Skip to content
    HLT
    Earnings call· Mar 2026(Q1 FY26)

    Hilton Worldwide Holdings Q1 FY26 earnings call HLT

    Apr 28, 2026 Source

    Executive summary

    Hilton Q1 FY26 — Strong RevPAR and Net Unit Growth Drive Top and Bottom Line Beat

    Hilton delivered a strong first quarter, driven by robust RevPAR growth and significant net unit expansion, surpassing top and bottom-line guidance. The company sees strengthening demand trends, particularly in the U.S., and is leveraging its asset-light model to generate substantial free cash flow. Despite geopolitical headwinds in the Middle East, Hilton remains confident in its growth trajectory and commitment to shareholder returns.

    Highlights

    5

    • System-wide RevPAR increased 3.6% year-over-year, exceeding guidance.

    • Adjusted EBITDA grew 13% year-over-year to $901 million, above the high end of guidance.

    • Opened 131 hotels totaling over 16,000 rooms, marking the second strongest Q1 for openings in history.

    • Net unit growth was 6.3% for the quarter, with a record pipeline of 527,000 rooms.

    • Returned over $860 million to shareholders in Q1, on track for $3.5 billion for the full year.

    Concerns

    2

    • Middle East & Africa RevPAR decreased 1.7% year-over-year due to conflict, with full-year expectation of mid- to high-teens decline.

    • China RevPAR increased only 1.3% in Q1, with full-year expected to be flat due to pressure in group and leisure.

    Guidance & targets

    15
    CategoryTargetConfidence
    System-wide RevPAR growth
    2% and 3%
    high materiality
    Medium
    Adjusted EBITDA
    $1.015 billion and $1.035 billion
    high materiality
    Medium
    Diluted EPS adjusted for special items
    $2.18 and $2.24
    high materiality
    Medium
    System-wide RevPAR growth
    2% to 3%
    high materiality
    Medium
    Adjusted EBITDA
    $4.02 billion and $4.06 billion
    high materiality
    Medium
    Diluted EPS adjusted for special items
    $8.79 and $8.91
    high materiality
    Medium
    Net Unit Growth
    between 6% to 7%
    high materiality
    High
    Capital Return
    approximately $3.5 billion
    high materiality
    High
    U.S. RevPAR growth
    high end or above System-wide guidance
    medium materiality
    High
    Americas (outside U.S.) RevPAR growth
    low to mid-single digits
    medium materiality
    Medium
    Europe RevPAR growth
    low to mid-single digits
    medium materiality
    Medium
    Middle East & Africa RevPAR growth
    down in the mid- to high teens
    high materiality
    High
    Asia Pacific RevPAR growth
    low single digits
    medium materiality
    Medium
    China RevPAR growth
    flat
    medium materiality
    Medium
    New Development Construction Starts growth
    up over 20%
    medium materiality
    High

    Segment performance

    6
    SegmentRevenueYoYQoQMargin
    U.S.
    Driven by group growth trends, broad business travel strength, and leisure demand from concentrated spring break. Full-year 2026 U.S. RevPAR growth expected to be at the high end or above System-wide guidance.
    Comparable RevPAR growth: 3.4% YoY
    		————
    Americas (outside U.S.)
    Driven by strong demand across all segments and continued strength in the Caribbean and South America. Full-year 2026 RevPAR growth expected in low to mid-single digits.
    RevPAR growth: 4.4% YoY
    		————
    Europe
    Led by growth across all segments, with Continental Europe strength related to the Winter Olympics and other regional event-driven demand. Full-year 2026 RevPAR growth expected in low to mid-single digits.
    RevPAR growth: 6.9% YoY
    		————
    Middle East & Africa
    Strong early quarter performance offset by weakness following travel disruptions from conflict. Full-year 2026 RevPAR expected to be down in mid- to high teens, with biggest impact in Q2.
    RevPAR growth: -1.7% YoY
    		—-1.7%——
    Asia Pacific (ex China)
    Led by Australasia RevPAR growth and extended Chinese New Year and other regional events. Part of full-year 2026 Asia Pacific RevPAR growth expected to be low single digits.
    RevPAR growth: 9.1% YoY
    		————
    China
    Driven by business segment recovery, but offset by continued pressure in group from softer convention and company meetings activity and leisure due to weaker inbound travel. Full-year 2026 RevPAR expected to be flat.
    RevPAR growth: 1.3% YoY
    		————

    Operational metrics

    19
    Adjusted EBITDA
    $901 millionup 13% year-over-year
    Q1 FY26

    Exceeded the high end of guidance range, predominantly driven by better-than-expected System-wide RevPAR growth.

