Item 1. Business
Item 1. Business
Overview
Hilton is one of the largest hospitality companies in the world, with 7,530 properties comprising 1,182,937 rooms in 126 countries and territories as of December 31, 2023. Founded in 1919, Hilton has been an innovator in the industry for more than 100 years, driven by the vision of founder Conrad Hilton "to fill the earth with the light and warmth of hospitality." Our premier brand portfolio includes luxury, lifestyle, full service, focused service and all-suites hotel brands, as well as our timeshare brands. As of December 31, 2023, we had 180 million members in our award-winning guest loyalty program, Hilton Honors, a 19 percent increase from December 31, 2022; refer to "—Our Brand Portfolio" and "—Our Guest Loyalty Program" below for additional information on our brands, including Hilton Honors.
We operate our business through: (i) a management and franchise segment and (ii) an ownership segment, each of which is reported as a segment based on (a) delivering a similar set of products and services and (b) being managed separately given its distinct economic characteristics. The management and franchise segment includes all of the hotels we manage for third-party owners, as well as all franchised hotels that license our intellectual property ("IP"), including our brand names, trademarks and service marks, and to which we provide other contracted services, but the day-to-day services of the hotels are operated or managed by someone other than us. Revenues from this segment include: (i) management and franchise fees charged to third-party hotel owners; (ii) licensing fees from our strategic partners, including co-branded credit card providers, and HGV; and (iii) fees for managing hotels in our ownership segment. The ownership segment primarily derives revenues from nightly hotel room sales, food and beverage sales and other services at our consolidated owned and leased hotels. For more information regarding our segments, refer to "—Our Business—Management and Franchise" and "—Our Business—Ownership" below.
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In addition to our current hotel portfolio, we are focused on the growth of our business by expanding our global hotel network through our development pipeline, which represents hotels that we expect to add to our system in the future. The following table summarizes our development activity:
As of or for the Year Ended December 31, 2023
Hotels Rooms (1)
Hotel system
Openings
395 62,900
Net additions (2)
353 53,100
Development pipeline
Additions
994 130,200
Count as of period end (3)(4)
3,274 462,400
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(1) Rounded to the nearest hundred.
(2) Represents room additions, net of rooms removed from our system. Net unit growth for the year ended December 31, 2023 was 4.9 percent.
(3) The hotels in our development pipeline were under development throughout 118 countries and territories, including 30 countries and territories where we had no existing hotels.
(4) Of the total rooms in our development pipeline, 216,600 were under construction and 259,800 were located outside of the U.S. Nearly all of the rooms in our development pipeline will be in our management and franchise segment upon opening. We do not consider any individual development project to be material to us.
We continue to drive customer loyalty, including participation in our Hilton Honors guest loyalty program, through: (i) our experience in the hospitality industry, which spans more than a century of customer service and entrepreneurship, and continues to evolve to meet the tastes, preferences and demands of our guests; (ii) our strong, well-defined brands that operate throughout the hospitality industry chain scales; (iii) our diverse, inclusive workforce, built to focus on providing exceptional customer experiences; and (iv) our commercial service offerings. We believe that satisfied customers will generate additional business at our properties, yielding strong overall hotel performance for us and our hotel owners. Strong results at our existing properties will encourage further development of additional hotels under our brands and conversions of existing hotels to our brands with both (i) owners who currently have properties in our system and (ii) new owners who sign management or franchise contracts with us in the future, which further supports our growth and future financial performance. We believe that our existing hotel system and development pipeline, which will require minimal capital investment from us, positions us to further improve and grow our business, allocate capital effectively and meet our customers' demands and preferences in the future.
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Our Brand Portfolio
The goal of each of our brands is to deliver exceptional customer experiences and superior operating performance.
