Hilton Worldwide Holdings on Wednesday reported its first quarter 2021 results, reflecting the material impact that COVID-19 has had on the business.
The operations of approximately 275 properties, which are primarily located in the United States and Europe, were suspended for some period of time during the three months ended March 31, 2021, as compared to approximately 730 properties during the three months ended March 31, 2020. For the three months ended March 31, 2021, systemwide comparable RevPAR decreased 38.4% compared to the same period in 2020 due to both occupancy and ADR decreases.
Additionally, as a result of the pandemic, fee revenues decreased 34% during the three months ended March 31, 2021 compared to the same period in 2020. For the three months ended March 31, 2021, diluted EPS was US$(0.39) and diluted EPS, adjusted for special items, was US$0.02 compared to US$0.06 and US$0.74, respectively, for the three months ended March 31, 2020. Net income (loss) and Adjusted EBITDA were US$(109) million and US$198 million, respectively, for the three months ended March 31, 2021, compared to US$18 million and US$363 million, respectively, for the three months ended March 31, 2020
Other highlights include:
- Hilton approved 21,900 new rooms for development during the first quarter, bringing Hilton’s development pipeline to 399,000 rooms as of March 31, 2021
- Added 16,500 rooms to Hilton’s system in the first quarter, contributing to 13,100 net additional rooms during the period and approximately 5.8% annualized net unit growth from March 31, 2020
- As of April 28, 2021, 97% of Hilton’s systemwide hotels were open
- In March 2021, repaid US$250 million of the outstanding debt balance under the Revolving Credit Facility, for a total of US$500 million repaid in the first quarter
“We are pleased with our first quarter results. While rising COVID-19 cases and tightened travel restrictions, particularly across Europe and our Asia Pacific region, weighed on demand in January and February, we saw meaningful improvement in March and April,” said Hilton President and CEO Chris Nassetta. “We expect this positive momentum to continue as vaccines are more widely distributed and our customers feel safe traveling again.”
Michael Bellisario, senior research analyst at R.W. Baird wrote on Wednesday that while Q121 results missed consensus it was in line with its expectations. “We see no change in the underlying trajectory of the fundamental recovery for Hilton’s business or our positive investment thesis,” he said.
Fully, 21,900 new rooms for approved development, Bellisario said, represents the first meaningful sequential quarterly uptick since the onset of the pandemic. “The recent quarterly signings pace had been ~18,000 rooms, but the 1Q21 signings are still well below the more than 29,000 new rooms signed in each of 1Q19 and 1Q20. Most recently, Hilton’s pipeline stood at 399,000 rooms (+2,000 rooms), essentially stable versus year-end,” he added.