Hilton's (HLT) Garden Inn Continues Expansion, Opens 4 Hotels

Hilton Worldwide Holdings, Inc. (NYSE:HLT) continues to expand its upscale brand, Hilton Garden Inn, domestically as well as internationally.

Currently, Hilton’s Garden Inn brand comprises over 740 hotels across 33 countries and territories catering to the needs of business and leisure travelers alike.

In fact, the brand’s most recent round of hotel openings includes two new properties in the United States and two more across the globe.

The first U.S. property is located in Louisville, KY, minutes away from downtown and near many of the city’s best attractions. This 150-roomed hotel also encompasses a fitness center, an indoor pool and a 24-hour business center. The second one is situated in Jacksonville, NC, near one of the nation’s top military training facilities. The property has 128 rooms and boasts of a 5,000-square-foot ballroom.

Moreover, the two international locations include one in the center of Shangri-La, China, and another in the Kocaeli province of Turkey.

Interestingly, the company is committed to grow its presence in China, going forward. This is because it is a key strategic market where Hilton boasts a robust pipeline that is double its current portfolio in ideal locations.

Meanwhile, it is to be noted that all the new properties are part of the company’s industry-leading guest loyalty program - Hilton HHonors loyalty program - which serves millions of members worldwide. In fact, we expect the company’s performance to be buoyed by strong unit development and tremendous growth in its loyalty program, given its scale, size, industry-leading brands and commercial platform.

Notably, in January 2017, Hilton completed the spin-offs of Park Hotels & Resorts, Inc. (NYSE:PK) and Hilton Grand Vacations Inc. (NYSE:HGV) resulting in three independent, publicly traded companies. On the same day, the company put into effect the previously announced 1-for-3 reverse stock split. All these changes are anticipated to make Hilton a fee-based, capital efficient and resilient business, having enormous growth potential worldwide.

Post the split on Jan 4, the company’s shares have rallied nearly 9% while the S&P 500 market recorded a gain of 8%.

However, Hilton’s international presence makes it vulnerable to lingering political uncertainties and economic downturns in certain parts of the world. Meanwhile, unfavorable currency translations and competition from larger hoteliers like Marriott International, Inc. (NASDAQ:MAR) might also hurt the top line.

Nevertheless, aggressive expansion policies augur well for this Zacks Rank #3 (Hold) company. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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