Hilton Worldwide Holdings Inc. (HLT, NYSE)
Industry: Lodging
Annual report, fiscal year 2018


## THE HILTON
EFFECT

2018 Annual Report



Hilton

WALDORF ASTORIA LXR CONRAD CONRAD CONRAD CONRAD CONRAD CONRAD CONRAD CON




5,600+ PROPERTIES

10 Million
TEAM MEMBERS

3 Billion

GUESTS

$1 Trillion
IN ECONOMIC IMPACT





These numbers represent the positive, world-altering impact Hilton has had on lives and communities around the globe in its nearly 100-year history.

THIS IS THE HILTON Effect



## 2018
Highlights



## A RECORD-SETTING YEAR



Christopher J. Nassetta
Chief Executive Officer

In 2018 – our 99th year of hospitality – we continued the momentum that will extend The Hilton Effect well into our next 100 years.

Reflecting on 2018, Hilton continued to have a positive impact on the people and communities we serve, fueling strong growth and performance across our business.

## A STRONG FINISH TO OUR FIRST CENTURY







Kevin Jacobs
Chief Financial Officer




Waldorf Astoria Edinburgh – The Caledonian

## Align CULTURE & ORGANIZATION

• Ranked #2 World’s Best Workplace by Great Place to Work \( ^{®} \) 

• Recognized as #1 Workplace for Diversity by FORTUNE and a Top 10 Company for Diversity by DiversityInc

• Created more than 28,000 new hospitality jobs globally

• Awarded 10 Team Members the opportunity to take a paid four-week Thrive Sabbatical to give a dream or live a dream as part of our Thrive@Hilton commitment

• Remained focused on Operation: Opportunity, our commitment to hire an additional 20,000 veterans, spouses, dependents and caregivers by 2020

## Win ON CUSTOMER EXPERIENCE

• Demonstrated the power of our network effect by increasing industry-leading market share premiums 100 basis points for the full year

• Enrolled more than 14 million new Hilton Honors members, bringing total membership to more than 85 million

• Scaled industry-first Digital Key technology to more than 4,100 properties with 7.6 million keys downloaded in 2018

• Rolled out more than 1,800 Connected Rooms, enabling guests to create more personalized travel experiences through partnerships with Netflix \( ^{®} \)  and SHOWTIME \( ^{®} \)  and other customization features







OPERATION: OPPORTUNITY
CUR MISSION IS YOUR SUCCESS






## Expand GLOBAL FOOTPRINT

- Grew development pipeline to more than 364,000 rooms across 15 brands, supported by record approvals of nearly 110,000 rooms

- Opened more than a hotel per day, adding 452 properties and bringing our portfolio to more than 5,600 properties with nearly 913,000 rooms in 113 countries and territories

- Unveiled Motto by Hilton, an affordable lifestyle micro-hotel brand that will give guests the freedom to create their own experiences in the world’s top urban destinations

- Expanded our luxury portfolio with the launch of LXR Hotels & Resorts, a luxury collection of distinctive hotels and resorts offering singular service and remarkable local experiences

## Maximize PERFORMANCE

+ ~7% Net Unit Growth

+ 6% Rooms in Pipeline from 2017

$2.79 Adjusted Diluted EPS \( ^{*} \) 

+ 3% System-Wide 2018 Revenue Per Available Room (RevPAR) Growth

+ 10% Adjusted EBITDA* to $2.1 Billion

$1.9 Billion Returned to Shareholders in the Form of Buybacks and Dividends

*Reconciliations of non-GAAP to GAAP financial measures can be found on pages 12 and 14 in our Fourth Quarter and Full Year 2018 earnings press release.

Waldorf Astoria Ras Al Khaimah







Hilton is one of the world’s largest hospitality companies, with more than 5,600 properties, comprising nearly 913,000 rooms in 113 countries and territories. We are committed to being everywhere our guests want to travel.



THE AMERICAS: We expanded our luxury offerings with the opening of Waldorf Astoria Hotels & Resorts properties in Las Vegas and Atlanta, and grew our All Suites and Focused Service portfolios, opening our 1,000th All Suites property, and 50th Tru by Hilton.

