Nassetta pointed to Hilton s dozen brands, and the traction these have gained. DoubleTree is one exa

Revpar was up 6.6% in the fourth quarter, while the company finished the year with a record 230,000 rooms in its pipeline, having added a net 36,000 rooms during 2014. This was a banner year for Hilton Worldwide. For both the quarter and the year we exceeded our adjusted EBITDA guidance, we also remained very optimistic on the fundamentals and macro setup for 2015, said chief executive Chris Nassetta.
minneapolis downtown hotel The results came as the company announced how it had redeployed the USD1.95bn cash received from its sale of the Waldorf Astoria hotel in New York. Hilton has purchased four Florida hotels that already operate under its brand flags, and added a fifth property in San Francisco.
The deals meet the provisions of US tax laws that mean the reinvested money will be free from capital gains tax. A total of USD1.76bn has been spent, and after taxes and other charges, Hilton will have a further USD100m net that it expects to spend within minneapolis downtown hotel the next six months.
Nassetta pointed to Hilton s dozen brands, and the traction these have gained. DoubleTree minneapolis downtown hotel is one example, he noted, which really has gone international. We took a largely American brand and have strategically deployed it across six continents. We now have 54 Doubletree’s in Europe and 37 in Asia all where we previously had none. Today, minneapolis downtown hotel 80% of the brand s pipeline is outside the USA.
New brands Curio and Canopy are making a good start. Affiliate brand Curio already has five properties open, with 23 signed, while accessible lifestyle brand Canopy was launched four months ago, and promises its first opening within minneapolis downtown hotel a year, while 15 properties are signed.
In contrast with comments from some other peers, Hilton was positive on Europe. Generally speaking, we think the trends in Europe are positive and we’ll continue in that direction, which is reflected in our guidance, said CFO Kevin Jacobs. He saw optimism in Western Europe, a little bit in Southern Europe tempered by discontinued difficulties in Eastern Europe and certain markets like France.
Having enjoyed a strong year, in which it repaid capital early, Hilton is now looking ahead to the time when it will start paying shareholders a dividend. We are committed to our leverage goals of being three to four times and I think we’ve been pretty consistent about that, said Nassetta. Once we get to that point, we didn’t want to overcook the balance sheet and we’d be looking to start to return capital. And we’d be looking to do that initially minneapolis downtown hotel with the institution of a dividend and to get in sync with our competitive set, and then to the extent that we had excess minneapolis downtown hotel cash flow beyond that and within the constraints of being at our targeted leverage minneapolis downtown hotel levels, we would look to other forms of return on capital. I think in today’s world that would look like a stock buyback.
Quizzed by analysts on market supply, Nassetta said he saw continuing good news in the US market. Demand is growing and it is still being matched by historically low levels of supply, 2.5% is the 30-year average. Last year it was 1%, looks like this it will be a bit over that, but still far below the 30-year averages in a market condition where demand is growing modestly.
With Hilton continuing to hold a rump of real estate and the Waldorf Astoria sale barely minneapolis downtown hotel diminishing the amount, analysts asked Nassetta to clarify his position on a potential minneapolis downtown hotel spin-off minneapolis downtown hotel of the properties in a REIT. We are constantly looking at the real estate obviously minneapolis downtown hotel to maximize the value, like we’ve done with the number of our big value enhancements opportunities most recently the Waldorf creating a huge value arbitrage. The reality is, when you look at a market basket, there is not enough separation minneapolis downtown hotel relative to the incremental cost – the onetime minneapolis downtown hotel cost of doing it and incremental minneapolis downtown hotel cost of having two entities or enterprises versus one where on paper, we think that there’s a significant value arbitrage.
Alongside the strong European performance, Hilton is also looking to China to start delivering, having recently signed a multiple site development deal with a local partner. And Nassetta said the country continues to deliver, despite some soft numbers at the end of the year. For the fourth quarter for a bunch of hotel-specific reasons we were in the 3% range. In China for the full year we were six, six plus. We think it’s sort of in that range, again this year on a comp basis and has a lot to deal with sort of where our hotels minneapolis downtown hotel are, both in diversity of the market as well as the individual locations in those markets.
China is obviously seeing some slowdown in broader economic growth. It’s still one of the highest growing markets in the mid to high single-digit in the world and while we have seen revpar growth rates temper over the last two or three years, we are still managing to drive pretty healthy growth and we think we will. The other thing that sort of happening in China which is nice to see early days is as you starting to the food and beverage minneapolis downtown hotel side is up a little bit.
