Hilton has this week announced its full year results for 2016. The results were slightly above analyst expectations but by no means spectacular.
System-wide revenues for the year were US$11.7 billion, up from $11.3billion in 2015. Net income was down to $348 million from $1.4 billion. Restructuring costs incurred as the company split itself into three in 2016 led to a loss of $387 million in the final quarter, compared with a profit of $814 million in the same period in 2015, were a drag on income.
Christopher J. Nassetta, Hilton's president and CEO, said, "For the quarter and full year, performance met our expectations. We also continued to increase our development activity this quarter and surpassed development records this year, approving 106,000 new rooms and opening nearly one hotel per day, contributing to net unit growth of over 45,000 rooms. With completion of the spin-offs, Hilton is a fee-based, capital-efficient and resilient business, with meaningful cash flow that we intend to be very disciplined in returning to stockholders."
The hotel group, which includes bands ranging from Waldorf Astoria and Conrad to DoubleTree and Hampton, has almost 5,000 properties around the world, amounting to more than 800,000 rooms. The company works largely on a franchise model — 4,175 of its properties are run this way — and it is heavily US-focused, with three-quarters of the group's rooms there.
For our chart this week, we have chosen to drill down into the results on a chain basis. Year-on-year changes in occupancy, average daily rate and revenue per available room (RevPAR) are show for the main chains in the group's portfolio.
Occupancy has remained largely flat across the portfolio which, as you would expect, limits any significant changes in ADR and RevPAR. This suggests that buyers are largely in the driving seat. Waldorf Astoria and Curio, the company's collection of independent and individual properties, bucked this trend, posting significant increases in RevPAR.
The company said corporate transient business was growing and that RevPAR across the group was expected to grow by 1 to 3% in 2017.
Hilton has also announced that its Stop Clicking Around direct-booking campaign has started to return results. Bookings from loyalty programme members are up to 56% from 52% while direct bookings are up 2% year on year. The more this trend continues, the less influence buyers will exert.