December 31, 2023 (1)
Brand (1)
Countries/ Territories Properties Rooms Percentage of Total Rooms Selected Competitors (2)
17 35 9,840 0.8% Four Seasons, Mandarin Oriental, Peninsula, Ritz-Carlton,
Rosewood Hotels & Resorts, St. Regis
9 13 1,774 0.1% Leading Hotels of the World,
Legend Preferred Hotels & Resorts,
Belmond, The Luxury Collection
23 47 16,950 1.5% Intercontinental,
JW Marriott, Park Hyatt, Sofitel
11 40 6,940 0.6% Kimpton, Thompson Hotels, W Hotels, Virgin Hotels,
The Hoxton
1 3 1,700 0.1% JW Marriott, Grand Hyatt, Fairmont, Intercontinental, Omni
97 613 226,015 19.1% Hyatt Regency, Marriott,
Omni, Sheraton, Westin
38 161 31,000 2.6% Autograph Collection, The Unbound Collection, Independent Hotels, MGallery, Kimpton
55 677 154,708 13.1% Marriott, Crowne Plaza, Delta, Holiday Inn, Radisson, Sheraton, Wyndham
16 125 14,719 1.2% Joie de Vivre, Tribute Portfolio, Graduate Hotels, Kimpton, Hotel Indigo, Ascend, Trademark
7 267 61,844 5.2% Hyatt Regency, Marriott, Sheraton, Westin
1 1 661 0.1% AC Hotels, Aloft Hotels, Cambria, Hotel Indigo, Hyatt Centric
3 6 1,494 0.1% CitizenM, Generator,
The Hoxton, Moxy, Yotel, MAMA Shelter, POD, TRIBE Hotels, Ace Hotels
62 1,010 149,130 12.6% Aloft, Courtyard by Marriott, Four Points, Holiday Inn, Hyatt Place
38 2,971 327,690 27.7% Comfort Suites, Courtyard by Marriott,
Fairfield Inn, Holiday Inn Express, Springhill Suites
4 253 24,755 2.1% Best Western, Comfort Inn, La Quinta, Sleep Inn, Wingate, Avid
1 8 915 0.1% Quality Inn, Baymont, Travelodge, Howard Johnson, Super 8, Days Inn
4 538 61,624 5.2% Element, Hyatt House, Residence Inn, Staybridge Suites
3 652 70,436 6.0% TownePlace Suites, Candlewood Suites, Hyatt Studios
— — — —% Candlewood Suites, Everhome Suites, Stay Apt Suites, ECHO Suites, Extended Stay America Premiere Suites
8 92 16,109 1.4% Disney Vacation Club, Holiday Inn Club Vacations,
Marriott Vacations Worldwide,
Travel & Leisure Co.
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(1) Excludes 18 unbranded properties with 4,633 rooms, representing approximately 0.4 percent of total rooms. Hilton Grand Vacations is inclusive of Hilton Club, Hilton Grand Vacations Club and Hilton Vacation Club.
(2) These selected competitors exclude lesser-known regional competitors.
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Waldorf Astoria Hotels & Resorts : Waldorf Astoria Hotels & Resorts is a luxury brand with an award-winning portfolio of iconic properties with a relentless commitment to elegant service, one-of-a-kind experiences and award winning culinary expertise in landmark destinations around the world. Waldorf Astoria hotels deliver an effortless experience seamlessly, creating a true sense of place for guests through stunning architecture, Peacock Alley luxury bedding, refined art collections, Michelin-starred dining concepts and elevated in-room amenities.
LXR Hotels & Resorts: LXR Hotels & Resorts is a hand-picked collection of independent and spirited luxury properties located on five continents celebrating the timeless pursuit of personal adventure. Found in alluring destinations and city centers, LXR connects legendary properties into an exclusive network of hotels that are set apart by individual design, an unrivaled commitment to personalized service and elegant, yet locally immersive, experiences for guests.
Conrad Hotels & Resorts : A luxury brand that spans five continents, Conrad Hotels & Resorts creates a seamless connection between bold design, impactful experiences and curated contemporary art to inspire the conscientious traveler. Found in major urban centers and resort destinations, Conrad is a place where guests are empowered to explore through intuitive service and experiences that authentically connect them with local culture.
