Chris Nassetta, Hilton: Optimistic about 2025 despite market challenges

Hilton recorded record growth in its portfolio in 2024, a trend that looks set to continue at the same pace in 2025.

As Hilton President and CEO Chris Nassetta said during the presentation of its fourth-quarter and full-year financial results to analysts, the global chain recorded a unit growth rate of 7.3% in 2024 and expects a further 6%-7% growth in 2025. Conversions accounted for 45% of Hilton’s new hotels in 2024. Luxury and lifestyle brands accounted for 50% of new openings, while new construction increased 10% year-over-year.

Can that momentum continue this year, as hotel operating costs continue to rise? Nassetta believes so, for a number of reasons.

“How do we defy gravity in a challenging environment for new construction and development in general?” he asked.

His answer is based on the popularity of Hilton, which he said absorbs a “disproportionately large share” of both hotel conversions and new project financing, despite high interest rates.

Overall, Nassetta said the company feels “a little better” than it did in the previous quarter, largely because the U.S. presidential election is now a thing of the past.

“We have a full-blown election cycle today,” he said. “There is a broad belief ... that the economic growth outlook in the short and medium term is more positive.”

The Future of the Hotel Market and the Impact of Interest Rates

Nassetta takes a longer-term view of interest rate pressure and other economic and political challenges.

“Over the next year or two, interest rates will come down overall. Investors are feeling the gap between supply and demand is narrowing as performance has improved a little bit,” he said. “I also think we’re seeing more capital availability. Despite the challenges, I see a trend toward a more positive sentiment.”

Regarding the possibility of new tariffs, Nassetta said he hasn’t heard concerns from owners or investors about significantly increasing costs. He described recent reports of tariffs on goods from Canada, Mexico, and China as “a series of delicate negotiations, part of a strategy to get the right trade deals.”

He also noted that Hilton has been “aggressively diversifying” its supply chain since the start of the pandemic.

Business Travel and Upcoming Luxury Investments

Nassetta said the business travel sector should recover in 2025.

“That will happen as more workers return to the office and businesses resume normal operations,” he explained.

“That’s positive for the business travel sector’s recovery. Prices remain higher, and demand hasn’t fully recovered, but by the end of the year there’s a good chance we’ll get there.”

2025 brings several major luxury hotel additions to the Waldorf Astoria and Conrad chains globally. The Waldorf Astoria New York will reopen in the spring, while new Waldorf Astoria hotels will open in Costa Rica, Shanghai, Osaka and Morocco. Conrad Hotels to expand with new properties in Hamburg and Athens

The new Hiltons in Athens

After 60 years in Athens, the iconic Athens Hilton is transforming into the new luxury destination The Ilisian, which will include hotel rooms and residences under the Conrad and Waldorf Astoria brands.

Hilton currently has two hotels in Athens, the A77 Suites, an SLH Hotel, located on Adrianou Street in Plaka, and the Hilton Garden Inn at Athens Syggrou Avenue, on Syggrou Avenue. Soon, Adia, by Isrotel, will be added, which will operate in Omonia and will join the Curio Collection by the Hilton brand.

In total, Hilton has 44 hotels in operation and under development in Greece.

Hilton Financial Performance

Hilton reported a 3.5% increase in revenue per available room (RevPAR) in the fourth quarter, reaching $110.33, while for the full year it increased by 2.7%, to $115.09.

The increase in average daily rate (ADR) strengthened the company's performance, with ADR increasing by 1.9% in the fourth quarter (to $157.73) and by 1.6% for the full year (to $159.55).

Hilton's average occupancy rate reached 69.9% in the fourth quarter and 72.1% for the year, recording small increases.

Management and franchise revenue increased by 4.8% in the quarter and 9.1% for the full year.

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