Hilton Reports Third Quarter Results

Hilton Reports Q3 2021 Results (Graphic: Business Wire)

MCLEAN, Va.--()--Hilton Worldwide Holdings Inc. ("Hilton" or the "Company") (NYSE: HLT) today reported its third quarter 2021 results. The following results reflect the material impact that the novel coronavirus ("COVID-19") pandemic has had on Hilton's business. Highlights include:

  • Diluted EPS was $0.86 for the third quarter, and diluted EPS, adjusted for special items, was $0.78
  • Net income was $240 million for the third quarter
  • Adjusted EBITDA was $519 million for the third quarter
  • System-wide comparable RevPAR increased 98.7 percent on a currency neutral basis for the third quarter from the same period in 2020
  • System-wide comparable RevPAR decreased 18.8 percent on a currency neutral basis for the third quarter from the same period in 2019
  • Approved 23,600 new rooms for development during the third quarter, bringing Hilton's development pipeline to 404,000 rooms as of September 30, 2021
  • Added 14,700 rooms to Hilton's system in the third quarter, contributing to 11,200 net additional rooms during the period and approximately 6.6 percent annualized net unit growth from September 30, 2020
  • Full year 2021 net unit growth is expected to be between 5.0 percent and 5.5 percent

Overview

Christopher J. Nassetta, President & Chief Executive Officer of Hilton, said, "We are pleased with our third quarter results which continue to reflect recovery from the adverse impact of the COVID-19 pandemic. Leisure travel remained strong and business travel continued to pick up during the quarter. We continue to expand our global footprint driven by the power of our industry-leading brand portfolio. Overall, we remain confident in a strong recovery in global tourism in the months and years ahead, as well as our positioning within the industry, which will enable us to continue to differentiate ourselves and deliver exceptional performance for all of our stakeholders.

During the three and nine months ended September 30, 2021, the COVID-19 pandemic continued to negatively impact Hilton's business and hotel operating statistics; however, Hilton experienced significant improvement in its results as compared to the same periods in 2020, due to an upward trend in travel and tourism. As a result of the pandemic, certain hotels suspended operations at various times throughout 2020, but the majority of those hotels were reopened by 2021. In line with the recovery, although some hotels did suspend operations during the nine months ended September 30, 2021, reopenings significantly outpaced suspensions. As such, the operations of only approximately 335 hotels, or 5 percent, of Hilton's system-wide properties as of September 30, 2021, which were primarily located in the U.S. and Europe, were suspended for some period of time during the nine months ended September 30, 2021, as compared to approximately 1,270 hotels during the nine months ended September 30, 2020. As of September 30, 2021, all but 88, or approximately 1 percent, of Hilton's system-wide hotels were open and Hilton expects nearly all of its system-wide hotels to be open by the end of 2021.

For the three and nine months ended September 30, 2021, system-wide comparable RevPAR increased 98.7 percent and 47.6 percent, respectively, compared to the same periods in 2020, due to increases in both occupancy and ADR, and the three months ended September 30, 2021 was down 18.8 percent compared to the three months ended September 30, 2019. For the three and nine months ended September 30, 2021, fee revenues increased 93 percent and 49 percent, respectively, compared to the same periods in 2020.

For the three months ended September 30, 2021, diluted EPS was $0.86 and diluted EPS, adjusted for special items, was $0.78 compared to $(0.29) and $0.06, respectively, for the three months ended September 30, 2020. Net income (loss) and Adjusted EBITDA were $240 million and $519 million, respectively, for the three months ended September 30, 2021, compared to $(81) million and $224 million, respectively, for the three months ended September 30, 2020.

For the nine months ended September 30, 2021, diluted EPS was $0.94 and diluted EPS, adjusted for special items, was $1.36 compared to $(1.77) and $0.20, respectively, for the nine months ended September 30, 2020. Net income (loss) and Adjusted EBITDA were $259 million and $1,117 million, respectively, for the nine months ended September 30, 2021, compared to $(495) million and $638 million, respectively, for the nine months ended September 30, 2020.

Development

In the third quarter of 2021, Hilton opened 96 new hotels totaling approximately 14,700 rooms and achieved net unit growth of 11,200 rooms. During the quarter, Hilton opened three new hotels under LXR Hotels & Resorts, including the brand's first property in the Asia Pacific region. Additionally, Hilton celebrated the opening of the 500th hotel under its Home2 Suites by Hilton brand only ten years after the brand was introduced, making it one of the fastest growing hotel brands in industry history.

As of September 30, 2021, Hilton's development pipeline totaled more than 2,620 hotels representing 404,000 rooms throughout 114 countries and territories, including 27 countries and territories where Hilton does not currently have any existing hotels. Additionally, of the rooms in the development pipeline, 249,000 rooms were located outside the U.S., and 204,000 rooms were under construction.

Balance Sheet and Liquidity

As of September 30, 2021, Hilton had $8.9 billion of long-term debt outstanding, excluding deferred financing costs and discount, with a weighted average interest rate of 3.99 percent. Excluding finance lease liabilities and other debt of Hilton's consolidated variable interest entities, Hilton had $8.6 billion of long-term debt outstanding with a weighted average interest rate of 3.95 percent and no scheduled maturities until 2025. No amounts were outstanding under Hilton's $1.75 billion senior secured revolving credit facility as of September 30, 2021, which had an available borrowing capacity of $1,690 million after considering $60 million of outstanding letters of credit. Total cash and cash equivalents were $1,387 million as of September 30, 2021, including $99 million of restricted cash and cash equivalents.

Conference Call

Hilton will host a conference call to discuss third quarter 2021 results on October 27, 2021 at 10:00 a.m. Eastern Time. Participants may listen to the live webcast by logging on to the Hilton Investor Relations website at https://ir.hilton.com/events-and-presentations. A replay and transcript of the webcast will be available within 24 hours after the live event at https://ir.hilton.com/financial-reporting/quarterly-results/2021.

