Hilton Worldwide Holdings Inc. today reported its second quarter 2022 results that exceed expectations and raise the full-year outlook.
For the three months ended June 30, 2022, system-wide comparable RevPAR increased 54.3 percent compared to the same period in 2021, due to increases in both occupancy and ADR, and fee revenues increased 54 percent compared to the same period in 2021. For comparison to pre-pandemic results, system-wide comparable RevPAR for the three months ended June 30, 2022 was down 2.1 percent compared to the three months ended June 30, 2019.
For the six months ended June 30, 2022, system-wide comparable RevPAR increased 64.4 percent compared to the same period in 2021, due to increases in both occupancy and ADR, and fee revenues increased 64 percent compared to the same period in 2021. For comparison to pre-pandemic results, system-wide comparable RevPAR for the six months ended June 30,
2022 was down 9.0 percent compared to the six months ended June 30, 2019.
For the three months ended June 30, 2022, diluted EPS was $1.32 and diluted EPS, adjusted for special items, was $1.29 compared to $0.46 and $0.56, respectively, for the three months ended June 30, 2021. Net income and Adjusted EBITDA were $367 million and $679 million, respectively, for the three months ended June 30, 2022, compared to $128 million and $400
million, respectively, for the three months ended June 30, 2021.
For the six months ended June 30, 2022, diluted EPS was $2.07 and diluted EPS, adjusted for special items, was $2.00 compared to $0.08 and $0.58, respectively, for the six months ended June 30, 2021. Net income and Adjusted EBITDA were $578 million and $1,127 million, respectively, for the six months ended June 30, 2022, compared to $19 million and $598 million,
respectively, for the six months ended June 30, 2021.
Christopher J. Nassetta, President & Chief Executive Officer of Hilton, said, “Our second quarter results exceeded the high end of our guidance for system-wide comparable RevPAR, diluted EPS, adjusted for special items and Adjusted EBITDA. Given our strong results in the quarter, coupled with our confidence in continued recovery throughout the year, we are raising our full year guidance, including our outlook for capital return. With a capital-light business model, a strong portfolio of brands and dynamic, industry-leading platforms, we are well-positioned for the opportunities that lie ahead.”
Development
In the second quarter of 2022, Hilton opened 91 new hotels contributing to 14,400 additional rooms and achieved net unit growth of 13,300 rooms. Hilton celebrated notable openings during the quarter, including the Waldorf Astoria Washington, D.C. and the Hotel Marcel New Haven, Tapestry Collection by Hilton, which is anticipated to be the first net-zero hotel in the U.S. Additionally, in July, Hilton celebrated the opening of its 7,000th property, following the recent openings of the Hilton Maldives Amingiri, the Conrad Los Angeles and the Lost Property St. Paul’s London, a Curio Collection hotel.
As of June 30, 2022, Hilton’s development pipeline totaled nearly 2,780 hotels representing more than 413,000 rooms throughout 114 countries and territories, including 29 countries and territories where Hilton does not currently have any existing hotels. Additionally, of the rooms in the development pipeline, more than 195,000 of the rooms were under construction and over 246,000 of the rooms were located outside the U.S.
Balance Sheet and Liquidity
As of June 30, 2022, Hilton had $8.8 billion of long-term debt outstanding, excluding the deduction for deferred financing costs and discount, with a weighted average interest rate of 4.12 percent. Further excluding finance lease liabilities and other debt of Hilton’s consolidated variable interest entities, Hilton had $8.6 billion of long-term debt outstanding with a weighted average interest rate of 4.10 percent and no scheduled maturities until 2025. No debt amounts were outstanding under Hilton’s $1.75 billion senior secured revolving credit facility as of June 30, 2022, which had an available borrowing capacity of $1,690 million after considering $60 million of outstanding letters of credit. Total cash and cash equivalents were $1,254 million as of June 30, 2022, including $79 million of restricted cash and cash equivalents.
During the second quarter of 2022, Hilton repurchased 3.6 million shares of its common stock at a cost of $480 million and an average price per share of $133.32. During the six months ended June 30, 2022, Hilton repurchased 4.5 million shares of its common stock at a cost of $610 million and an average price per share of $135.45. The amount remaining under Hilton’s stock repurchase program is $1.5 billion.
In June 2022, Hilton paid a quarterly cash dividend of $0.15 per share of common stock, for a total of $41 million. In July 2022, Hilton’s board of directors authorized a regular quarterly cash dividend of $0.15 per share of common stock to be paid on or before September 23, 2022 to holders of record of its common stock as of the close of business on August 26, 2022.
Outlook
Share-based metrics in Hilton’s outlook include actual share repurchases to date, but do not include the effect of potential share repurchases hereafter.
Full Year 2022
System-wide comparable RevPAR, on a currency neutral basis, is expected to increase between 37.0 percent and 43.0 percent compared to 2021, and to be down between 1.0 percent and 5.0 percent from 2019.
Diluted EPS is projected to be between $4.11 and $4.36.
Diluted EPS, adjusted for special items, is projected to be between $4.21 and $4.46.
Net income is projected to be between $1,146 million and $1,216 million.
Adjusted EBITDA is projected to be between $2,400 million and $2,500 million.
Contract acquisition costs and capital expenditures, excluding amounts indirectly reimbursed by hotel owners, are expected to be between $250 million and $275 million.
Capital return is projected to be between $1.5 billion and $1.9 billion.
General and administrative expenses are projected to be between $400 million and $420 million.
Net unit growth is expected to be approximately 5.0 percent.
Third Quarter 2022
System-wide comparable RevPAR, on a currency neutral basis, is expected to increase between 25.0 percent and 30.0 percent compared to the third quarter of 2021, and to increase between 1.0 percent and 5.0 percent from the third quarter of 2019.
Diluted EPS is projected to be between $1.09 and $1.16.
Diluted EPS, adjusted for special items, is projected to be between $1.16 and $1.24.
Net income is projected to be between $303 million and $324 million.
Adjusted EBITDA is projected to be between $660 million and $690 million.
