Hilton Releases 2020 Results

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Hilton today released its full 2020 results, and as expected, they weren’t pretty. The total loss for the year was $720M.

Most hotel hotels have opened, and Asia-Pacific occupancy rates are OK’ish while Europe continues to be challenging. The select-service properties are overperforming full-service ones.

You can access Hilton here.

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Worldwide Occupancy by Region

During the fourth quarter, system-wide occupancy was 40%, and ADR (Average Daily Rate) was down by 27%.

Performance by Brand

Select and limited-service brands such as Hampton Inn and Hilton Garden Inn perform much better than luxury ones such as Waldorf Astoria and Conrad.

Here are the highlights:

  • Diluted EPS was $(0.80) for the fourth quarter and $(2.56) for the full year, and diluted EPS, adjusted for special items, was $(0.10) for the fourth quarter and $0.10 for the full year

  • Net loss was $225 million for the fourth quarter and $720 million for the full year

  • Adjusted EBITDA was $204 million for the fourth quarter and $842 million for the full year

  • System-wide comparable RevPAR decreased 59.2 percent and 56.7 percent on a currency neutral basis for the fourth quarter and full year, respectively, from the same periods in 2019

  • Approved 18,700 new rooms for development during the fourth quarter, bringing Hilton’s development pipeline to 397,000 rooms as of December 31, 2020

  • Opened 22,900 rooms in the fourth quarter, reaching the one million room milestone and contributing to 47,400 net additional rooms in Hilton’s system for the full year, which represented approximately 5.1 percent net unit growth from December 31, 2019

  • As of February 10, 2021, 97 percent of Hilton’s system-wide hotels were open

  • In December 2020, issued $1.9 billion of senior notes consisting of: (i) $800 million aggregate principal amount of 3.750% Senior Notes due 2029 and (ii) $1.1 billion aggregate principal amount of 4.000% Senior Notes due 2031; and used the net proceeds to redeem: (i) $1.0 billion in aggregate principal amount of outstanding 4.250% Senior Notes due 2024 and (ii) $900 million in aggregate principal amount of outstanding 4.625% Senior Notes due 2025

  • In January 2021, repaid $250 million of the outstanding debt balance under the $1.75 billion senior secured revolving credit facility

  • In February 2021, issued $1.5 billion aggregate principal amount of 3.625% Senior Notes due 2032 and used the net proceeds to redeem $1.5 billion in aggregate principal amount of outstanding 5.125% Senior Notes due 2026

Conclusion

This year will be very challenging for the hospitality sector, but hopefully, we will see countries opening up for international arrivals in the second half.

Hotels are better positioned for recovery than airlines because people have been to havings staycations at city hotels or those within driving distance.

You have to keep in mind that Hilton doesn’t own or have a financial interest outside of their fees at most hotels that carry their flags. It is difficult to tell how much the entire Hilton-system lost in 2020. It has to be billions of dollars.

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