10. Hilton Worldwide Holdings Inc. (NYSE:HLT)
Number of Hedge Fund Investors In Q2 2024: 64
Sector: Consumer Discretionary
Hilton Worldwide Holdings Inc. (NYSE:HLT) is one of the biggest hospitality companies in the world. It has a presence all over the world through properties under its namesake, Waldorf Astoria, and other brands. As a result, the firm’s narrative depends on the key metric of revenue per available room and the performance of the global economy due to its global presence. Hilton Worldwide Holdings Inc. (NYSE:HLT) depends to a large extent on its franchise revenue, with 23% of its H1 2024 revenue coming from franchises. Another chunk comes from its managed properties, and the stock’s performance in 2024 has mirrored economic sentiment. A weakening labor environment and souring investor sentiment led to the shares tumbling by 7.7% in late July and early August. Since the Fed’s interest rate cut though the shares have gained 7% and its future outlook depends on revenue per room, global travel patterns, and global economic performance.
Hilton Worldwide Holdings Inc. (NYSE:HLT)’s management shared key details about its pipeline during the Q3 2024 earnings call:
“We welcome nearly 400 luxury properties through our exclusive agreement with Small Luxury Hotels of the World. These properties, spanning 70 different countries, provide Honors members even more opportunities to book unique luxury experiences and sought-after destinations across the globe. Including SLH and our existing luxury properties, we now have one of the largest luxury hotel portfolios in the industry. Conversions accounted for 60% of openings in the quarter, driven by the addition of SLH properties and continued momentum from Spark. We opened more than 20 Spark hotels in the quarter and now have over 6,000 Spark rooms in supply just a year after the brand opened its first property. Spark now has opened hotels in the US and the UK and Canada, and we recently announced plans to open hotels in Germany and Austria before the end of the year.
The brand’s pipeline is three times larger than its existing supply, and we expect continued launches in international markets to further boost Spark’s trajectory, positioning us well for future growth in the premium economy space. In the quarter, we signed 28,000 rooms, expanding our pipeline to more than 492,000 rooms, which is up 8% year-over-year, excluding partnerships, our pipeline also increased from the second quarter. We signed three luxury deals in Greece, Japan and the UAE and 35 lifestyle properties, including a record 15 Curios. Conversions accounted for more than 30% of signings in the quarter, driven by the strength of Spark and continued momentum across Curio, Tapestry and DoubleTree. Construction starts remained strong, up 21%, excluding acquisitions and partnerships.
We remain on track to exceed prior levels of starts by year-end with meaningful growth across both the US and international markets. Approximately half of our pipeline is under construction, and we continue to have more rooms under construction than any other hotel company, accounting for more 20% of industry share and nearly four times our existing share of supply. As a result of our strong pipeline and under construction activity, we continue to expect net unit growth of 7% to 7.5% for the full year and 6% to 7% for 2025. We continue to be recognized for our culture and award-winning brands. During the quarter, we were named the top hospitality workplace in Latin America and Asia by Great Place to Work, adding to the more than 560 Great Place to Work Awards and nearly 60 number one wins around the world since 2016.”
