Hilton Raises RevPAR Outlook as Room Growth Accelerates
Second-quarter revenue rose 6.5% to $3.341 billion as franchising gains offset weaker ownership revenue.
Hilton Worldwide Holdings (HLT), the hotel operator, raised its full-year revenue-per-available-room outlook after system-wide comparable RevPAR growth accelerated to 3.9% in the second quarter from 3.6% in the first quarter and 0.5% in the fourth quarter. The latest increase reflected a 1.0-percentage-point rise in occupancy and 2.5% growth in average daily rates.
The improvement extended beyond room demand. Hilton opened 24,100 rooms during the quarter, up 50% sequentially, while net additions nearly doubled to 21,600. Development approvals climbed about 64% to 42,900 rooms, lifting the pipeline to a record 541,300. Year-over-year net unit growth moderated to 6.1% from 6.3% in March and 6.7% in December.
Total revenue increased from $3.137 billion a year earlier, while revenue excluding cost reimbursements and including contract-cost amortization rose 2.8% to $1.376 billion. Net income gained 9.0% to $482 million, and diluted earnings increased to $2.10 a share from $1.84. Adjusted earnings rose 4.1% to $2.29 a share, slowing from 16.9% growth in the first quarter.
Franchise and licensing fees rose 8.5% to $808 million, reinforcing the shift toward franchising. Incentive management fees declined 8.0% to $69 million, and ownership revenue fell 6.3% to $311 million. Management and franchise fee revenue grew 6.4%, down from 10.4% in the preceding quarter.
Operating income rose 10.3% to $858 million, outpacing total revenue growth. Adjusted EBITDA increased 4.6% to $1.054 billion and its margin expanded 1.4 percentage points to 76.6%. Adjusted EBITDA growth had been 13.3% in the first quarter.
Regional results varied. U.S. RevPAR rose 5.4%, Europe gained 4.3%, and the Americas excluding the U.S. increased 4.6%. Middle East and Africa RevPAR dropped 29.5% as occupancy fell 16.1 points and average daily rates declined 8.1%. Hilton’s management-and-franchise segment recorded 4.0% RevPAR growth, while ownership RevPAR decreased 3.4%.
Hilton now expects 2026 RevPAR growth of 3.0% to 3.5%, up from its April forecast of 2.0% to 3.0%, and adjusted EBITDA of $4.040 billion to $4.080 billion. The company lowered its net-income forecast to $1.883 billion to $1.911 billion. For the third quarter, Hilton expects about 4.0% RevPAR growth, adjusted EBITDA of $1.035 billion to $1.055 billion, and adjusted earnings of $2.28 to $2.34 a share.
The company returned $966 million to shareholders during the quarter, including dividends, and repurchased 2.9 million shares. Hilton reiterated plans to return about $3.5 billion for the year and stated second-half unit growth should outpace the first half.