Dive Brief:
- Hilton announced an exclusive partnership with Small Luxury Hotels of the World as part of its fourth-quarter and full-year 2023 earnings report on Wednesday.
- Hilton posted systemwide year-on-year RevPAR growth of 5.7% and 12.6%, on a currency neutral basis, for the fourth quarter and full year, respectively. In an earnings call with analysts, Hilton President and CEO Chris Nassetta said growth was fueled by strong international and group trends, with a notable uptick in small company meetings and convention demand, and that group RevPAR, in particular, “outperformed expectations,” Nassetta said.
- Overall, Hilton posted $1.15 billion net income for the full year of 2023, RevPAR growth across all segments for both the quarter and the year and the largest quarter for openings in the company’s history — what Nassetta called “a great end of what was another really strong year for Hilton.”
Dive Insight:
Though individual hotels will have to opt in, the Small Luxury Hotels of the World partnership could see over 500 luxury hotels join Hilton’s network.
On the earnings call, Nassetta said the partnership with SLH had the potential to grow Hilton’s “150, 160 hotel luxury portfolio and turn it into six or seven hundred.”
Nassetta said SLH’s portfolio consists primarily of small luxury hotels with a “heavy resort orientation,” often in niche markets that “are super hard to get into.” Roughly 60% of that portfolio is in Europe, and 20% is in the Americas, he added.
On the development end, Q4 was Hilton’s largest-ever quarter for openings based on rooms, coming on the heels of a record development pipeline in Q3. Hilton added a record 24,000 rooms to its system in Q4, resulting in 62,900 new rooms opened for the full year 2023 — a net unit growth of 4.9%.
Hilton CFO and President of Global Development Kevin Jacobs said he expects the company’s two newest brands, Spark by Hilton and LivSmart Studios, to bolster future growth.
Nassetta declined to comment on a recent Bloomberg report that said Hilton was in talks to acquire the Graduate Hotels brand, but said, “Our attitude on M&A is the same that it’s always been,” and, “Never say never.”