EUROPE, MIDDLE EAST AND AFRICA: LXR Hotels & Resorts launched its first property in Dubai with Al Habtoor Group; we debuted the Hilton Garden Inn brand in France, and introduced Hampton by Hilton to the United Arab Emirates with a 420-room property in Dubai, the world’s largest Hampton.

ASIA PACIFIC: DoubleTree by Hilton expanded its presence in the region, with key openings including DoubleTree by Hilton Okinawa Chatan Resort and DoubleTree by Hilton Hainan Xinglong; we also grew our luxury portfolio with the opening of Waldorf Astoria Bangkok and Conrad Bengaluru.

## GROWTH BY BRAND
2008-2018

<table><tr><td rowspan="2">As of Dec. 31, 2018</td><td colspan="2">2008</td><td colspan="2">2018</td></tr><tr><td>Properties</td><td>Pipeline</td><td>Properties</td><td>Pipeline</td></tr><tr><td>Waldorf Astoria Hotels &amp; Resorts</td><td>6</td><td>11</td><td>31</td><td>19</td></tr><tr><td>LXR Hotels &amp; Resorts</td><td>0</td><td>0</td><td>1</td><td>1</td></tr><tr><td>Conrad Hotels &amp; Resorts</td><td>17</td><td>9</td><td>33</td><td>19</td></tr><tr><td>Canopy by Hilton</td><td>0</td><td>0</td><td>8</td><td>34</td></tr><tr><td>Hilton Hotels &amp; Resorts</td><td>511</td><td>82</td><td>586</td><td>169</td></tr><tr><td>Curio Collection by Hilton</td><td>0</td><td>0</td><td>68</td><td>57</td></tr><tr><td>DoubleTree by Hilton</td><td>207</td><td>26</td><td>559</td><td>207</td></tr><tr><td>Tapestry Collection by Hilton</td><td>0</td><td>0</td><td>18</td><td>45</td></tr><tr><td>Embassy Suites by Hilton</td><td>199</td><td>60</td><td>253</td><td>46</td></tr><tr><td>Motto by Hilton</td><td>0</td><td>0</td><td>0</td><td>1</td></tr><tr><td>Hilton Garden Inn</td><td>429</td><td>214</td><td>815</td><td>307</td></tr><tr><td>Hampton by Hilton</td><td>1,619</td><td>509</td><td>2,433</td><td>642</td></tr><tr><td>Tru by Hilton</td><td>0</td><td>0</td><td>53</td><td>316</td></tr><tr><td>Homewood Suites by Hilton</td><td>258</td><td>129</td><td>482</td><td>105</td></tr><tr><td>Home2 Suites by Hilton</td><td>0</td><td>0</td><td>290</td><td>435</td></tr><tr><td>Hilton Grand Vacations</td><td>35</td><td>0</td><td>51</td><td>0</td></tr><tr><td>TOTAL</td><td>3,294</td><td>1,040</td><td>5,685</td><td>2,403</td></tr></table>




Since Hilton opened its doors nearly a century ago, we have welcomed more than 3 billion guests by easing travel, broadening perspectives and building trust – dramatically changing the travel landscape through various industry-firsts.

## HILTON FIRSTS



The Hilton Effect: Puerto Rico

Hilton was the first hospitality company to cater extensively to business travelers so they can focus their time and energy on the all-important meeting or negotiation, rather than the challenges of navigating an unfamiliar place. And throughout our history, we have introduced numerous innovations to enhance the guest experience – from the first air-conditioned hotel lobbies and televisions in guest rooms to the invention of the piña colada and today’s Digital Key and Connected Room.

See more Hilton Effect videos here.



Air-Conditioned
Hotel Lobbies



Guest Room
Televisions



Created the
Piña Colada



Digital Key



Connected Room



Our award-winning guest loyalty program, Hilton Honors, added more than 14 million members in 2018, bringing membership to more than 85 million. Members who book direct through Hilton channels enjoy instant benefits, including exclusive member discounts and free standard WiFi, all while earning Points for their stays.

## WAYS TO REDEEM HILTON HONORS POINTS



Free Night Stays



Live Nation Concerts



Shop on Amazon



VIP Events

In 2018, Hilton debuted a new campaign to directly address the frustrations consumers face when booking their hotel stay. Expect Better. Expect Hilton.



With the best-performing portfolio in the business, Hilton’s award-winning brands serve guests with any lodging need anywhere in the world.






