Hilton Presses Ahead With All Suites Brand, Eyes Unit Growth

Hilton Worldwide Holdings Inc. (NYSE:HLT) has been constantly focusing on unit growth as a major strategy. To this end, the company saw a notable third quarter of 2018 for All Suites brand, which consists of Embassy Suites, Homewood Suites and Home2 Suites.

Year to date, Hilton has opened 1,000 All Suites properties, introduced the first modular construction hotel and tri-branded property. In fact, as of the third quarter, the brand has already surpassed the growth target for 2018. Moreover, the company plans to develop a pipeline of over 580 ongoing properties by year-end.

Per the company, innovative development along with operational strategies in 2018 has helped it achieve the milestone. Moreover, All Suites brands focus on expanding in growing urban and coastal destinations.

During the third quarter, the All Suites brand signed 138 new deals. The agreements include Embassy Suites by Hilton Waco, Homewood Suites by Hilton Honolulu International Airport and Home2 Suites by Hilton Euless DFW West. The first two properties are expected to open in 2021 while the third one is likely to be launched in 2020.

Buoyed by rapid growth in these brands, total revenues increased 7.7% from the year-ago quarter to $2,253 million in the third quarter. Also, the company achieved net unit growth of 14,800 rooms, indicating a 24% increase from the prior-year quarter.

We believe the company’s relentless expansion helps it in strategizing against rising competition in the industry, thereby helping it to further grow its market share. Meanwhile, shares of Hilton have declined 1.3% in the past year compared with the industry’s decline of 18.1%.

Zacks Rank & Stocks to Consider

Hilton currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the Consumer-Discretionary sector are Peak Resorts, Inc. (NASDAQ:SKIS) , Belmond Ltd. (NYSE:BEL) and DISH Network Corporation (NASDAQ:DISH) . While Peak Resorts sports a Zacks Rank #1 (Strong Buy), Belmond and DISH Network carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Peak Resorts’ 2019 earnings are expected to increase 342.9%.

Belmond has an expected earnings growth rate of 150% for 2018.

DISH Network has an expected earnings growth rate of 12% for 2018.

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