Hilton looks to exceed 2022’s almost a hotel per day expansion rate

Pictured: rendering of Waldorf Astoria Guanacaste. Imagery © 2023 Hilton.
Hilton Worldwide is expecting to up its hotel portfolio global growth levels, following a positive set of 2022 financial results.

During the full year 2022, Hilton opened 355 new hotels – nearly one hotel per day – totalling 58,200 rooms, and achieved net unit growth of 48,300 rooms, representing 4.7% of the portfolio.

The organisation believes 2023 will outpace those figures, with full year net unit growth forecast to be between 5.0% and 5.5%.

Fourth quarter milestones

Within just the fourth quarter of last year, the group added 17,700 keys to its system, though hotel openings modestly lagged prior expectations due to the ongoing Covid-19 environment in China. The total represented 108 new hotels, achieving net unit growth of 15,100 rooms.

Hilton continued to achieve growth milestones during the fourth quarter, opening its 7,000th site; its 600th hotel in Asia Pacific, including the first Hilton Garden Inn in Japan; the 60,000th room under the Home2 Suites by Hilton brand; and the 150,000th room under the DoubleTree by Hilton brand. Furthermore, during this period, Hilton inaugurated Waldorf Astoria Cancun, marking the company’s 200th hotel in the Caribbean and Latin America region.

Development progress

Hilton approved 24,400 new rooms for development during the fourth quarter, bringing its development pipeline to 416,400 rooms and more than 2,820 hotels as of 31 December 2022. These projects are located throughout 118 countries and territories, including 30 countries and territories where Hilton does not currently have any existing hotels. 

Additionally, of the pipeline keys, 205,400 of the rooms were under construction and 243,500 of the rooms were located outside the US.

New spark

In January 2023, Hilton launched Spark by Hilton, a premium economy brand that is designed to deliver thoughtful simplicity, reliable service, unexpected touches and consistent quality.

Spark by Hilton leverages a conversion model approach to growth and had more than 200 hotels in various stages of negotiation as of 3 February 2023.

Construction leader

Hilton’s president and CEO, Christopher J. Nassetta, reported in the group’s Q4 2022 earnings conference call: “We continue to enhance our network through our strategic and disciplined approach to development, enabling us to serve even more guests across more destinations for any stay occasion they may have.

“We saw continued strength in construction starts throughout the year, leading to starts of more than 70,000 rooms for the full year. In the US, starts increased more than 9% versus 2021. We now have more rooms under construction than all major competitors.

“Additionally, we’ve identified more than 100 US markets with no Hilton-branded products, providing a great opportunity for the brand and the company to expand its presence.”

Doubling system

Nassetta looked back at Hilton’s development momentum over recent years, analysing: “Since our go-private transaction 15 years ago, we’ve more than doubled the size of our system. Our rooms in the U.S. are up nearly 100% and our international portfolio is now 3.5x larger.

“Additionally, we’ve added 10 new brands to our system, more than doubling our portfolio of brands. We achieved all of this without any acquisitions and more than 90% of the deals in our current pipeline did not have any key money or other financial support.”

Conversion quarter

Kevin Jacobs, chief financial officer and president, global development, added: “Conversions accounted for 24% of our gross openings for the year.

“Looking to the year ahead, despite the near-term macroeconomic uncertainty, we are encouraged by the robust demand for Hilton-branded products in both the US and international markets. Nearly 60% of our pipeline is located outside the US and roughly half is under construction.”

Notable projects in the pipeline include the first Waldorf Astoria Hotels & Resorts property in Costa Rica, the 215-key Waldorf Astoria Guanacaste, which is due to complete in Q1 2025; and the first Hilton Garden Inn in Mauritius, the 135-room Hilton Garden Inn Phoenix Mauritius, set to open in 2026.