AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · Licensed brand IP, substantial loyalty-member occupancy participation and a broad operating footprint demonstrate an established commercial platform. Realized hotel additions and comparable fee growth support the advantage beyond margins alone; relative superiority remains incompletely documented.
durability · 2/4 · Existing licensing relationships, extension options and continued growth support persistence. Missing initial durations and renewal data, performance termination rights and owner sensitivity to standards prevent a strong durability grade.
customer dependency · 2/4 · Loyalty members' approximately 67% occupancy contribution demonstrates engagement, and owners purchase branded systems and services. Neither guest lock-in nor owner dependence is established; owners can negotiate terms and some can terminate for performance.
erosion resilience · 2/4 · Net unit growth and comparable franchised-hotel ADR and occupancy gains show current resilience. Recognized competing brands, owner incentives and realized regional weakness leave resilience across a full competitive or travel downturn unproven.
Pricing power56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · First-half 2026 comparable franchised-hotel ADR rose 2.1% while occupancy increased 1.5 percentage points, demonstrating positive realized pricing without sacrificing aggregate utilization. Regional weakness and only 0.4% system RevPAR growth in 2025 temper the result; neither a sustained brand premium nor higher royalty rates is demonstrated.
retention · 2/4 · Member occupancy participation and higher comparable occupancy provide indirect evidence of engagement and continuing demand. Net hotel growth supports owner appeal but does not distinguish retention from recruitment; repeat-stay and renewal rates are missing.
margin resilience · 3/4 · Operating income increased across 2023–2025 and again in first-half 2026. First-half operating income rose faster than revenues excluding cost reimbursements, while ownership expenses declined despite lower ownership revenue. This demonstrates recent operating resilience, although it does not isolate pricing causality or establish recession durability.
contractual freedom · 2/4 · Hilton has contractual rights to recover prior program expenditures, providing specific cost-recovery flexibility. Core royalties remain linked to room sales and contract economics require negotiation and sometimes owner incentives. The evidence supports mixed contractual flexibility rather than unilateral core pricing authority.
Predictability86
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 17.81
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 6.54
Financial strength18
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 27.20
- netDebtEbitGrade
- 15.00
- interestCoverageGrade
- 30.40
- currentRatioGrade
- 0.00
- Debt / FCF (x)
- 6.10
- Net debt / operating income (x)
- 4.25
- Interest coverage (x)
- 4.34
- Current ratio (x)
- 0.66
Capital allocation100
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 39.52
- 3-year average dilution (%)
- -4.97
- 3-year average SBC / revenue (%)
- 1.55
- cashConversionGrade
- 100.00
Management69
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · First-half 2026 generated $1.090 billion of operating cash with $21 million of property capital expenditure and $47 million of capitalized software spending. However, $1.787 billion of repurchases plus dividends exceeded operating cash generation, alongside $985 million of net borrowing and higher interest expense. Cash generation is demonstrated; repurchase value and financing discipline remain mixed.
incentive alignment · 3/4 · The existing compensation program uses multiyear equity, with half of LTI in performance units and measures including cash flow per share, unit growth and competitive RevPAR performance. Disclosed ownership compliance and disposal restrictions support actual alignment. Complete thresholds and beneficial ownership amounts are absent; future achievement is not assumed.
execution · 3/4 · Realized openings, positive net additions, 6.1% trailing-year net unit growth and rising franchise and licensing fees demonstrate execution. This assessment uses operating outcomes rather than attributing all growth causally to management. Lower incentive management fees and slightly lower operating cash flow temper the favorable record.
governance · 3/4 · Annual director elections, a single voting class, majority voting, a majority-independent board, fully independent committees and actual director attendance provide concrete governance evidence. These structures support accountability without proving exceptional oversight effectiveness.
Evidence
Franchising We license our IP, including our brand names, trademarks and service marks, and our operating systems to hotel owners under franchise contracts.
Franchising: licensing of brands and operating systems · Filed 11/02/2026
We do not estimate revenues expected to be recognized related to our unsatisfied performance obligations for our: (i) royalty fees, since they are considered sales-based royalty fees recognized as hotel room sales occur in exchange for licenses of our IP over the terms of the franchise contracts and (ii) other licensing fees, base and other management fees and incentive management fees since they are allocated entirely to the wholly unsatisfied promise to transfer IP or provide management services, respectively, which form part of a single performance obligation in a series, over the term of the individual contract.
