The fourth quarter of 2023 was a record for Hilton. The McLean, Va.-based hotel company said it opened more rooms in the quarter than any previous quarter in its history.
Hilton said it opened 132 hotels and approximately 24,000 rooms between October and December 2023, contributing to full-year openings of 395 hotels and approximately 63,000 rooms to achieve net unit growth of 4.9%.
On Hilton’s third-quarter earnings call, President and CEO Chris Nassetta underscored the company’s focus on net unit growth, telling analysts “we are confident in our ability to accelerate net unit growth to 5.5% to 6% next year and to return to our prior 6% to 7% growth rate.”
“We believe we have hit an inflection point and expect a meaningful uptick in openings in the fourth quarter, with
continued positive momentum into next year, with forecasts for our highest level of signings in the year,” Nassetta added, at the time.
Hilton also said it strengthened its development pipeline with record 2023 signings of nearly 1,000 hotels representing 130,000 rooms, up 45% from the prior year and meaningfully ahead of pre-pandemic levels. The company’s pipeline is now the largest in its history with nearly 3,300 hotels, totaling more than 462,000 rooms, it said.
At the beginning of last year, Hilton announced a pure conversion brand Spark by Hilton, creating a space it calls “premium economy.” Ten months later, it opened the first, Spark by Hilton Mystic Groton, in Connecticut. On October 31, it opened its next, Spark by Hilton Germantown, in Maryland. Nassetta said there are more than 400 deals in negotiation for the brand. “We think this is the start of a journey to reshape the premium economy space,” he said.
Earlier this month, Hilton unveiled the name of its new extended stay, studio apartment-style brand, which had been working under the working title Project H3 by Hilton. The the brand will officially be called LivSmart Studios by Hilton and has received “tremendous interest” from developers and owners in six months, Hilton said in a statement. Built to accommodate stays for 20 nights or more, the brand has more than 350 deals in various stages of negotiation, Hilton said.
In 2023, Hilton reported that it delivered another year of strong construction starts, up 15% over 2022 and approaching pre-pandemic levels.
Premium products and exceptional levels of service are driving strong customer demand for our hotels around the world, while better returns are supporting strong owner interest,” said Nassetta, adding that Hilton still feels “very good” about its prior net unit growth guidance of 5.5% to 6.0% in 2024, “with strong indications towards the higher end of the range based on the positive momentum we are seeing in signings and construction starts.”
“Hilton’s development results continue to be an indicator of how well-positioned we are for long-term growth,” said Kevin Jacobs, CFO and president, global development, Hilton. “Hotel owners choose to work with us because of the strength of our growing portfolio of brands and our premium commercial performance. This owner preference drives our capital light growth and fuels our network effect, which helps us continue to deliver value for all our stakeholders.”
Hilton said it ended 2023 with more than 7,500 properties in 126 countries and territories and that, on average, more than one new hotel per day was added to Hilton’s global portfolio.