Hilton owns or leases about 51 of 7,530 properties. That's the strategy.
In 2017 Hilton spun off its real estate. By 2024 franchise and licensing fees reached $2,600 million, up from $2,068 million in 2022, and net unit growth hit 7.3%.
Transcript
If your business ties up capital in assets that rise and fall with a cycle, ask whether you need to own them. Hilton answered that question in 2017.
In January 2017, Hilton spun off its real estate into a separate REIT, Park Hotels & Resorts, and its timeshare arm into Hilton Grand Vacations.
By the end of 2023, Hilton owned or leased about 51 of its 7,530 properties. That is under 1% of its portfolio.
What Hilton kept was the fee stream. Hilton's franchise and licensing fees rose from $2,068 million in 2022 to $2,370 million in 2023, and $2,600 million in 2024. Those fees keep arriving whether Hilton's own portfolio is in or out of fashion.
And each new franchised hotel adds near-pure-margin royalty with almost no added cost. In 2024, Hilton's net unit growth hit 7.3%, with 973 hotels opened and a pipeline of 3,578 more.
One honest caveat. Hilton began franchising in 1965. The spinoff sped up a model it already had; it did not invent one. So the lesson is not to sell your buildings. It is to know which part of your business earns the steady money, and to stop letting the cyclical part set your pace.
The records behind this video
Every figure in the video comes from this Decision Record, each with its sources.
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