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Hilton Worldwide Holdings Inc. HLT is making significant strides in the luxury hospitality sector with its recent collaboration with Small Luxury Hotels of the World (SLH). The company announced the addition of nearly 400 boutique properties from SLH to Hilton, joining the likes of the latter’s luxury brand portfolio, including Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, LXR Hotels & Resorts and Signia by Hilton.

By integrating SLH properties, Hilton not only broadens its offerings but also attracts a more diverse and discerning clientele. The company emphasized benefits for Hilton Honors members.

The initiative allows members to earn and redeem points at participating SLH properties. Perks such as free WiFi, guaranteed member discounts, room upgrades and continental breakfast (for Gold and Diamond members) and flexibility for Points & Money payment options are made available.

The company stated that the properties will be available on Hilton direct booking channels, including Hilton.com and the Hilton Honors app.

SLH: A Growing Partnership

Since February 2024, Hilton has integrated 390 SLH properties into its portfolio, with more expected as the partnership with Small Luxury Hotels of the World continues to expand. The collaboration represents a major milestone for Hilton, significantly enhancing its luxury offerings and providing guests with unique, localized travel experiences. The inclusion of the SLH collection underscores Hilton’s dedication to delivering exceptional hospitality and unforgettable stays worldwide. The company is optimistic and anticipates the collaboration to drive increased bookings and loyalty program engagement, further strengthening Hilton's brand equity in the competitive hospitality industry.

Price Performance

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Year to date, HLT has gained 18.2% compared with the industry’s 8.7% growth. The company is benefiting from digital initiatives, unit expansion efforts and strategic partnerships and acquisitions. Also, the focus on luxury and lifestyle properties bodes well. With a pipeline of 472,000 rooms and a 45% year-over-year increase in system-wide construction starts, Hilton is poised for continued expansion. Signings in Asia-Pacific, particularly the addition of four new Conrad properties, highlight the increasing demand for Hilton's luxury offerings.

However, potential economic uncertainties in the United States, such as inflation management and broader economic conditions, suggest a cautious stance. Earnings estimates for 2024 have declined in the past 30 days, depicting analysts’ concern regarding the stock’s growth potential.

Zacks Rank & Key Picks

Hilton currently has a Zacks Rank #4 (Sell).

Some better-ranked stocks in the Zacks Consumer Discretionary sector are as follows:

PlayAGS, Inc. AGS sports a Zacks Rank #1 (Strong Buy). AGS has a trailing four-quarter earnings surprise of 33.3%, on average. The stock has appreciated 96% in the past year. You can see the complete list of today’s Zacks Rank #1 stocks here.

The consensus estimate for AGS’s 2024 sales and earnings per share (EPS) suggests growth of 7.7% and 5,200%, respectively, from the year-ago levels.

Adtalem Global Education Inc. ATGE currently carries a Zacks Rank #2 (Buy). ATGE has a trailing four-quarter earnings surprise of 18.8%, on average. The stock has surged 79.8% in the past year.

The Zacks Consensus Estimate for ATGE’s fiscal 2025 sales and EPS indicates an increase of 8.3% and 16.4%, respectively, from year-ago levels.

Royal Caribbean Cruises Ltd. RCL currently carries a Zacks Rank #2. RCL has a trailing four-quarter earnings surprise of 18.3%, on average. The stock has rallied 61% in the past year.

The Zacks Consensus Estimate for RCL’s 2024 sales and EPS calls for growth of 16.9% and 64%, respectively, from the year-ago levels.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.