Hilton Reports First Quarter Results; Raises Full Year Outlook

MCLEAN, Va.–(BUSINESS WIRE)–Hilton Worldwide Holdings Inc. (“Hilton” or the “Company”) (NYSE: HLT) today reported its first quarter 2023 results. Highlights include:

• Diluted EPS was $0.77 for the first quarter, and diluted EPS, adjusted for special items, was $1.24

• Net income was $209 million for the first quarter

• Adjusted EBITDA was $641 million for the first quarter

• System-wide comparable RevPAR increased 30.0 percent, on a currency neutral basis, for the first quarter compared to the same period in 2022

• System-wide comparable RevPAR increased 8.0 percent, on a currency neutral basis, for the first quarter compared to the same period in 2019

• Approved 24,900 new rooms for development during the first quarter, bringing Hilton’s development pipeline to 428,100 rooms as of March 31, 2023

• Added 9,200 rooms to Hilton’s system in the first quarter, resulting in 5,300 net additional rooms in Hilton’s system during the period

• Repurchased 3.2 million shares of Hilton common stock during the first quarter, bringing total capital return, including dividends, to $487 million for the quarter and more than $602 million year to date through April

• Full year 2023 system-wide RevPAR is expected to increase between 8 percent and 11 percent on a comparable and currency neutral basis compared to 2022; full year net income is projected to be between $1,331 million and $1,385 million; full year Adjusted EBITDA is projected to be between $2,875 million and $2,950 million

• Full year 2023 capital return is projected to be between $1.8 billion and $2.2 billion

Overview

Christopher J. Nassetta, President & Chief Executive Officer of Hilton, said, “We carried strong momentum into 2023, exceeding the high end of our guidance for system-wide RevPAR, driving strong bottom-line results and delivering meaningful free cash flow available for return to our shareholders. As a result of our strong performance and positive outlook, we are raising our Adjusted EBITDA guidance for the full year.”

For the three months ended March 31, 2023, system-wide comparable RevPAR increased 30.0 percent compared to the same period in 2022, due to increases in both occupancy and ADR, and management and franchise fee revenues increased 30.1 percent compared to the same period in 2022. For comparison to pre-pandemic results, system-wide comparable RevPAR for the three months ended March 31, 2023 increased 8.0 percent compared to the same period in 2019, and management and franchise fee revenues increased 26.3 percent from the same period in 2019.

For the three months ended March 31, 2023, diluted EPS was $0.77 and diluted EPS, adjusted for special items, was $1.24 compared to $0.75 and $0.71, respectively, for the three months ended March 31, 2022. Net income and Adjusted EBITDA were $209 million and $641 million, respectively, for the three months ended March 31, 2023, compared to $211 million and $448 million, respectively, for the three months ended March 31, 2022.

Development

In the first quarter of 2023, Hilton opened 64 new hotels totaling 9,200 rooms and achieved net unit growth of 5,300 rooms. Additionally, Hilton started construction on over 19,000 hotel rooms during the first quarter, continuing the positive momentum from the end of 2022, particularly in China. Further, Hilton continued to achieve development milestones during the first quarter, opening the 100th Tapestry Collection by Hilton, as well as its 500th hotel in China.

As of March 31, 2023, Hilton’s development pipeline totaled approximately 2,930 hotels representing 428,100 rooms throughout 116 countries and territories, including 30 countries and territories where Hilton did not have any existing hotels. Additionally, of the rooms in the development pipeline, 215,700 of the rooms were under construction and 246,200 of the rooms were located outside of the U.S. In April, Hilton announced a notable addition to its development pipeline, the Waldorf Astoria Jaipur, which will mark the debut of the Waldorf Astoria Hotels & Resorts brand in India.

Balance Sheet and Liquidity

As of March 31, 2023, Hilton had $8.8 billion of long-term debt outstanding, excluding the deduction for deferred financing costs and discount, with a weighted average interest rate of 4.51 percent. Excluding all finance lease liabilities and other debt of Hilton’s consolidated variable interest entities, Hilton had $8.6 billion of long-term debt outstanding with a weighted average interest rate of 4.50 percent and no scheduled maturities until May 2025. As of March 31, 2023, no debt amounts were outstanding under Hilton’s $2.0 billion senior secured revolving credit facility, which had an available borrowing capacity of $1,940 million after considering $60 million of outstanding letters of credit. Total cash and cash equivalents were $978 million as of March 31, 2023, including $77 million of restricted cash and cash equivalents.

During the three months ended March 31, 2023, Hilton repurchased 3.2 million shares of its common stock at an average price per share of $139.88, returning $446 million of capital to shareholders. Through April 21, 2023, since the inception of Hilton’s stock repurchase program in March 2017, Hilton repurchased approximately 56.4 million shares of its common stock for approximately $5.4 billion at an average price per share of $96.39. The amount remaining under Hilton’s stock repurchase program is approximately $2.6 billion.

In March 2023, Hilton paid a quarterly cash dividend of $0.15 per share of common stock, bringing total dividend payments for the quarter to $41 million. In April 2023, Hilton’s board of directors authorized a regular quarterly cash dividend of $0.15 per share of common stock to be paid on or before June 30, 2023 to holders of record of its common stock as of the close of business on May 19, 2023.