Nassetta said US results had been helped by an improvement in occupancy figures. We finished with historically high occupancies last year, they were up to 240 basis points. We do not think we will repeat that this year. Although I will say, embedded in our guidance is probably 1.5 points to 2 points in occupancy, which will mean we’ll be at yet another historical high.
Monday through Thursday we all know is a very different experience than Friday through Sunday, not everywhere but most places. And so what we’ve really tried to do with our teams is bifurcate that into being. Its super strategic about how we’re pricing minneapolis downtown hotel in the high demand periods, and being thoughtful about how we price in the lesser demand minneapolis downtown hotel periods, but recognizing if we can fill those rooms at a reasonable rate then the bottom line is going to be better. So I know that all sounds easy, but it’s not and I think the short answer is one size is not fit at all.
HA Perspective [by Chris Bown]: It s been a banner year for Hilton, and the momentum it has as industry minneapolis downtown hotel scale leader is impressive. So, will 2015 be as good as 2014? In the US, where Hilton has around 80% of its business, there are signs the gloss may fade a little.
On revpar, Nassetta told analysts he expects supply to continue to lag demand. But there are plenty of signs that supply minneapolis downtown hotel is picking up the pace, with New York leading the pack. There, minneapolis downtown hotel a pick-up in development has increased the room count 21% in the last five years: the city has more than 110,000 rooms now, with a further 27,000 under construction or planned. As a result, room rates are expected to edge up just 1.5% in 2015, reckons STR. And many of the rooms are in the lower half of the market.
Is New York a one-off, or the early warning of things to come in other US markets? STR predicts New York is one of only three US cities that will see sub 5% rate growth this year, so perhaps the tide will turn but slowly.
On occupancy, Nassetta indicated that the improvements of this year will be harder to repeat on a similar scale as the occupancy rate tends to a plateau. There has been more assertive advance pricing, and an attempt to chase incremental occupancy by being more generous in periods of weaker demand. But this latter strategy is difficult minneapolis downtown hotel to finesse, in a multi-branded group. One UK manager of a Hampton told Hotel Analyst of the local Hilton undercutting it on quiet nights a problem for brand managers and something that endangers that 15% brand premium Hilton claims.
Outside the US, the company may have, in its terms, a small business; but in absolute minneapolis downtown hotel terms, it is an active player that is expanding fast. Recent initiatives such as the deal with Plateno to advance the Hampton brand in China, and an agreement with manufacturer CIMC to deliver minneapolis downtown hotel modular properties across Australia, China, Africa and Europe have the potential to really deliver growth at some scale.
So far, so great, Hilton seems to be top of the class. But there s one area where it certainly could do better. A report in the Economist names Hilton as a laggard when it comes to providing free wifi, something customers are increasingly demanding as a right. To be fair, it does offer free wifi in some (ironically the lower priced) minneapolis downtown hotel of its brands. Surely, as the scale leader in the sector, it could set an example albeit it would only be following other brands such as Hyatt, Best Western and Whitbread, who have already declared online an essential, free, utility for guests.
[Additional comment by Andrew Sangster]: Hilton’s decision to recycle the capital from the Waldorf minneapolis downtown hotel sale in New York straight into five new properties stands in marked contrast to its global major peers. Whereas for Marriott, IHG and Starwood, the pressure is constantly about how fast and how much can be paid out, Hilton seems to be on a different path.
Perhaps it is because Blackstone remains the substantial shareholder and has the longer term view that right now in the cycle it is best to be reinvesting in hotel property rather than just selling out.
Certainly, the sale of the Waldorf proves that Hilton is not wedded to assets, no matter how iconic. And the almost seamless redeployment of the capital into five other assets set to deliver higher returns on capital employed should further encourage investors to believe that this is a hotel company intent on driving shareholder value.
minneapolis downtown hotel Right now, he argued, the costs of a spin-off outweigh any advantages to be gained by higher multiples. He conceded that these multiples had changed minneapolis downtown hotel over the last few months but had so far not changed enough.
This raises an interesting question about how investors are treating rival hotel companies. Why has Starwood just ejected its CEO for not divesting its assets fast enough and why is IHG being beaten-up for similar reasons?
minneapolis downtown hotel As Nassetta minneapolis downtown hotel hinted, there is not yet the value arbitrage between privately-owned real estate and publicly-owned real estate. In a year or two there is every sign it will be back with a vengeance. Right now, it seems the best