Presentation May 2022 - Mango House Seychelles, LXR Hotels & Resorts
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Presentation May 2022 Mango House Seychelles, LXR Hotels & Resorts
HLT VALUE PROPOSITION
Hilton's scale, global presence and leading brands at multiple price points drive
a network effect delivering industry-leading performance
Leading
Brands serving
• Award-winning brands that serve guests for virtually any
virtually any lodging need they have anywhere HLT Financial
lodging need
in the world Performance
anywhere
• Leads to satisfied customers, including 133
million Hilton Honors loyalty members
• Creates a network effect that drives a strong
global RevPAR premium of more than 15%(a) Satisfied,
Leading Loyal
• These premiums drive strong financial returns Hotel Customers
for the company and our hotel owners Supply &
Pipeline
• Satisfied owners continue to invest in growing
Hilton’s brands, driving leading organic net unit
growth with de minimis use of capital
• We believe the reinforcing nature of these Premium,
activities will allow Hilton to outperform the Growing
Satisfied
competition Market Share
Owners
(a) Source: STR (three months ended 3/31/2022). “RevPAR” or “Revenue per Available Room” represents hotel room revenue divided by room nights available to guests for a given period.
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© 2022 Hilton ProprietaryInvestment Thesis
1. INDUSTRY-LEADING PORTFOLIO OF BRANDS
WITH A GLOBAL PRESENCE
2. A SIMPLIFIED, FEE-BASED BUSINESS
3. A HIGH-QUALITY PIPELINE GENERATING
SUBSTANTIAL RETURNS ON MINIMAL CAPITAL
INVESTMENT
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© 2022 Hilton Proprietary1. INDUSTRY-LEADING PORTFOLIO OF BRANDS
With nearly ~6,900 properties & ~1,083,000 rooms in 122 countries and territories,
Hilton is one of the world’s largest and most diversified hotel companies
Industry-leading, clearly defined, global brands drive a
15%+ global RevPAR premium(a)
Luxury & Lifestyle Full Service All Suites Focused Service Timeshare
2019 ADJ. EBITDA BY GEOGRAPHY(b) ROOMS BY CHAIN SCALE(c)
Americas Midscale
Middle East & Other
Non-U.S. Luxury 2%
Africa 1%
Asia 3% 3% 2%
Pacific
10% Upper
Upscale
Upper 29%
Europe Midscale
11% 33%
U.S.
No single U.S. market 73%
accounts for more than Upscale
3% of Adj. EBITDA 33%
(a) Source: STR (three months ended 3/31/2022).
(b) Based on year ended 12/31/2019, reflecting a more normalized environment. For the last twelve months (“LTM”) ended 3/31/2022 calculated as the three months ended 3/31/2022 plus the year ended 12/31/2021 less the three months ended 3/31/2021,
reflective of the impact of the COVID-19 pandemic on demand levels, Adjusted EBITDA by Geography was 85% U.S., 3% Americas Non-U.S., 3% Europe, 3% Middle East & Africa, and 6% Asia Pacific..
(c) Room count as of 3/31/2022. Other includes HGV.
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© 2022 Hilton Proprietary1. INDUSTRY-LEADING PORTFOLIO OF BRANDS
Hilton Honors loyalty program enables a better, more personalized
hotel stay, driving incremental value to the system
HILTON HONORS IS OFFERING MORE VALUE TO MORE MEMBERS
Members 133M
Share of system
36M Occupancy(b)
2012 2022(a)
~60%
+15% CAGR (c) + More than 500 bps YOY (c)
INNOVATIVE NEW FEATURES & PARTNERSHIPS
POINTS & MONEY 2.0 SHOP WITH POINTS POINTS POOLING RIDESHARING
Can choose any The first hotel loyalty Can pool Points into a single When a member rides with
combination of Points and program to enable members account (for free), Lyft, they earn
money to pay for a stay, to use their Points on generating incremental Hilton Honors Points.
using an interactive “Slider.” Amazon.com. reward stays and increasing
engagement.
(a) As of 3/31/2022. All trademarks, service marks and trade names appearing in this
(b) For the three months ended 3/31/2022. presentation are, to our knowledge, the property of their
(c) “CAGR” is defined as compound annual growth rate. “YOY” is defined as year-over-year. respective owners.