Revenue recognition: sales-based royalties and contracted services · Filed 11/02/2026
for the 7th consecutive year 243M Members representing ~67% of total occupancy Launched Hilton Honors program upgrades, including a faster path to Hilton Honors elite status and a new premium tier Introduced Hilton Honors Adventures in collaboration with Explora Journeys Achieved 6.7% Net unit growth with 9,100+ properties across 143 countries and territories Opened the 1,000th hotel in Hilton's luxury and lifestyle portfolio Launched Achieved +0.4% RevPAR growth, $1,461M Net income, $3,725M Adjusted EBITDA, $6.12 Diluted EPS, and $8.11 Adjusted Diluted EPS FINANCIAL PERFORMANCE Over the past 5 years, Hilton has outperformed peers and delivered $41B of value creation to stockholders through stock price appreciation.
Proxy summary: 2025 loyalty participation, footprint and operating achievements · Filed 02/04/2026
23 Segment Results As of June 30, 2026, our management and franchise segment included 882 managed and 8,525 franchised and licensed properties, which included 121 timeshare and 562 strategic partner hotels, consisting of 1,369,556 total rooms, and our ownership segment included 46 hotels consisting of 15,286 total rooms.
Segment results: operating properties and rooms at June 30, 2026 · Filed 28/07/2026
The following table summarizes our development activity: As of or for the Six Months Ended June 30, 2026 Hotels Rooms(1) Hotel system Openings 338 40,400 Net additions(2) 288 32,500 Development pipeline Additions 544 69,100 Count as of period end(3) 3,853 541,300 ____________ (1)Rounded to the nearest hundred.
Development activity: realized openings and net additions versus pipeline · Filed 28/07/2026
Net unit growth from June 30, 2025 to June 30, 2026 was 6.1 percent.
Development activity: trailing-year net unit growth · Filed 28/07/2026
2025 2026 2025 2026 vs. 2025 (in millions) (in millions) Franchise and licensing fees $ 808 $ 745 8.5 $ 1,504 $ 1,370 9.8 Base and other management fees $ 99 $ 97 2.1 $ 194 $ 185 4.9 Incentive management fees 69 75 (8.0) 145 147 (1.4) Total management fees $ 168 $ 172 (2.3) $ 339 $ 332 2.1 The currency neutral increases in franchise fees at our comparable franchised hotels of $26 million and $44 million for the three and six months ended June 30, 2026, respectively, were primarily due to increases in RevPAR.
Revenue discussion: fee growth and comparable franchised-hotel contribution · Filed 28/07/2026
During the six months ended June 30, 2026, RevPAR at our comparable franchised hotels increased 4.3 percent, due to increases in occupancy of 1.5 percentage points and ADR of 2.1 percent.
Revenue discussion: first-half comparable franchised-hotel ADR and occupancy · Filed 28/07/2026
Generally, these contracts contain one or two extension options that are for either five or 10 years and can be exercised at our or the hotel owner's option or by mutual agreement, as specified by the contract.
Management contracts: extension options · Filed 11/02/2026
Our principal competitors are other operators of luxury, full-service and focused-service hotels, including other major hospitality chains with well-established and recognized brands.
Competition: recognized competing hospitality brands · Filed 11/02/2026
Our ability to compete effectively is based primarily on the value and quality of our management services, brand name recognition and reputation, our access to and willingness to invest capital or provide other incentives or inducements, availability of suitable properties to maintain brand variety across geographic areas, the overall economic terms of our contracts and the economic advantages to the third-party hotel owner of retaining our management services and/or using our brands.
Competition for contracts: incentives, economic terms and owner benefits · Filed 11/02/2026
If our property owners fail to make investments necessary to maintain or improve the properties and related operations in accordance with our standards, or based on customer demand more broadly, guest preference for our brands could diminish.
Owner risks: underinvestment and potential loss of guest preference · Filed 11/02/2026
Conversely, if third-party property owners feel our brand standards are too restrictive or costly, we may fail to maintain and renew existing management and franchise contracts or enter into new contracts on favorable terms, and thus, we may be unable to expand our presence and our business, and our financial condition and results of operations may suffer.
Owner risks: brand-standard costs and contract renewal · Filed 11/02/2026
Some of our management contracts provide early termination rights to hotel owners upon certain events, including the failure to meet certain financial or performance criteria.
