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Hilton Expands Presence in Northeast China, Eyes Growth

Zacks Equity Research

Hilton Worldwide Holdings Inc. (HLT) continues to expand its footprint in China. To this end, the company has announced the expansion of Conrad Hotels & Resorts with the opening of Conrad Shenyang in Northeast China.

The hotel is situated at the heart of the historic city that was home to the birth of the Qing Dynasty. Notably, this 315-roomed hotel marks the brand’s second property in China within a month. Conrad Shenyang is owned by Hang Lung Properties and managed by Hilton.

The company is confident about the success of this hotel as it offers the city's largest guest rooms with stylish and modern design, advanced dining concepts and uninterrupted views. Qian Jin, area president for Greater China and Mongolia, Hilton, stated that “We are seeing promising momentum in the revitalization and development of Shenyang's business environment as well as its influence on surrounding areas”.

The hotel is in close proximity to the city’s administrative bureaus, high-end retail shops and entertainment venues. Conrad Shenyang is less than three kilometers away from Shenyang North Railway Station and six kilometers from Shenyang Railway Station.

Strategic Expansion to Drive Growth

In a bid to maintain its position as the fastest-growing global hospitality company, Hilton is continuing to drive unit growth. To this end, Hilton opened 123 new hotels during the second quarter of 2019. It also achieved net unit growth of 15,700 rooms, marking roughly 7% increase from the prior-year quarter.

As of Jun 30, 2019, Hilton's development pipeline comprised nearly 2,490 hotels, with roughly 373,000 rooms throughout 109 countries and territories including 37 countries and territories. For 2019, the company anticipates net unit growth of 6.5%.

Backed by solid expansion strategies and a strong brand presence, shares of Hilton have gained 28.6% year to date compared with the industry’s 16.4% rally. Notably, the expansion of Conrad Hotels & Resorts is likely to help Hilton boost its overall revenues and witness increased revenue per available room (RevPAR) for its worldwide comparable system-wide properties.

In the second quarter, RevPAR for worldwide comparable system-wide properties increased 1.4%, driven by a 7% improvement in average daily rate (ADR). The company anticipates its system-wide RevPAR to witness a year-over-year improvement of 1-2% on a comparable and currency-neutral basis.

Currently, Hilton, which shares space with Hyatt Hotels Corporation H, Marriott International, Inc. MAR and Choice Hotels International, Inc. CHH, carries a Zacks Rank #3 (Hold). You can the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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