Canopy by Hilton: Canopy by Hilton is an upper upscale brand that delivers elevated, boutique hotel experiences that celebrate the best of the neighborhood. Inviting, sophisticated design, bespoke food and beverage and crafted touchpoints deliver a locally inspired, high-end and welcoming stay.
Signia by Hilton: Signia by Hilton is a an upper upscale brand with a portfolio of exceptional hotels in gateway cities and resort destinations around the world. Each Signia by Hilton property infuses sophistication into every stay, offering top tier meetings and event spaces, a vibrant atmosphere, exceptional amenities and personalized service catering to the needs of today's global traveler.
Hilton Hotels & Resorts : For more than 100 years, Hilton Hotels & Resorts, Hilton’s flagship brand and one of the most globally recognized hotel brands, has set the benchmark for hospitality around the world, providing new product innovations and services to meet guests' evolving needs. With hotels on six continents, Hilton Hotels & Resorts properties are located in sought-after destinations and offer exceptional travel experiences to every guest. Hilton Hotels & Resorts are upper upscale, full service properties that feature advanced meeting and event spaces and services, award-winning restaurants and mindful fitness and wellness facilities.
Curio Collection by Hilton : Curio Collection by Hilton is an upper upscale brand with a global portfolio of individually remarkable hotels hand-picked to immerse guests in one-of-a-kind moments in sought-after destinations. Each hotel in the Curio Collection evokes a bespoke story through distinctive architecture and design, world-class food and beverage and curated experiences.
DoubleTree by Hilton : DoubleTree by Hilton is a global portfolio of upscale hotels. For more than 50 years, DoubleTree by Hilton has maintained its philosophy of making guests feel welcome through contemporary accommodations and thoughtful amenities, including diverse food and beverage experiences, state-of-the-art fitness offerings and meetings and event spaces. Whether traveling for business or leisure, every guest is welcomed with the signature, warm DoubleTree chocolate chip cookie at check in, a hallmark of the brand's hospitable service.
Tapestry Collection by Hilton : Tapestry Collection by Hilton is an upper upscale brand with a portfolio of original hotels that offer guests unique style and vibrant personality, encouraging travelers to connect to their destination and enjoy authentic off-the-beaten-path experiences. While each property is unique, every Tapestry Collection by Hilton property is united by the reliability that comes with the Hilton name.
Embassy Suites by Hilton : Embassy Suites by Hilton offers an approachable, upper upscale experience with dedicated customer service that anticipates travelers' needs and delivers what matters most to them. The full service, upper upscale brand offers both leisure and business travelers spacious two-room suites with separate bedroom and living room space, free made-to-order breakfast each morning, complimentary drinks and snacks at an evening reception every night, flexible meetings and events spaces and 24-hour fitness centers.
Tempo by Hilton: Tempo by Hilton is an upscale, stylish and contemporary lifestyle hotel brand designed for the ambitious traveler looking to maintain a sense of balance and momentum. Tempo by Hilton offers re-imagined guest rooms designed with well-being in mind, dynamic communal spaces for collaboration or focused work, healthy cafe-style dining, a leading-edge beverage program and next-level fitness facilities.
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Motto by Hilton : Motto by Hilton is an upper midscale brand with an urban, lifestyle feel designed to help guests live like a local in prime locations globally. Motto by Hilton caters to travelers looking for dynamic experiences by bringing together the best elements of a lifestyle hotel — cleverly compact guestrooms, centrally located destinations, modern design, and locally inspired food and beverage to make each hotel a launchpad to the city. Motto by Hilton delivers a flexible and innovative hospitality experience through elements like first-of-its-kind connecting rooms for up to nine rooms, lively communal spaces and a coffee house and bar for work and social use by guests and locals alike.