Alternatively, participants may listen to the live call by dialing 1-888-317-6003 in the U.S. or 1-412-317-6061 internationally using the conference ID 1317541. Participants are encouraged to dial into the call or link to the webcast at least fifteen minutes prior to the scheduled start time. A telephone replay will be available for seven days following the call. To access the telephone replay, dial 1-877-344-7529 in the U.S. or 1-412-317-0088 internationally using the conference ID 10160550.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements related to the expectations regarding the impact of and recovery from the COVID-19 pandemic, the performance of Hilton's business, financial results, liquidity and capital resources and other non-historical statements. In some cases, these forward-looking statements can be identified by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "could," "seeks," "projects," "predicts," "intends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties including, among others, risks inherent to the hospitality industry, macroeconomic factors beyond Hilton's control, such as challenges due to labor shortages and supply chain disruptions, risks related to the impact of the COVID-19 pandemic, including as a result of new strains or variants of the virus and uncertainty of acceptance of the COVID-19 vaccines and their effectiveness, competition for hotel guests and management and franchise contracts, risks related to doing business with third-party hotel owners, performance of Hilton's information technology systems, growth of reservation channels outside of Hilton's system, risks of doing business outside of the U.S. and Hilton's indebtedness. Additional factors that could cause Hilton's results to differ materially from those described in the forward-looking statements can be found under the section entitled "Part I—Item 1A. Risk Factors" of Hilton's Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the Securities and Exchange Commission (the "SEC"), as such factors may be updated from time to time in Hilton's periodic filings with the SEC, which are accessible on the SEC's website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this press release and in Hilton's filings with the SEC. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

Definitions

See the "Definitions" section for the definition of certain terms used within this press release, including within the schedules.

Non-GAAP Financial Measures

The Company refers to certain financial measures that are not recognized under U.S. generally accepted accounting principles ("GAAP") in this press release, including: net income, adjusted for special items; diluted EPS, adjusted for special items; EBITDA; Adjusted EBITDA; Adjusted EBITDA margin; net debt; and net debt to Adjusted EBITDA ratio. See the schedules to this press release, including the "Definitions" section, for additional information and reconciliations of such non-GAAP financial measures.

About Hilton

Hilton (NYSE: HLT) is a leading global hospitality company with a portfolio of 18 world-class brands comprising more than 6,700 properties and more than 1 million rooms in 122 countries and territories. Dedicated to fulfilling its founding vision to fill the earth with the light and warmth of hospitality, Hilton has welcomed more than 3 billion guests in its more than 100-year history, earned a top spot on the 2021 World's Best Workplaces list and was named the 2020 Global Industry Leader on the Dow Jones Sustainability Indices. In 2020, Hilton CleanStay was introduced, bringing an industry-defining standard of cleanliness to hotels worldwide. Through the award-winning guest loyalty program Hilton Honors, the nearly 123 million members who book directly with Hilton can earn Points for hotel stays and experiences money can't buy. With the free Hilton Honors app, guests can book their stay, select their room, check in, unlock their door with a Digital Key and check out, all from their smartphone. Visit newsroom.hilton.com for more information, and connect with Hilton on facebook.com/hiltonnewsroom, twitter.com/hiltonnewsroom, linkedin.com/company/hilton, instagram.com/hiltonnewsroom and youtube.com/hiltonnewsroom.

HILTON WORLDWIDE HOLDINGS INC.

EARNINGS RELEASE SCHEDULES

TABLE OF CONTENTS

Condensed Consolidated Statements of Operations

Comparable and Currency Neutral System-Wide Hotel Operating Statistics

Property Summary

Capital Expenditures and Contract Acquisition Costs

Reconciliations of Non-GAAP Financial Measures

Definitions

HILTON WORLDWIDE HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in millions, except per share data)

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2021

 

2020

 

2021

 

2020

Revenues

 

 

 

 

 

 

 

Franchise and licensing fees

$

451

 

 

$

241

 

 

$

1,062

 

 

$

712

 

Base and other management fees

 

49

 

 

 

24

 

 

 

116

 

 

 

92

 

Incentive management fees

 

26

 

 

 

7

 

 

 

60

 

 

 

25

 

Owned and leased hotels

 

199

 

 

 

94

 

 

 

376

 

 

 

335

 

Other revenues

 

18

 

 

 

19

 

 

 

56

 

 

 

52

 

 

 

743

 

 

 

385

 

 

 

1,670

 

 

 

1,216

 

Other revenues from managed and franchised properties

 

1,006

 

 

 

548

 

 

 

2,282

 

 

 

2,201

 

Total revenues

 

1,749

 

 

 

933

 

 

 

3,952

 

 

 

3,417

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

Owned and leased hotels

 

200

 

 

 

144

 

 

 

452

 

 

 

478

 

Depreciation and amortization

 

46

 

 

 

90

 

 

 

143

 

 

 

269

 

General and administrative

 

107

 

 

 

66

 

 

 

302

 

 

 

189

 

Reorganization costs

 

 

 

 

 

 

 

 

 

 

38

 

Impairment losses

 

 

 

 

9

 

 

 

 

 

 

136

 

Other expenses

 

12

 

 

 

21

 

 

 

31

 

 

 

48

 

 

 

365

 

 

 

330

 

 

 

928

 

 

 

1,158

 

Other expenses from managed and franchised properties

 

944

 

 

 

592

 

 

 

2,339

 

 

 

2,482

 

Total expenses

 

1,309

 

 

 

922

 

 

 

3,267

 

 

 

3,640

 

 

 

 

 

 

 

 

 

Loss on sale of assets, net

 

(8

)

 

 

 

 

 

(8

)

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

432

 

 

 

11

 

 

 

677

 

 

 

(223

)

 

 

 

 

 

 

 

 

Interest expense

 

(98

)

 

 

(116

)

 

 

(302

)

 

 

(316

)

Gain (loss) on foreign currency transactions

 

 

 

 

(12

)

 

 

1

 

 

 

(16

)

Loss on debt extinguishment

 

 

 

 

 

 

 

(69

)

 

 

 

Other non-operating income (loss), net

 

6

 

 

 

3

 

 

 

16

 

 

 

(20

)

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

340

 

 

 

(114

)

 

 

323

 

 

 

(575

)

 

 

 

 

 

 

 

