Hilton reports RevPAR decline, but NUG still strong

MCLEAN, Virginia — Hilton reported a systemwide RevPAR decline of 0.5% year-over-year but reported net unit growth of 7.5% as part of second quarter earnings.

Hilton said it approved 36,200 new rooms for development during the second quarter, bringing its development pipeline to a record 510,600 rooms, a 4% increase year-over-year, excluding the impact of acquisitions and strategic partner hotels. The company added 26,100 rooms to its system, resulting in 22,600 net additional rooms for the second quarter, which contributed to a net unit growth of 7.5% over the past year.

“We continued to demonstrate the power of our resilient business model as we delivered strong bottom line results in the quarter, even with modestly negative top line performance given holiday and calendar shifts, reduced government spending, softer international inbound business and broader economic uncertainty,” Chris Nassetta, president and CEO of Hilton, said in a news release. “With that being said, we believe the economy in our largest market is set up for better growth over the intermediate term, which should accelerate travel demand and, when paired with low industry supply growth, unlock stronger RevPAR growth. On the development side, we achieved the largest pipeline in our history, and we remain confident in our ability to deliver net unit growth between 6% and 7% for the next several years.”

For its full-year projections, Hilton said 2025 systemwide RevPAR is projected to be flat to +2% compared to 2024; full-year net income is projected to be between $1.64 billion and $1.682 billion, and full-year adjusted EBITDA is projected to be between $3.65 billion and $3.71 billion.

Other Q2 highlights

• Diluted EPS was $1.84 and diluted EPS, adjusted for special items, was $2.20
• Net income was $442 million  
• Adjusted EBITDA was $1.008 billion
• Systemwide comparable RevPAR declined 0.5% YOY 
• Hilton repurchased 3.2 million shares of its common stock during Q2, bringing total capital return, including dividends, to $791 million for the quarter and $1.881 billion year to date
• Full year 2025 capital return is projected to be approximately $3.3 billion

What the analysts said

Analyst Michael Bellisario of R.W. Baird said Hilton’s Q2 update was mixed.

“RevPAR was softer than expected. 2Q25 earnings beat but full-year guidance unchanged… earnings were well ahead of Baird/Street forecasts, but the beat was driven by G&A expense (+$11 million vs. our model), other revenues/expenses (+$21 million), and ownership (+$14 million),” he said. “RevPAR and total fees missed our expectations by 100 bps and $12 million, respectively. Full-year guidance was unchanged across the board, which implies a weaker 2H25 outlook, particularly 3Q25 vs. Baird/Street estimates. We suspect that ‘timing items’ are affecting the comparability between 2Q and 3Q. Positively, net unit growth accelerated sequentially.”

Analyst Patrick Scholes of Truist Securities said Hilton’s Q2 earnings were well ahead of consensus, but there are longer-term concerns about NUG growth.

“We see the vast majority of the beat from lower quality items such as owned hotel income and ‘other’ revenues and expenses, whereas the more important line items of franchise and licensing fees + base and other management fees + incentive management fees were just slightly above Street expectations,” he said.  “Regarding the very important KPI of net unit growth, the company noted they ‘remain confident in our ability to deliver net unit growth between 6-7% for the next several years’, which is similar commentary to prior quarters. However, we expect questions on how this organic growth rate can be achieved in 2026 as the pipeline only grew 4% YOY vs. the 7.2% growth rate in Q1, 4Q24’s +8% and the +15% in the same quarter a year ago.”