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BEVERLY HILLS, Calif. - July 21, 1999--Hilton Hotels Corporation
(NYSE:HLT) today reported results for the second quarter and six months
ended June 30, 1999.
Income for the second quarter from continuing operations of $66 million,
or $.25 per diluted share, was comparable with $65 million, or $.25 per
diluted share, for the same period a year
Hilton�s U.S. owned and equity hotels generated $178 million of EBITDA in the second quarter, compared to $159 million in the prior year, a 12 percent increase. The company�s successful strategy of purchasing full-service hotels in markets with high barriers to entry continues to contribute to EBITDA growth, with acquisitions accounting for the significant portion of the second quarter EBITDA increase. Further contributing to the EBITDA gains were strong results at the company�s owned hotels in New Orleans, San Francisco and Washington D.C., and earnings from the company�s vacation ownership projects in Orlando, Fla. and Las Vegas. Continuing weak conditions in Hawaii, along with short-term softness
in the New York and Chicago markets, impacted both the company and the
industry in general during the period.
While the Hilton Hawaiian Village is still expected to report declining results for the full year 1999, advance bookings and an upswing in general business trends are expected to result in improved performance in 2000. Market softness in group business, combined with ongoing construction at the Hilton New York and Towers related to that hotel�s major refurbishment (affecting both group and transient business) and difficult comparisons from the 1998 quarter, impacted results at the company�s New York and Chicago hotels. Advance bookings, however, are generally on track at the company�s major
hotels for the second half of 1999, particularly in the fourth quarter,
when New York will also benefit from
Given the significance and uniqueness of the declines at the Hilton Hawaiian Village and the impact on the quarterly comparisons, the following data on Hilton�s domestic owned and equity hotel operations is presented on an �excluding Hawaii� and �including Hawaii� basis. Owned Hotel Operations (Excluding Hawaii) Excluding Hawaii, comparable EBITDA at Hilton U.S. owned and equity properties was flat in the second quarter. Occupancy of 79.8 percent (down .1 point from 79.9 percent), combined with a 1.7 percent increase in average daily rate (ADR) to $168.93, resulted in a revenue per available room (RevPAR) gain of 1.6 percent. EBITDA margins remained strong at an industry leading 38.5 percent, in line with the comparable period a year ago. At the company�s Top Ten hotels (minus Hawaii), EBITDA for the second quarter improved 2.5 percent. Occupancy was up .3 points at 82.1 percent, with ADR improving 2.2 percent to $188.84, resulting in a RevPAR increase of 2.5 percent, generally in line with industry trends for the quarter. EBITDA margins were 40.1 percent. Excellent results in San Francisco, Washington and New Orleans could only partially offset the aforementioned soft results in New York and Chicago. Owned Hotel Operations (Including Hawaii) Including the Hawaiian operations, comparable second quarter EBITDA at the company�s U.S. owned and equity hotels declined 1.9 percent. RevPAR increased 0.5 percent, resulting from flat occupancy of 78.1 percent and an ADR increase of 0.6 percent to $168.62. Results were impacted by a 15 percent EBITDA decline at the Hilton Hawaiian Village. Overall margins at this group of properties declined slightly to 36.9 percent. At the Top Ten properties, EBITDA for the quarter (including Hawaii)
was flat on a comparable basis over the prior year. Top Ten occupancy rose
0.6 points to 80.3 percent, with ADR improving 1.0 percent to $184.17,
for a RevPAR increase of 1.8 percent. EBITDA
Acquisitions, Franchising, Vacation Ownership In the second quarter Hilton purchased hotels in two major U.S. markets:
the Hilton Boston Back Bay for $70 million, and the Pointe Hilton Squaw
Peak Resort in Phoenix for $94 million. When combined with the first quarter
acquisition of what is now the Hilton Mark Center in Alexandria, Va., the
company to-date has purchased $215 million of hotel properties.
Hilton Garden Inn properties, the company�s new mid-price franchised hotels, were opened during the quarter in California; Colorado; Florida; Georgia; Kentucky; Minnesota; Ohio; Oklahoma; Oregon; Monterrey, Mexico; and Calgary, Alberta, Canada. To date, a total of 43 Garden Inn hotels are now open, and 70 are expected to be open by year-end 1999. The company expects to have 140 Garden Inns open with another 60 under construction by year-end 2000. Income from Hilton�s growing vacation ownership business increased 8 percent due primarily to additional earnings from the company�s project at Sea World in Orlando, Fla. and advance sales at its newest facility located at the Las Vegas Hilton (scheduled to open in the fourth quarter of 1999). The company also recently announced plans to renovate the Lagoon Tower at the Hilton Hawaiian Village for conversion to timeshare units. Six-Month Results For the six months ended June 30, 1999, Hilton reported income from continuing operations of $108 million, or $.41 per diluted share, a 5 percent increase from $103 million, or $.39 per diluted share, for the similar period a year ago. Total company EBITDA for the six months was $354 million, up 20 percent from $295 million in the 1998 period. At the company�s comparable U.S. owned and equity hotels (excluding Hawaii), a six-month occupancy increase of 1.4 points to 76.5 percent, coupled with an ADR increase of 1.6 percent to $165.25, resulted in RevPAR increasing 3.6 percent for the period. Including Hawaii, six-month occupancy increased 1 point to 75.8 percent, ADR was flat at $166.41 and RevPAR increased 1.2 percent. Stephen F. Bollenbach, president and chief executive officer of Hilton
Hotels Corporation, said: �The second quarter was a challenging and in
many ways a difficult one, though we continued to show good revenue and
total EBITDA growth. The facts are that despite some
�We are running our properties well as evidenced by our industry-leading margins, and we look for improved RevPAR and EBITDA results in the third and fourth quarters. �Our optimism for the second half of the year�the fourth quarter in particular�is supported by our advance booking pace; our expectations for a continued strong economy; and the opening in September of our new hotel at Boston�s Logan Airport.� Occupancy 78.1% 78.2% (.1) pts Average rate $168.62 $167.61 0.6% RevPAR $131.69 $130.99 .5% U.S. Owned and Equity
U.S. Managed(a)
International�Managed(a)(c)
Franchised(a)
Six Months Ended
1999 1998
Change
U.S. Owned and Equity
U.S. Managed(a)
International�Managed(a)(c)
Franchised(a)
1999
1998
U.S. Owned and Equity 39
26,517 32
23,562
(a) Operating statistics are based on a comparable hotel mix.
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Also See: | Occupancy at Hilton Owned Properties in 1998 Declined to 75.0 %, While ADR Increased 8.3 % / Feb 1999 |
Hilton, Grand Casinos Spinoff to be Named Park Place Entertainment Corp./ Oct 1998 |