Skip to Main Content

2019 Vault Rankings

About Hilton Worldwide Holdings Inc.

If you need a bed for the night, Hilton has a few hundred thousand of them. The company is one of the world's largest hoteliers with a lodging empire that includes about 5,285 hotels and resorts in more than 100 countries operating under such names as Doubletree, Embassy Suites, and Hampton Inn, as well as its flagship Hilton brand. Many of its hotels serve the mid-market segment, though its Hilton and Conrad hotels offer full-service, upscale lodging. In addition, its Homewood Suites chain offers extended-stay services. The company franchises many of its hotels; it owns the Waldorf-Astoria brand and the New York Hilton. Hilton became a public company again in 2013.

Operations

Hilton's management and franchise segment provides services, including hotel management and licensing of Hilton's brands. Its ownership segment derives revenue from providing hotel room rentals, food and beverage sales, and other services at the company's owned and leased hotels.

With its extensive portfolio of brands, Hilton seeks to serve multiple segments within the lodging sector. The company's largest chains, Hampton Inn and Hampton Inn & Suites, include about 2,300 locations and target mid-market travelers with moderately priced rooms and limited amenities. Nearly all of its Hampton hotels are operated by franchisees or by the company under management contracts with third-party owners.

At the other end of the scale, the company's Conrad chain offers luxury services and distinctive locations, while its Waldorf-Astoria Collection is a prestigious collection of hotels inspired by the New York landmark.

Hilton's "focused service" hotel brands include Hilton Garden Inn, Hampton by Hilton, Tru by Hilton, Homewood Suites by Hilton, and Home2 Suites by Hilton.

The company's Hilton Grand Vacations subsidiary operates almost 50 time-share vacation resorts, with a concentration located in Florida.

Hilton manages more than 650 hotels with some 208,235 rooms, excluding its owned, leased, and joint venture hotels. Hotel owners generally pay Hilton a monthly fee based on a percentage of their hotel's gross room revenue.

Geographic Reach

Hilton's holdings comprise more than 855,000 rooms in 105 countries. The company divides its business into three geographic regions (Americas; Europe, Middle East, and Africa ("EMEA"); and Asia Pacific). The Americas region includes North America, South America, and Central America, including all Caribbean nations.

Although the US is included in Hilton's Americas geographic segment, properties in the US represent almost 75% of the company's system-wide hotel rooms. The US accounted for 77% of Hilton's revenue in fiscal 2017.

Sales and Marketing

Hilton relies on traditional advertising and promotions along with a variety of direct marketing techniques such as email, social media marketing, and postal mailings to drum up business. When the company's hotel rooms are booked through internet travel intermediaries, Hilton pays commissions and transaction fees for sales of rooms through such services.

The company also has a robust customer loyalty program, Hilton Honors, it uses to try to generate return business. As part of the company's hotel management business, hotel owners pay for participation in the Hilton Honors guest loyalty program. The owners also pay Hilton usage fees, which cover the costs of advertising and marketing programs, internet, technology and reservation systems, and quality assurance program expenses.

Financial Performance

Hilton has enjoyed strong and steady revenue in recent years. The only major fluctuations have come as a result of spinning off operations or selling off hotels, which negatively impacted fiscal 2015 and 2016 revenues.

Hilton reported $9.1 billion in revenue for fiscal 2017, up from $7.3 billion in fiscal 2016.

During fiscal 2017 Hilton's management and franchise segment revenues and operating income increased. The increase in management and franchise segment revenues and operating income was partially due to an increase in licensing and other fees.

Hilton's ownership segment revenues decreased in fiscal 2017 compared to the prior fiscal year, primarily as a result of foreign currency changes and the company's disposal of hotels. Ownership operating income increased for fiscal 2017 compared to fiscal 2016, primarily as a result of decreases in owned and leased hotel operating expenses.

Hilton's net income for fiscal 2017 was $1.2 billion, up from just $364 million the previous fiscal period. In addition to the increased revenue in fiscal 2017 compared to fiscal 2016, differences in tax liabilities were one of the reasons fiscal 2017 net income was different than the prior fiscal year.

At the close of fiscal 2017 Hilton had total cash and cash equivalents of $670 million, including $100 million of restricted cash and cash equivalents. The company reported it had $974 in net cash provided by operations. The $441 million decrease in net cash provided by operating activities during fiscal 2017 compared to fiscal 2016 was primarily as a result of a decrease in operating income from the company's owned and leased properties and sales of timeshare units as a result of spin-offs.

Strategy

Hilton's strategic objectives include the continued expansion of its global footprint and fee-based business. However, staffing shortages in various parts of the world could slow Hilton's ability to grow and expand its businesses. Payroll costs are always a major component of the company's operating expenses at its hotels and franchised hotels.

At the end of fiscal 2017, Hilton had a total of 2,257 hotels in its development pipeline, representing approximately 345,000 rooms under construction or approved for development. More than half of the rooms in development are located outside the US.

An increasing percentage of hotel rooms are booked through internet travel intermediaries and Hilton continues to deal with the impact on its bottom line. The commissions and transaction fees for sales of Hilton's rooms through intermediaries could lead to higher commissions, reduced room rates, or other significant concessions from Hilton franchisees. The hospitality intermediaries could theoretically reduce bookings by de-ranking Hilton hotels in search results.

To counter the intense hospitality competition and online booking disruption, Hilton relies heavily on brand loyalty. The company boasts 71 million members in its guest loyalty program, Hilton Honors.

Hilton will continue to try to improve the cost, speed, effectiveness, and efficiency of its reservation system. Failure to maintain or upgrade its system or any other disruption to the company's reservation system could adversely affect revenue for the company and its franchisees.

Mergers and Acquisitions

In January 2017 Hilton completed the spin-offs of Park and HGV. The company also completed a 1-for-3 reverse stock split of Hilton's outstanding common stock early in 2017.

In 2015 Hilton sold its Waldorf Astoria New York hotel for $1.95 billion. The company used the proceeds from the sale to acquire five other hotel properties. That same year Hilton also completed the sale of the Hilton Sydney for about $340 million.

Hilton Worldwide Holdings Inc.

7930 Jones Branch Dr STE 1100
Mc Lean, VA 22102-3313
Phone: 1 (703) 883-1000

Stats

Employer Type: Publicly Owned
Stock Symbol: HLT
Stock Exchange: , NYSE
Chairman: Jonathan D. Gray
EVP and CFO: Kevin J. Jacobs
President, CEO, and Director: Christopher J. Nassetta
Employees (This Location): 363
Employees (All Locations): 169,000