Hilton Worldwide projects 2014 revenue per available room
gains of between 5 percent and 7 percent year over year as the company becomes "increasingly
focused on rate," president and CEO Christopher Nassetta said during the
company's fourth-quarter earnings call on Thursday.
The global average daily rate at Hilton Worldwide properties
during the fourth quarter increased 2.9 percent year over year to $137.06, and
occupancy increased 1.2 percentage points to 68.4 percent. Fourth-quarter ADR
was up across all four global regions, most strongly in the Middle East and
Africa, where it increased 9.1 percent to $177.59.
ADR during the quarter also increased at all Hilton brands except
midprice extended-stay Home2 Suites. Increases were strongest at Hilton's
luxury brands: Waldorf Astoria Hotels & Resorts' ADR increased 6.7 percent
to $320.93, and Conrad Hotels & Resorts' ADR increased 8.7 percent to
$287.02.
For the full year, Hilton's occupancy increased by 1.3
percentage points to 72.3 percent, and with the exception of the Middle East
and Africa, occupancy was near or above 70 percent in all global regions.
"Our hotels continue to benefit from strong
fundamentals, with transient outpacing group and group picking up momentum at
the end of the year," Nassetta said during the call, Hilton's first since
its initial public offering late last year. "We have a very positive
outlook for group, with both rooms on the books and rate up meaningfully."
He added that group business at Hilton's eight largest
big-box group hotels was up 10 percent year over year in 2013.
In 2013, Hilton opened 207 hotels comprising 34,000 rooms,
and the company plans to continue significant expansion this year. Measured in
rooms, Hilton's development pipeline currently is the industry's largest, with
195,000 rooms slated for development, 102,000 of which are under construction,
according to STR data. Hilton projects account for more than 20 percent of the
total rooms under construction in the Americas, Europe and the Middle
East/Africa regions and 18.6 percent of rooms under construction around the
world.
Nassetta also hinted that Hilton was preparing to launch a
new boutique brand in the "not-too-distant future."
"We are definitely working on a concept there,"
Nassetta said. "We have a little different view than our competitors as to
what it looks like and what the price point will be."
Hilton Worldwide's net income for the fourth quarter was $62 million, down from $64 million in the fourth quarter of 2012. Net income for the full year was $460 million, up from $359 million in 2012.