Hilton Worldwide Holdings Inc. has reported a robust financial performance for the third quarter of 2025, exceeding its own guidance for Adjusted EBITDA and Adjusted EPS. This achievement comes despite a minor decline in system-wide Revenue Per Available Room (RevPAR). The company attributes its success to strategic initiatives, including substantial growth in non-RevPAR fees, rigorous cost management, and an impressive expansion in net unit growth. Hilton highlights its global development momentum, marked by a record-setting pipeline, and organic expansion, particularly through accelerating new development construction and an increase in hotel conversions. The integration of advanced technology and artificial intelligence (AI) across operations, marketing, and customer experience is central to driving efficiency and future profitability. Furthermore, Hilton introduced the Outset Collection by Hilton, implemented fee reductions for owners based on product quality, and continued to deliver significant capital returns to shareholders through buybacks and dividends.
Hilton’s Strategic Growth and Financial Performance in Q3 2025
On Wednesday, October 22, 2025, at 9 a.m. ET, Hilton Worldwide Holdings Inc. (NYSE: HLT) hosted its third-quarter earnings call, featuring President and CEO Christopher J. Nassetta and CFO Kevin J. Jacobs. The executives presented a compelling narrative of resilience and strategic advancement, underscoring Hilton’s ability to navigate a dynamic market while preparing for future expansion.
Despite a 1.1% year-over-year decrease in system-wide RevPAR on a comparable and currency-neutral basis, Hilton's Adjusted EBITDA surged by 8% to $976 million, outperforming the high end of guidance. Diluted Adjusted EPS reached $2.11 for the quarter, contributing to a projected full-year range of $7.97 to $8.06. This strong financial showing was largely driven by unexpected growth in non-RevPAR fees, stringent cost controls, and the benefits of hotel ownership and strategic timing.
Geographically, RevPAR trends varied: the U.S. saw a 2.3% decrease due to holiday shifts, reduced government spending, renovations, and softer international inbound demand. Conversely, the Middle East/Africa region experienced a significant 9.9% increase, the Americas (excluding the U.S.) grew by 4.3%, and Europe posted a modest 1% rise. Asia Pacific (excluding China) recorded a 3.8% increase, while China's RevPAR declined by 3.1% due to governmental travel policies.
Hilton's development pipeline continues to impress, with net unit growth reaching 6.5% in Q3, including 199 new hotel openings and over 24,000 rooms. This represents a more than 35% organic year-over-year growth in openings. The company's luxury and lifestyle brands, accounting for approximately 20% of new openings, are expanding globally, with notable plans for Asia Pacific and Europe. Conversions are a key element of this growth strategy, expected to constitute nearly 40% of 2025 openings across 12 brands. The launch of Outset Collection by Hilton, the company's 25th brand, targets the upper midscale to upscale independent hotel market, with over 60 hotels already in development and projections for more than 500 in North America alone.
Technological innovation is at the forefront of Hilton's strategy. Christopher J. Nassetta highlighted that 90% of Hilton's enterprise solutions are now cloud-based, a substantial increase from 20% in 2020. This modern platform supports over 41 AI use cases, enhancing operational efficiency and customer experience. The company's loyalty program is thriving, approaching 70% Honors occupancy and growing active members by 15%-20% annually.
Looking ahead, Hilton anticipates full-year RevPAR growth of 0%-1% for 2025 and projects Adjusted EBITDA between $3.685 billion and $3.715 billion. Net unit growth is expected to be between 6.5%-7% for 2025, continuing at 6%-7% annually over the next few years. The company remains committed to returning capital to shareholders, having paid a $0.15 per-share dividend in Q3 and expecting to return approximately $3.3 billion through buybacks and dividends for the full year.
Christopher J. Nassetta expressed strong optimism for the coming years, citing anticipated lower interest rates, a more favorable regulatory environment, stable tax policies, and a significant investment cycle in the U.S. These factors, combined with limited industry supply growth, are expected to drive stronger RevPAR growth and overall economic expansion.
In response to a question regarding potential partnerships with large language models, Nassetta affirmed Hilton's engagement with various companies in the rapidly evolving AI landscape. He categorized AI's impact into three main areas: process reinvention for efficiencies, enhancing go-to-market and distribution strategies, and elevating customer experience through mass customization. He emphasized Hilton's unique position to leverage AI due to its agile, cloud-based tech stack, enabling personalized experiences and real-time problem resolution.
On the topic of key money in competitive environments, Kevin J. Jacobs clarified that while the market is competitive, approximately 85% to 90% of key money is deployed in full-service and luxury projects. He noted that over 90% of deals under construction do not involve key money, and the run rate for key money remains stable at $150 million to $200 million annually. Nassetta reinforced that Hilton's strong brand performance and disciplined approach ensure that any investments yield significant value, benefiting both the company and its owners.
The discussion also touched upon corporate travel trends, with Nassetta indicating anecdotal evidence of increasing travel intentions among corporate clients for the upcoming year, despite current economic uncertainties. He suggested that as macroeconomic conditions stabilize, corporate travel is likely to rebound robustly. Regarding pricing strategies, while the company may run promotions during weaker periods, overall rate integrity remains strong, influenced by a mix shift towards lower-rated leisure customers rather than a collapse in rates.
Addressing the impact of a potential government shutdown on forecasts, Jacobs confirmed that the Q4 guidance already incorporates the effects of a month-long shutdown, reflecting the company's proactive risk assessment.
The call concluded with Nassetta reiterating his deep optimism about Hilton's future, emphasizing the robust business model, strong execution, and strategic initiatives that position the company for continued growth and outperformance.
This quarter’s performance and outlook underscore the importance of adaptability and forward-thinking strategies in the hospitality sector. Hilton's proactive embrace of technology, its commitment to owner satisfaction through innovative programs like fee reductions tied to quality scores, and its aggressive yet disciplined growth in diverse markets worldwide, offer valuable lessons. The company's ability to maintain strong financial health amidst global economic fluctuations, while simultaneously laying the groundwork for sustained future growth, demonstrates a keen understanding of both immediate challenges and long-term opportunities. For investors and industry observers, Hilton's trajectory provides an insightful case study in strategic resilience and innovative leadership.
