Four New Hilton Brands 'Under Heavy Development'

Hilton reported strong third-quarter results this week, beating expectations as well as realizing 1.3 percent year-over-year growth in revenue per available room. The hospitality giant raised its outlook for the year, and is calling for 1 to 3 percent growth in systemwide RevPAR for 2017.

In the earnings call, CEO Chris Nassetta referred to four new brands that are currently "under heavy development," including a "Hilton-Plus" brand as well as flags in the "urban micro," luxury-lifestyle and luxury-collection categories. Nassetta expects two or three of those new brands to launch sometime in 2018.

"We continue to see steady business-transient and group growth at the low-to-mid point of our guidance range, and leisure transient at the high end," noted Nassetta. "Group pace in the quarter was up, improving position for the balance of the year." 

Nassetta pointed to strong performance in Europe and the Asia Pacific as key to boosting the results. Given consistent supply growth in the U.S. around the long-term average, he added, he expects Hilton's rate growth to be similar in 2018 as well, and for RevPAR to increase by 1 to 3 percent again in 2018.

Hilton is growing at a record clip, with 335,000 rooms in the pipeline, approximately 13 percent more than last year's third quarter. "We are committed to thoughtful and intentional organic growth that allows us to strategically expand our global footprint," Nassetta said, pointing out that the number of rooms in the pipeline represents a market-leading 40 percent of the company's existing supply.

"The Asia-Pacific region represents our largest growth opportunity," he added, "with roughly 400 hotels totaling over 90,000 rooms. The region accounts for a quarter of our pipeline and we're opening more than one hotel per week there."