 

Income tax benefit (expense)

 

(100

)

 

 

33

 

 

 

(64

)

 

 

80

 

 

 

 

 

 

 

 

 

Net income (loss)

 

240

 

 

 

(81

)

 

 

259

 

 

 

(495

)

Net loss attributable to noncontrolling interests

 

1

 

 

 

2

 

 

 

4

 

 

 

4

 

Net income (loss) attributable to Hilton stockholders

$

241

 

 

$

(79

)

 

$

263

 

 

$

(491

)

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic

 

279

 

 

 

277

 

 

 

278

 

 

 

277

 

Diluted(1)

 

281

 

 

 

277

 

 

 

281

 

 

 

277

 

 

 

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

 

Basic

$

0.86

 

 

$

(0.29

)

 

$

0.94

 

 

$

(1.77

)

Diluted(1)

$

0.86

 

 

$

(0.29

)

 

$

0.94

 

 

$

(1.77

)

 

 

 

 

 

 

 

 

Cash dividends declared per share

$

 

 

$

 

 

$

 

 

$

0.15

 

____________

(1)

The weighted average shares outstanding used in the calculation of diluted loss per share for the three and nine months ended September 30, 2020 were revised from the previously reported amounts. Refer to “Reconciliations of Non-GAAP Financial Measures – Net Income and Diluted EPS, Adjusted for Special Items” for additional information.

HILTON WORLDWIDE HOLDINGS INC.

COMPARABLE AND CURRENCY NEUTRAL SYSTEM-WIDE HOTEL OPERATING STATISTICS

BY REGION

(unaudited)

 

Three Months Ended September 30,

 

Occupancy

 

ADR

 

RevPAR

 

2021

 

vs. 2020

 

2021

 

vs. 2020

 

2021

 

vs. 2020

U.S.

67.9

%

23.4

%

pts.

$

146.89

34.2

%

$

99.71

104.9

%

Americas (excluding U.S.)

54.4

 

30.1

 

 

 

116.18

19.9

 

 

63.15

168.3

 

Europe

59.3

 

27.7

 

 

 

132.23

28.9

 

 

78.42

142.3

 

Middle East & Africa

52.9

 

27.8

 

 

 

120.92

(0.4

)

 

63.94

110.1

 

Asia Pacific

49.5

 

(4.8

)

 

 

102.67

15.4

 

 

50.86

5.2

 

System-wide

64.3

 

21.5

 

 

 

140.57

32.2

 

 

90.39

98.7

 

 

 

Nine Months Ended September 30,

 

Occupancy

 

ADR

 

RevPAR

 

2021

 

vs. 2020

 

2021

 

vs. 2020

 

2021

 

vs. 2020

U.S.

59.9

%

17.7

%

pts.

$

130.26

7.0

%

$

78.00

51.9

%

Americas (excluding U.S.)

40.7

 

12.1

 

 

 

108.63

(3.1

)

 

44.25

38.0

 

Europe

37.0

 

6.8

 

 

 

115.89

1.0

 

 

42.92

23.8

 

Middle East & Africa

48.1

 

15.0

 

 

 

125.50

 

 

60.40

45.2

 

Asia Pacific

49.8

 

9.5

 

 

 

99.95

3.1

 

 

49.81

27.5

 

System-wide

55.7

 

15.6

 

 

 

125.93

6.2

 

 

70.15

47.6

 

HILTON WORLDWIDE HOLDINGS INC.

COMPARABLE AND CURRENCY NEUTRAL SYSTEM-WIDE HOTEL OPERATING STATISTICS

BY BRAND

(unaudited)

 

 

 

Three Months Ended September 30,

 

 

Occupancy

 

ADR

 

RevPAR

 

 

2021

 

vs. 2020

 

2021

 

vs. 2020

 

2021

 

vs. 2020

Waldorf Astoria Hotels & Resorts

46.5

%

 

14.2

%

pts.

 

$

500.93

 

97.2

%

 

$

233.15

 

184.2

%

Conrad Hotels & Resorts

47.1

 

 

16.6

 

 

 

 

220.71

 

23.5

 

 

 

103.96

 

91.1

 

Canopy by Hilton

58.0

 

 

24.6

 

 

 

 

166.30

 

27.0

 

 

 

96.44

 

120.8

 

Hilton Hotels & Resorts

51.8

 

 

22.8

 

 

 

 

162.94

 

30.2

 

 

 

84.34

 

132.8

 

Curio Collection by Hilton

56.3

 

 

26.9

 

 

 

 

203.87

 

28.8

 

 

 

114.70

 

146.8

 

DoubleTree by Hilton

57.6

 

 

22.1

 

 

 

 

128.09

 

29.7

 

 

 

73.72

 

110.3

 

Tapestry Collection by Hilton

64.7

 

 

29.8

 

 

 

 

154.38

 

27.8

 

 

 

99.86

 

137.3

 

Embassy Suites by Hilton

62.7

 

 

26.2

 

 

 

 

162.46

 

33.0

 

 

 

101.93

 

128.4

 

Hilton Garden Inn

66.4

 

 

24.0

 

 

 

 

130.36

 

34.3

 

 

 

86.55

 

110.1

 

Hampton by Hilton

71.1

 

 

19.4

 

 

 

 

127.17

 

30.5

 

 

 

90.41

 

79.5

 

Tru by Hilton

74.0

 

 

21.1

 

 

 

 

123.47

 

38.3

 

 

 

91.40

 

93.5

 

Homewood Suites by Hilton

80.1

 

 

18.1

 

 

 

 

136.69

 

23.5

 

 

 

109.43

 

59.7

 

Home2 Suites by Hilton

81.1

 

 

18.4

 

 

 

 

124.14

 

24.7

 

 

 

100.64

 

61.2

 

System-wide

64.3

 

 

21.5

 

 

 

 

140.57

 

32.2

 

 

 

90.39

 

98.7

 

 

 

Nine Months Ended September 30,

 

Occupancy

 

ADR

 

RevPAR

 

2021

 

vs. 2020

 

2021

 

vs. 2020

 

2021

 

vs. 2020

Waldorf Astoria Hotels & Resorts

41.9

%

 

9.4

%

pts.