# OUR
Team Members

For nearly a century, Hilton has not only changed the face of travel globally, but also impacted the lives of more than 10 million Team Members.





The Hilton Effect: Myanmar

Hilton has impacted its Team Members by fostering a powerful entrepreneurial spirit and wide-ranging career opportunities – creating a culture where it is possible for a restaurant server to become a senior leader – and encouraging innovative ideas from every corner of the company. Today, we are committed to empowering all Team Members to leverage their full potential, investing extensively in industry-leading training and creating a culture of inclusive growth.

## HEAR MORE ABOUT THE HILTON EFFECT FROM THESE TEAM MEMBERS



The Hilton Effect: China



The Hilton Effect: London




Hilton Shenzhen Shekou Nanhai

# We Are
HILTON
We Are
HOSPITALITY

## OUR VISION

To fill the earth with the light and warmth of hospitality – by delivering exceptional experiences – every hotel, every guest, every time.

## OUR MISSION

To be the most hospitable company in the world – by creating heartfelt experiences for guests, meaningful opportunities for Team Members, high value for owners and positive impact in our communities.

## OUR VALUES

HOSPITALITY
We are passionate about
delivering exceptional
guest experiences.

INTEGRITY
We do the right thing,
all the time.

LEADERSHIP
We are leaders in our industry and in our communities.

OWNERSHIP
We are the owners of our
actions and decisions.

NOW
We operate with a sense
of urgency and discipline.

TEAMWORK
We are team players in
everything we do.
















CHRISTOPHER J. NASSETTA
President & Chief
Executive Officer

KRISTIN CAMPBELL
General Counsel

IAN R. CARTER
President, Global
Development, Architecture,
Design & Construction

KATIE B. FALLON
Global Head of
Corporate Affairs

DANNY HUGHES
President, Americas

KEVIN JACOBS
Chief Financial Officer











MATTHEW W. SCHUYLER
Chief Human
Resources Officer

CHRIS SILCOCK
Chief Commercial Officer

SIMON VINCENT
President, Europe, Middle
East & Africa

ALAN WATTS
President, Asia Pacific

JONATHAN A. WITTER
Chief Customer Officer



# OUR
Communities

Hilton has woven itself into the history, economies and very fiber of communities all over the world, often serving as the catalyst for development, renewal and growth. We continue to grow sustainably through Travel with Purpose, our corporate responsibility strategy.





The Hilton Effect: Abuja

## REDEFINING
SUSTAINABLE TRAVEL

By 2030, we are committed to doubling our investment in social impact and cutting our environmental footprint in half, ensuring the destinations where our guests live, work and travel are vibrant and resilient for generations to come.

For more information on our Travel with Purpose 2030 goals, visit our website.

We operate at a global scale, but our success is driven locally in more than 5,600 communities and neighborhoods around the world. Here, we create jobs, support small businesses by sourcing local products, and help shape strong and resilient communities. Hilton has been the first to enter numerous emerging markets around the globe, and has led the charge on revitalizing communities in need of economic growth and opportunity.



Hilton Travel with Purpose



TRAVEL WITH PURPOSE
2018
Key Milestones
We’re committed to sustainable travel and tourism through the execution of our Travel with Purpose strategy. That’s why in 2018 we launched ambitious new 2030 goals to drive positive social and environmental change on a global scale. Here’s a look at what we accomplished in 2018.



## HILTON IS REDEFINING
SUSTAINABLE TRAVEL

Launched the Hilton 2030 Travel with Purpose goals, committing to doubling investment in social impact and cutting our environmental footprint in half by 2030



Debuted as the first major hotel company to set SCIENCE-BASED CARBON REDUCTION TARGETS approved by the Science-based Targets Initiative



Announced initial investment of USD $1 MILLION TO DRIVE SUSTAINABLE TRAVEL AND TOURISM in Africa



Became first hotel company to COMMIT TO SENDING ZERO SOAP TO LANDFILL

## NAMED INDUSTRY

LEADER on the Dow Jones
Sustainability Index,
North America





RECOGNIZED AS THE MOST
JUST COMPANY in our industry and
America's top 100 Most
JUST companies by Forbes
& JUST Capital

RANKED 2ND on the World's Best Regarded Companies by Forbes



Premiered as the only hospitality company on FORTUNE'S 2018 CHANGE THE WORLD LIST





