Hilton on Wednesday reported results in line with expectations, with Q4 earnings per share of US$0.70, 5 cents better than analyst estimates.
Revenue for the quarter came in at US$2.92 billion versus the consensus estimate of US$2.91 billion, while RevPAR growth came in at +0.9% (+0.7% ADR) versus 0%-1% guidance.
R.W. Baird analyst Michael Bellisario that wrote there were no surprises with 2017 guidance. As expected, Hilton maintained its 1%-3% RevPAR growth range, which, when initially provided last quarter, assumed a modest uptick in economic growth. “We are modeling 1.8% currency-neutral growth with a 60 bps FX headwind,” Bellisario said. “Importantly, especially given Hilton’s new asset-light model, capex is expected to be US$150-$200 million, which is above our ~US$140 million estimate.”
Hilton reported continued momentum with its emerging Tru brand with with 179 hotels in the pipeline (+35 versus 3Q16), while its new upscale soft brand, Tapestry Collection by Hilton, had 40-plus deals in process at the end of January. “While net unit growth remains solid (+6.6% in 2016), we expect construction delays and deal slippage to persist in 2017, which puts our 50K net unit growth estimate at the low end of Hilton’s 50-55K guidance range,” Bellisario added.
Lastly, Hilton said HNA Tourism Group’s acquisition of a 25% equity stake in Hilton from Blackstone is still on track for a 1Q17 closing.
Wyndham earnings
Wyndham Worldwide also announced Q4 2016 results on Wednesday with an earnings beat and a revenue miss, according to Zacks Consensus Estimate.
Adjusted earnings of US$1.35 per share beat the US$1.30 estimate, and earnings were up 37.8% year over year. Additionally, net revenue of US$1.32 billion improved 0.7% year over year on the back of increased contribution from the hotel group and the destination network segments. Revenue, however, slightly missed the Zacks estimate of US$1.33 billion by 0.6%. Adjusted EBITDA (excluding share-based compensation expense) grew 16.5% year over year to US$318 million.
Hotel Group revenue was US$316 million, up 0.6% from the year-ago figure, which reflected higher franchise fees as well as growth in the company’s Wyndham Rewards credit card program. Domestic same store RevPAR inched up 2.9%. At constant currency, total system-wide same store RevPAR increased 2.7% year over year, reflecting softness in the U.S. and Canadian oil markets.
For 2017, the company projects adjusted net income in a range of US$637 million to US$658 million. In the meantime, adjusted earnings per share are anticipated in a band of $5.90 to $6.10 per share. Wyndham also expects full-year revenue to roughly come in a range of US$5.80 billion to $5.95 billion.
During the quarter, Wyndham showed a 2.9% net room increase, compared with year-end 2015, to more than 697,600 rooms at more than 8,000 properties. Its development pipeline grew in Q4 to more than 1,100 hotels with 138,300 rooms.