Buoyed by performance and pipeline growth from fourth quarter and full-year results, Hilton Hotels Corp. President and CEO Chris Nassetta is optimistic about what 2026 holds for the company.
On Hilton's fourth-quarter and full-year earnings call on Wednesday, Nassetta pointed to growth in Europe, the Middle East and Africa, and Asia-Pacific, as well as favorable calendar shifts and events like the World Cup slated for later this year.
"As we look to the year ahead, we feel optimistic that 2026 will be stronger than 2025," Nassetta said. "We believe this will be driven by continued strength in EMEA, improvement in APAC and an improvement in the U.S., driven by stronger economic conditions, major events, easier comps and continued limited supply for the full year."
Conversions and key money moves
Nassetta said on the call that conversions were a main component to growth in 2025, accounting for around 40% of room openings.
"Against this backdrop of continued owner demand for conversion-friendly brands, we have been evolving our brand portfolio and creating opportunities to build the next chapter in Hilton's growth," he said.
In January, the company launched its first apartment-style soft brand in collaboration with Placemakr, Apartment Collection by Hilton. Nassetta, without revealing any specific details, noted new brands to launch later this year that will continue Hilton's "conversion momentum."
Nassetta said he expects conversions to again make up 30% to 40% of Hilton's openings for 2026, which is historically higher than the 10-year average for the company.
"Conversions are going to be a bigger part of our future than they might have been on average over the last 10 years," he said.
Key money is another thing that Hilton has increased above average, but not any more than its competitors, Nassetta noted.
"We have been really disciplined, I'd say, about key money. I mean, if you look at the broader market, key money is definitely edged up. But if you look at our numbers, like rooms under construction, the percentage of deals that have key money is like 9% (and) hasn't really changed a lot."
"When it comes down to it, we think our brands perform better, and a little bit of key money versus a lot of market share, we think is a bad trade for most owners," he said.
Reasons for long-term optimism
Nassetta said he was "reasonably optimistic" about 2025 being a decent year, but sees 2026 and beyond as even more of an improvement.
"You have some macro forces and some micro forces that are converging in a really positive way," he said.
Investments into basic infrastructure reshoring and into artificial intelligence is a huge opportunity for the industry.
"We're at the beginning of one of the greatest productivity booms in American history with the whole AI complex," he said.
"My belief (in 2025) and now was that we will have economic growth picking up. Most importantly — because it impacts our business — it would be broader based economic growth. It would not be as much the K-economy (activity)," Nassetta continued.
For Hilton's own investment into AI, Nassetta declined to comment on any specific ongoing AI projects or partnerships, but admitted that Hilton is collaborating with the bigger AI companies.
"My belief is (AI) is a pathway to lower distribution costs broadly for our owner community if we're smart," he said.
By the numbers
In the fourth quarter, Hilton's net income was $298 million and comparable revenue per available room increased 0.5%, according to its news release. For the full year, the company reported a net income of $1.46 billion and a RevPAR increase of 0.4%. Adjusted EBITDA was $946 million for the fourth quarter and $3,725 million for the full year.
By the end of 2025, Hilton added 97,000 rooms in the full year, with 26,000 rooms added to the system in the fourth quarter. It's a net unit growth of 6.7% compared to Dec. 31, 2024.
Hilton grew its total development pipeline to 520,500 rooms as if Dec. 31, 2025, with the fourth-quarter addition of 37,400 new rooms for development. It's a 4% growth for the pipeline compared to Dec. 31, 2024.
"We continue to have more rooms under construction than any other hotel company, with approximately one in every five hotel rooms under construction globally slated to join the Hilton portfolio," said Kevin Jacobs, chief financial officer for Hilton.
The company repurchased 2.8 million shares of Hilton common stock during the fourth quarter, bringing total capital return, including dividends, to $792 million for the quarter and $3.3 billion for the full year.
For 2026, Hilton projects an increase of 1% to 2% on system-wide, comparable RevPAR and full-year net income between $1.98 billion and $2 billion. Net unit growth for 2026 is anticipated to range between 6% and 7%.
As of press time, Hilton's stock was trading at $323.70, up 20.28% year to date. The New York Stock Exchange composite was up 16.01% for the same period.