Hilton Worldwide Holdings Inc. (HLT - Free Report) continues to expand its footprint in Canada. While the company has announced plans to introduce Canopy by Hilton and Tapestry Collection by Hilton therein, it intends to expand Tru by Hilton in the same region.
Going forward, Tapestry Collection by Hilton anticipates opening hotels in Moncton, Mississauga and Calgary. The Canvas Moncton is slated to open before 2019 end.
With 10 additional hotels in its pipeline, Tru by Hilton expects to open a few more hotels primarily in Ontario by the end of 2021. Notably, it opened the first hotel — Tru by Hilton Edmonton Windermere — outside the United States, early this year.
Canopy by Hilton, which is set to debut in Canada with Canopy by Hilton Toronto – Yorkville, is slated to open in 2022. The property will be in close proximity to several neighborhoods known for high-end retail and vibrant culture, offering unique experiences to its guests.
Hilton’s All Suites brands, Embassy Suites by Hilton, Homewood Suites by Hilton and Home2 Suites by Hilton also announced its 30th Canadian hotel opening with Homewood Suites by Hilton Ottawa Downtown, earlier this year.
Notably, Hilton’s Full and Focused Service categories has seen steady growth over the last three years. The categories aims at future in-market development that include DoubleTree by Hilton, Hilton Garden Inn and Hampton by Hilton with 15, 25 and 58 hotels and nearly 10, more than five and ten in its pipeline.
Notably, the hotelier believes that Canada has seen impressive growth in tourism. Per National Tourism Indicator, tourism economy grew nearly 4% in the first quarter of 2019.
Strategic Expansion to Drive Growth
In a bid to maintain its position as the fastest-growing global hospitality company, Hilton is continuing to drive unit growth. To this end, the company opened 123 new hotels during the second quarter of 2019. It also achieved net unit growth of 15,700 rooms, marking roughly 7% increase from the prior-year quarter.
As of Jun 30, 2019, Hilton's development pipeline comprised nearly 2,490 hotels, with roughly 373,000 rooms throughout 109 countries and territories including 37 countries and territories, where it has not opened any hotels. For 2019, the company anticipates net unit growth of 6.5%.
Backed by solid expansion strategies and a strong brand presence, shares of Hilton have gained 29.2% year to date compared with the industry’s 15.8% rally. Notably, the expansion of Conrad Hotels & Resorts is likely to help Hilton boost its overall revenues and witness increased revenue per available room (RevPAR) for its worldwide comparable system-wide properties.
In the second quarter 2019, RevPAR for worldwide comparable system-wide properties increased 1.4%, driven by a 7% improvement in average daily rate (ADR). The company anticipates its system-wide RevPAR to witness a year-over-year improvement of 1-2% on a comparable and currency-neutral basis.
Zacks Rank & Stocks to Consider
Hilton has a Zacks Rank #4 (Sell).
A better-ranked stock in the same space is Wyndham Destinations, Inc. (WYND - Free Report) , which carries a Zacks Rank #2 (Buy). You can the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Wyndham delivered an average four-quarter positive earnings surprise of 6.5%.
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