Hilton (H) Continues to Expand Presence Despite Pandemic
Although the hotel industry has been bearing the brunt of the coronavirus pandemic, Hilton Worldwide Holdings Inc. HLT continues to expand footprint worldwide. Notably, the company recently opened its 300th hotel in China market. Notably, China is the company’s single largest market outside the United States.
The company is planning to open 1,000 hotels in China by 2025. Hilton is the fastest growing company in Asia. The company currently has 10 out of Hilton's 18 brands in China. The company has “1 in 5 rooms under construction in Asia Pacific, and 1 in 3 in China, carrying the Hilton flag -- a huge leap from just 100 properties three years ago.”
Qian Jin, area president of Greater China and Mongolia, Hilton said "This milestone opening by Hilton during such an unprecedented and challenging time for the global hospitality industry is a strong testament to the incomparable resilience and potential of the China market.”
Robust Development Pipeline
Hilton has 6,300 properties with one million rooms in 118 countries and territories. As of Sep 30, 2020, Hilton's development pipeline comprised more than 2,640 hotels, with roughly 408,000 rooms across 121 countries and territories — including 33 countries and territories where it currently does not have any running hotel. Moreover, 237,000 rooms in the development pipeline were located outside the United States and 217,000 rooms were under construction. In 2020, the company anticipates net unit growth in the range of 4.5% to 5%.
Hilton’s broad geographic diversity lowers the effect of volatility in individual markets. More than 30% of the pipeline is located in the Asia Pacific region, where demand has been high. Notably, the company continues to make great progress in its luxury development strategy, anticipating double-digit luxury growth in the next several years.
In the past six months, shares of the company have surged 33% compared with the industry’s rally of 35.4%.
Zacks Rank
Hilton — which shares space with Marriott International, Inc. MAR, Hyatt Hotels Corporation H and Extended Stay America, Inc. STAY in the Zacks Hotels and Motels industry — has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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