Hilton’s record hotel openings and pipeline growth

Skift take

This summer, Hilton opened more hotels than ever before in a three-month period. If you subtract the hotels lost, the number of hotels increased by 7.8%, also a record.

Sean O’Neill

Hilton reported record hotel openings and development activity in the third quarter.

The McLean, Virginia-based company said Wednesday that it has opened 531 hotels totaling more than 6,000 rooms, the highest quarterly room addition in its history. Net room growth reached an all-time high of 7.8%.

“Our market share is at an all-time high,” said President and CEO Christopher Nassetta. “It is significantly higher than all of our competitors.”

The acceleration

• Hilton’s pipeline reached 492,000 rooms – an increase of 8% year over year.

• The pace of growth should remain high. Hilton expects to deliver net room growth of between 7% and 7.5% for full-year 2024 and between 6% and 7% next year (excluding loyalty licensing partnerships and potential acquisitions).

• Nearly half of Hilton’s pipeline consists of projects already in the works. The rest are new signings.

• About 60% of planned rooms are outside the U.S. as Hilton looks to diversify globally. “In Asia, we are moving our business to APAC outside of China,” Nassetta said. “So there are a lot of growth opportunities there, a lot of growth opportunities in a lot of growth opportunities in India and the Middle East.”

• Executives said one in five hotels under construction worldwide is a Hilton offering.

The drivers of deal growth

• Conversions. Hilton has stepped up its efforts to attract rival and independent hotels to its brands. The company expects so-called conversions, as opposed to new construction, to account for about a third of its growth next year.

• Hurry. CEO Chris Nassetta highlighted the company’s “sloppy” approach to closing deals: “We’re moving forward.”

• Lower interest rates. “The development environment is starting to thaw,” said Kevin Jacobs, chief financial officer. He pointed to increased transaction activity over the past 30 days, which he said could indicate a faster pace of signings next year.

• Effectiveness in increasing gross profit for owners. “Why do we win half the deals even though we represent 6% of the global market?” asked Nassetta rhetorically. “Ultimately what matters is our ability to deliver performance for owners over a long period of time.”

Year-to-date performance of the accommodation sector stock index

What am I looking at? The performance of hotel and short-term rental stocks in the ST200. The index includes companies listed in global markets, including international and regional hotel brands, hotel REITs, hotel management companies, alternative accommodations and timeshares.

The Skift Travel 200 (ST200) summarizes the financial performance of nearly 200 travel companies valued at more than $1 trillion into a single number. Learn more about the performance of the hotel and short-term rental financial sector.

Read the full methodology behind the Skift Travel 200.