Dive Brief:
- Hilton posted 3.5% RevPAR growth year over year in the second quarter of 2024, “driven by growth in all segments, with particularly strong group performance,” according to CEO Chris Nassetta in an earnings report Wednesday.
- Group RevPAR grew more than 10% year over year in Q2, Nassetta said on an earnings call, “led by strong demand for corporate and social meetings and events.”
- The company also made significant strides to grow its footprint in recent months, surpassing 8,000 hotels system-wide in July, Nassetta shared, thanks in part to several partnerships with — and acquisitions of — other brands.
Dive Insight:
RevPAR stemming from large corporates’ business travel grew 5% year over year in the quarter, with Nassetta remarking upon “notable recovery” in the technology industry.
“With continued strength in group, and steady recovery in business transient, we expect higher-end chain scales to continue to outperform,” Nassetta said on the call.
Meanwhile, several of Hilton’s acquisitions and partnerships went live in the quarter — including that of the college town-focused Graduate Hotels brand, luxury lifestyle hotels NoMad, boutique hotel brand Small Luxury Hotels of the World and “glamping” operator AutoCamp.
The pace of property signups from Small Luxury Hotels joining the Hilton network is “far exceeding expectations,” Nassetta noted, adding that the collection is “highly complementary” to Hilton’s existing luxury portfolio. Some 400 Small Luxury Hotels were available to book through Hilton platforms as of last month.
Over the past year, Hilton has expanded its offerings in the quickly growing lifestyle segment by more than 30%, Nassetta said on the call.
Nassetta also touted the company’s strength in conversions, which are making up a growing percentage of its pipeline. Conversions accounted for more than half of Hilton’s signings in Q2, he said.
The company is building plenty of its own rooms, as well. “We have more rooms under construction than any other hotel company,” Nassetta claimed on the call. Hilton approved more than 62,000 new rooms for development during Q2, growing its pipeline to a record 508,300 rooms as of June 30, 2024 — up 15% from June 30, 2023.
Future quarters will not be without their challenges, however, and Hilton lowered the high end of its guidance range for the full year due to normalizing leisure travel and softening growth in certain international markets, Nassetta said.