Hilton Garden Inn : Hilton Garden Inn is an award-winning, upscale brand where guests find an open, inviting atmosphere with warm, glowing service and simple, thoughtful touches that allow them to socialize and unwind. As a recognized leader in food and beverage offerings, Hilton Garden Inn caters to guests' dining needs by serving cooked-to-order breakfast and offering handcrafted cocktails, shareable small plates and full meals at its on-site restaurants and bars. Flexible meeting space, free Wi-Fi, wireless printing and fitness centers are offered to help guests stay productive.
Hampton by Hilton : Hampton by Hilton is our largest brand and includes both Hampton Inn and Hampton Inn & Suites hotels, with properties located on four continents. Recognized as a leading upper midscale brand in the lodging industry, Hampton has been ranked the #1 lodging brand to franchise by Entrepreneur for 15 consecutive years. Hampton by Hilton hotels around the world provide guests high-quality and thoughtfully designed accommodations, friendly and authentic service and value-added amenities, like complimentary hot breakfast and free Wi-Fi, all backed by the 100% Hampton Guarantee.
Tru by Hilton: Tru by Hilton is a game-changing, midscale hotel brand where guests don't have to compromise between a consistent, fun and affordable hotel stay. Spirited, simplified and grounded in value, Tru by Hilton is designed for cross-generational appeal, with a large, reimagined public space where guests can work, play, lounge and eat. Efficiently designed modern guest rooms feature a rolling desk, oversized windows for natural light and bright, spacious bathrooms. Guests can enjoy complimentary amenities, including a build-your-own breakfast, a multifunctional fitness center and fast Wi-Fi. Premium snacks, light meal options and single-serve wine and beer are available for purchase at the 24/7 Eat. & Sip. market.
Spark by Hilton: Spark by Hilton is a premium economy hotel brand at the intersection of value and consistency. Spark by Hilton provides a reliable and comfortable stay at a hotel with friendly service for every guest, all at an accessible price. Offering simple design with splashes of color and cheer, Spark by Hilton hotels provide a welcoming sense of arrival with colorful exterior statement walls and inspiring artwork. The public spaces provide multi-functional seating, from communal tables to rocking chairs, and guest rooms are comfortable and relaxing with simple, streamlined furniture. Travelers can enjoy complimentary breakfast with premium coffee and a signature bagel bar. Spark by Hilton opened its first hotel in 2023, less than one year after its launch, and, as of December 31, 2023, had over 140 properties in our development pipeline.
Homewood Suites by Hilton : Homewood Suites by Hilton is an upscale, award-winning, all-suites, extended-stay hotel brand that delivers the comforts of home. This brand offers inviting, generous-sized suites featuring separate living and sleeping areas and fully equipped kitchens with full-size refrigerators for guests seeking home-like accommodations when traveling for extended or quick overnight stays. Additional value-driven amenities include complimentary Wi-Fi and free breakfast.
Home2 Suites by Hilton : Home2 Suites by Hilton is an upper midscale, all-suites, award-winning extended-stay hotel concept offering stylish accommodations with flexible guest room configurations and home-like amenities for cost-conscious guests. With a commitment to environmentally friendly products and hotel operations, Home2 Suites by Hilton offers complimentary hotel breakfast, innovative and customizable guestroom designs, laundry and fitness areas, free Wi-Fi, multiple outdoor spaces, expansive community spaces and pet-friendly environments.
LivSmart Studios by Hilton: LivSmart Studios by Hilton is a midscale, long-stay hotel brand for guests looking for comfortable apartment-style accommodations for 20 nights or more. Offering simplicity, consistency and convenience, LivSmart Studios by Hilton will create a space where guests can seamlessly maintain their daily routines while also immersing themselves in the local community. The hotel will feature a streamlined public area filled with natural light that includes a simple retail market, a large guest laundry room and a state-of-the-art fitness center. There will also be a spacious outdoor gathering area, which includes a fire pit, grills, and comfortable seating for guests looking to connect. Guest studio suites will include a fully equipped kitchen with a full-sized refrigerator, dishwasher, microwave and two-burner cooktop, along with ample storage options for the long-stay traveler.
