MCLEAN, VA—Hilton Worldwide Holdings Inc. posted positive earnings results for the second quarter due to increased ADR and continuous expansion.
“We are pleased with our strong second quarter results, which exceeded the high end of guidance for Adjusted EBITDA and diluted EPS, adjusted for special items, driven by our resilient business model and strong net unit growth,” said Christopher J. Nassetta, president/CEO of Hilton. “We continued to experience meaningful market share gains during the quarter with increases across all brands and regions, further growing our industry-leading RevPAR index premium. As we look to the remainder of the year, we think we are well-positioned to continue driving growth ahead of the industry.”
For the three and six months ended June 30, system-wide comparable RevPAR grew 1.4% and 1.6%, respectively, driven by increases in both ADR and occupancy.
In the second quarter, Hilton opened 123 new hotels totaling 17,100 rooms and achieved net unit growth of 15,700 rooms, contributing to a 7% net unit growth from June 30, 2018.
As of June 30, Hilton’s development pipeline totaled nearly 2,490 hotels consisting of approximately 373,000 rooms throughout 109 countries and territories, including 37 countries and territories where Hilton does not currently have any open hotels. Additionally, 201,000 rooms in the development pipeline were located outside the U.S., and 192,000 rooms, or more than half, were under construction.
Hilton continues to expand its luxury brand presence, with the recent openings of the Waldorf Astoria Dubai International Finance Centre and the Waldorf Astoria Maldives Ithaafushi, and remains on track to grow its luxury portfolio by 17% in 2019.
Management and franchise fee revenues increased 8% and 10% during the three and six months ended June 30, respectively, as a result of RevPAR growth at comparable managed and franchised hotels of 1.3% and 1.6%, respectively, increased licensing and other fees and the addition of new properties to Hilton’s portfolio.
For the three months ended June 30, diluted EPS was $0.89 and diluted EPS, adjusted for special items, was $1.06 compared to $0.71 and $0.86, respectively, for the three months ended June 30, 2018. Net income and Adjusted EBITDA were $261 million and $618 million, respectively, for the three months ended June 30, 2019, compared to $217 million and $555 million, respectively, for the three months ended June 30, 2018.
For the six months ended June 30, 2019, diluted EPS was $1.42 and diluted EPS, adjusted for special items, was $1.85 compared to $1.21 and $1.55, respectively, for the six months ended June 30, 2018. Net income and Adjusted EBITDA were $420 million and $1,117 million, respectively, for the six months ended June 30, 2019, compared to $380 million and $1,000 million, respectively, for the six months ended June 30, 2018.