Hilton (HLT) Opens Hotel in Taipei, Expands DoubleTree Brand

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Hilton Worldwide Holdings Inc.HLT recently announced the opening of DoubleTree by Hilton Taipei Zhongshan hotel in downtown Taipei. The hotel is the company's first property under its market-leading DoubleTree brand in Taipei. Owned by Jiu-Yu Property Group, the property will be managed by Hilton.

This 14-storied and 106-roomed hotel, offering Hilton's signature services, lies in close proximity to the Zhongshan MRT train station and both Taiwan Taoyuan International Airport and Taipei Songshan International Airport.

The move underscores Hilton's efforts to expand in international markets and strengthen its brand name. Though the company has expanded in China, Latin America and Europe, it continues to face competition from large hotel chains like Marriott MAR and Hyatt H as well as smaller independent local hospitality providers like Choice Hotels CHH .

Shares of Hilton have declined 11.2% in the past year, comparing favorably with the industry 's fall of 27.1%.

Rationale Behind

Hilton continues to drive unit growth to remain the fastest-growing global hospitality company. The company's continuous efforts toward expanding brands globally help increase its market share.

In third-quarter 2018, the company achieved net unit growth of 14,800 rooms, showing a 24% increase from the prior-year quarter. Further, the company added 113 hotels, taking the room count to 16,100. For 2018, it projects approximately 6.5% net unit growth.

It also has more rooms under construction in Europe, the Middle East and the Asia Pacific than any other hotel chain. As of Sep 30, Hilton's development pipeline comprised more than 2,420 hotels with 371,000 rooms across 108 countries and territories. Currently, almost half of 200 hotels in the pipeline under DoubleTree brand are in the Asia-Pacific region.

We expect expansion to drive Hilton's system-wide comparable revenue per available room (RevPAR). In the third quarter, comparable RevPAR increased 2% year over year. Also, the recent hotel addition will strengthen the DoubleTree brand's presence. Currently, the brand comprises more than 543 hotels in 43 countries and territories.

Efforts to Fortify Loyalty Program

The hotel is part of Hilton Honors, one of the largest loyalty programs in the hospitality industry. Hilton extensively focuses on expanding its loyalty program to drive occupancy and revenues. With about 82 million members, this network created an extremely valuable asset for the company. In fact, in the third quarter of 2018, more than 3.5 million members were added to Hilton Honors. In fact, the loyalty program increased occupancy in the third quarter to nearly 60%.

Hilton currently carries a Zacks Rank #4 (Sell).

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Hyatt Hotels Corporation (H): Free Stock Analysis Report

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Hilton Worldwide Holdings Inc. (HLT): Free Stock Analysis Report

Choice Hotels International, Inc. (CHH): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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