transient revenues have surpassed 2019 levels, though demand occupancy is slightly lower. The expectation is that by the end of the year, both segments will fully recover in terms of demand, driven by strong group bookings and increased corporate travel.
Q: What are the expectations for the U.S. market compared to international markets in terms of RevPAR growth? A: Kevin J. Jacobs, CFO & President of Global Development - The U.S. market is expected to be at the lower end of the 2% to 4% RevPAR growth guidance, with stronger performance anticipated in international markets, particularly Europe and APAC. The resilience in Europe and the recovery in APAC, except for China, are key contributors to this outlook.
Q: Can you elaborate on the drivers behind the significant increase in base and other fees? A: Kevin J. Jacobs, CFO & President of Global Development - The increase is driven by a mix of stronger management fees, incentive management fees, and license fee growth. The company's purchasing business has also shown strong performance, contributing to the growth in other fees.
Q: What are the long-term plans for the NoMad brand, and how do you see it contributing to Hilton's growth? A: Christopher J. Nassetta, President, CEO & Director - The acquisition of a controlling interest in the NoMad brand is seen as a strategic move to expand Hilton's presence in the luxury lifestyle segment. The brand is expected to grow to about 100 hotels over time, with a mix of conversions and new builds, significantly contributing to Hilton's net unit growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
