Hilton (HLT) Expands In Los Angeles With Dual-Branded Hotel

Hilton Worldwide Holdings, Inc. (NYSE:HLT) recently announced the opening of its new property in Los Angeles, CA, bringing together two of its upscale brands — Homewood Suites and Curio Collection.

The 290-roomed dual-branded property — Homewood Suites by Hilton Los Angeles International Airport and H Hotel Los Angeles — marks the first hotel in the city for both these brands. Meanwhile, it is Homewood Suites’ fourth property in the greater Los Angeles County.

Developed and owned by SVI Airport, LLC and managed by Interstate Hotels & Resorts, the property is located in close proximity to the city’s main beaches and attractions. Further, the hotel also offers a flexible meeting space, fitness centers, outdoor pool, food & beverage outlets, as well as an on-site convenience store and grocery shopping service.

Being located close to one of the nation’s busiest airports enables Hilton’s new hotel to cater to both business and leisure travelers. Further, Los Angeles has been attracting a large number of tourists – the highest number in the country since the past six years – making it an extremely opportune time to open a property there.

Lately, Hilton has been undertaking several dual-branded ventures throughout the United States, Canada, Mexico, South America, Europe and the Middle East, to better serve both travelers and developers. Dual-brand hotels offer larger and enhanced communal areas and amenities than what would be possible for standalone properties, benefiting both business and leisure travelers.

Hilton’s newest property also participates in the company’s industry-leading guest loyalty program — Hilton HHonors — which serves millions of members worldwide. The program has proven to be an extremely valuable asset for the company, improving guest experience and thereby driving occupancy.

In addition, Hilton’s scale, size, commercial platform and industry-leading brands continue to drive overall unit growth, taking a disproportionate share of the global hotel development activity.

Meanwhile, we note that shares of the company have outpaced the broader S&P 500 Index post the spin-offs of Park Hotels & Resorts, Inc. (NYSE:PK) and Hilton Grand Vacations Inc. (NYSE:HGV) from Hilton on Jan 4, 2017. While the index has gained 12.1%, Hilton’s shares jumped 20.5% since the date. The transaction also transformed the company into a capital-light operating business focused on growing market share, units, free cash flow per share as well as preserving its strong balance sheet and accelerating return of capital.

Thus, we are reasonably optimistic on this Zacks Rank #2 (Buy) company’s prospects in the long run, given its aggressive expansions strategies, asset-light model and industry-leading guest program.

Another Key Pick

Another stock worth considering in the same industry is China Lodging Group, Limited (NASDAQ:HTHT) with a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

China Lodging has witnessed its Zacks Consensus Estimate for current-year’s earnings revising upward by 22.2% over the last two months, signifying optimism in the stock’s prospects.

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