Hilton Hotel Organizational Analysis I am looking for work as same as I post the sample of them. Hilton Worldwide Holdings Annual Report 2021 Form 10-K (NY

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Hilton Worldwide Holdings Annual Report 2021
Form 10-K (NYSE:HLT)

Published: February 17th, 2021

PDF generated by stocklight.com


Washington, D.C. 20549
Form 10-K

(Mark One)

For the fiscal year ended December 31, 2020

For the transition period from to

Commission File Number 001-36243

Hilton Worldwide Holdings Inc.
(Exact name of registrant as specified in its charter)

Delaware 27-4384691
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

7930 Jones Branch Drive, Suite 1100, McLean, VA 22102
(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (703) 883-1000

Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbol(s) Name of each exchange on which registered

Common Stock, $0.01 par value per share HLT New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the
preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or emerging growth company. See
the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☐

Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting
under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of June 30, 2020, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s common stock held by
non-affiliates of the registrant was approximately $19,902 million (based upon the closing sale price of the common stock on that date on the New York Stock Exchange). The
number of shares of common stock outstanding on February 10, 2021 was 277,607,799.

Items 10, 11, 12, 13 and 14 of Part III incorporate information by reference from the registrant’s definitive proxy statement relating to its 2021 annual meeting of stockholders to be
filed with the Securities and Exchange Commission within 120 days after the close of the registrant’s fiscal year.


Page No.

Forward-Looking Statements 2
Summary of Risk Factors 2
Terms Used and Basis of Presentation in this Annual Report on Form 10-K, COVID-19 Pandemic

and Social Media 3
Item 1. Business 3
Item 1A. Risk Factors 20
Item 1B. Unresolved Staff Comments 42
Item 2. Properties 43
Item 3. Legal Proceedings 45
Item 4. Mine Safety Disclosures 45

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of

Equity Securities 46
Item 6. Selected Financial Data 48
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 49
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 68
Item 8. Financial Statements and Supplementary Data 70
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 119
Item 9A. Controls and Procedures 119
Item 9B. Other Information 119

Item 10. Directors, Executive Officers and Corporate Governance 120
Item 11. Executive Compensation 120
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder

Matters 120
Item 13. Certain Relationships and Related Transactions, and Director Independence 120
Item 14. Principal Accounting Fees and Services 120

Item 15. Exhibits and Financial Statement Schedules 120
Item 16. Form 10-K Summary 124

Signatures 125


Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended
(the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements include, but are not
limited to, statements related to our expectations regarding the impact of the novel coronavirus (“COVID-19”) pandemic, the performance of our
business, our financial results, our liquidity and capital resources and other non-historical statements. In some cases, you can identify these forward-
looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,”
“projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking
statements are subject to various risks and uncertainties that could cause actual outcomes or results to differ materially from those indicated in these
statements, including, among others, those described under “Part I—Item 1A. Risk Factors” and under “Summary of Risk Factors” below. These factors
should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this Annual Report on
Form 10-K. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future
developments or otherwise, except as required by law.

Summary of Risk Factors

In addition to the other information in this Annual Report on Form 10-K, the following risk factors should be considered carefully in evaluating our
company and our business. A summary of the principal factors that create risk in investing in our securities and might cause actual results to differ is set
forth below:

• The ongoing global COVID-19 pandemic has negatively affected and will continue to negatively affect our business, financial condition and
results of operations;

• We are subject to the business, financial and operating risks inherent to the hospitality industry, any of which could reduce our revenues and limit
opportunities for growth;

• Macroeconomic and other factors beyond our control can adversely affect and reduce demand for our products and services ;

• Because we operate in a highly competitive industry, our revenues or profits could be harmed if we are unable to compete effectively ;

• Our business is subject to risks related to doing business with third-party property owners that could adversely affect our reputation, operational
results or prospects for growth;

• Failures in, material damage to or interruptions in our information technology systems, software or websites and difficulties in updating our
existing software or developing or implementing new software could have a material adverse effect on our business or results of operations;

• The growth of internet reservation channels could adversely affect our business and profitability ;

• Because we derive a portion of our revenues from operations outside the U.S. the risks of doing business internationally could lower our
revenues, increase our costs, reduce our profits or disrupt our business; and

• Our substantial indebtedness and other contractual obligations could adversely affect our financial condition, our ability to raise additional capital
to fund our operations, our ability to operate our business, our ability to react to changes in the economy or our industry and our ability to pay our
debts, and could divert our cash flow from operations for debt payments.

