he higher cost of capital has made it tougher on new hotel development and led to lodging companies cultivating new ways to reach growth goals , chiefly through conversion projects .

It ’ s become a hallmark of Hilton , which , during its second-quarter earnings call , it noted that conversions accounted for roughly half of openings in the quarter , much driven by the addition of Graduate Hotels and on the strength from DoubleTree by Hilton and Spark by Hilton , the latter a pure-conversion brand Hilton launched in early 2023 .

Hilton added 22,400 rooms to its system in the second quarter , resulting in 18,000 net additional rooms , and contributing to net unit growth

of 6.2 % from June 30 , 2023 . This included the debut of Spark by Hilton in Europe with the opening of Spark by Hilton London Romford , nine months after the first property opened in the U . S . in Mystic , Conn .

Expectations are that net unit growth , or NUG , will be in the range of 7 % to 7.5 % for the full year .

In July , Hilton surpassed 8,000 hotels globally .

Conversions not only helped lead Hilton ’ s openings , they also accounted for more than half of the signings in the quarter .

Global RevPAR increased 3.5 % in the quarter compared to the same time a year ago , with strength in group RevPAR that rose more than 10 % year-overyear , led by strong demand for corporate and social meetings

and events , as booking windows continued to expand due to this increased demand for rooms that has shrunk the amount of overall space available at any given moment .

Regionally , U . S . RevPAR was up 3 %, driven by strong group performance , particularly in urban markets . In the Americas outside the U . S ., Q2 RevPAR increased 7 % YOY , driven by strong results in leisure markets , while in Europe , RevPAR grew 7 % with continued strength from international inbound travel . In the Middle East and Africa region , RevPAR increased 11 % YOY , with growth in both average rates and occupancy . Overall RevPAR growth was tempered by China , where RevPAR declined 5 % in the

LEISURE TRANSIENT HAS BEEN NORMALIZING AFTER VERY ELEVATED RATES . WE ’ RE JUST GETTING BACK TO A MORE NORMAL LIFE

– CHRIS NASSETTA , PRESIDENT

AND CEO , HILTON

10 hotelsmag . com September 2024