Hilton Worldwide is not buying Starwood Hotels & Resorts Worldwide, it is launching a new midscale brand early next year and Airbnb, while viable, is not a worthy adversary. Just some of the nuggets from Hilton Worldwide's Q3 call.
- Net income attributable to Hilton stockholders for the third quarter was $279 million, an increase of $96 million from the same period in 2014
- System-wide comparable RevPAR increased 5.8 percent for the third quarter on a currency neutral basis from the same period in 2014
- Management and franchise fees for the third quarter increased 14 percent from the same period in 2014 to $438 million
- Net unit growth was 13,000 rooms in the third quarter, a 16 percent increase from the same period in 2014
- Approved 26,000 new rooms for development during the third quarter, a 29 percent increase from the same period in 2014, growing Hilton's development pipeline to 1,555 hotels, consisting of 260,000 rooms
- Full year 2016 RevPAR expected to increase between 4.0 percent and 6.0 percent and net unit growth expected to be 45,000 rooms to 50,000 rooms
Chris Nassetta, CEO of Hilton Worldwide, said group revenue was up 4 percent, which portends well for the industry after years of sluggish group demand growth.
In regard to rate, Nassetta said they are trying to push it in the face of occupancies that can't move up too much more.
In China, Nassetta said Hilton is doing more deals than last year and deploying its focused-service brands there as full-service and luxury hotel development there lags.
Globally, he offered this tidbit: One in five rooms under construction are Hilton branded.
In recent times, Hilton has launched such new brands as Canopy (lifestyle) and Curio (soft brand). Early next year it will launch a new midscale product, which Nassetta said it could be "its largest" over time.
The question of Airbnb was brought up on the call by an analyst. To hear it from Nassetta, he isn't too worried. "They are really an urban market thing," he said. "They thrive when there isn't enough capacity in the market."
He went on to say that Airbnb has done a good job carving its own niche, but doesn't believe that they are a major threat to "the core value proposition we have, in regard to service delivery and amenity package." Nassetta is not worried that Hilton's core customers are going the Airbnb route.
He also definitive about the rumors of the imminent Starwood sale, which is to say: Hilton, unequivocally, is not the buyer. "You can rule out Hilton's interest," he said. "We are not involved in any way. We feel good about the setup we have, having transformed the business over the last eight years."