These risk factors do not identify all risks that we face, and our business, financial condition and results of operations could also be affected by
factors, events or uncertainties that are not presently known to us or that we currently do not consider to present material risks.


Terms Used and Basis of Presentation in this Annual Report on Form 10-K

Except where the context requires otherwise, references in this Annual Report on Form 10-K to “Hilton,” “the Company,” “we,” “us” and “our” refer to
Hilton Worldwide Holdings Inc., together with all of its consolidated subsidiaries. Except where the context requires otherwise, references to our
“properties” refer to the hotels, resorts and timeshare properties that are managed, franchised, owned or leased by us, while references to “hotels”
exclude timeshare properties.

On January 3, 2017, we completed the spin-offs of a portfolio of hotels and resorts, as well as our timeshare business, into two independent, publicly
traded companies: Park Hotels & Resorts Inc. (“Park”) and Hilton Grand Vacations Inc. (“HGV”), respectively, (the “spin-offs”). Hilton did not retain any
interest in Park or HGV, but did enter into long-term management and franchise contracts with Park for the portfolio of hotels and resorts that it held at the
time of the spin-offs and a 100-year license agreement with HGV for the timeshare business.

Reference to “Average Daily Rate” or “ADR” represents hotel room revenue divided by the total number of room nights sold for a given period, and
reference to “Revenue per Available Room” or “RevPAR” is calculated by dividing hotel room revenue by the total number of room nights available to
guests for a given period. Reference to “Adjusted EBITDA” means earnings before interest expense, a provision for income taxes and depreciation and
amortization, or “EBITDA,” further adjusted to exclude certain items. Refer to “Part II—Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations—Key Business and Financial Metrics Used by Management” for additional information on these financial metrics.

COVID-19 Pandemic

During the year ended December 31, 2020, the COVID-19 pandemic significantly impacted the global economy and strained the hospitality industry
due to travel restrictions and stay-at-home directives in place at various times during the period, resulting in cancellations and significantly reduced travel
around the world. The reduction in travel resulted in the complete and partial suspensions of hotel operations in many of the areas where our hotels are
located. As such, it had a material adverse impact on our results for the year ended December 31, 2020. See “Part I—Item 1A. Risk Factors—Risks
Related to the COVID-19 Pandemic” and “Part II—Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” for
additional information.

Social Media

We use our website at newsroom.hilton.com, our Facebook page at facebook.com/hiltonnewsroom and our corporate Twitter account at
twitter.com/hiltonnewsroom as channels of distribution of company information. The information we post through these channels may be deemed
material. Accordingly, investors should monitor these channels, in addition to following our press releases, our filings with the U.S. Securities and
Exchange Commission (the “SEC”) and our webcasts. The contents of our website and social media channels are not, however, part of this report.

Item 1. Business


Hilton is one of the largest hospitality companies in the world, with 6,478 properties comprising 1,019,287 rooms in 119 countries and territories as of
December 31, 2020. Founded in 1919, Hilton has been an innovator in the industry for more than 100 years, driven by the vision of our founder Conrad
Hilton, “to fill the earth with the light and warmth of hospitality.” Our premier brand portfolio includes: our luxury and lifestyle hotel brands, Waldorf Astoria
Hotels & Resorts, LXR Hotels & Resorts, Conrad Hotels & Resorts, Canopy by Hilton, Tempo by Hilton and Motto by Hilton; our full service hotel brands,
Signia by Hilton, Hilton Hotels & Resorts, Curio Collection by Hilton, DoubleTree by Hilton, Tapestry Collection by Hilton and Embassy Suites by Hilton;
our focused service hotel brands, Hilton Garden Inn, Hampton by Hilton, Tru by Hilton, Homewood Suites by Hilton and Home2 Suites by Hilton; and our
timeshare brand, Hilton Grand Vacations. As of December 31, 2020, we had more than 112 million members in our award-winning guest loyalty program,
Hilton Honors.

