10-QPeriod: Q2 FY2021

Hilton Worldwide Holdings Inc. Quarterly Report for Q2 Ended Jun 30, 2021

Filed July 29, 2021For Securities:HLT

Summary

Hilton Worldwide Holdings Inc. (HLT) reported its second-quarter 2021 results, demonstrating a significant recovery from the pandemic's impact. Total revenues increased substantially year-over-year, driven by a strong rebound in franchise and licensing fees, and base and other management fees. This recovery is largely attributed to the easing of travel restrictions and the broader distribution of COVID-19 vaccinations. The company's operational metrics, such as occupancy, ADR, and RevPAR, showed marked improvement across all regions compared to the second quarter of 2020, indicating a strong return to travel and tourism. Despite the ongoing recovery, the company has strategically managed its debt, fully repaying its senior secured revolving credit facility and focusing on extending debt maturities. Hilton's development pipeline remains robust, positioning the company for future growth.

Financial Highlights

49 data points
Beta

Revenue

$1.33B

Net Income

$130.00M

9.8% Net Margin

EPS (Diluted)

$0.46

Total Assets

$15.09B

Cash & Equivalents

$1.04B

Free Cash Flow

-$135.00M

Financial Statements
Beta
Revenue$1.33B
Operating Expenses$1.10B
Operating Income$224.00M
Interest Expense$101.00M
Net Income$130.00M
EPS (Basic)$0.47
EPS (Diluted)$0.46
Shares Outstanding (Basic)279.00M
Shares Outstanding (Diluted)281.00M

Key Highlights

  • 1Revenues saw a significant increase of over 130% year-over-year for the second quarter of 2021, reaching $1.33 billion, reflecting a strong recovery in the hospitality sector.
  • 2System-wide occupancy for comparable hotels increased by 36.1 percentage points to 58.5% in Q2 2021 compared to Q2 2020, indicating a substantial return of travelers.
  • 3RevPAR (Revenue per Available Room) for comparable hotels surged by 233.8% year-over-year in Q2 2021, a key indicator of the strong demand recovery.
  • 4The company fully repaid its $1.69 billion senior secured revolving credit facility during the first six months of 2021, significantly strengthening its liquidity position.
  • 5Hilton's development pipeline remains a key strategic focus, with nearly 2,590 hotels (401,000 rooms) approved for development or under construction as of June 30, 2021.
  • 6Adjusted EBITDA more than quadrupled year-over-year in Q2 2021 to $400 million, demonstrating improved operational profitability.
  • 7The company reported a net income of $130 million ($0.47 per diluted share) for Q2 2021, a substantial improvement from a net loss of $432 million ($1.55 per diluted share) in Q2 2020.

Frequently Asked Questions

Hilton's financial performance in the second quarter of 2021 showed a significant recovery compared to the same period in 2020, which was heavily impacted by the COVID-19 pandemic. While still facing challenges, the easing of travel restrictions and increased vaccination rates led to substantial improvements in revenues, occupancy, ADR, and RevPAR. The company reported a net income of $130 million for Q2 2021, a marked turnaround from the net loss of $432 million in Q2 2020.

Hilton has actively managed its debt. During the first six months of 2021, the company fully repaid its $1.69 billion senior secured revolving credit facility. As of June 30, 2021, its total indebtedness was approximately $8.86 billion. The company ended the period with $1.13 billion in cash and cash equivalents, indicating a solid liquidity position to meet its operational and financial obligations.

Hilton continues to focus on expanding its global footprint through its management and franchise model, which requires minimal capital investment. As of June 30, 2021, the company had a robust development pipeline of nearly 2,590 hotels (401,000 rooms) under construction or approved for development worldwide. This pipeline, with a significant portion located outside the U.S., positions Hilton for continued long-term growth as the travel industry recovers.

Hilton operates through two main segments: management and franchise, and ownership. The management and franchise segment showed strong recovery, driven by increased franchise and licensing fees and management fees, correlating with the rebound in travel. The ownership segment also saw significant revenue recovery, though it still reflects some lingering impacts from the pandemic. Overall, the management and franchise segment's operating income saw a substantial increase, while the ownership segment's operating loss narrowed significantly compared to the prior year.