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Hilton (HLT) Eyes Expansion, Opens Hotel in Central Vietnam
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Hilton Worldwide Holdings Inc. (HLT - Free Report) has been constantly focusing on unit growth. To this end, the company announced the opening of a hotel named Hilton Da Nang in Central Vietnam under its flagship brand Hilton Hotels & Resorts. This is the third Hilton hotel in the country after Hilton Hanoi Opera and Hilton Garden Inn Hanoi.
This 28-storied hotel with 223 guest rooms lies in close proximity to the Da Nang International Airport near Da Nang Beach. The company expects 15 million tourists to visit Da Nang Beach by 2030 which in turn will drive bookings.
The move underscores Hilton’s effort to venture into international markets and strengthen flagship brand presence. The company has successfully expanded in China, Latin America and Europe.
Continual Expansion — A Bright Spot
Hilton’s continuous efforts toward expanding brands globally help to increase market share in the hospitality industry. This enhances its brand portfolio and enhances growth prospects in terms of revenue and profitability.
In third-quarter 2018, the company achieved net unit growth of 14,800 rooms, marking 24% increase from the prior-year quarter. Further, the company added 113 hotels to its portfolio taking the room count to 16,100. For 2018, it projects approximately 6.5% net unit growth. It also continues to have more rooms under construction in Europe, the Middle East and the Asia Pacific compared with any other hotel chain.
We expect expansion to drive Hilton’s system-wide comparable revenue per available room (RevPAR) further. In the third quarter, comparable RevPAR increased 2% year over year on growth in average daily rate (ADR). Strength in the company’s international hotels, mainly in Europe and the Asia Pacific, also contributed to the upside.
We believe that the recent hotel addition will strengthen the Hilton Hotels & Resorts brand’s global footprint. Currently, the brand comprises more than 579 hotels in 89 countries and territories.
Bottom Line
Hilton is seen to have a lower mix of luxury and upper upscale rooms compared with large hotel chains like Marriott (MAR - Free Report) and Hyatt (H - Free Report) . Thus, we believe the recent move is Hilton’s strategy to counter competition from established hotel chains as well as small hospitality providers such as Choice Hotels (CHH - Free Report) . Meanwhile, its shares have declined 12.2% in the past year, better than the industry’s fall of 26%.
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
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Hilton (HLT) Eyes Expansion, Opens Hotel in Central Vietnam
Hilton Worldwide Holdings Inc. (HLT - Free Report) has been constantly focusing on unit growth. To this end, the company announced the opening of a hotel named Hilton Da Nang in Central Vietnam under its flagship brand Hilton Hotels & Resorts. This is the third Hilton hotel in the country after Hilton Hanoi Opera and Hilton Garden Inn Hanoi.
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This 28-storied hotel with 223 guest rooms lies in close proximity to the Da Nang International Airport near Da Nang Beach. The company expects 15 million tourists to visit Da Nang Beach by 2030 which in turn will drive bookings.
The move underscores Hilton’s effort to venture into international markets and strengthen flagship brand presence. The company has successfully expanded in China, Latin America and Europe.
Continual Expansion — A Bright Spot
Hilton’s continuous efforts toward expanding brands globally help to increase market share in the hospitality industry. This enhances its brand portfolio and enhances growth prospects in terms of revenue and profitability.
In third-quarter 2018, the company achieved net unit growth of 14,800 rooms, marking 24% increase from the prior-year quarter. Further, the company added 113 hotels to its portfolio taking the room count to 16,100. For 2018, it projects approximately 6.5% net unit growth. It also continues to have more rooms under construction in Europe, the Middle East and the Asia Pacific compared with any other hotel chain.
We expect expansion to drive Hilton’s system-wide comparable revenue per available room (RevPAR) further. In the third quarter, comparable RevPAR increased 2% year over year on growth in average daily rate (ADR). Strength in the company’s international hotels, mainly in Europe and the Asia Pacific, also contributed to the upside.
We believe that the recent hotel addition will strengthen the Hilton Hotels & Resorts brand’s global footprint. Currently, the brand comprises more than 579 hotels in 89 countries and territories.
Bottom Line
Hilton is seen to have a lower mix of luxury and upper upscale rooms compared with large hotel chains like Marriott (MAR - Free Report) and Hyatt (H - Free Report) . Thus, we believe the recent move is Hilton’s strategy to counter competition from established hotel chains as well as small hospitality providers such as Choice Hotels (CHH - Free Report) . Meanwhile, its shares have declined 12.2% in the past year, better than the industry’s fall of 26%.
Hilton currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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