As the hospitality industry continues to thrive, Hilton Worldwide is seeking to take advantage while the going is good. According to The Washington Post, Hilton is considering a number of business initiatives, including paying shareholders a dividend, repurchasing its stock, spinning off the 148 hotels it owns and leases around the world and even creating a company for its timeshare business.
“We definitely plan to begin giving back capital in the second half of the year in the form of a dividend,” Hilton CEO Christopher Nassetta told WaPo.
Hilton's stock is currently trading in the $30 range, about 50 percent higher than the stock sold for at its initial public offering in December 2013. Buybacks can help boost a company's stock price by reducing the number of shares available to investors.
Nassetta’s comments to The Washington Post come at during heady times for the hospitality industry. “The hotel industry is doing really well for one basic reason,” Nassetta said. “The fundamentals are very strong. Demand continues to grow at a reasonable pace, matching with historically low levels of capacity.”
As reported, Hilton could also spin off its Orlando-based timeshare business and 100-plus hotels that it owns, leases or partly owns in a joint venture into a real estate investment trust.
Nassetta knows the REIT territory well; he ran Host Hotels & Resorts for several years prior to taking the Hilton job in 2008. Spinoffs, The Post wrote, are not expected before the end of 2016.