Hilton Sees a 59.9% RevPAR Dip in Q3, but Pipeline Remains Strong
MCLEAN, VA—Hilton Worldwide Holdings Inc. has reported its third quarter 2020 results. The company cited a drop in RevPAR for the quarter, but development—both here and abroad—remains robust.
Christopher J. Nassetta, president/CEO of Hilton, said, “Our third quarter results show meaningful improvement over the second quarter. The vast majority of our properties around the world are now open and have gradually begun to recover from the limitations that the COVID-19 pandemic has imposed on the travel industry, with occupancy increasing more than 20 percentage points from the second quarter. While a full recovery will take time, we are well-positioned to capture rising demand and execute on growth opportunities.”
- Diluted EPS was $(0.28) for the third quarter, and diluted EPS, adjusted for special items, was $0.06
- Net loss was $81 million for the third quarter
- Adjusted EBITDA was $224 million for the third quarter
- System-wide comparable RevPAR decreased 59.9% on a currency neutral basis for the third quarter from the same period in 2019
- Approved 17,400 new rooms for development during the third quarter, bringing Hilton’s development pipeline to 408,000 rooms as of Sept. 30, 2020, representing 8% growth from Sept. 30, 2019
- Opened 17,100 rooms in the third quarter, contributing to 14,800 net additional rooms in Hilton’s system, representing 4.7% net unit growth from Sept. 30, 2019, with full-year net unit growth expected to be between 4.5-5.0%
- As of Nov. 2, 2020, 97% of Hilton’s system-wide hotels were open
On a global level, the impact of the COVID-19 pandemic began in March, with its most significant adverse impact on occupancy and RevPAR in April. Since April, system-wide occupancy has increased month over month, with the most notable recoveries in Asia-Pacific, the U.S. and Europe, with comparable hotel occupancy levels up approximately 32 percentage points, 32 percentage points and 31 percentage points, respectively, from April-September.
For the three and nine months ended Sept. 30, 2020, system-wide comparable RevPAR decreased 59.9% and 55.9%, respectively, compared to the prior year periods, due to both occupancy and ADR decreases. Additionally, management fee and franchise and licensing fee revenues decreased 53% and 51% during the three and nine months ended Sept. 30, 2020, respectively, compared to the prior year periods. The decreases were due to the COVID-19 pandemic and the related reduction in global travel and tourism, which required the complete or partial suspensions of hotel operations at approximately 20% of Hilton’s properties at some point during the nine months ended Sept. 30, 2020. As of Nov. 2, 2020, 97% of Hilton’s system-wide properties were open.
In the third quarter of 2020, Hilton opened 133 new hotels totaling 17,100 rooms, and achieved net unit growth of over 14,800 rooms. Notable openings in the quarter included the Conrad Punta de Mita in Mexico and the Hilton Beijing Tongzhou in China, as well as the Motto by Hilton Washington DC City Center, the first hotel under the Motto by Hilton brand.
Notable additions to Hilton’s development pipeline during the quarter included the Conrad Rabat Arzana in Morocco and the Waldorf Astoria Monarch Beach Resort & Club in California.
As of Sept. 30, 2020, Hilton’s development pipeline totaled approximately 2,640 hotels consisting of more than 408,000 rooms throughout 120 countries and territories, including 33 countries and territories where Hilton does not currently have any open hotels. Additionally, of the rooms in the development pipeline, 237,000 rooms were located outside the U.S., and 217,000 rooms were under construction.