David Eisen

```html 🏨 ``` Hilton achieved a record net unit growth of 7.3% in 2024, adding nearly 100,000 rooms. In Q4 alone, the company added 22,600 rooms, reaching a full-year total of 98,400 room openings across 973 hotels. Their development pipeline reached 498,600 rooms, marking an 8% YOY growth. The fourth quarter's net income was $505 million, with RevPAR increasing by 3.5% for the quarter and 2.7% for the full year. Hilton's luxury and lifestyle pipeline is nearly double its current supply, and recently, it added 400 luxury hotels through a partnership and aims to double its lifestyle segment presence in four years. Hilton also expanded internationally, debuting brands in new countries and signing an agreement to open 150 Spark by Hilton hotels in India.

📌 At the Americas Lodging Investment Summit, held at the JW Marriott LA Live in Los Angeles, lodging company executives discussed the impact of political factors like tariffs, taxes, and President Trump's policies on their decision-making. Aimbridge Hospitality's Craig Smith and Marriott International's Tony Capuano emphasized the need for stability and economic vitality for business growth. Hilton's Chris Nassetta expressed optimism that Trump's focus on immigration, taxes, and deregulation would benefit the hospitality industry. Immigration reform was a focal point, with illegal immigration levels reportedly three times higher in the past four years than under previous presidents, drawing comments from InterContinental Hotels Group's Elie Maalouf. Investment in the hotel sector was also a key topic; JLL predicts a 15% to 25% increase in global hotel investment volume in 2025, based on the relatively low $57.4 billion in 2024, the third-lowest since 2012. Expectations are for private equity to play a significant role in hotel asset purchases in 2025. Additionally, executives discussed the trend towards brand conversions, especially in Europe, where nearly half of hotels are unbranded, and the potential for further industry consolidation and adjacent market expansion. Diversity and inclusion (DEI) efforts were affirmed by CEOs amid discussions on Trump's approach to DEI at the government level.

🏨 Global hotel brands are utilizing key money—a payment not exceeding 5% of total deal cost—to secure hotel management or franchise agreements. Marriott uses key money in about 33% of deals, while Hilton does so for roughly 9%. Sonesta International Hotels, managing 1,100 hotels, employs key money to stimulate growth and compete for conversions. The trend has surged in the past 24 months due to higher construction costs, supply-chain issues, and inflation. Choice Hotels spent 21% of gross fees on key money in 2023, and Wyndham's spending represented 9% of their gross fees. Key money can also be a defensive strategy to maintain marquee assets. Despite its benefits, some owners and operators, like Stonebridge Companies, view key money critically, preferring performance-based relationships without the strings attached.

💰 Aimbridge Hospitality, the world's largest third-party management company, has agreed to convert over $1.1 billion in debt into equity and inject $100 million in new capital. This deal will reduce Aimbridge’s debt from $1.3 billion to a maximum of $210 million. First- and second-lien lenders have shown "overwhelming support," with first-lien lenders becoming majority owners. Although not explicitly stated, the Restructuring Support Agreement (RSA) often precedes Chapter 11 bankruptcy proceedings. Aimbridge, under CEO Craig Smith, aims to strengthen its balance sheet and continue investing in operations, targeting improvements and industry leadership. The company manages over 1,000 hotels in more than 20 countries and has recently reshaped its operational structure for greater efficiency.