Analysis of Reportable Segments
Hilton Worldwide Holdings Inc. operates in 2 segments: Management and franchise and Ownership.
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- Cash Flow Statement
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Geographic Areas
- Price to FCFE (P/FCFE)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2013
- Price to Operating Profit (P/OP) since 2013
- Aggregate Accruals
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Segment Profit Margin
Hilton Worldwide Holdings Inc., profit margin by reportable segment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Management and franchise | |||||
| Ownership |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- Management and Franchise Segment Profit Margin
- The profit margin for the Management and Franchise segment remained stable and consistent at 100% across all reported years from 2019 through 2023. This indicates that within this segment, the company maintained full profitability relative to the measure used.
- Ownership Segment Profit Margin
- The Ownership segment presented significant volatility over the observed period. In 2019, the profit margin was positive at 8.79%. However, in 2020, there was a substantial decline resulting in a negative margin of -47.98%, indicating a considerable loss during that year. The margin improved in 2021 to a negative value of -15.22%, suggesting some recovery though still reflecting a loss. By 2022, the segment returned to profitability with a margin of 5.02%, and continued a modest upward trend to 6.19% in 2023. This trend suggests a recovery trajectory after a sharp downturn in 2020, likely influenced by broader economic or industry-specific challenges during that period.
Segment Profit Margin: Management and franchise
Hilton Worldwide Holdings Inc.; Management and franchise; segment profit margin calculation
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Segment operating income | |||||
| Segment revenues | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Segment profit margin = 100 × Segment operating income ÷ Segment revenues
= 100 × ÷ =
The segment demonstrating the "Management and franchise" category exhibited notable fluctuations and overall growth from 2019 to 2023. Segment revenues and segment operating income, both measured in millions of US dollars, followed an identical pattern throughout the reported periods, indicating a direct correlation between revenues and operating income with a constant profit margin.
- Segment Operating Income and Revenues
- Both segment operating income and revenues started at $2,315 million at the end of 2019. In 2020, there was a significant decline to $1,138 million, reflecting impacted performance possibly due to external factors.
- In 2021, the figures showed recovery to $1,809 million, suggesting improvement in segment activities or market conditions.
- Growth continued more strongly in 2022, reaching $2,619 million, and further increased to $3,055 million by the end of 2023.
- Segment Profit Margin
- The profit margin remained consistently at 100% throughout all years, which indicates that all segment revenues translated directly into operating income without reported operating expenses or that the reported revenue equals operating income according to segment accounting practices. This consistency suggests a stable profitability structure within the segment despite fluctuations in revenue and income amounts.
Overall, the "Management and franchise" segment showed resilience after a sharp drop in 2020, followed by steady recovery and growth in subsequent years. The constant profit margin highlights stable operational efficiency or accounting treatment of this segment's financial results across the analyzed period.
Segment Profit Margin: Ownership
Hilton Worldwide Holdings Inc.; Ownership; segment profit margin calculation
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Segment operating income | |||||
| Segment revenues | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Segment profit margin = 100 × Segment operating income ÷ Segment revenues
= 100 × ÷ =
The financial performance of the ownership segment exhibits significant volatility over the examined five-year period, as evidenced by trends in operating income, revenues, and profit margins.
- Segment Revenues
- Segment revenues experienced a sharp decline from 1,422 million US dollars in 2019 to 421 million US dollars in 2020, reflecting a substantial contraction. This was followed by a gradual recovery in subsequent years: increasing to 598 million in 2021, 1,076 million in 2022, and reaching 1,244 million in 2023. The revenue figures indicate a near return to pre-2020 levels by the end of the period, evidencing a positive growth trajectory after the initial downturn.
- Segment Operating Income
- Operating income shows a similar pattern of fluctuation. Initially, it was positive at 125 million US dollars in 2019 but suffered a marked decrease to a negative 202 million in 2020. The operating losses continued in 2021, albeit at a reduced scale (-91 million). Recovery began in 2022 with a positive operating income of 54 million, improving further to 77 million in 2023. This trend highlights a return to profitability after two years of significant losses.
- Segment Profit Margin
- The profit margin declined sharply from a positive 8.79% in 2019 to a negative 47.98% in 2020. Although still negative, the margin improved to -15.22% in 2021, signaling a reduction in losses relative to revenue. In 2022 and 2023, profitability was restored with margins reaching 5.02% and 6.19%, respectively. The margin trend parallels the operating income recovery and points to improving operational efficiency and cost management.