 

$

518.82

 

44.2

%

 

$

217.35

 

85.8

%

Conrad Hotels & Resorts

39.8

 

 

9.0

 

 

 

 

205.63

 

1.0

 

 

 

81.82

 

30.4

 

Canopy by Hilton

44.2

 

 

15.6

 

 

 

 

148.59

 

4.6

 

 

 

65.74

 

61.3

 

Hilton Hotels & Resorts

41.9

 

 

10.2

 

 

 

 

148.20

 

0.8

 

 

 

62.16

 

33.2

 

Curio Collection by Hilton

46.9

 

 

15.2

 

 

 

 

191.67

 

12.1

 

 

 

89.87

 

65.7

 

DoubleTree by Hilton

48.2

 

 

13.4

 

 

 

 

115.19

 

2.7

 

 

 

55.54

 

42.2

 

Tapestry Collection by Hilton

51.5

 

 

17.4

 

 

 

 

138.32

 

12.0

 

 

 

71.26

 

69.3

 

Embassy Suites by Hilton

55.1

 

 

17.5

 

 

 

 

144.88

 

4.0

 

 

 

79.78

 

52.4

 

Hilton Garden Inn

57.6

 

 

17.7

 

 

 

 

114.77

 

6.5

 

 

 

66.07

 

53.7

 

Hampton by Hilton

62.7

 

 

18.1

 

 

 

 

112.69

 

10.2

 

 

 

70.66

 

55.1

 

Tru by Hilton

65.8

 

 

22.5

 

 

 

 

105.98

 

17.7

 

 

 

69.70

 

79.0

 

Homewood Suites by Hilton

73.7

 

 

17.8

 

 

 

 

122.73

 

4.3

 

 

 

90.47

 

37.5

 

Home2 Suites by Hilton

74.8

 

 

20.5

 

 

 

 

112.40

 

9.2

 

 

 

84.04

 

50.5

 

System-wide

55.7

 

 

15.6

 

 

 

 

125.93

 

6.2

 

 

 

70.15

 

47.6

 

HILTON WORLDWIDE HOLDINGS INC.

COMPARABLE AND CURRENCY NEUTRAL SYSTEM-WIDE HOTEL OPERATING STATISTICS

BY SEGMENT

(unaudited)

 

 

Three Months Ended September 30,

 

Occupancy

 

ADR

 

RevPAR

 

2021

 

vs. 2020

 

2021

 

vs. 2020

 

2021

 

vs. 2020

Management and franchise

64.6

%

 

21.5

%

pts.

 

$

140.12

 

32.2

%

 

$

90.49

 

98.3

%

Ownership(1)

47.4

 

 

23.3

 

 

 

 

177.92

 

19.8

 

 

 

84.31

 

135.2

 

System-wide

64.3

 

 

21.5

 

 

 

 

140.57

 

32.2

 

 

 

90.39

 

98.7

 

 

 

Nine Months Ended September 30,

 

Occupancy

 

ADR

 

RevPAR

 

2021

 

vs. 2020

 

2021

 

vs. 2020

 

2021

 

vs. 2020

Management and franchise

56.1

%

 

15.9

%

pts.

 

$

125.62

 

6.4

%

 

$

70.51

 

48.2

%

Ownership(1)

29.5

 

 

2.5

 

 

 

 

161.78

 

(3.1

)

 

 

47.75

 

5.9

 

System-wide

55.7

 

 

15.6

 

 

 

 

125.93

 

6.2

 

 

 

70.15

 

47.6

 

 

____________

(1) Includes hotels leased by entities in which Hilton owns a noncontrolling financial interest.

 

HILTON WORLDWIDE HOLDINGS INC.

PROPERTY SUMMARY

As of September 30, 2021

 

Owned / Leased(1)

 

Managed

 

Franchised

 

Total

 

Properties

 

Rooms

 

Properties

 

Rooms

 

Properties

 

Rooms

 

Properties

 

Rooms

Waldorf Astoria Hotels & Resorts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

13

 

5,319

 

 

 

13

 

5,319

Americas (excluding U.S.)

 

 

2

 

261

 

 

 

2

 

261

Europe

2

 

463

 

4

 

898

 

 

 

6

 

1,361

Middle East & Africa

 

 

5

 

1,224

 

 

 

5

 

1,224

Asia Pacific

 

 

6

 

1,259

 

 

 

6

 

1,259

LXR Hotels & Resorts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

3

 

426

 

3

 

426

Americas (excluding U.S.)

 

 

 

 

1

 

76

 

1

 

76

Europe

 

 

2

 

383

 

 

 

2

 

383

Middle East & Africa

 

 

1

 

41

 

1

 

234

 

2

 

275

Asia Pacific

 

 

 

 

1

 

114

 

1

 

114

Conrad Hotels & Resorts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

6

 

2,211

 

2

 

1,716

 

8

 

3,927

Americas (excluding U.S.)

 

 

2

 

438

 

 

 

2

 

438

Europe

 

 

4

 

1,155

 

 

 

4

 

1,155

Middle East & Africa

1

 

614

 

3

 

1,569

 

 

 

4

 

2,183

Asia Pacific

1

 

164

 

21

 

6,287

 

1

 

659

 

23

 

7,110

Canopy by Hilton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

22

 

3,693

 

22

 

3,693

Americas (excluding U.S.)

 

 

2

 

272

 

 

 

2

 

272

Europe

 

 

1

 

123

 

3

 

577

 

4

 

700

Middle East & Africa

 

 

1

 

200

 

 

 

1

 

200

Asia Pacific

 

 

3

 

489

 

 

 

3

 

489

Signia by Hilton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

1

 

1,009

 

 

 

1

 

1,009

Hilton Hotels & Resorts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

61

 

44,712

 

185

 

58,439

 

246

 

103,151

Americas (excluding U.S.)

