Hilton Continues Brand Expansion, Opens Hotel in Huizhou
Hilton Worldwide Holdings Inc. HLT, which banks on its strong brand presence and continual expansion for growth, has announced the opening of DoubleTree by Hilton Huidong Resort in Huizhou. Owned by Huizhou Fumao Properties Development Co., Ltd., the property will be managed by Hilton.
Nine kilometers away from the Huizhou East high-speed railway station, this new hotel comprises 309 rooms including 27 suites. We believe that this latest addition will strengthen the DoubleTree brand’s portfolio. Currently, the brand includes nearly more than 540 upscale hotels across six continents.
The move underscores Hilton's efforts to expand into international markets and strengthen its brand name. Though the company has expanded in China, Latin America and Europe, it continues to face competition from large hotel chains like Marriott MAR and Hyatt H as well as smaller independent local hospitality providers like Choice Hotels CHH.
In a year’s time, shares of Hilton have lost 10.5%, comparing favorably with the industry’s 26.8% decline.
Unit Growth to Boost Performance
In a bid to remain the fastest-growing global hospitality company, Hilton continues to boost unit growth. Globally, its consistent efforts toward expanding brands helps in increasing its market share.
In third-quarter 2018, the company achieved net unit growth of 14,800 rooms, mirroring a 24% increase from the prior-year quarter number. Further, the company added 113 hotels, taking the room count to 16,100. For 2018, it projects approximately 6.5% net unit growth.
Additionally, Hilton has more rooms under construction in Europe, the Middle East and the Asia Pacific than any other hotel chain. As of Sep 30, its development pipeline comprised more than 2,420 hotels, with 371,000 rooms across 108 countries and territories. Currently, almost half of 200 hotels in the pipeline under DoubleTree brand are in the Asia-Pacific region.
We expect Hilton’s expansion initiatives to drive its system-wide comparable revenue per available room (RevPAR). In the third quarter, comparable RevPAR increased 2% year over year. The recent hotel addition too bodes well for the DoubleTree brand. Currently, the brand comprises more than 543 hotels across 43 countries and territories.
Hilton currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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