COVID-19 Hotel Development Analysis: Hilton Worldwide [Infographic]



TOPHOTELNEWS shines the spotlight on Hilton Worldwide in an exclusive analysis of its hotel development pipeline, exploring how the group has been affected by Covid19.

With its price down more than 40% and countless hotels closed around the world, Hilton Worldwide has been hit hard by the Covid-19 crisis, but senior executives remain positive about the company’s future prospects. .

With Covid-19 wreaking havoc in the hospitality industry for several weeks now, it’s time to take a closer look at how the big players are being affected by the global travel halt.

We find out how things are going for Hilton Worldwide.

Review of the hotel project pipeline

As one of the largest hotel groups in the world, Hilton always has a full pipeline of new projects. Currently, 748 new Hilton hotels are in the planning or construction phase:

While this is impressive, especially during the current crisis, it should also be noted that 85 new hotels have been suspended and 14 have been canceled as of April 30, 2020.

Regarding the company’s current brand launch strategies, CEO Christopher J. Nassetta mentioned taking things a little slower now and focusing on existing brands. This happened just after Hilton announced it would begin construction on its very first Tempo by Hilton in early March. The establishment is expected to open in 2021.

Meanwhile, brand changes such as the conversion from Mandarin Orchard Singapore to Hilton Singapore Orchard are still progressing. Here, Hilton and the owners apparently plan to take advantage of the weak operating environment to reap bigger profits when the recovery begins.

Hilton share price development

Before the crisis, Hilton’s share price had been fairly stable at around $ 112. After February 19, it fell to $ 56.68 on March 18. After a brief spike in late March, it then fell to its lowest level last year on April 3 at $ 55.94.

With some travel markets recovering, a slight rally overall took place and by April 21, the stock price had climbed back to $ 71.35. This reflects the optimism that is spreading due to the resumption of travel to China. However, given current developments in the United States, this recovery may be short-lived.

Hilton during COVID-19

In February, things were still going well for Hilton overall, and the company predicted net unit growth of 6-7%, which already included a 0.5% drop due to Covid-19. Then, in early March, Hilton withdrew its guidelines for 2020 as it became clear that the impact of the pandemic would be much greater than expected.

Only a month later, the group acknowledged that the situation would have a negative effect on the results. Hilton quickly took mitigating measures such as massive cost cuts, selling Hilton Honors Points to American Express, and other steps to ensure the business can remain liquid for the next 18-24 months. In addition, its executives are optimistic that this will give the industry enough time to recover to a point where operations can support cash flow.

“As a century-old company with a long-term vision, we are confident in our resilient business model, the performance of our portfolio of leading brands and our ability to respond appropriately to market conditions,” said Christopher J Nassetta, President and Chief Executive Officer. Managing Director of Hilton.



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