Hilton Grand Vacations : Our timeshare brands, including Hilton Club, Hilton Grand Vacations Club and Hilton Vacation Club, are premier vacation ownership brands known for delivering a consistently exceptional standard of service, maximum flexibility for members and guests and elegant, family-friendly resorts in desirable locations around the world. Signature elements include spacious, well-appointed accommodations and resorts with extensive on-site amenities. A special points-based
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reservation system gives owners the flexibility to vacation when, where and how they prefer. HGV has the exclusive right to use our timeshare brands, subject to the terms of a long-term license agreement with us.
Our Guest Loyalty Program
Hilton Honors is our award-winning guest loyalty program that supports our portfolio of brands. The program generates significant repeat business by rewarding guests with points for each stay at our properties, which are then redeemable for free or discounted room nights at our properties and other goods and services. Hilton Honors members can also use points earned to transact with many strategic partners, including credit card providers, such as American Express, airlines, rail and car rental companies, Amazon, Lyft and others. Hilton Honors members who book through preferred Hilton channels also have access to instant benefits, including a flexible payment slider that allows members to choose nearly any combination of points and money to book a stay, an exclusive member discount and free standard Wi-Fi. Members also have access to contactless technology exclusively through the Hilton Honors app, where members can check in, choose their room and access their room using Digital Key. The program provides targeted marketing, promotions and customized guest experiences to 180 million members. Affiliation with our loyalty program encourages members to allocate more of their travel spend to our hotels. The percentage of travel spend we capture from loyalty members increases as they move up the tiers of our program. The program is funded by contributions from eligible revenues generated by Hilton Honors members and collected from properties in our system, as well as our strategic partnerships. The funds collected by the Hilton Honors program are subsequently applied to reimburse hotels and strategic partners for Hilton Honors points redemptions by loyalty members and to pay for administrative expenses and marketing initiatives that support the program.
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Our Business
As of December 31, 2023, our existing system included the following properties and rooms, by type, brand and region:
Owned / Leased (1)
Managed Franchised Total
Properties Rooms Properties Rooms Properties Rooms Properties Rooms
Waldorf Astoria Hotels & Resorts
U.S. — — 12 4,598 — — 12 4,598
Americas (excluding U.S.) — — 3 422 — — 3 422
Europe 2 463 4 898 — — 6 1,361
Middle East and Africa — — 8 2,200 — — 8 2,200
Asia Pacific — — 6 1,259 — — 6 1,259
LXR Hotels & Resorts
U.S. — — — — 3 522 3 522
Americas (excluding U.S.) — — — — 1 76 1 76
Europe — — 1 70 1 307 2 377
Middle East and Africa — — 2 331 3 282 5 613
Asia Pacific — — 1 72 1 114 2 186
Conrad Hotels & Resorts
U.S. — — 6 2,227 2 1,730 8 3,957
Americas (excluding U.S.) — — 3 787 — — 3 787
Europe — — 4 1,155 1 107 5 1,262
Middle East and Africa 1 614 4 1,689 — — 5 2,303
Asia Pacific 1 164 24 7,818 1 659 26 8,641
Canopy by Hilton
U.S. — — — — 26 4,490 26 4,490
Americas (excluding U.S.) — — 2 272 1 184 3 456
Europe — — 1 123 5 1,058 6 1,181