Management contracts: performance-related early termination rights · Filed 11/02/2026
CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) Year Ended December 31, 2025 2024 2023 Revenues Franchise and licensing fees $ 2,780 $ 2,600 $ 2,370 Base and other management fees 376 369 342 Incentive management fees 313 290 274 Ownership 1,233 1,255 1,244 Other revenues 252 232 178 4,954 4,746 4,408 Cost reimbursement revenues 7,085 6,428 5,827 Total revenues 12,039 11,174 10,235 Expenses Ownership 1,094 1,126 1,141 Depreciation and amortization 177 146 147 General and administrative 393 415 408 Impairment losses — — 38 Other expenses 132 137 112 1,796 1,824 1,846 Reimbursed expenses 7,550 6,985 6,164 Total expenses 9,346 8,809 8,010 Gain on sales of assets, net — 5 — Operating income 2,693 2,370 2,225 Interest expense (620) (569) (464) Loss on foreign currency transactions (11) (12) (16) Loss on investments in unconsolidated affiliate — — (92) Other non-operating income (loss), net 10 (6) 39 Income before income taxes 2,072 1,783 1,692 Income tax expense (611) (244) (541) Net income 1,461 1,539 1,151 Net income attributable to redeemable and nonredeemable noncontrolling interests (4) (4) (10) Net income attributable to Hilton stockholders $ 1,457 $ 1,535 $ 1,141 Earnings per share: Basic $ 6.18 $ 6.20 $ 4.36 Diluted $ 6.12 $ 6.14 $ 4.33 Cash dividends declared per share $ 0.60 $ 0.60 $ 0.60 See notes to consolidated financial statements.
Consolidated statements of operations: 2023–2025 results · Filed 11/02/2026
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) (unaudited) Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Revenues Franchise and licensing fees $ 808 $ 745 $ 1,504 $ 1,370 Base and other management fees 99 97 194 185 Incentive management fees 69 75 145 147 Ownership 311 332 560 566 Other revenues 72 77 138 123 1,359 1,326 2,541 2,391 Cost reimbursement revenues 1,982 1,811 3,737 3,441 Total revenues 3,341 3,137 6,278 5,832 Expenses Ownership 266 286 501 525 Depreciation and amortization 49 43 99 84 General and administrative 114 109 217 203 Other expenses 46 26 68 52 475 464 885 864 Reimbursed expenses 2,008 1,895 3,857 3,654 Total expenses 2,483 2,359 4,742 4,518 Operating income 858 778 1,536 1,314 Interest expense (183) (151) (345) (296) Gain (loss) on foreign currency transactions (7) (1) (12) 1 Other non-operating income, net 12 3 19 20 Income before income taxes 680 629 1,198 1,039 Income tax expense (198) (187) (333) (297) Net income 482 442 865 742 Net loss (income) attributable to redeemable and nonredeemable noncontrolling interests — (2) 2 (2) Net income attributable to Hilton stockholders $ 482 $ 440 $ 867 $ 740 Earnings per share: Basic $ 2.12 $ 1.85 $ 3.80 $ 3.10 Diluted $ 2.10 $ 1.84 $ 3.76 $ 3.07 Cash dividends declared per share $ 0.15 $ 0.15 $ 0.30 $ 0.30 See notes to condensed consolidated financial statements.
Unaudited statements of operations: first-half 2026 and 2025 results · Filed 28/07/2026
4 HILTON WORLDWIDE HOLDINGS INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (unaudited) Six Months Ended June 30, 2026 2025 Operating Activities: Net income $ 865 $ 742 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of contract acquisition costs 32 27 Depreciation and amortization expenses 99 84 Loss (gain) on foreign currency transactions 12 (1) Share-based compensation expense 106 91 Deferred income taxes (28) (18) Contract acquisition costs, net of refunds (77) (72) Change in deferred revenues 26 85 Change in liability for guest loyalty program 164 186 Working capital changes and other (109) (14) Net cash provided by operating activities 1,090 1,110 Investing Activities: Capital expenditures for property and equipment (21) (42) Issuance of financing receivables (15) — Settlements of undesignated derivative financial instruments 4 — Capitalized software costs (47) (41) Other (1) (3) Net cash used in investing activities (80) (86) Financing Activities: Borrowings 1,565 650 Repayment of debt (580) (881) Debt issuance costs (21) — Dividends paid (69) (73) Repurchases of common stock (1,787) (1,644) Share-based compensation tax withholdings (72) (72) Proceeds from share-based compensation 51 40 Settlements of interest rate swap with financing component 7 20 Acquisition of redeemable noncontrolling interests (5) — Net cash used in financing activities (911) (1,960) Effect of exchange rate changes on cash, restricted cash and cash equivalents (5) 8 Net increase (decrease) in cash, restricted cash and cash equivalents 94 (928) Cash, restricted cash and cash equivalents, beginning of period 970 1,376 Cash, restricted cash and cash equivalents, end of period $ 1,064 $ 448 See notes to condensed consolidated financial statements.