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© 2022 Hilton Proprietary1. INDUSTRY-LEADING PORTFOLIO OF BRANDS
We are one of the most innovative hotel companies, leading in delivering
personalized experiences for guests in every interaction they have with Hilton
Our Hilton Honors app is one example of how we offer end-to-end experiences for guests:
• Our Digital Key and welcome experience empower guests to pick their room before arrival and
bypass the front desk
• Launched Digital Key Share, allowing more than one guest to access their room’s Digital Key
• Connected Room enables guests to control lighting, HVAC and entertainment options using
their mobile device
• We partner with SHOWTIME and Netflix to allow guests to stream their favorite content
• Digital Check-Out gives guests the convenience of checking out of their room in the app
• Launched Confirmed Connecting Rooms, allowing guests to easily book and instantly confirm at
least two adjoining rooms through our website or app
~45 million 133 million
Digital Keys downloaded Hilton Honors Members
~5,700 ~185 million ~54,000 +15% YOY
Digital Key hotels Doors opened with Digital Key Connected Rooms
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© 2022 Hilton Proprietary1. INDUSTRY-LEADING PORTFOLIO OF BRANDS
We are committed to sustainable travel and tourism
Our Travel with Purpose initiatives aim to drive positive social and environmental change across
our operations, supply chain, and communities
GOALS FOR 2030 FOCUS ON
ENVIRONMENTAL IMPACT SOCIAL IMPACT
Energy Youth
Carbon Diversity & Inclusion
Water Community Investment
Waste Disaster Relief
Responsible Sourcing Human Rights
LEADING THE WAY TO POSITIVELY CHANGE THE WORLD
100% The only global hotel
Rating on the brand named to the
Corporate Equality
Index for the eighth
100 Best Corporate
year in a row Citizens of 2021 List
For the fifth consecutive by CR Magazine
year, scoring in the 100th
percentile in our industry
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© 2022 Hilton Proprietary2. A SIMPLIFIED, FEE-BASED BUSINESS
Top-Line Driven Majority Franchise Fees
of total fees driven
90% Adj. EBITDA from fees,
90% revenue driven(a)
~75% by franchise and
licensing fees(a)
Increasing franchise fees as contracts
+/- 1% of RevPAR growth is roughly roll over at higher published rates
~5.0% in-place rate vs. ~$120M annual
+/- 1% of Adjusted EBITDA growth(b) 5.6% published rate(c) Adj. EBITDA
Meaningful Fee Growth on a Normalized Basis Capital Efficient Growth
MANAGEMENT & FRANCHISE FEES(d)
$2,272M
$814M
5.0% NUG YOY(f)
~$300M Total HLT investment
in pipeline(g) with ~50% of total pipeline
2009(e) 2019(a) rooms under construction and average
contract term of 19 years
+11% CAGR
Fee-based model drives significant free cash flow in stabilized markets
(a) Based on year ended 12/31/2019 and therefore not reflective of the impact of the COVID-19 pandemic on more recent results, Adjusted EBITDA excludes corporate and other and Adjusted EBITDA from fees was ~100% of Adjusted EBITDA for the LTM ended 3/31/22. Franchise and license fees were
~85% of total fees for the LTM ended 3/31/2022.
(b) Historical relationship holds up in environments when RevPAR increases or decreases 30% or less. It is slightly more than that beyond 30% increases or decreases.
(c) For the three months ended and as of 3/31/2022. In-place franchise rate is up ~100 bps since FY 2007 and is calculated as franchise fee revenue from comparable franchised hotels divided by room revenue of comparable franchised hotels. Published franchise rate is calculated as the weighted average of
current published brand franchise fee rates.
(d) Excludes amortization of contract acquisition costs recorded as contra-revenue. Management and franchise fees for the LTM ended 3/31/2022 were $2,022M, reflecting the significant impact of the COVID-19 pandemic and are not indicative of our future performance in any future period. 7
(e) Does not include the effect of the revenue recognition standard adopted on January 1, 2018.
(f) Net Unit Growth (“NUG”) based on the LTM ended 3/31/2022.
(g) Reflects committed contract acquisition costs as of 3/31/2022.. © 2022 Hilton Proprietary3. A HIGH-QUALITY PIPELINE GENERATING SUBSTANTIAL
RETURNS ON MINIMAL CAPITAL INVESTMENT
DIVERSIFIED PIPELINE OF INDUSTRY-LEADING BRANDS
PIPELINE BY GEOGRAPHY(a) PIPELINE BY SEGMENT(a)
Americas
Non-U.S.