1

 

405

 

26

 

9,767

 

26

 

7,826

 

53

 

17,998

Europe

44

 

12,413

 

44

 

15,046

 

42

 

11,079

 

130

 

38,538

Middle East & Africa

5

 

1,998

 

38

 

12,809

 

2

 

1,415

 

45

 

16,222

Asia Pacific

5

 

2,999

 

109

 

38,286

 

6

 

2,649

 

120

 

43,934

Curio Collection by Hilton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

6

 

2,776

 

56

 

11,580

 

62

 

14,356

Americas (excluding U.S.)

 

 

2

 

99

 

12

 

1,750

 

14

 

1,849

Europe

 

 

4

 

360

 

18

 

2,450

 

22

 

2,810

Middle East & Africa

 

 

4

 

685

 

1

 

356

 

5

 

1,041

Asia Pacific

 

 

4

 

773

 

2

 

248

 

6

 

1,021

DoubleTree by Hilton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

33

 

11,169

 

338

 

77,484

 

371

 

88,653

Americas (excluding U.S.)

 

 

3

 

587

 

34

 

6,745

 

37

 

7,332

Europe

 

 

14

 

3,741

 

106

 

17,997

 

120

 

21,738

Middle East & Africa

 

 

14

 

3,853

 

5

 

568

 

19

 

4,421

Asia Pacific

 

 

72

 

19,453

 

5

 

1,395

 

77

 

20,848

 

____________

(1) Includes hotels owned or leased by entities in which Hilton owns a noncontrolling financial interest.

HILTON WORLDWIDE HOLDINGS INC.

PROPERTY SUMMARY (continued)

As of September 30, 2021

 

Owned / Leased(1)

 

Managed

 

Franchised

 

Total

 

Properties

 

Rooms

 

Properties

 

Rooms

 

Properties

 

Rooms

 

Properties

 

Rooms

Tapestry Collection by Hilton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

62

 

7,447

 

62

 

7,447

Americas (excluding U.S.)

 

 

1

 

138

 

4

 

354

 

5

 

492

Europe

 

 

 

 

2

 

102

 

2

 

102

Asia Pacific

 

 

1

 

266

 

1

 

175

 

2

 

441

Embassy Suites by Hilton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

42

 

11,103

 

209

 

46,773

 

251

 

57,876

Americas (excluding U.S.)

 

 

3

 

667

 

5

 

1,336

 

8

 

2,003

Motto by Hilton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

2

 

497

 

2

 

497

Hilton Garden Inn

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

4

 

425

 

726

 

100,275

 

730

 

100,700

Americas (excluding U.S.)

 

 

11

 

1,571

 

48

 

7,270

 

59

 

8,841

Europe

 

 

19

 

3,642

 

58

 

9,451

 

77

 

13,093

Middle East & Africa

 

 

17

 

3,726

 

3

 

474

 

20

 

4,200

Asia Pacific

 

 

46

 

10,136

 

 

 

46

 

10,136

Hampton by Hilton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

28

 

3,648

 

2,274

 

224,172

 

2,302

 

227,820

Americas (excluding U.S.)

 

 

13

 

1,644

 

108

 

13,158

 

121

 

14,802

Europe

 

 

17

 

2,806

 

92

 

14,171

 

109

 

16,977

Middle East & Africa

 

 

4

 

1,238

 

 

 

4

 

1,238

Asia Pacific

 

 

 

 

205

 

33,369

 

205

 

33,369

Tru by Hilton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

209

 

20,367

 

209

 

20,367

Americas (excluding U.S.)

 

 

 

 

2

 

179

 

2

 

179

Homewood Suites by Hilton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

10

 

1,172

 

488

 

55,667

 

498

 

56,839

Americas (excluding U.S.)

 

 

3

 

406

 

23

 

2,591

 

26

 

2,997

Home2 Suites by Hilton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

2

 

210

 

501

 

52,551

 

503

 

52,761

Americas (excluding U.S.)

 

 

 

 

7

 

753

 

7

 

753

Other

 

 

3

 

1,800

 

4

 

822

 

7

 

2,622

Total hotels

59

 

19,056

 

735

 

231,852

 

5,905

 

801,430

 

6,699

 

1,052,338

Hilton Grand Vacations

 

 

 

 

59

 

9,348

 

59

 

9,348

Total system

59

 

19,056

 

735

 

231,852

 

5,964

 

810,778

 

6,758

 

1,061,686

 

____________

(1) Includes hotels owned or leased by entities in which Hilton owns a noncontrolling financial interest.

HILTON WORLDWIDE HOLDINGS INC.

CAPITAL EXPENDITURES AND CONTRACT ACQUISITION COSTS

(unaudited, dollars in millions)

 

Three Months Ended

 

 

 

September 30,

 

Increase / (Decrease)

 

2021

 

2020

 

$

 

%

Capital expenditures for property and equipment(1)

$

8

 

$

8

 

 

 

 

Capitalized software costs(2)

 

12

 

 

5

 

7

 

 

NM(3)

Total capital expenditures

 

20

 

 

13

 

7

 

 

53.8

 

Contract acquisition costs

 

45

 

 

14

 

31

 

 

NM(3)

Total capital expenditures and contract acquisition costs

$

65

 

$

27

 

38

 

 

NM(3)

 

 

Nine Months Ended

 

 

 

September 30,

 

Increase / (Decrease)

 

2021

 

2020

 

$

 

%

Capital expenditures for property and equipment(1)

$

17

 

$

38

 

(21

)

 

(55.3

)

Capitalized software costs(2)

 

28

 

 

38

 

(10

)

 

(26.3

)

Total capital expenditures

 

45

 

 

76

 

(31

)

 

(40.8

)

Contract acquisition costs

 

160

 

 

37

 

123

 

 

NM(3)

Total capital expenditures and contract acquisition costs

$

205

 

$

113

 

92

 

 

81.4

 

____________

(1)

 

Expenditures for hotels, corporate and other property and equipment, which include amounts indirectly reimbursed by hotel owners of $2 million and $3 million for the three months ended September 30, 2021 and 2020, respectively, and $3 million and $10 million for the nine months ended September 30, 2021 and 2020, respectively. Excludes expenditures for FF&E replacement reserves of $15 million and $18 million for the three months ended September 30, 2021 and 2020, respectively, and $30 million and $39 million for the nine months ended September 30, 2021 and 2020, respectively.

