Hilton Hotels Corporation (NYSE:HLT) today reported results for the second quarter and six months ended June 30, 1999.
Income for the second quarter from continuing operations of $66 million, or $.25 per diluted share, was comparable with $65 million, or $.25 per diluted share, for the same period a year ago. Second quarter earnings before interest, taxes, depreciation, amortization and non-cash items (EBITDA) increased 14 percent to $198 million from $173 million last year.
Hilton`s U.S. owned and equity hotels generated $178 million of EBITDA in the second quarter, compared to $159 million in the prior year, a 12 percent increase.
The company`s successful strategy of purchasing full-service hotels in markets with high barriers to entry continues to contribute to EBITDA growth, with acquisitions accounting for the significant portion of the second quarter EBITDA increase. Further contributing to the EBITDA gains were strong results at the company`s owned hotels in New Orleans, San Francisco and Washington D.C., and earnings from the company`s vacation ownership projects in Orlando, Florida and Las Vegas, Nevada.
Continuing weak conditions in Hawaii, along with short-term softness in the New York and Chicago markets, impacted both the company and the industry in general during the period.
In Hawaii, where Hilton has two major properties - the Hilton Hawaiian Village in Honolulu and the Hilton Waikoloa Village on the Big Island - results were again adversely affected by a decline in transient business caused by the soft demand from Asian travelers. While the Hilton Hawaiian Village is still expected to report declining results for the full year 1999, advance bookings and an upswing in general business trends are expected to result in improved performance in 2000.
Market softness in group business, combined with ongoing construction at the Hilton New York and Towers related to that hotel`s major refurbishment (affecting both group and transient business) and difficult comparisons from the 1998 quarter, impacted results at the company`s New York and Chicago hotels. Advance bookings, however, are generally on track at the company`s major hotels for the second half of 1999, particularly in the fourth quarter, when New York will also benefit from Millennium-related activity in the city. Second half results will also benefit from the September opening of Hilton`s new 600-room hotel at Logan Airport in Boston.
Given the significance and uniqueness of the declines at the Hilton Hawaiian Village and the impact on the quarterly comparisons, the following data on Hilton`s domestic owned and equity hotel operations is presented on an “excluding Hawaii” and “including Hawaii” basis.