Hilton plans to add a lot of new hotels and loyalty members in 2024 (oh, and yet another new brand)
If you listen to economists, you might expect the hotel development cycle to start slowing down in light of high interest rates making it unfeasible to build new projects.
Hilton apparently didn't get the memo.
The hotel giant had plenty of financial bragging rights Wednesday on its third-quarter earnings call, including a $379 million profit. But perhaps the most surprising boastful arc entailed future growth: Hilton's development pipeline, at 457,000 hotel rooms, is the highest it has ever been.
More than half of that is already under construction, and the company expects to see net room growth increase next year. Hilton anticipates it will grow its portfolio by about 5% this year before rising to between 5.5% and 6% in 2024 — not exactly a signal high interest rates are deterring owners from embarking on a new hotel project.
"We wouldn't say it if we didn't believe it," Hilton CEO Christopher Nassetta said on an investor call Wednesday morning in response to a query about the growth forecast appearing at odds with current construction and financing conditions in the U.S. "It's possible next year a few things go our way."
While boosting real estate growth targets might seem like a head-scratcher at a time when construction costs are so high, it's not entirely out of left field.
Hilton's new Spark brand, which officially opened its first hotel earlier this month, is expected to quickly bring in a slew of new hotels for the company thanks to it being a conversion brand — owners of existing hotels can renovate, rather than build from the ground up, into Spark affiliation within nine to 12 months.
The company also has a new extended-stay concept, dubbed Project H3, in the works. Home2 Suites, the company's all-suite extended-stay brand, is the hotel brand with the largest U.S. development pipeline, according to Lodging Econometrics.
Long story short: Travelers are likely to have many additional Hilton options when booking a stay in the coming years.
"When I look at all of the data in a granular way, I think there's probably more upside potential than downside risk at this point," Nassetta added.
More Hilton Honors members
The development uptick wasn't the only growth signal touted by Hilton executives Wednesday. Nassetta also noted the Hilton Honors program is on track to hit 200 million members sometime next year.
By comparison, the Marriott Bonvoy program had 186 million members at the end of September. Bonvoy is also seeing rapid growth, so don't necessarily take this as a sign Hilton Honors is going to leapfrog over Bonvoy — but it will be worth observing Bonvoy's growth rate when Marriott reports earnings next week.
Hilton Honors, which currently has more than 173 million members, is 19% larger than it was a year ago, Nassetta said. That's a big deal, as Hilton Honors members account for 64% of the occupancy at Hilton hotels around the world.
Another new brand is coming
Nassetta also reiterated the company's plan to launch a luxury lifestyle brand next year. This would mean a Hilton brand that could go head-to-head with Marriott's Edition brand.
Why does Hilton need another brand? It appears company leaders saw they were losing business to competitors by not having an offering in this space.
"Not only do we want our customers to have more opportunities at the high end, but we're just giving away, if I'm being honest, we're just giving away development opportunities," Nassetta said. "We have owners that are super loyal to us, and many of them want to build a luxury lifestyle hotel, and we don't really have a product for them."
But don't expect this unnamed brand in the works to flood the world with thousands, or even hundreds, of new hotels. Edition launched in 2008, and there are still less than 20. Hilton's growth trajectory in this sector is likely to look very similar.
"Look at people that have been at it for a long time," Nassetta said. "You will be fortunate to have dozens of them."
Related reading:
- The award travelers guide to Hilton Honors
- How to choose the best Hilton credit card for you
- What is Hilton Honors elite status worth?
- The best credit cards to reach elite status
- Which credit cards offer the most lucrative rewards for hotel stays?
- The best hotel rewards programs in the world
- Best hotel credit cards
TPG featured card
at American Express's secure site
Terms & restrictions apply. See rates & fees.
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 5X | New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App. |
| 3X | Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines. |
| 2X | Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Pros
- Valuable dining and food-related credits
- Flexible rewards with airline and hotel transfer partners
- Multiple travel and purchase protections
- No foreign transaction fees
- Access to Amex Offers for additional savings (enrollment required)
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.