    Management and Franchise Fees growth
    10.4%year-over-year
    Q1 FY26
    Diluted EPS adjusted for special items
    $2.01
    Q1 FY26
    Hotels opened
    131second strongest Q1 in history
    Q1 FY26

    Comprised 20% Luxury and Lifestyle brands.

    Net Unit Growth
    6.3%
    Q1 FY26
    Global Hotel Supply Share
    5.5%
    Q1 FY26

    Hilton represents only 5.5% of global hotel supply but over 20% of rooms under construction.

    Rooms Under Construction Share
    over 20%
    Q1 FY26

    Approximately 1 in every 5 hotel rooms under construction globally is slated to join the Hilton portfolio.

    Conversions as % of openings
    36%
    Q1 FY26

    Expected to be up on a nominal basis in 2026 across every region.

    Infrastructure Bill
    $1.6 trillionvery little spent
    multi-year

    Passed last year, driving non-residential fixed investment.

    CHIPS Act
    $800 billionvery little spent
    multi-year

    Aimed at reshoring critical manufacturing, driving non-residential fixed investment.

    Correlation of demand growth and non-residential fixed investment
    95%+
    long span of time

    Historically, over a long span of time, excluding post-COVID disruptions.

    Capital returned to shareholders
    $860 million
    Q1 FY26

    On track to return approximately $3.5 billion for the full year.

    Cash dividend per share
    $0.15
    Q1 FY26

    Total of $35 million paid in Q1. Board authorized same amount for Q2.

    Middle East impact on System-wide RevPAR
    1.5 points
    Q2 FY26

    This is the estimated impact on overall System-wide RevPAR due to the Middle East conflict.

    Middle East impact on System-wide RevPAR
    0.5 to 1 point
    Full-year FY26

    Estimated full-year impact depending on trajectory of conflict and recovery.

    Middle East deliveries as % of total deliveries
    about 2%
    Full-year FY26

    Potential for slowdown in development in the region.

    U.S. quality hotel market share
    over 25%
    current

    Hilton controls rate, inventory, and availability for this segment.

    Direct business percentage
    80%+
    current

    Hilton aims to continue building more direct lines to customers.

    EBITDA per point of RevPAR
    $25 million to $30 million
    typical

    Rule of thumb for flow-through.

    Industry KPIs

    4
    MetricValueDetails
    Fee revenue streams10.4%%
    Comparable sales comps3.6%%
    Group booking pace booking window—
    Net unit growth development pipeline527,000rooms

    Orderbook & backlog

    1
    Pipeline Rooms527,000Q1 FY26

    record

    Includes brand [indiscernible] in more than 25 new countries.

    Product announcements

    9
    ProductTypeDetails
    Waldorf Astoria Rabat Salelaunch
    Waldorf Astoria Admiralty Archlaunch
    Waldorf Astoria Kualalampurlaunch
    Monarch San Antoniolaunch
    Hotel Hera on Alexandria, Old Town Virginialaunch
    Mottoexpansion
    Home2 Suitesexpansion
    Apartment Collection by Hiltonlaunch
    Hilton AI Plannerlaunch

    Deals & partnerships

    1
    Royal Orchard Hotelstrategic agreement

    Agreement to open 125 Hampton Hotels in India.

    Risks & headwinds

    3
    Middle East conflictQ1 FY26, Q2 FY26, Full-year FY26

    Middle East & Africa RevPAR decreased 1.7% YoY in Q1; expected to be down mid- to high teens for full-year FY26; biggest impact in Q2 FY26; potential 0.5 to 1 point impact on full-year System-wide RevPAR.

