Muted new supply growth globally has forced the hands of lodging companies to grow via conversions—a method of taking an existing asset, branded or independent, and transitioning it to a new flag. Hilton figures it has the brands and scale to make it happen at a higher clip than most. And Europe, Hilton president and CEO Chris Nassetta said during his company’s third-quarter earnings call, is a large opportunity.
Conversions represented 37% of Hilton’s openings in the third quarter. “Because our brands drive RevPAR index premiums, we believe there is significant opportunity to continue growing through conversions,” Nassetta said.
European hotel stock still skews largely independent prompting Nassetta to say that there is huge opportunity for conversions across the region. Independent, non-branded hotels account for approximately 60% of the region’s current supply, Nassetta said, while Hilton represents just 2% of the region’s supply across the system. “We are a fly speck overall,” he said.
In the third quarter, Hilton delivered conversion openings across 12 of its 28 brands, including the debut of Spark by Hilton in Italy, and the conversion of 10 Select by Hilton Yotel properties across four countries. Over the last 12 months, Hilton has converted hotels from almost 60 different brands into its system.
Hilton said its strong RevPAR performance in the quarter was driven by growth in both occupancy and rate, which helped increase system-wide comparable RevPAR 5.8% compared to the same period a year ago. For full-year 2026, Hilton projects RevPAR to increase between 4% and 4.5% compared to 2025.
“RevPAR outperformance reflected strength in business and group demand, continued momentum following the World Cup and favorable calendar and holiday shifts,” Nassetta said. Globally, business transient RevPAR was up 8.3%, driven by outperformance in the U.S. that he said should carry into the fourth quarter, especially in the U.S., “where supportive policy, increased private sector investment, including in AI, and ongoing public infrastructure spending are supporting demand,” he said.
Leisure transient RevPAR was up 1.6% as demand normalized following a strong summer travel period. “In the U.S., we are seeing middle-class real wage growth despite higher inflation, contributing to broad-based strength we have described as a C-shaped economy. We believe we are uniquely positioned to benefit from this demand, given our exposure to business travel, especially small and medium-sized companies,” Nassetta said.
Looking beyond 2026, Nassetta said he remained optimistic about the strengthening demand backdrop, particularly given the close correlation between hotel demand and non-residential fixed investment, which, he said, has grown for the past six quarters and has been growing nearly two times faster than the average rate over the prior 20 years, “providing an unusually strong and durable macroeconomic backdrop for our business.”
Hilton approved 30,500 new rooms for development during the quarter, pushing its development pipeline to 543,100 rooms as of September 30, 2026, and representing growth of 5% from the same time last year. It added 27,000 rooms to its system, resulting in 23,000 net additional rooms for the third quarter, up 6.5% sequentially from the second quarter, contributing to net unit growth of 6% from September 30, 2025. “We achieved our highest quarter ever for organic openings, and the continued quarterly sequential increases give us confidence in delivering net unit growth around the midpoint of our 6% to 7% full-year guidance range,” Nassetta said.
Net income was $536 million for the third quarter.
During the quarter, Hilton also announced it would begin trading on the Nasdaq as of November 5, 2026, and it also hired former Uber VP of software engineering Jeff Moore as its new CTO.
On the question of how Hilton is interacting with AI agents to accept and increase direct bookings, Nassetta showed heightened enthusiasm over the likes of Meta’s Muse. “We’re in the very early days of of this opportunity with AI, particularly in the distribution space,” he said. “You should assume we’re working with each and every one of them.”
Ever since online travel agencies and other intermediaries cropped up at around the turn of the century, hotel companies have been working to wrestle back consumer control with mixed results. “What’s really important to us is that we continue to build great and direct relationships with our customers. All of these tools are the future, just like the internet was the future,” Nassetta said.
He came short of saying that agentic AI would be the end to OTAs. “We will continue to have a big relationship with our OTA partners for a certain segment of our business,” he said. “I don’t think that’s going away anytime soon, but I do think these tools are ultimately going to lead to a path of our being able to drive much more direct business at at lower cost structure.”