We operate our business through: (i) a management and franchise segment and (ii) an ownership segment, each of which is managed separately
because of its distinct economic characteristics. The management and franchise segment includes all of the hotels we manage for third-party owners, as
well as all franchised hotels that license our brands and where we provide other prescribed services to third-party owners, but the day-to-day services of
the hotels are operated or managed by someone other than us. The management and franchise segment generates its revenue from: (i) management
and franchise fees charged to

third-party hotel owners; (ii) licensing fees from HGV’s 56 resorts, consisting of 9,030 rooms, and strategic partnerships, including co-branded credit card
arrangements, for the right to use certain Hilton marks and intellectual property (“IP”); and (iii) fees for managing our owned and leased hotels. As of
December 31, 2020, this segment included 715 managed hotels and 5,646 franchised hotels consisting of 990,857 total rooms. As of December 31,
2020, the ownership segment included 61 hotels totaling 19,400 rooms, comprising 53 hotels that we wholly owned or leased, one hotel owned by a
consolidated non-wholly owned entity, two hotels leased by consolidated variable interest entities (“VIEs”) and five hotels owned or leased by
unconsolidated affiliates. For more information regarding our segments, see “Part II—Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations—Segment Results” and Note 18: “Business Segments” in “Part II—Item 8. Financial Statements and
Supplementary Data.”

In addition to our current hotel portfolio, we are focused on the growth of our business by expanding our share in the global hospitality industry
through our development pipeline, and despite the adverse effects of the COVID-19 pandemic, we continued to open new hotels and expand our
development pipeline in 2020. During the year ended December 31, 2020, we opened over 410 hotels consisting of nearly 56,000 rooms, contributing to
over 47,000 net additional rooms in our system, reflecting a net unit growth of 5.1 percent from December 31, 2019. Additionally, during the year ended
December 31, 2020, nearly 530 hotels, consisting of more than 83,000 new rooms, were approved and added to our development pipeline. As of
December 31, 2020, we had nearly 2,570 hotels in our development pipeline that we expect to add to our system in the future, representing over 397,000
rooms under construction or approved for development throughout 116 countries and territories, including 31 countries and territories where we do not
currently have any open hotels. Nearly all of the rooms in the development pipeline are within our management and franchise segment. Additionally, of
the rooms in the development pipeline, 233,000 rooms were located outside the U.S., and 204,000 rooms were under construction. We do not consider
any individual development project to be material to us.

In 2020, the COVID-19 pandemic significantly impacted the global economy and strained the hospitality industry due to travel restrictions and stay-at-
home directives in place at various times during the period, resulting in cancellations and significantly reduced travel around the world. The reduction in
travel resulted in the complete and partial suspensions of hotel operations in many of the areas where our hotels are located at some point in time during
2020, having a material adverse impact on our results for the year ended December 31, 2020. As of February 10, 2021, 97 percent of our global hotel
properties were open, while approximately 220 hotels had temporarily suspended operations. In response to this global crisis, we took actions to prioritize
the safety and security of our guests, employees and owners and support our communities. During the summer, we launched Hilton CleanStay and Hilton
EventReady, which deliver a new standard of cleanliness and customer service to our properties worldwide, including for meetings and events. We also
found alternative uses for certain of our hotel properties, including partnering with American Express to donate up to one million hotel room nights for
frontline medical professionals, and provided financial assistance to organizations helping those affected by COVID-19, through our Hilton Effect
Foundation. Additionally, we took certain proactive measures to secure our liquidity position to help our business withstand this uncertain time.

Despite the challenges associated with the COVID-19 pandemic, we maintain our belief that our experience in the hospitality industry, which spans
more than a century of customer service and entrepreneurship, and continues to evolve for the tastes, preferences and demands of our hotel guests; our
strong, well-defined brands that operate throughout the hospitality industry chain scales; our diverse, inclusive workforce, built to focus on providing
exceptional customer experiences; and our commercial service offerings will continue to drive customer loyalty, including participation in our Hilton
Honors guest loyalty program. We believe that satisfied customers will continue to provide strong overall hotel performance for us and our hotel owners
and encourage further development of additional hotels under our brands with both existing and new hotel owners, which further supports our growth and
future financial performance. We believe that our existing portfolio and development pipeline, which will require minimal capital investment from us,
positions us to further improve our business, allocate capital effectively and meet our customers’ demands and preferences in the future.

