Hilton Worldwide Holdings Inc. delivered a solid Q2 2024 performance, marked by consistent revenue growth, strong development momentum, and strategic expansion across its portfolio. Against a backdrop of moderated global travel growth, Hilton continues to outperform expectations by leveraging brand strength, disciplined operations, and a record development pipeline. The second quarter results highlight the company’s focus on long-term value creation through innovation, portfolio diversification, and global expansion.
Key Financial Highlights
Hilton reported robust financial results in Q2 2024:
Net income reached $422 million, up from $413 million in Q2 2023.
Adjusted EBITDA climbed to $917 million, a 13% year-over-year increase.
Diluted EPS was $1.67, while adjusted diluted EPS was $1.91, up 17% compared to Q2 2023.
System-wide comparable RevPAR (Revenue Per Available Room) increased 3.5%, driven by higher occupancy and average daily rates.
These figures underscore Hilton’s ability to sustain margin growth while navigating macroeconomic uncertainty, positioning the company for continued profitability in the second half of the year.
Strategic Initiatives and Market Performance
Hilton’s growth engine showed no signs of slowing:
The company added 22,400 new rooms in Q2, achieving 18,000 net additional rooms, resulting in 6.2% net unit growth year-over-year.
Hilton also approved 62,700 rooms for development, bringing its development pipeline to a record 508,300 rooms, a 15% increase from Q2 2023.
Strategic acquisitions continued with the completion of the Graduate Hotels and NoMad acquisitions, further strengthening its lifestyle and luxury offerings.
A major partnership with Small Luxury Hotels of the World (SLH) was launched, with nearly 400 hotels expected to join Hilton’s system, adding approximately 18,000 high-end rooms and bolstering its luxury segment globally.
Performance across brands and regions remained healthy, with the Middle East & Africa and Europe posting the strongest RevPAR growth at 10.7% and 6.7%, respectively. Management and franchise fee revenues grew 10% in the quarter, reinforcing the strength of Hilton’s asset-light model.
Challenges and Outlook
Despite strong quarterly results, Hilton faces near-term challenges:
Interest expense rose to $141 million, reflecting the impact of higher borrowing costs.
CapEx and contract acquisition costs were moderated to $78 million in Q2, down 10% year-over-year, reflecting disciplined capital deployment.
Continued inflationary pressures and geopolitical uncertainties, particularly in global markets, could affect RevPAR momentum and development timelines.
Nonetheless, Hilton remains bullish on its full-year outlook:
2024 system-wide RevPAR is projected to grow 2.0% to 3.0%.
Full-year adjusted EBITDA is forecasted between $3.375 billion and $3.405 billion.
Capital returns to shareholders are expected to reach approximately $3.0 billion in 2024.
Net unit growth is anticipated between 7.0% and 7.5%, driven by the accelerating pipeline and strategic partnerships.
