Initial Public Offerings

Hilton IPO Could Break Records

The Blackstone Group-owned Hilton Worldwide Holdings reportedly plans to raise as much as $2.37 billion in its U.S. initial public offering, one of the year’s largest and the most ever for a hotel company, surpassing even Twitter‘s $2.1 billion IPO last month.

New York Hilton, Midtown

New York Hilton, Midtown

A regulatory filing stated that the company will offer 112.8 million shares, priced between $18 and $21 each, with Hilton offering roughly 64.1 million shares and selling shareholders putting up the balance, according to an Associated Press report, which noted a hotel industry resurgence since sustaining a battering during the recession.   

The hotel industry has turned around as business travel improves and room rates rise with the generally improved economy, no more apparent in New York City, where the extent of development has in many cases exceeded expectations.

Occupancy rates in the city remain among the highest in the nation, bolstered by Midtown and Times Square, even with a significant uptick in product (i.e. the number of hotel rooms), and it all happens despite the fact that hotels continue to charge the highest room rates in the country.

The city logged another record-breaking year for tourism in 2012, with 52 million visitors (41 million domestic and 11 million international), according to city data; and occupancy rates, which hovered around 83.7 percent, were second only to those on the Hawaiian island of Oahu, according to data from Smith Travel Research, as reported previously in The Commercial Observer.  

Hilton has 4,080 hotels, resorts and timeshare properties. Its brands include Hilton Hotels & Resorts, Waldorf Astoria Hotels & Resorts, and Hampton Inn. The properties range from full-service hotels to luxury resorts and a timeshare brand.

Blackstone purchased the hotel chain in October 2007 for $20 billion and would retain a majority of the voting power of shares eligible to vote in the election of board members. 

Among the top grossing IPOs so far this year are oil and gas pipeline company Plains GP Holdings LP, which raised $2.9 billion in October and Pfizer spinoff Zoetis, which raised $2.6 billion in January.

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