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Hilton (HLT) Opens Hotel in Sanya, Expands Garden Inn Brand

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Hilton Worldwide Holdings, Inc. (HLT - Free Report) continues to expand its upscale brand, Hilton Garden Inn, both domestically and internationally. Recently, the company announced the opening of Hilton Garden Inn Sanya, on Hainan Island.

This 280-roomed hotel is located in the downtown area, 11 kilometers away from Sanya Phoenix International airport. It encompasses a fitness center, an indoor pool and a business center. Currently, Hilton’s Garden Inn brand comprises over 800 hotels across 41 countries and territories catering to the needs of business and leisure travelers alike.

The latest move underscores Hilton’s efforts to expand in international markets and strengthen its brand name. As the company has productively expanded in China, Latin America and Europe, it continues to face intense competition from both large hotel chains like Marriott (MAR - Free Report) and Hyatt (H - Free Report) as well as smaller independent local hospitality providers like Choice Hotels (CHH - Free Report) . Consequently, shares of Hilton have lost 11.3% in the past year, narrower than the industry’s 27.3% decline.

 

Expansion Efforts to Drive Growth

In a bid to maintain its position as the fastest-growing global hospitality company, Hilton continues to boosts unit growth. Also, its consistent efforts toward expanding brands globally drive its market share significantly.

In third-quarter 2018, the company achieved net unit growth of 14,800 rooms, marking a 24% increase from the prior-year quarter. Further, the company added 113 hotels, taking the room count to 16,100. For 2018, Hilton projects net unit growth of approximately 6.5%. It also has more rooms under construction in Europe, the Middle East and the Asia Pacific compared with any other hotel chain.

We expect Hilton’s expansion efforts to boost system-wide comparable revenue per available room (RevPAR). In the third quarter, comparable RevPAR increased 2% year over year on growth in average daily rate (ADR).
Also, the recent hotel addition will strengthen the Hilton Hotels & Resorts brand’s presence. Currently, the brand comprises more than 579 hotels in 89 countries and territories.

Hilton currently has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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