(2)

 

Includes $11 million and $4 million of expenditures that were indirectly reimbursed by hotel owners for the three months ended September 30, 2021 and 2020, respectively, and $25 million and $31 million for the nine months ended September 30, 2021 and 2020, respectively.

(3)

 

Fluctuation in terms of percentage change is not meaningful.

HILTON WORLDWIDE HOLDINGS INC.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

NET INCOME AND DILUTED EPS, ADJUSTED FOR SPECIAL ITEMS

(unaudited, in millions, except per share data)

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2021

 

2020

 

2021

 

2020

Net income (loss) attributable to Hilton stockholders, as reported

$

241

 

 

$

(79

)

 

$

263

 

 

$

(491

)

Diluted EPS, as reported(1)

$

0.86

 

 

$

(0.29

)

 

$

0.94

 

 

$

(1.77

)

Special items:

 

 

 

 

 

 

 

Net other expenses (revenues) from managed and franchised properties

$

(62

)

 

$

44

 

 

$

57

 

 

$

281

 

Purchase accounting amortization(2)

 

11

 

 

 

47

 

 

 

35

 

 

 

143

 

FF&E replacement reserves

 

15

 

 

 

18

 

 

 

30

 

 

 

39

 

Asset dispositions(3)

 

8

 

 

 

 

 

 

8

 

 

 

 

Reorganization costs

 

 

 

 

 

 

 

 

 

 

38

 

Impairment losses

 

 

 

 

9

 

 

 

 

 

 

136

 

Loss on debt extinguishment(4)

 

 

 

 

 

 

 

69

 

 

 

 

Tax-related adjustment(5)

 

(8

)

 

 

 

 

 

(38

)

 

 

 

Other adjustments(6)

 

9

 

 

 

14

 

 

 

10

 

 

 

39

 

Total special items before taxes

 

(27

)

 

 

132

 

 

 

171

 

 

 

676

 

Income tax benefit (expense) on special items

 

5

 

 

 

(36

)

 

 

(52

)

 

 

(130

)

Total special items after taxes

$

(22

)

 

$

96

 

 

$

119

 

 

$

546

 

 

 

 

 

 

 

 

 

Net income, adjusted for special items

$

219

 

 

$

17

 

 

$

382

 

 

$

55

 

Diluted EPS, adjusted for special items

$

0.78

 

 

$

0.06

 

 

$

1.36

 

 

$

0.20

 

____________
(1)

The weighted average shares outstanding used in the calculation of diluted EPS for both the three and nine months ended September 30, 2020 were revised from the previously reported amount of 279 million to 277 million, as the previously reported dilutive shares were determined to be anti-dilutive as a result of the net loss attributable to Hilton stockholders reported during those periods.

(2)

Represents the amortization of finite-lived intangible assets that were recorded at fair value in October 2007 when the Company became a wholly owned subsidiary of affiliates of Blackstone Inc. Certain of these assets became fully amortized during the year ended December 31, 2020, and the majority of the remaining finite-lived intangible assets will be fully amortized during 2023.

(3)

Includes a loss on the sale of one of the Company's owned hotels, which was recognized in loss on sale of assets, net.

(4)

Relates to the redemption of the 5.125% Senior Notes due 2026 and includes a redemption premium of $55 million and the accelerated recognition of unamortized deferred financing costs of $14 million.

(5)

The three and nine months ended September 30, 2021 include income tax benefits recognized related to changes in effective tax rates. The benefits recognized did not have an effect on cash paid for taxes in the periods.

(6)

The three and nine months ended September 30, 2021 and 2020 include costs recognized for certain legal settlements, which were recognized in general and administrative expenses and other expenses, respectively. The nine months ended September 30, 2020, also includes losses related to the disposal of an investment and the settlement of a debt guarantee for a franchised hotel, which were recognized in other non-operating loss, net.

HILTON WORLDWIDE HOLDINGS INC.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN

(unaudited, dollars in millions)

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2021

 

2020

 

2021

 

2020

Net income (loss)

$

240

 

 

$

(81

)

 

$

259

 

 

$

(495

)

Interest expense

 

98

 

 

 

116

 

 

 

302

 

 

 

316

 

Income tax expense (benefit)

 

100

 

 

 

(33

)

 

 

64

 

 

 

(80

)

Depreciation and amortization expenses

 

46

 

 

 

90

 

 

 

143

 

 

 

269

 

EBITDA

 

484

 

 

 

92

 

 

 

768

 

 

 

10

 

Loss on sale of assets, net

 

8

 

 

 

 

 

 

8

 

 

 

 

Loss (gain) on foreign currency transactions

 

 

 

 

12

 

 

 

(1

)

 

 

16

 

Loss on debt extinguishment

 

 

 

 

 

 

 

69

 

 

 

 

FF&E replacement reserves

 

15

 

 

 

18

 

 

 

30

 

 

 

39

 

Share-based compensation expense

 

52

 

 

 

25

 

 

 

144

 

 

 

37

 

Reorganization costs

 

 

 

 

 

 

 

 

 

 

38

 

Impairment losses

 

 

 

 

9

 

 

 

 

 

 

136

 

Amortization of contract acquisition costs

 

9

 

 

 

7

 

 

 

23

 

 

 

22

 

Net other expenses (revenues) from managed and franchised properties

 

(62

)

 

 

44

 

 

 

57

 

 

 

281

 

Other adjustments(1)

 

13

 

 

 

17

 

 

 

19

 

 

 

59

 

Adjusted EBITDA

$

519

 

 

$

224

 

 

$

1,117

 

 

$

638

 

____________
(1)

The three and nine months ended September 30, 2021 and 2020 include costs recognized for certain legal settlements. The nine months ended September 30, 2020 also includes losses related to the disposal of an investment and the settlement of a debt guarantee for a franchised hotel. All periods include severance not related to the reorganization activities undertaken in response to the COVID-19 pandemic and other items.

