Hilton Trading & Covid-19 Performance Update For April

Hilton held earlier this morning its 1st quarter earnings call, although most of the financial information was already disclosed previously.

The call had some interesting information about loyalty and April hotel performance, however.

You can access Hilton here.

READ MORE: Hilton Honors Rate & Bonus Points Promotion

Here are some notes that I took:

  • Honors members donated 6.5M points
  • 106 million members
  • 950 hotels are currently closed representing 16% of all properties
    • 10% of Americas suspended
    • 60% of Europe, the Middle East, and Africa
    • 15% of Asia-Pacific
  • Hilton is seeing 90% systemwide RevPAR (Revenue Per Available Room) decline for April
  • China (some if not all) hotels were at 50% occupancy for May Day holiday
  • Global occupancy is now 23% compared to 13% at the lowest point
  • Has enough liquidity for 24 months

Honors

  • Honors occupancy has skyrocketed (during the pandemic – a higher share than usually)
  • In the good times it is harder to differentiate (was about doing the right thing for the member)
  • Focused listening to customers and doing the right thing
  • What they will do now will define the future

Here’s the press release about the results:

Hilton Worldwide Holdings Inc. (“Hilton” or the “Company”) (NYSE: HLT) today reported its first quarter 2020 results. The following results reflect the material impact that the novel coronavirus (“COVID-19”) pandemic had on Hilton’s business, the effects of which were not significant until March 2020. Highlights include:

  • Diluted EPS was $0.06 for the first quarter, and diluted EPS, adjusted for special items, was $0.74
  • Net income was $18 million for the first quarter
  • Adjusted EBITDA was $363 million for the first quarter
  • System-wide comparable RevPAR decreased 22.6 percent on a currency neutral basis for the first quarter from the same period in 2019
  • Approved 29,500 new rooms for development during the first quarter, growing Hilton’s development pipeline to 405,000 rooms as of March 31, 2020, representing 9 percent growth from March 31, 2019
  • Opened 8,800 rooms in the first quarter, contributing to 6,100 net additional rooms
  • In April 2020, pre-sold Hilton Honors points to American Express for $1.0 billion in cash
  • In April 2020, issued $1.0 billion of senior notes consisting of: (i) $500 million aggregate principal amount of 5.375% Senior Notes due 2025 and (ii) $500 million aggregate principal amount of 5.750% Senior Notes due 2028
  • Giving effect to the Hilton Honors pre-sale and issuance of senior notes, as of March 31, 2020, cash, restricted cash and cash equivalents would have been $3.8 billion

Hilton recently launched CleanStay initiative:

Hilton CleanStay With Lysol Coming In June 2020

Conclusion

It is very challenging times, to say the least, for the entire hospitality sector, including hotels and airlines.

Hilton recently sold (read more here) a billion USD worth of Honors points to American Express that will find their way to affiliated cardholders in due course.

The second quarter of this year (we are close to halfway through it) will be the worst for the hotels. I cannot wait to see those numbers in three months.

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