    Mitigation: Factored into guidance ranges, assuming a range of scenarios; monitoring stabilization in certain markets.

    Supply chain knock-on from Middle East conflictFull-year FY26

    Potential for slowdown in development deliveries (about 2% of total deliveries from MEA).

    Mitigation: Keeping net unit growth guidance range (6-7%) due to potential impact, but not concerned about projects falling out, just timing shifts.

    China Group and Leisure PressureQ1 FY26, Full-year FY26

    China RevPAR increased only 1.3% in Q1 FY26; expected to be flat for full-year FY26.

    Mitigation: Business segment recovery partially offsetting pressure; no specific mitigation stated beyond general market monitoring.

    Q&A highlights

    7

    Asked for elaboration on the significant improvement in U.S. demand outlook and evidence for the "C-shaped economy" convergence.

    Chris Nassetta explained that macro factors like declining inflation, expected lower interest rates, pro-business tax policies, and significant non-residential fixed investment (AI, infrastructure, CHIPS Act) are driving demand, particularly in mid-market segments. He noted that these trends, which he anticipated, are now visibly impacting the business, leading to improving performance across chain scales.

    “we're seeing what to me was inevitably on its way, but it takes time for these things to sort of deep into the economy.”

    asked by Shaun Kelley · answered by Christopher Nassetta

    2 min read6 chapters

    Detailed Narrative

    01

    U.S. Demand Trends and 'C-shaped Economy'

    Management highlighted a significant improvement in U.S. demand dynamics, attributing it to several macro factors including declining inflation, expected lower interest rates, and pro-business tax policies. The 'C-shaped economy' concept suggests a convergence where lower and mid-chain scales, catering to middle and lower-income consumers, are seeing increased demand, driven by private sector investment in AI and public infrastructure spending. This trend, observed since late 2025 and accelerating into Q1 and April 2026, is expected to continue.

    02

    Middle East Conflict Impact

    The ongoing Middle East conflict is a notable headwind, particularly for Q2 FY26, where it is expected to have the most dramatic impact on RevPAR. While the region represents only about 3% of Hilton's business, the anticipated mid-to-high teens decline in RevPAR for the full year in MEA could translate to a 0.5 to 1 point impact on System-wide RevPAR. Management noted some stabilization in certain markets within the region, but the situation remains fluid.

    03

    Development and Pipeline Strength

    Hilton opened 131 hotels (16,000 rooms) in Q1 FY26, its second-strongest first quarter for openings. The pipeline reached a record 527,000 rooms, with Hilton accounting for over 20% of rooms under construction globally. Conversions represented 36% of Q1 openings and are expected to increase to 38-40% for the full year, demonstrating the system's performance for owners.

    04

    AI and Technology Innovation

    Hilton is actively leveraging AI to enhance guest experience, deliver owner value, and empower team members. The company launched the Anthropic-powered Hilton AI Planner, an LLM tool combining property content with local information to help customers plan and book unique experiences. Hilton is also working with partners like Google, ChatGPT, and Anthropic, emphasizing its advanced, agile, cloud-based tech stack as a competitive advantage for distribution and customer engagement.

    05

    Brand Expansion and Strategic Agreements

    The company continues to expand its Luxury and Lifestyle brands globally, with notable openings like Waldorf Astoria Rabat Sale and the debut of Home2 Suites in Europe. Strategic agreements, such as the one with Royal Orchard Hotel to open 125 Hampton Hotels in India, underscore Hilton's commitment to key emerging economies and its goal to exceed 400 hotels in India. APAC ex China saw double-digit growth in approvals, openings, and construction starts.

    06

    Group Business Momentum

    Group RevPAR increased 4.3% in Q1 FY26, driven by growth in company meetings and conventions. Management expressed confidence in the group segment, citing strong corporate lead volumes and a positive sentiment from sales discussions, indicating that the business is materializing in line with forecasts.

    AI-generated summary of the company’s earnings call. Not investment advice.