Asia
6%
Pacific
36% Middle East
& Africa
9% Full
Service
40%
Focused
Service
Europe U.S. 60%
9% 40%
Resulting in: High-quality pipelines across all brand segments with minimal HLT capital investment
Pipeline Rooms % Under Construction 3rd Party Investment HLT Investment(b) % Dry Deals(c)
410K ~50% $50B ~$300M ~90%
Stabilized Pipeline Illustrative
Adj. EBITDA Value Creation(d)
~$800M $11,000M
(a) Pipeline as of 3/31/2022.
(b) Reflects committed contract acquisition costs as of 3/31/2022.
(c) Reflects percentage of pipeline rooms requiring no contract acquisition costs as of 3/31/2022.
(d) Based on 13.5 times Illustrative Adjusted EBITDA. Figure is illustrative only and does not reflect the actual valuation or the view of Hilton with respect to proper valuation. The market may attribute a different valuation. Valuation is based on historical
approximation and does not reflect current valuations inclusive of the impact of the COVID-19 pandemic. Pipeline as of 3/31/2022. 8
© 2022 Hilton Proprietary3. A HIGH-QUALITY PIPELINE GENERATING SUBSTANTIAL
RETURNS ON MINIMAL CAPITAL INVESTMENT
Development focused on balanced global growth
Brand portfolio drives high quality, high return, industry-leading
organic growth enabled by demand patterns around the world
A LEADING SHARE OF DEVELOPMENT MARKET SHARE IS
FUTURE DEVELOPMENT(a) 3x+ LARGER THAN CURRENT SHARE
Existing GLOBAL SHARE OF ROOMS UNDER
CONSTRUCTION/EXISTING SHARE(a)
Room Rooms Under
Supply Construction
3.4x
% of Total % of Total
United States 13% 21%
2.5x
Americas ex. U.S. 3% 19%
2.4x
Europe 2% 7%
Middle East, Africa 3% 16%
Asia Pacific 2% 22%
Global System 5% 18%
(a) Source: STR Global Census, April 2022 (adjusted to March 2022) and STR Global New Development Pipeline, March 2022. All trademarks, service marks and trade names appearing in this
presentation are, to our knowledge, the property of their
respective owners.
Source: Company filings.
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© 2022 Hilton Proprietary3. A HIGH-QUALITY PIPELINE GENERATING SUBSTANTIAL
RETURNS ON MINIMAL CAPITAL INVESTMENT
Industry-leading growth with solid sight lines into future development
GLOBAL SYSTEM ROOM GROWTH HLT NET UNIT GROWTH (000s of rooms)
2007-TODAY(a)
International U.S. 58
57 55
118%
52
47
45
(b)
43
87%
36 56% 58% 50%
(c)
85% 66%
61%
57% 69%
25
(d)
24 53%
60% 19 18
43% 57%
57% 50%
60% 51% 44% 42%
(e)
50% 57% 47% 43% 31% 34% 39%
40% 49% 43%
30%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
23% 46% 38% 35% 26% 29% 22% 20% 25% 17% 19% 20%
% Conversions(f)
(a) Note: “2007” metrics are as of 6/30/07, except for H which is as of 12/31/07; “Today” metrics are as of 3/31/2022 from the latest public reports through 5/10/2022 for HLT and peers. All trademarks, service marks and trade names appearing in this
(b) Reflects MAR acquisition of HOT in both periods.. presentation are, to our knowledge, the property of their
(c) Room count reflects H’s acquisitions of Two Roads Hospitality and Apple Leisure Group in both periods. respective owners.
(d) Accor data reflects sale of Motel 6 and Studio 6 brands and the acquisition of Fairmont Raffles Hotels International Group. Source: Company filings.
(e) Excludes timeshare properties due to lack of 2007 data availability for WYN.
(f) As a % of gross room openings. 10
© 2022 Hilton ProprietaryAppendix Conrad New York Midtown
FLEXIBLE CAPITAL STRUCTURE
CAPITAL STRUCTURE DEBT BREAKDOWN / SCHEDULED AMORTIZATION
OVERVIEW AND MATURITIES(a)
Net debt % fixed ($ in millions) Weighted average term: 6.6 years
$3,000
$7.3B 88% $2,619
$2,000
Net leverage(b) % unsecured
$1,500
3.9x 70% $1,000
$1,100
$1,000
$800
$600
% freely $500
WACD $500
prepayable
4.0% 30% $0
$0 $0 $0
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032
(a) Excludes finance lease liabilities and other debt of our consolidated variable interest entities.