Overall, the segment experienced a severe downturn in 2020, likely influenced by extraordinary circumstances, followed by a progressive recovery phase. By the conclusion of 2023, the segment demonstrated improved financial health with revenues and profit margins approaching or exceeding pre-2020 levels, indicating regained operational stability and effectiveness in managing business challenges.
Segment revenues
Hilton Worldwide Holdings Inc., segment revenues by reportable segment
US$ in millions
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Management and franchise | |||||
| Ownership | |||||
| Total |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- Management and Franchise Revenues
- The revenues from the Management and Franchise segment exhibit a significant decline from 2019 to 2020, decreasing from 2,315 million US dollars to 1,138 million US dollars. This decline is followed by a steady recovery trend, with revenues increasing to 1,809 million in 2021, then rising more sharply to 2,619 million in 2022, and reaching 3,055 million by the end of 2023. The data suggests a strong rebound after the initial drop, surpassing pre-2019 levels by 2023.
- Ownership Revenues
- Ownership segment revenues also experienced a sharp decline from 1,422 million US dollars in 2019 to 421 million in 2020. Subsequently, these revenues increased gradually, reaching 598 million in 2021, then nearly doubling to 1,076 million in 2022, and further growing to 1,244 million in 2023. Despite the growth trend post-2020, the revenue in 2023 remains below the 2019 peak but shows steady improvement.
- Total Segment Revenues
- The total segment revenues reflect the composite trend observed in the individual segments. A substantial decrease from 3,737 million US dollars in 2019 to 1,559 million in 2020 is evident. This is followed by a progressive recovery, with total revenues climbing to 2,407 million in 2021, then significantly up to 3,695 million in 2022, and further increasing to 4,299 million in 2023. The total revenues in 2023 surpass the levels recorded in 2019, indicating a full recovery and growth beyond the pre-2020 figures.
- Overall Observations
- All segments experienced a pronounced revenue decline in 2020, likely due to adverse external conditions. The data shows a consistent and robust recovery in both Management and Franchise and Ownership revenues from 2021 onwards. The Management and Franchise segment not only recovered but also exceeded the 2019 levels by a significant margin in 2023, while the Ownership segment showed steady gains, nearing but not yet regaining the 2019 peak. The overall total segment revenues surpassed their pre-2020 levels by 2023, suggesting effective strategies and operational recovery in the years following the downturn.
Segment operating income
Hilton Worldwide Holdings Inc., segment operating income by reportable segment
US$ in millions
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Management and franchise | |||||
| Ownership | |||||
| Total |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
The data reveals distinct trends across the three reportable segments over the five-year period from 2019 to 2023.
- Management and franchise segment
- This segment exhibits an initial sharp decline in operating income from US$2,315 million in 2019 to US$1,138 million in 2020, likely reflecting a significant adverse impact during that year. However, a notable recovery begins in 2021, with operating income rising to US$1,809 million, followed by continued growth in 2022 and 2023, reaching US$2,619 million and US$3,055 million respectively. The segment not only recovers but surpasses the 2019 level by 2023, indicating strong operational improvement and possibly favorable market conditions or strategic enhancements.
- Ownership segment
- The ownership segment presents a markedly different pattern, starting from a positive US$125 million in 2019 but declining to negative figures in the subsequent two years, with -US$202 million in 2020 and -US$91 million in 2021. This illustrates considerable challenges or losses during that span. In 2022, the segment turns positive again with US$54 million, continuing a moderate increase to US$77 million in 2023. Though recovery is evident, the segment's operating income remains substantially lower than the initial 2019 level, indicating ongoing fluctuations and potential volatility in this area.
- Total operating income
- The total operating income closely mirrors the trends observed in the combined segments. It declines sharply from US$2,440 million in 2019 to US$936 million in 2020, highlighting the impact of the downturn perceived across segments. Subsequently, there is a consistent recovery upward to US$1,718 million in 2021, then a strong growth trajectory to US$2,673 million in 2022, and finally US$3,132 million in 2023. These figures indicate an overall resurgence exceeding the pre-downturn level by a substantial margin in the final year reported.
In summary, the operating income data reflects a significant contraction in 2020, followed by a steady and robust recovery through 2023. The management and franchise segment demonstrates strong performance and growth post-2020, while the ownership segment's operating income experiences more volatility but improves in the later years. The aggregate result is a pronounced rebound in total operating income, surpassing the initial 2019 level by a wide margin, suggesting effective strategic responses and improving business conditions.