Outlook

Share-based metrics in Hilton’s outlook include actual share repurchases to date, but do not include the effect of potential share repurchases hereafter.

Full Year 2023

• System-wide comparable RevPAR, on a currency neutral basis, is expected to increase between 8 percent and 11 percent compared to 2022.

• Diluted EPS is projected to be between $4.95 and $5.14.

• Diluted EPS, adjusted for special items, is projected to be between $5.68 and $5.88.

• Net income is projected to be between $1,331 million and $1,385 million.

• Adjusted EBITDA is projected to be between $2,875 million and $2,950 million.

• Contract acquisition costs and capital expenditures, excluding amounts reimbursed by third parties, are expected to be approximately $300 million.

• Capital return is projected to be between $1.8 billion and $2.2 billion.

• General and administrative expenses are projected to be between $390 million and $410 million.

• Net unit growth is expected to be between 5.0 percent and 5.5 percent.

Second Quarter 2023

• System-wide comparable RevPAR, on a currency neutral basis, is expected to increase between 10 percent and 12 percent compared to the second quarter of 2022.

• Diluted EPS is projected to be between $1.45 and $1.50.

• Diluted EPS, adjusted for special items, is projected to be between $1.54 and $1.59.

• Net income is projected to be between $387 million and $401 million.

• Adjusted EBITDA is projected to be between $770 million and $790 million.

Conference Call

Hilton will host a conference call to discuss first quarter of 2023 results on April 26, 2023 at 10:00 a.m. Eastern Time. Participants may listen to the live webcast by logging on to the Hilton Investor Relations website at https://ir.hilton.com/events-and-presentations. A replay and transcript of the webcast will be available within 24 hours after the live event at https://ir.hilton.com/financial-reporting.

Alternatively, participants may listen to the live call by dialing 1-888-317-6003 in the United States (“U.S.”) or 1-412-317-6061 internationally using the conference ID 7057332. Participants are encouraged to dial into the call or link to the webcast at least fifteen minutes prior to the scheduled start time. A telephone replay will be available for seven days following the call. To access the telephone replay, dial 1-877-344-7529 in the U.S. or 1-412-317-0088 internationally using the conference ID 5182053.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements related to the expectations regarding the performance of Hilton’s business, future financial results, liquidity and capital resources and other non-historical statements. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties including, among others, risks inherent to the hospitality industry; macroeconomic factors beyond Hilton’s control, such as inflation, changes in interest rates, challenges due to labor shortages and supply chain disruptions and instability in the banking system as a result of several recent bank failures; risks related to the impact of the COVID-19 pandemic; competition for hotel guests and management and franchise contracts; risks related to doing business with third-party hotel owners; performance of Hilton’s information technology systems; growth of reservation channels outside of Hilton’s system; risks of doing business outside of the U.S.; risks associated with the Russian invasion of Ukraine; and Hilton’s indebtedness. Additional factors that could cause Hilton’s results to differ materially from those described in the forward-looking statements can be found under the section entitled “Part I—Item 1A. Risk Factors” of Hilton’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which is filed with the Securities and Exchange Commission (the “SEC”) and is accessible on the SEC’s website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this press release and in Hilton’s filings with the SEC. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

Definitions

See the “Definitions” section for the definition of certain terms used within this press release, including within the schedules.

Non-GAAP Financial Measures

The Company refers to certain financial measures that are not recognized under U.S. generally accepted accounting principles (“GAAP”) in this press release, including: net income, adjusted for special items; diluted EPS, adjusted for special items; EBITDA; Adjusted EBITDA; Adjusted EBITDA margin; net debt; and net debt to Adjusted EBITDA ratio. See the schedules to this press release, including the “Definitions” section, for additional information and reconciliations of such non-GAAP financial measures, as well as the most comparable GAAP financial measures.

About Hilton

Hilton (NYSE: HLT) is a leading global hospitality company with a portfolio of 19 world-class brands comprising more than 7,200 properties and more than 1.1 million rooms, in 122 countries and territories. Dedicated to fulfilling its founding vision to fill the earth with the light and warmth of hospitality, Hilton has welcomed more than 3 billion guests in its more than 100-year history, earned a top spot on Fortune’s 100 Best Companies to Work For list and been recognized as a global leader on the Dow Jones Sustainability Indices for six consecutive years. Hilton has introduced several industry-leading technology enhancements to improve the guest experience, including Digital Key Share, automated complimentary room upgrades and the ability to book confirmed connecting rooms. Through the award-winning guest loyalty program Hilton Honors, the more than 158 million members who book directly with Hilton can earn Points for hotel stays and experiences money can’t buy. With the free Hilton Honors app, guests can book their stay, select their room, check in, unlock their door with a Digital Key and check out, all from their smartphone. Visit stories.hilton.com for more information, and connect with Hilton on facebook.com/hiltonnewsroom, twitter.com/hiltonnewsroom, linkedin.com/company/hilton, instagram.com/hiltonnewsroom and youtube.com/hiltonnewsroom. 

Contacts

Investor Contact
Brian Kucaj

+1 703 883 5476

Media Contact
Kent Landers

+1 703 883 3246

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