Despite several quarters of reduced guidance amid declining revenue per available room, Hilton President and CEO Christopher Nassetta expressed confidence for the company’s future during the Q3 earnings call with investors.
Management and franchise-fee revenues increased 5.3 percent compared to the same period in 2024. Year to date, systemwide comparable revenue per available room increased 0.3 percent compared to the same period in 2024 due to an increase in average daily rate. Management and franchise fee revenues increased 6.1 percent compared to the same period in 2024.
For the quarter, systemwide comparable revenue per available room decreased 1.1 percent compared to the same period in 2024, which the company credited to due to “modest” occupancy and declines in average daily rate. During the call, Nassetta noted “unfavorable” timing for holidays and events, softer international inbound travel to the U.S., declines in U.S. government-related travel and portfolio renovations that “weighed on results in the quarter.”
For the quarter, net income and adjusted earnings before interest, taxes, depreciation and amortization were $421 million and $976 million, respectively, compared to $344 million and $904 million, respectively, for the same quarter in 2024. Net income and adjusted EBITDA were $1.16 billion and $2.78 billion, respectively, year to date, compared to $1.03 billion and $2.57 billion, respectively, for the first three quarters of 2024.
Nassetta noted that the company “communicated” a new program that offers owners system-fee reductions, many of which are tied to hotel-specific product and service quality scores. “The fee reductions will share the efficiencies we have gained through scale and technology with our owners, while reinforcing the need to continue maximizing the customer experience,” he said.
The CEO also emphasized the company’s focus on technology during the call. “Our proprietary tech platform, which was envisioned a decade ago, was built for agility,” he said, noting that 90 percent of the company’s enterprise solutions are now in the cloud, up from 20 percent in 2020 when deployment began. “Because of where we are in our technology platform roadmap, we feel uniquely positioned in the industry to embrace AI and drive greater differentiation for our Hilton network.”
Development
In the third quarter of 2025, Hilton opened 199 hotels, totaling 24,800 rooms, resulting in 23,200 net room additions. The company expanded its luxury and lifestyle brands during the quarter, including the addition of the Conrad Hamburg, representing the brand's debut in Germany and the KROMO Bangkok, Curio Collection by Hilton, the brand's first hotel in Thailand.
Hilton also opened the Sunseeker Resort Florida Gulf Coast, Curio by Hilton; signed the Makati in Metro Manila, Canopy by Hilton, representing the brand's first hotel in the Philippines; and broke ground on the Signia by Hilton Savannah, which will serve as the Savannah Convention Center's headquarters hotel.
In Vietnam, Hilton approved nearly 1,800 rooms across five hotels to debut its Conrad, LXR and DoubleTree brands and expand the Hilton brand. In October, the company reached another milestone with its 9,000th property, the Signia by Hilton La Cantera Resort and Spa. “After eclipsing 8,000 hotels just a year ago we opened nearly three hotels per day to reach this latest milestone,” Nassetta noted.
Hilton also launched its new lifestyle brand, Outset Collection by Hilton. “We determined that the upper-midscale to upscale collection space represents an enormous opportunity for unbranded or independent hotels that currently comprise more than 50 percent of the global hotel supply,” Nassetta said during the call. “To date, we have more than 60 hotels in development with a long-term growth potential of more than 500 hotels across North America alone, and will open our first several in the fourth quarter.”
Hilton added 33,000 rooms to the development pipeline during the third quarter, and, as of Sept. 30, its development pipeline totaled 3,648 hotels representing 515,400 rooms throughout 128 countries and territories, including 26 countries and territories where it had no existing hotels. Additionally, of the rooms in the development pipeline, nearly half were under construction and more than half were located outside of the U.S.
Acknowledging the company’s strength at the upper end of the chain scale with a number of luxury brands, Nassetta also acknowledged that this segment was not necessarily a major driver of EBITDA for Hilton.
"It's important because it does help create a halo effect that helps the whole system,” he said. "It's an aspirational product that our customers want, and so we have been very focused on it.” The company’s 2024 partnership with Small Luxury Hotels of the world added 600 new “dots on the map,” he added, with a further 100 on the way through its core brands.
In terms of the company’s pipeline, Nassetta said “all the most important destinations” are covered, although he admitted to wanting a Waldorf Astoria in Paris. “There are a few places that are hard, that we're focused on. But if you look at the whole world, we think we're in all the right places.”
Outlook
Nassetta expressed optimism for the company’s future—and the future of the travel and hospitality industries as a whole—thanks to lower interest rates, a “more favorable regulatory environment,” stronger “certainty” on tax policies and a “significant” investment cycle. “Accelerated economic growth and meaningful increases in travel demand … when paired with limited industry supply growth, should drive stronger RevPAR growth over the next several years,” he added.
Acknowledging the turbulence of 2025, Nassetta said the Hilton team feels “incrementally a lot better about the setup for 2026.” While industry numbers were lower than expected, he sees “good things going on” in the U.S. “Inflation is definitely coming down. Rates are coming down with it [and the] expectation [is] that rates will continue to come down. You have certainty on tax policy, which is unusual, and probably lasts for at least three to five years. You have some meaningful benefits in that tax policy, like bonus depreciation and things that stimulate investment.”
Nassetta also highlighted federal legislation from the previous administration that is poised to continue driving hotel development. “If you add up all the pieces of it, [of the] roughly $1.6 trillion, less than 20 percent of that's been spent,” he said. “You had $800 billion, from the CHIPS [and Science] Act—less than 5 percent of that's been spent, because it takes time to get the money in the system.”
Full Year 2025
Systemwide comparable RevPAR, on a currency-neutral basis, is projected to be flat to an increase of 1 percent compared to 2024.
Net income is projected to be between $1.6 billion and $1.62 billion.
Adjusted EBITDA is projected to be between $3.68 billion and $3.71 billion.
Contract acquisition costs and capital expenditures, excluding amounts reimbursed by third parties, are projected to be between $250 million and $300 million.
General and administrative expenses are projected to be between $410 million and $420 million.
Net unit growth is projected to be between 6.5 percent and 7 percent.
Fourth Quarter 2025
Systemwide comparable RevPAR, on a currency-neutral basis, is projected to increase approximately 1 percent compared to the fourth quarter of 2024.
Net income is projected to be between $441 million and $462 million.
Adjusted EBITDA is projected to be between $906 million and $936 million.
“I would bet a lot of money that ’26 is going to be better than ’25 and I'd bet a lot of money ’27 is going to be better than ’26,” Nassetta said, but acknowledged that the “exact slope” of that improvement will be “difficult to determine.”