Hilton Worldwide Holdings’ adjusted earnings before interest, tax, depreciation and amortization rose 12 percent in the first quarter compared to the same time last year, exceeding the high end of its guidance range. The company’s quarterly report, released Wednesday, also revealed a 1.8 percent increase in revenue per available room (RevPAR), a 2.5 percent dip in net income and the addition of 29,300 rooms to its pipeline.
Overall, improved average daily rate (ADR) drove RevPAR growth. In the United States, occupancy only rose 0.4 percent while ADR increased 1.3 percent, with RevPAR growth (1.8 percent) matching Hilton’s systemwide results. For full-year 2019, the company estimated RevPAR would increase between 1 percent and 3 percent compared to 2018.
The Americas (excluding the U.S.) and Europe led the way in RevPAR internationally, with the regions reporting 4.4 and 3.2 percent increases, respectively. In the Middle East and Africa, RevPAR dropped by 5.7 percent, because of a 9.1 percent fall in ADR, and despite having the largest increase in occupancy, 2.7 percent, of any region.
Earnings per share rose 5.9 percent from $0.51 to $0.54, while cash dividends declared per share were flat at $0.15.
At the end of Q1 Hilton’s pipeline included 2,480 hotels, representing 371,000 rooms, all within its management and franchise operations. Of these rooms, 200,000 were in the U.S. and 193,000 of them were under construction.
The company also opened 12,100 rooms, achieving 7 percent net unit growth. According to Hilton, it is on track for approximately 6.5 percent net unit growth for the full year.
In February, the company introduced its 17th brand, Signia Hilton. Focused on the meetings and events industry, each property will include at least 500 guestrooms and at least 75 square feet of event space per room. Hilton already has plans to debut locations in or around Orlando, Fla., Atlanta and Indianapolis.
“Overall, we're very pleased with the first-quarter results and feel good about our momentum for the balance of the year,” said Hilton President/CEO Christopher Nassetta during an earnings call with investors. “Our story is simple. Our resilient business model, growing market share, capital-light development strategy should lead to significant free-cash-flow generation and strong shareholder returns. As we celebrate our 100th anniversary, we are confident this truly will be our most dynamic year yet.”