Our Brand Portfolio

The goal of each of our brands is to deliver exceptional customer experiences and superior operating performance.
December 31, 2020

Brand Chain Scale
Territories Properties Rooms

Percentage of
Total Rooms Selected Competitors

Luxury 15 33 10,018 1.0%
Four Seasons, Mandarin Oriental,

Peninsula, Ritz Carlton,
Rosewood Hotels & Resorts, St. Regis

Luxury 4 4 693 0.1%
Leading Hotels of the World,

Legend Preferred Hotels & Resorts,
Small Luxury Hotels of The World,

The Luxury Collection

Luxury 21 39 13,057 1.3% Fairmont, Intercontinental, JW Marriott, Park Hyatt, Sofitel

Upper Upscale 6 27 4,489 0.4%
25hours Hotels, Hyatt Centric,

Joie de Vivre, Kimpton,
Le Meridien, Renaissance

Upper Upscale — — — —% Grand Hyatt, JW Marriott

Upper Upscale 93 580 214,788 21.1% Hyatt, Hyatt Regency, Marriott,Sheraton, Westin

Upper Upscale 27 96 17,518 1.7%
Autograph Collection, Design Hotels,

Destination Hotels,
The Unbound Collection

Upscale 48 616 141,364 13.9%
Courtyard by Marriott, Crowne Plaza,

Delta, Holiday Inn, Radisson, Sheraton,

Upscale 4 46 5,757 0.6% Joie de Vivre, Tribute Portfolio

Upper Upscale 5 258 59,795 5.9% Hyatt Regency, Marriott, Sheraton, Westin

Upscale — — — —% AC Hotels, Aloft, Cambria, Hotel Indigo

Upper Midscale 1 1 245 0.0% CitizenM, Freehand, Generator, Hoxton, Moxy, tommie, Yotel

Upscale 50 899 131,574 12.9% Aloft, Courtyard by Marriott, Four Points, Holiday Inn, Hyatt Place

Upper Midscale 31 2,661 282,646 27.7%
Comfort Suites, Courtyard by Marriott,

Fairfield Inn, Holiday Inn Express,
Springhill Suites

Midscale 2 178 17,403 1.7%
Avid, Best Western, Comfort Inn & Suites,
La Quinta, Quality Inn, Sleep Inn, Wingate

by Wyndham

Upscale 4 511 58,228 5.7% Element, Hyatt House, Residence Inn,Staybridge Suites

Upper Midscale 2 463 48,757 4.8% Candlewood Suites, Comfort Suites,TownePlace Suites

Timeshare 6 56 9,030 0.9%
Bluegreen Vacations, Diamond Resorts,
Disney Vacation Club, Holiday Inn Club

Vacations, Marriott Vacations, Wyndham

The table above excludes 10 unbranded properties with 3,925 rooms, representing approximately 0.3 percent of total rooms, and also excludes lesser-known regional
HGV has the exclusive right to use our Hilton Grand Vacations brand, subject to the terms of a license agreement with us.

(1) (1)




Waldorf Astoria Hotels & Resorts : What began as an iconic hotel in New York City is today an extensive portfolio of luxury hotels and resorts in
landmark destinations around the world. Each Waldorf Astoria property provides a unique sense of place with a relentless commitment to personal
service and culinary expertise, enabling guests to create truly unforgettable moments. Properties feature elegant spa and wellness facilities; best in class
bars and restaurants; golf courses at select resort properties; 24-hour room service; fitness centers; impressive meeting and events capabilities; wedding
and banquet facilities; and special event and concierge services.

LXR Hotels & Resorts: Found in some of the world’s most alluring destinations, LXR Hotels & Resorts connect legendary properties into an exclusive
network of hotels that are set apart by an unrivaled commitment to personalized service and elegant, yet locally immersive experiences for their guests.

Conrad Hotels & Resorts : Conrad is a global luxury brand offering guests service and style on their own terms—all while connecting with the local
and global culture. Conrad has created a seamless connection between contemporary design, leading innovation and curated art to inspire the
entrepreneurial spirit of the globally connected traveler. Properties feature convenient and relaxing wellness facilities; innovative bars and restaurants;
comprehensive room service; multi-purpose meeting/business facilities; and special event and concierge services.