Unaudited cash flows: operating cash, investment, borrowing and repurchases · Filed 28/07/2026
Further, Adjusted EBITDA excludes both cost reimbursement revenues and reimbursed expenses as we contractually do not operate the related programs to generate a profit and have contractual rights to adjust future collections to recover prior period expenditures.
Program economics: contractual recovery of prior expenditures · Filed 28/07/2026
MEA RevPAR decreased during both the three and six months ended June 30, 2026 as a result of the ongoing geopolitical conflict in the Middle East, with results for the six months ended June 30, 2026 partially offset by increased demand in January and February for special events.
Regional operating results: Middle East and Africa RevPAR decline · Filed 28/07/2026
The majority of target compensation is delivered in the form of equity that vests over multiple years, including 50% of our LTI comprising performance share units ("PSUs") that vest at the end of a three-year period based on defined growth targets, 25% restricted stock units ("RSUs"), and 25% stock options.
Existing 2025 executive compensation: equity mix and performance vesting · Filed 02/04/2026
The Adjusted EBITDA, FCF per share, and RPI Growth metrics are based on a final-year measurement after three years.
Existing PSU program: financial and competitive performance measures · Filed 02/04/2026
Charnaux, who rejoined Hilton in 2025, currently satisfies the stock ownership requirement above.
Executive ownership policy: disclosed compliance and recent-hire exception · Filed 02/04/2026
Under this requirement, executives may not dispose of any shares of the Company they acquire, including, but not limited to, any shares of vested restricted stock, any shares underlying vested restricted stock units, net of taxes, or any shares acquired upon the exercise of any stock options, net of taxes and payment of any exercise price, in each case, received from grants made until the ownership requirements are satisfied.
Executive ownership policy: share-disposal restrictions · Filed 02/04/2026
2025 CEO Target Compensation 2025 Other NEO Target Compensation (Average) GOVERNANCE Our commitment to strong governance practices continued in 2025 as illustrated by the following: •Commitment to a skilled director candidate pool consisting of candidates with diverse skills, experiences, and backgrounds •Board-level oversight of cybersecurity, sustainability & community impact, and corporate governance matters •Annual election of directors •Lead independent director •Single class of voting stock •No supermajority voting provisions •Majority voting standard for directors in uncontested elections •Proxy access by-law •No stockholder rights plan; and if our Board were ever to adopt a stockholder rights plan in the future without prior stockholder approval, we would either submit the plan to stockholders for ratification or cause the rights plan to expire within one year Board Composition 2 PROXY STATEMENT Hilton PROXY SUMMARY VOTING ROADMAP Our Board’s Recommendation Proposal No.
Existing governance arrangements: director elections and shareholder rights · Filed 02/04/2026
Our Board has a majority of independent directors, and all of our Board’s committees are fully independent.
Board matters: board and committee independence · Filed 02/04/2026
In 2025, each of our director nominees attended at least 80% of the meetings of the Board and committees on which they served as a member.
Board meetings: actual 2025 director attendance · Filed 02/04/2026
Licensing fees increased $34 million and $42 million for the three and six months ended June 30, 2026, respectively, as a result of increases in fees from our strategic partnerships, primarily resulting from activity under our co-branded credit card arrangements, HGV and branded residential fees.
Licensing fee growth: strategic partnerships and co-branded arrangements · Filed 28/07/2026
Our development pipeline grew to the highest level in our history, reinforcing the strong demand from owners who continue to choose Hilton for the superior returns our brands and commercial engine deliver.
Management letter: assertion of superior owner returns · Filed 02/04/2026
We compete for these customers based primarily on brand name recognition and reputation, as well as location, rates for hotel rooms, food and beverage and other services, property size and availability of guest rooms and conference and meeting space, quality of the accommodations and technology provided, previous customer experience and satisfaction, amenities and the ability to earn and redeem loyalty program points.
Guest competition: recognition, rates, experience and loyalty benefits · Filed 11/02/2026
Consideration paid or anticipated to be paid to incentivize hotel owners to enter into management and franchise contracts with us is amortized over the life of the applicable contract, generally including any extension periods that are at our sole option, as a reduction to base and other management fees and franchise and licensing fees, respectively.
Contract acquisition accounting: consideration paid to hotel owners · Filed 11/02/2026