(b) Ratio of net debt as of 3/31/2022 to the LTM ended 3/31/2022 Adjusted EBITDA.
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© 2022 Hilton ProprietaryRECONCILIATIONS
($ in millions)
Q1 2022 LTM FY 2021
Net income $ 727 $ 407
Interest expense 384 397
Income tax expense 268 153
Depreciation and amortization expenses 181 188
EBITDA 1,560 1,145
Loss on sale of assets, net 7 7
Loss on foreign currency transactions 13 7
Loss on debt extinguishment - 69
FF&E replacement reserves (a) 56 48
Share-based compensation expense 191 193
Amortization of contract acquisition costs 33 32
Net other expenses from managed and franchised properties 16 110
Other adjustments (b) 3 18
Adjusted EBITDA $ 1,879 $ 1,629
As of As of
March 31, December 31,
2022 2021
Long-term debt, including current maturities $ 8,765 $ 8,766
Add: unamortized deferred financing costs and discount 84 87
Long-term debt, including current maturities and excluding unamortized deferred financing costs and discount 8,849 8,853
Less: cash and cash equivalents (1,432) (1,427)
Less: restricted cash and cash equivalents (78) (85)
Net Debt(c) $ 7,339 $ 7,341
Net Debt/Adjusted EBITDA ratio 3.9 4.5
(a) Represents furniture, fixtures and equipment (“FF&E”) replacement reserves established for the benefit of lessors for requisition of capital assets under certain lease agreements.
(b) Amounts for both periods include severance, costs recognized for certain legal settlements and other items. Amount for the LTM ended 3/31/2022 also includes a gain related to Hilton's investments in unconsolidated affiliates.
(c) Beginning as of March 31, 2022, the Company has modified its definition of net debt to no longer include Hilton's share of unconsolidated affiliate debt. Since this debt is not consolidated by the Company, the modified definition more accurately
reflects how the Company and the Company's investors evaluate Hilton's financial leverage, as well as its indebtedness.
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© 2022 Hilton ProprietaryDISCLAIMER
This presentation 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 our expectations regarding the
impact of and recovery from the COVID-19 pandemic, the performance of our business, our financial results, our liquidity and capital resources and other
non-historical statements. You can identify these forward-looking statements 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 our 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 our information technology systems, growth of reservation channels outside of our system, risks of doing business outside of the United
States, risks associated with the Russian invasion of Ukraine and our indebtedness. Additional factors that could cause our results to differ materially from
those described in the forward-looking statements can be found under the section entitled “Part I—Items 1A. Risk Factors” in Hilton Worldwide Holdings
Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and "Part II—Item 1A. Risk Factors" of Hilton Worldwide Holdings Inc.’s
Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022, as such factors may be updated from time to time in our periodic filings with
the Securities and Exchange Commission (“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 presentation and in our filings with the SEC. We
undertake 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.
This presentation includes certain financial measures, including earnings before interest expense, taxes, depreciation and amortization (“EBITDA”), or
Adjusted EBITDA (“Adj. EBITDA”), Net Debt, and Net Debt to Adj. EBITDA ratio that are not calculated in accordance with U.S. generally accepted accounting
principles (“GAAP”). These non-GAAP financial measures should be considered only as supplemental to, and not as a substitute for or superior to, financial
measures prepared in accordance with GAAP. Please refer to the Appendix and footnotes of this presentation for a reconciliation of the historical non-
GAAP financial measures included in this presentation to the most directly comparable financial measures prepared in accordance with GAAP.
Slides in this presentation include certain Adj. EBITDA amounts that are used only for illustrative purposes to present illustrative Adj. EBITDA amounts by
applying assumptions to existing rooms pipeline, increases of in-place rates and increases in RevPAR, as applicable, in each case based on information for
the LTM March 31, 2022. These amounts do not represent projections of future results and may not be realized. Value information on such slides that is
derived from such illustrative Adj. EBITDA amounts is indicative only, based upon a number of assumptions, and does not reflect actual valuation. Please
review carefully the detailed footnotes in this presentation.
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© 2022 Hilton Proprietary© 2022 Hilton Proprietary
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