Canopy by Hilton: Canopy by Hilton is an energizing lifestyle hotel in neighborhood settings. Our guests are explorers who seek uncomplicated
comfort, thoughtful details, an energizing atmosphere and a uniquely local experience. Each property is designed as a natural extension of its
neighborhood, with local design, food and drink and culture delivering an authentic neighborhood experience with a boutique hotel feel.

Signia by Hilton: Signia by Hilton is our premier meetings-and-events brand positioned at the top of the upper upscale category. It provides guests
with best-in-class experiences in top urban and resort destinations around the world. Signia by Hilton has been developed to attract highly sought-after
larger convention group and transient business customers who are looking for a hotel focused on modern design, technology and premium culinary and
wellness offerings that are associated with a prestigious global brand.

Hilton Hotels & Resorts : For more than 100 years, Hilton Hotels & Resorts, Hilton’s flagship brand and one of the most globally recognized hotel
brands, has set the benchmark for hospitality around the world, providing new product innovations and services to meet guests’ evolving needs. With
hotels on six continents, Hilton Hotels & Resorts properties are located in the world’s most sought-after destinations for guests who know that where they
stay matters. The brand primarily serves business and leisure upper upscale travelers and meeting groups. Hilton Hotels & Resorts are full service
properties that offer advanced meeting and event spaces and services; trend-forward restaurants, lobby bars and grab-and-go options; mindful
fitness/wellness facilities; and other services.

Curio Collection by Hilton : Curio Collection by Hilton is a global portfolio of one-of-a-kind hotels and resorts. These properties offer travelers
authentic, curated experiences through distinctly local offerings and elevated amenities, while providing the many benefits of Hilton.

DoubleTree by Hilton : DoubleTree by Hilton is a fast-growing, global portfolio of upscale hotels. For more than 50 years, DoubleTree is the
unpretentious brand that indulges you with a double dose of comfortable — through spaces and human moments that just make you feel good, including
welcoming guests with its signature, warm DoubleTree cookie. Thanks to the dedication of its employees, DoubleTree by Hilton invites business and
leisure travelers in key economic centers and tourist spots to experience the brand’s comfortable and contemporary accommodations and amenities,
including unique food and beverage experiences, state-of-the-art fitness offerings and meetings and event spaces.

Tapestry Collection by Hilton : Tapestry Collection by Hilton is a portfolio of original hotels that offers guests unique style and vibrant personality and
encourages guests to explore the local destination. Every property is united by the reliability that comes with the Hilton name.

Embassy Suites by Hilton: Embassy Suites by Hilton is the upper upscale all-suites hotel brand that delivers inclusive value. All guests are welcomed
with spacious two-room suites with separate areas to work and play, plus free made-to-order breakfast daily and complimentary drinks and snacks every

Tempo by Hilton: Tempo by Hilton is a new, approachable lifestyle hotel brand dedicated to exceeding the expectations of an emerging, and
discerning, class of traveler: the modern achiever. Pioneering a new hospitality category, Tempo by Hilton offers accommodations thoughtfully designed
to help guests relax and recharge; inspiring public spaces, including an open

lobby concept with dedicated spaces to relax, work and dine; and elevated, yet approachable, culinary options, including the brand’s signature coffee &
tea fuel bar, a casual breakfast café and an inviting evening bar experience with small plates and cocktails. Additional amenities include state-of-the-art
fitness facilities and programs and flexible meeting and working spaces. As of December 31, 2020, Tempo by Hilton had eight hotels in the pipeline.

Motto by Hilton: Motto by Hilton is a micro-hotel with an urban vibe in prime global locations. Motto caters to travelers looking for value and one-of-a-
kind experiences by bringing together the best elements of a lifestyle hotel—efficient guest rooms, activated social spaces, centrally located destinations
and locally inspired design and food & beverage. At its core, Motto delivers a flexible and innovative hospitality experience through elements like first-of-
its-kind linking rooms for group travel and vibrant communal spaces for work and social use by guests and locals alike. As of December 31, 2020, Motto
by Hilton had one open hotel and 14 hotels in the pipeline.

Hilton Garden Inn: Hilton Garden Inn is an award-winning brand where guests find an open, inviting atmosphere with warm, glowing service and
simple, thoughtful touches that allow them to relax and recharge. As a recognized leader in food and beverage services, Hilton Garden Inn caters to
guests’ dining needs by serving cooked-to-order breakfast and offering handcrafted cocktails, shareable small plates …

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