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2021

 

2020

 

2021

 

2020

Total revenues, as reported

$

1,749

 

 

$

933

 

 

$

3,952

 

 

$

3,417

 

Add: amortization of contract acquisition costs

 

9

 

 

 

7

 

 

 

23

 

 

 

22

 

Less: other revenues from managed and franchised properties

 

(1,006

)

 

 

(548

)

 

 

(2,282

)

 

 

(2,201

)

Total revenues, as adjusted

$

752

 

 

$

392

 

 

$

1,693

 

 

$

1,238

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

519

 

 

$

224

 

 

$

1,117

 

 

$

638

 

 

 

 

 

 

 

 

 

Adjusted EBITDA margin

 

69.0

%

 

 

57.1

%

 

 

66.0

%

 

 

51.5

%

HILTON WORLDWIDE HOLDINGS INC.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

NET DEBT AND NET DEBT TO ADJUSTED EBITDA RATIO

(unaudited, dollars in millions)

 

 

September 30,

December 31,

 

2021

2020

Long-term debt, including current maturities

$

8,767

 

$

10,487

 

Add: unamortized deferred financing costs and discount

 

90

 

 

93

 

Long-term debt, including current maturities and excluding unamortized deferred financing costs and discount

 

8,857

 

 

10,580

 

Add: Hilton's share of unconsolidated affiliate debt

 

8

 

 

8

 

Less: cash and cash equivalents

 

(1,288

)

 

(3,218

)

Less: restricted cash and cash equivalents

 

(99

)

 

(45

)

Net debt

$

7,478

 

$

7,325

 

 

 

Nine Months Ended

Year Ended

TTM Ended

 

September 30,

December 31,

September 30,

 

2021

2020

2020

2021

Net income (loss)

$

259

 

$

(495

)

$

(720

)

$

34

 

Interest expense

 

302

 

 

316

 

 

429

 

 

415

 

Income tax expense (benefit)

 

64

 

 

(80

)

 

(204

)

 

(60

)

Depreciation and amortization expenses

 

143

 

 

269

 

 

331

 

 

205

 

EBITDA

 

768

 

 

10

 

 

(164

)

 

594

 

Loss on sale of assets, net

 

8

 

 

 

 

 

 

8

 

Loss (gain) on foreign currency transactions

 

(1

)

 

16

 

 

27

 

 

10

 

Loss on debt extinguishments

 

69

 

 

 

 

48

 

 

117

 

FF&E replacement reserves

 

30

 

 

39

 

 

57

 

 

48

 

Share-based compensation expense

 

144

 

 

37

 

 

97

 

 

204

 

Reorganization costs

 

 

 

38

 

 

41

 

 

3

 

Impairment losses

 

 

 

136

 

 

258

 

 

122

 

Amortization of contract acquisition costs

 

23

 

 

22

 

 

29

 

 

30

 

Net other expenses from managed and franchised properties

 

57

 

 

281

 

 

397

 

 

173

 

Other adjustments(1)

 

19

 

 

59

 

 

52

 

 

12

 

Adjusted EBITDA

$

1,117

 

$

638

 

$

842

 

$

1,321

 

 

 

 

 

 

Net debt

 

 

 

$

7,478

 

 

 

 

 

 

Net debt to Adjusted EBITDA ratio

 

 

 

 

5.7

 

____________

(1)

 

The nine months ended September 30, 2021 and 2020 include costs recognized for certain legal settlements. The nine months ended September 30, 2020 and year ended December 31, 2020 also include losses related to the disposal of an investment and the settlement of a debt guarantee for a franchised hotel. The year ended December 31, 2020 also includes a gain related to the reimbursement by a third party for taxes owed resulting from the sale of a hotel in a prior period. All periods include severance not related to the reorganization activities undertaken in response to the COVID-19 pandemic and other items.

HILTON WORLDWIDE HOLDINGS INC.
DEFINITIONS

Trailing Twelve Month Financial Information

This press release includes certain unaudited financial information for the trailing twelve months ("TTM") ended September 30, 2021, which is calculated as the nine months ended September 30, 2021 plus the year ended December 31, 2020 less the nine months ended September 30, 2020. This presentation is not in accordance with GAAP. However, the Company believes that this presentation provides useful information to investors regarding its recent financial performance, and it views this presentation of the four most recently completed fiscal quarters as a key measurement period for investors to assess its historical results. In addition, the Company's management uses TTM information to evaluate the Company's financial performance for ongoing planning purposes.

The COVID-19 pandemic had a material adverse impact on the Company's results for the TTM period ended September 30, 2021 when compared to periods prior to the onset of the pandemic in early 2020. As such, this TTM period, as well as upcoming periods, are unlikely to be comparable to periods prior to the onset of the pandemic or to other periods affected by the pandemic, and are not indicative of future performance. As such, TTM information may not be useful for projecting future operating results.

Net Income (Loss), Adjusted for Special Items, and Diluted EPS, Adjusted for Special Items

Net income (loss), adjusted for special items, and diluted earnings (loss) per share ("EPS"), adjusted for special items, are not recognized terms under GAAP and should not be considered as alternatives to net income (loss) or other measures of financial performance or liquidity derived in accordance with GAAP. In addition, the Company's definition of net income (loss), adjusted for special items, and diluted EPS, adjusted for special items, may not be comparable to similarly titled measures of other companies.

Net income (loss), adjusted for special items, and diluted EPS, adjusted for special items, are included to assist investors in performing meaningful comparisons of past, present and future operating results and as a means of highlighting the results of the Company's ongoing operations.

EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin

EBITDA, presented herein, reflects net income (loss), excluding interest expense, a provision for income tax benefit (expense) and depreciation and amortization. Adjusted EBITDA, presented herein, is calculated as EBITDA, as previously defined, further adjusted to exclude certain items, including gains, losses, revenues and expenses in connection with: (i) asset dispositions for both consolidated and unconsolidated equity investments; (ii) foreign currency transactions; (iii) debt restructurings and retirements; (iv) furniture, fixtures and equipment ("FF&E") replacement reserves required under certain lease agreements; (v) share-based compensation; (vi) reorganization, severance, relocation and other expenses; (vii) non-cash impairment; (viii) amortization of contract acquisition costs; (ix) the net effect of reimbursable costs included in other revenues and other expenses from managed and franchised properties; and (x) other items.

Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of total revenues, adjusted to exclude the amortization of contract acquisition costs and other revenues from managed and franchised properties.

The Company believes that EBITDA, Adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors about the Company and its financial condition and results of operations for the following reasons: (i) these measures are among the measures used by the Company's management team to evaluate its operating performance and make day-to-day operating decisions and (ii) these measures are frequently used by securities analysts, investors and other interested parties as a common performance measure to compare results or estimate valuations across companies in the industry. Additionally, these measures exclude certain items that can vary widely across different industries and among competitors within the Company's industry. For instance, interest expense and income taxes are dependent on company specifics, including, among other things, capital structure and operating jurisdictions, respectively, and, therefore, could vary significantly across companies. Depreciation and amortization, as well as amortization of contract acquisition costs, are dependent upon company policies, including the method of acquiring and depreciating assets and the useful lives that are used. For Adjusted EBITDA, the Company also excludes items such as: (i) FF&E replacement reserves for leased hotels to be consistent with the treatment of capital expenditures for property and equipment, where it is capitalized and depreciated over the life of the FF&E; (ii) share-based compensation, as this could vary widely among companies due to the different plans in place and the usage of them; (iii) the net effect of the Company's cost reimbursement revenues and reimbursed expenses, as the Company contractually does not operate the related programs to generate a profit over the terms of the respective contracts; and (iv) other items, such as amounts related to debt restructurings and retirements and reorganization and related severance costs, that are not core to the Company's operations and are not reflective of the Company's operating performance.

EBITDA, Adjusted EBITDA and Adjusted EBITDA margin are not recognized terms under GAAP and should not be considered as alternatives, either in isolation or as a substitute, for net income (loss) or other measures of financial performance or liquidity derived in accordance with GAAP. The Company's definitions of EBITDA, Adjusted EBITDA and Adjusted EBITDA margin may not be comparable to similarly titled measures of other companies and may have limitations as analytical tools.

Net Debt and Net Debt to Adjusted EBITDA Ratio

Net debt and net debt to Adjusted EBITDA ratio, presented herein, are non-GAAP financial measures that the Company uses to evaluate its financial leverage. Net debt is calculated as: (i) long-term debt, including current maturities and excluding unamortized deferred financing costs and discount, and (ii) the Company's share of unconsolidated affiliate debt; reduced by: (a) cash and cash equivalents and (b) restricted cash and cash equivalents.

Net debt should not be considered as a substitute to debt presented in accordance with GAAP, and net debt to Adjusted EBITDA ratio should not be considered as an alternative to measures of financial condition derived in accordance with GAAP. Net debt and net debt to Adjusted EBITDA ratio may not be comparable to similarly titled measures of other companies. The Company believes net debt and net debt to Adjusted EBITDA ratio provide useful information about its indebtedness to investors as they are frequently used by securities analysts, investors and other interested parties to compare the indebtedness of companies.

Comparable Hotels

The Company defines comparable hotels as those that: (i) were active and operating in the Company's system for at least one full calendar year as of the end of the current period, and open January 1st of the previous year; (ii) have not undergone a change in brand or ownership type during the current or comparable periods reported; and (iii) have not sustained substantial property damage, business interruption, undergone large-scale capital projects or for which comparable results were not available. Of the 6,699 hotels in the Company's system as of September 30, 2021, 5,572 hotels were classified as comparable hotels. The 1,127 non-comparable hotels included 66 hotels, or less than one percent of the total hotels in the system, that were removed from the comparable group during the last twelve months because they have sustained substantial property damage, business interruption, underwent large-scale capital projects or comparable results were otherwise not available.

When considering business interruption in the context of the Company's definition of comparable hotels, no hotel that had completely or partially suspended operations on a temporary basis at any time as a result of the COVID-19 pandemic was excluded from the definition of comparable hotels on that basis alone. Despite these temporary suspensions of hotel operations, the Company believes that including these hotels within the hotel operating statistics of occupancy, average daily rate ("ADR") and revenue per available room ("RevPAR"), reflects the underlying results of the business for the three and nine months ended September 30, 2021 and 2020.

Occupancy

Occupancy represents the total number of room nights sold divided by the total number of room nights available at a hotel or group of hotels for a given period. Occupancy measures the utilization of the hotels' available capacity. Management uses occupancy to gauge demand at a specific hotel or group of hotels in a given period. Occupancy levels also help management determine achievable ADR pricing levels as demand for hotel rooms increases or decreases.

ADR

ADR represents hotel room revenue divided by the total number of room nights sold for a given period. ADR measures the average room price attained by a hotel, and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. ADR is a commonly used performance measure in the industry, and management uses ADR to assess pricing levels that the Company is able to generate by type of customer, as changes in rates charged to customers have different effects on overall revenues and incremental profitability than changes in occupancy, as described above.

RevPAR

RevPAR is calculated by dividing hotel room revenue by the total number of room nights available to guests for a given period. Management considers RevPAR to be a meaningful indicator of the Company's performance as it provides a metric correlated to two primary and key drivers of operations at a hotel or group of hotels, as previously described: occupancy and ADR. RevPAR is also a useful indicator in measuring performance over comparable periods for comparable hotels.

References to RevPAR, ADR and occupancy throughout this press release are presented on a comparable basis, based on the comparable hotels as of September 30, 2021, and references to RevPAR and ADR are presented on a currency neutral basis, unless otherwise noted. As such, comparisons of these hotel operating statistics for the three and nine months ended September 30, 2021 and 2020 use the exchange rates used to translate the results of the Company's foreign operations within its financial statements for the three and nine months ended September 30, 2021, respectively, and for the three months ended September 30, 2021 and 2019, use the exchange rates used to translate the results of the Company's foreign operations within its financial statements for the three months ended September 30, 2021.

Contacts

Investor Contact
Jill Slattery
+1 703 883 5476

Media Contact
Megan Ryan
+1 703 883 6711

Contacts

Investor Contact
Jill Slattery
+1 703 883 5476

Media Contact
Megan Ryan
+1 703 883 6711