Middle East and Africa — — 1 200 — — 1 200
Asia Pacific — — 4 613 — — 4 613
Signia by Hilton
U.S. — — 3 1,700 — — 3 1,700
Hilton Hotels & Resorts
U.S. — — 59 44,970 187 58,623 246 103,593
Americas (excluding U.S.) 1 405 31 11,749 25 7,238 57 19,392
Europe 37 11,141 43 14,792 46 11,984 126 37,917
Middle East and Africa 4 1,705 39 13,386 6 2,096 49 17,187
Asia Pacific 5 2,999 119 40,705 11 4,222 135 47,926
Curio Collection by Hilton
U.S. — — 11 4,984 68 13,683 79 18,667
Americas (excluding U.S.) — — 2 99 20 2,870 22 2,969
Europe — — 6 516 36 4,941 42 5,457
Middle East and Africa — — 5 1,104 3 912 8 2,016
Asia Pacific — — 6 1,153 4 738 10 1,891
DoubleTree by Hilton
U.S. — — 31 10,105 354 80,206 385 90,311
Americas (excluding U.S.) — — 3 587 38 7,695 41 8,282
Europe — — 17 4,211 109 19,161 126 23,372
Middle East and Africa — — 19 5,225 6 1,118 25 6,343
Asia Pacific — — 90 24,050 10 2,350 100 26,400
Tapestry Collection by Hilton
U.S. — — 1 124 99 12,088 100 12,212
Americas (excluding U.S.) — — 1 138 9 1,122 10 1,260
Europe — — — — 11 640 11 640
Middle East and Africa — — 1 50 — — 1 50
Asia Pacific — — 2 382 1 175 3 557
(continued on next page)
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Owned / Leased (1)
Managed Franchised Total
Properties Rooms Properties Rooms Properties Rooms Properties Rooms
Embassy Suites by Hilton
U.S. — — 37 9,943 220 49,417 257 59,360
Americas (excluding U.S.) — — 2 504 7 1,829 9 2,333
Middle East and Africa — — — — 1 151 1 151
Tempo by Hilton
U.S. — — 1 661 — — 1 661
Motto by Hilton
U.S. — — — — 4 1,271 4 1,271
Americas (excluding U.S.) — — — — 1 115 1 115
Europe — — — — 1 108 1 108
Hilton Garden Inn
U.S. — — 5 602 741 102,153 746 102,755
Americas (excluding U.S.) — — 13 1,968 56 8,506 69 10,474
Europe — — 13 2,533 74 11,598 87 14,131
Middle East and Africa — — 17 3,555 4 648 21 4,203
Asia Pacific — — 69 14,535 18 3,032 87 17,567
Hampton by Hilton
U.S. — — 17 2,296 2,343 232,636 2,360 234,932
Americas (excluding U.S.) — — 11 1,442 123 14,896 134 16,338
Europe — — 19 3,181 114 17,951 133 21,132
Middle East and Africa — — 5 1,459 — — 5 1,459
Asia Pacific — — — — 339 53,829 339 53,829
Tru by Hilton
U.S. — — — — 248 24,181 248 24,181
Americas (excluding U.S.) — — — — 5 574 5 574
Spark by Hilton
U.S. — — — — 8 915 8 915
Homewood Suites by Hilton
U.S. — — 8 999 503 57,531 511 58,530
Americas (excluding U.S.) — — 3 406 24 2,688 27 3,094
Home2 Suites by Hilton
U.S. — — 2 210 593 62,269 595 62,479
Americas (excluding U.S.) — — — — 10 1,041 10 1,041
Asia Pacific — — — — 47 6,916 47 6,916
Other — — 3 1,414 15 3,219 18 4,633
Total hotels 51 17,491 800 250,472 6,587 898,865 7,438 1,166,828
Hilton Grand Vacations (2)
— — — — 92 16,109 92 16,109
Total system 51 17,491 800 250,472 6,679 914,974 7,530 1,182,937
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(1) Includes hotels owned or leased by entities in which we own a noncontrolling financial interest.
(2) Includes properties under our timeshare brands including Hilton Club, Hilton Grand Vacations Club and Hilton Vacation Club.
Management and Franchise
We manage hotels and license our brands through our management and franchise segment. This segment generates its revenue primarily from fees charged to hotel owners under management and franchise contracts, as well as from fees associated with license agreements. We grow our management and franchise business by attracting owners to become a part of our system and participate in our commercial services to support their properties. Our management and franchise contracts provide significant return on investment for us as we earn and collect fees.