AWARDED 2018 BEST
CORPORATE STEWARD
by U.S. Chamber of
Commerce Foundation

LEARN MORE ABOUT OUR ACCOMPLISHMENTS AND 2030 GOALS AT CR.HILTON.COM



## DOUBLING INVESTMENT IN SOCIAL IMPACT



Supported the development and launch of global industry goals for youth, water, carbon and human rights in partnership with the International Tourism Partnership



Logged 236,930 Team Member volunteer hours across 93 countries and nearly 5,300 projects during our 2018 Global Week of Service



Impacted over 900,000 young people nearing our pledge to Open Doors for 1 million young people by 2019

Launched 10 campaigns globally through the Hilton Responds Fund, raising over $175,000 to support 100 Team Members who were impacted by natural disasters



Rolled out mandatory antitrafficking training across all brands

Launched Tru by Hilton partnership with Boys & Girls Clubs of America to provide Club teens with the foundation they need to prepare for future careers

Donated over 234 million
Hilton Honors points to support nonprofit
organizations in 2018

Awarded 76 Travel with Purpose
Action Grants, investing $220,000
in local communities



## CUTTING OUR ENVIRONMENTAL FOOTPRINT IN HALF

## ZERO SOAP TO LANDFILL



Diverted more than 1.8 million pounds of soap and plastic bottles from landfills

Distributed more than 9.6 million bars of soap in 127 countries

Built more than 1.2 million hygiene kits for communities in need

Contributed to a 35 percent reduction in the death rate of children under the age of five dying due to hygiene-related illnesses





Launched brand standard to remove plastic straws, stir sticks and cocktail picks from all hotel operations, including franchises, by June 30, 2019

Named a USDA Food Loss and Waste 2030 Champion by the U.S. Department of Agriculture, Environmental Protection Agency and Food and Drug Administration

Activated 2,774 projects at 1,327 global locations during Earth Week 2018

Signed onto the UN Water Action Platform and joined The Climate Group’s Energy Productivity initiative

LEARN MORE ABOUT OUR ACCOMPLISHMENTS AND 2030 GOALS AT CR.HILTON.COM



## STOCKHOLDER
Information



Stock Market Information
Ticker Symbol: HLT
Market Listed and Traded:
NYSE

Corporate Office
Hilton
7930 Jones Branch Drive
McLean, Virginia 22102

+1 703 883 1000
www.hilton.com/corporate

## Investor Relations

7930 Jones Branch Drive
McLean, Virginia 22102

+1 703 883 5476
ir.hilton.com
ir@hilton.com

## Independent Registered
Public Accounting Firm

Ernst & Young LLP
1775 Tysons Boulevard
Tysons, Virginia 22102

+1 703 747 1000
ey.com

## Transfer Agent

EQ Shareowner Services
P.O. Box 64874
St. Paul, Minnesota 55164-0874

+1 800 468 9716
www.shareowneronline.com

## Annual Meeting of Stockholders

May 9, 2019
Dallas, TX

## Board of Directors

## CHRISTOPHER NASSETTA

President, Chief Executive Officer & Director, Hilton

## JONATHAN D. GRAY

Chairman of the Board of Directors, Hilton; President & Chief Operating Officer, Blackstone

## CHARLENE T. BEGLEY

Former Senior Vice President & Chief Information Officer, General Electric; President & Chief Executive Officer of Home and Business Solutions, General Electric

## MELANIE L. HEALEY

Former Group President,
The Procter & Gamble Company

## RAYMOND E. MABUS, JR.

United States Secretary of the Navy
2009-2017; Former Governor of
Mississippi; Former U.S. Ambassador
to the Kingdom of Saudi Arabia

## JUDITH A. MCHALE

President & Chief Executive Officer,
Cane Investments; Former President
& Chief Executive Officer, Discovery
Communications

## JOHN G. SCHREIBER

President of Centaur Capital
Partners; Retired Partner &
Co-Founder, Blackstone
Real Estate Advisors

## ELIZABETH A. SMITH

Executive Chair of the Board of
Directors, Bloomin' Brands

## DOUGLAS M. STEENLAND

Chairman of the Board of Directors,
American International Group &
Travelport Worldwide



## Hilton

ir.hilton.com