Hilton has highest ever signings quarter

Image © Hilton Worldwide
Hilton Worldwide signed a quarterly record of more than 36,000 keys in Q2 this year to boost its pipeline to 440,000 rooms.

The keys under development total has therefore grown by 7% in the year from 30 June 2022.

Global growth

In terms of sites, Hilton’s pipeline as at 30 June 2023 stood at a record 3,060 hotels throughout 116 countries and territories, including 29 countries and territories where the group did not have any existing hotels. 

Additionally, of the rooms in development, 217,000 were under construction and 250,100 were located outside of Hilton’s US home market. 

Record breakers

Christopher J Nassetta, president and CEO of Hilton, analysed: “Our system-wide pipeline increased 3% from last quarter.

“Conversions accounted for nearly a third of signings in the US. Signings in international markets doubled versus last year, accounting for roughly half of system-wide signings in the quarter, driven by strong momentum across Europe and Asia Pacific.”

Geographical development

Drilling down into development in various global regions, he reported: “In Europe, we signed agreements across 14 countries, including our first Tapestry Collection hotel in the French Riviera [Victoria Marina Hotel Villeneuve-Loubet, Tapestry Collection by Hilton] and our first Curio Collection in Croatia [Keight Hotel Opatija Curio Collection by Hilton].

“In China, Hilton Garden Inn continued to show tremendous growth since launching our new franchise business model. In the quarter, we signed approximately 3,700 Hilton Garden Inn rooms in China more than three times that of last year and accounting for more than a third of our signings in China.

“Signings in the Americas were up 25% year-over-year, with strong interest in the US despite tighter credit conditions.”

Pipeline progress

In terms of Hilton’s hotel project phases, Nassetta revealed: “Following another strong quarter of starts, up more than 73% year-over-year roughly and over 40% year-to-date, roughly half of our pipeline is currently under construction. We have more rooms under construction than any other hotel company.

“Specifically in the US, our under construction pipeline has continued to increase, up 15% year-over-year, which will contribute to increased openings later this year and next.”

Fresh Spark

Spark by Hilton, the premium economy brand launched in January 2023, already had approximately 60 hotels in the development pipeline as of 30 June 2023. Nassetta noted there were another 400 deals in negotiation in just six months since the line’s introduction.

He stated: “Nearly all deals are conversions from third-party brands and half represent new owners to Hilton, with our roughly 20 Sparks scheduled to open by year-end. Spark is well positioned to disrupt the premium economy segment while expanding our customer and owner base, especially in markets where there is no Hilton brand presence today.”

Long stay lift

In May 2023, Hilton launched another new brand in the US under the working title Project H3, an apartment-style extended-stay concept positioned to serve the needs of the long-stay traveller, including the rapidly expanding workforce travel market.

Nassetta outlined: “The apartment-style accommodations are designed for guests booking 20 or more nights built with the staying power of Hilton’s award-winning hospitality. We have received tremendous interest from owners and developers due to the strong market opportunity, cost-efficient build and high-margin model and we currently have more than 300 deals in negotiation.”

Additionally, Hilton signed more than 50 Tru hotels in the year to 30 June and according to Nassetta: “This represents the strongest pace since 2017 as the operating success of existing Tru properties is leading to a surge in new signings. 

“We continue to drive long-term growth of our global network through the launch of strategic, new brands.”

Openings uptick

In Q2 2023, Hilton opened 92 new hotels totalling 14,000 rooms and achieved net unit growth of 11,200 rooms.

A notable property introduction during the quarter included Conrad Shenzhen, Hilton’s first luxury property in China’s technology hub. Openings surpassed 150,000 hotel rooms in the Asia Pacific region, which included nearly 50,000 Hampton by Hilton rooms in China.

Additionally, in the all-suites category, Hilton opened its 600th Home2 Suites by Hilton, which Nassetta believes makes it one of the fastest growing brands in the industry.

Expansion forecast

He predicted: “We expect openings to accelerate as the year progresses given strong international and conversion trends and expect conversions to account for around 30% of openings. For the full year, we expect net unit growth of approximately 5%.

“With forecasts for our highest level of signings, the largest pipeline in our history and approaching the largest under construction pipeline in our history, we expect net unit growth to accelerate to 5% to 6% next year and to return to 6% to 7% over the next couple of years.”