Hilton Worldwide Holdings Inc. Q4 FY2024 earnings call

• Record unit growth: Opened more rooms than any year in history, with 171 hotels opened in Q4 and 973 for the full year.
• Financial performance: Solid top-line performance led to record adjusted EBITDA. System-wide RevPAR grew in Q4 and full year.
• Development: Strong pipeline with over 498,000 rooms in pipeline at year-end, 8% year-over-year growth, and construction starts at a record high. Added new brands and strategic partnerships.
• Wellness initiatives: Partnered with Peloton and Calm for in-room guest experiences.
• Recognition: Continued to be recognized for culture, with brands like Hampton leading in rankings.

For the full year 2024, system-wide RevPAR increased 2.7% compared to 2023, with growth across all segments and regions. Adjusted EBITDA reached a record of more than $3.4 billion, up 11% year over year. Net unit growth was 7.3%, with 973 hotels opened totaling nearly 100,000 rooms. In the fourth quarter, system-wide RevPAR grew 3.5% year over year, driven by leisure (4% RevPAR increase), business transient (>3% increase), and group (3% increase). Conversions accounted for roughly 45% of unit growth in 2024.

• Q1 2025: System-wide RevPAR growth expected to be 2.5%-3.5% year over year. Adjusted EBITDA预计 between $770 million and $790 million, diluted EPS adjusted for special items预计 between $1.57.
• Full year 2025: RevPAR growth expected 2%-3%. Adjusted EBITDA预计 between $3.7 billion and $3.74 billion, diluted EPS预计 between $7.71 and $7.82. Expect net unit growth of 6%-7% in 2025.

• Economic uncertainty: Impact on consumer and business spending affecting lodging demand.
• Regulatory changes: Potential regulatory shifts affecting operations and growth strategies.
• Supply chain issues: Cost pressures in construction and operations due to supply chain disruptions.

Q: Shaun Kelley asked about macro sentiment improvement post-election and its impact on lodging segments.

A: Chris Nassetta discussed post-election optimism leading to better economic growth expectations benefiting lodging segments, citing improved certainty on tax and regulatory environments.

Q: Stephen Grambling asked about development pipeline despite cost concerns.

A: Chris Nassetta talked about brands' strong performance, conversion opportunities, and improving sentiment on M&A and new development, noting brands are financeable and conversion opportunities are high.

Q: Carlo Santarelli asked about conversions as a percentage of unit growth.

A: Chris Nassetta said conversions were ~45% in 2024, expected to be ~33% in 2025, with a focus on normalizing conversion rates.

Q: Lizzie Dove asked about EBITDA growth vs RevPAR unit growth.

A: Kevin Jacobs explained adjustments for one-time items and FX, stating EBITDA was above algorithm when adjusted, with Q4 results beating guidance.

Q: Robin Farley asked about U.S. RevPAR expectations for luxury vs select service.

A: Kevin Jacobs said Hilton is in line or better than chain scale performance for U.S. segments.

Q: Patrick Scholes asked about tariffs impact.

A: Chris Nassetta discussed diversified supply chains and minimal current impact from tariffs, with supply chains diversified over the last five years.

Q: Michael Bellisario asked about deletions from pipeline.

A: Kevin Jacobs said typical deletions, consistent with long-term averages, with everything baked into 2025 expectations.

Q: Chad Beynon asked about large corporations traveling more.

A: Chris Nassetta said post-election certainty led to increased travel expectations from large corporations, with trends indicating more travel ahead.

Q: Richard Clarke asked about AI distribution.

A: Chris Nassetta said Hilton is committed to direct customer relationships and using AI for better experiences, working on AI integration for personalized stays.

Q: Dan Politzer asked about leisure trends and first quarter calendar.

A: Chris Nassetta discussed holiday impact on leisure in Q4 and Easter's positive impact on Q1 RevPAR.

Q: Conor Cunningham asked about China's RevPAR and development.

A: Kevin Jacobs said low single-digit RevPAR in China, with strong development approvals and starts in the region, benefiting from outbound travel from China.