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Hotel Management
Our core management services consist of operating hotels under management contracts for the benefit of third parties who either own or lease the hotels and the associated personal property. Often, particularly in the U.S., we employ the individuals working at these locations. Terms of our management contracts vary, but our fees generally consist of a base management fee, which is generally based on a percentage of the hotel’s monthly gross operating revenue, and, when applicable, an incentive management fee, which is generally based on a percentage of the hotel's operating profits, normally over a one calendar year period, and, in some cases, may be subject to a stated return threshold to the hotel owner. In general, the owner pays all operating and other expenses and reimburses any of our out-of-pocket expenses. In turn, our managerial discretion typically is subject to approval by the owner in certain major areas, including the approval of annual operating and capital expenditure budgets and the appointment of certain key personnel. Additionally, the owners generally pay monthly program fees based on the underlying hotel's sales or usage, as reimbursement for the costs related to our: (i) advertising and marketing programs; (ii) internet, technology and reservation systems; and (iii) quality assurance programs. Owners are also responsible for various other fees and charges, including payments for participation in our Hilton Honors guest loyalty program, training, consultation and procurement of certain goods and services. As of December 31, 2023, we m anaged 800 hotels with 250,472 r ooms, which does not include hotels in our ownership segment.
The initial terms of our management contracts are typically 20 to 30 years. In certain cases, we are both the franchisor and manager of the hotel, when we enter into a franchise contract in addition to the management contract, and, in these cases, we classify the hotel as managed in our system. Extension options for our management contracts are negotiated and vary, but typically are more prevalent in full service hotels. Generally, these contracts contain one or two extension options that are for either five or 10 years and can be exercised at our or the hotel owner's option or by mutual agreement, as specified by the contract.
Some of our management contracts provide early termination rights to hotel owners upon certain events, including the failure to meet certain financial or performance criteria. Performance test measures typically are based upon the hotel’s performance individually and/or in comparison to specified competitive hotels. We often have an optional cure right to pay an amount equal to the performance shortfall over a specified period, although in some cases our cure rights are limited.
Franchising
We license our IP, including our brand names, trademarks and service marks, and our operating systems to hotel owners under franchise contracts. We do not own, manage or operate franchised properties, do not employ the individuals working at these properties and do not have any legal responsibility for the employees or the liabilities associated with operating these properties. We conduct periodic inspections of our franchised hotels to ensure that brand standards that we establish are maintained. For newly franchised hotels, including both new construction and conversions of existing hotels outside of our system, we approve the location, as well as the plans for the facilities, to ensure the hotels meet our brand standards. For existing franchised hotels, we provide franchisees with property improvement plans that must be completed to keep the hotels in compliance with our brand standards, so that they can remain in our hotel system.
Each franchisee pays us an application, initiation or other fee in conjunction with the inception of a franchise contract. Franchisees also pay a royalty fee, generally based on a percentage of the hotel’s monthly gross room revenue and, in some cases, may also include a percentage of gross food and beverage revenues and other revenues, as applicable. Additionally, franchised properties generally pay monthly program fees based on the underlying property's sales or usage, as reimbursement for the costs related to our: (i) advertising and marketing programs; (ii) internet, technology and reservation systems; and (iii) quality assurance programs. They are also responsible for various other fees and charges, including payments for participation in our Hilton Honors guest loyalty program, training, consultation and procurement of certain goods and services. We also earn license fees from license agreements with strategic partners, including co-branded credit card providers, and HGV. As of December 31, 2023, we franchised 6,679 hotels and resorts, including timeshare properties, with 914,974 rooms.
Our franchise contracts typically have initial terms of approximately 20 years for new hotels and approximately 10 to 20 years for hotels converting from hotels outside of our system. At the expiration of the initial term, we may have a contractual right or obligation to relicense the hotel to the franchisee for an additional term generally ranging from 10 to 15 years. We have the right to terminate a franchise contract upon specified events of default, including nonpayment of fees or noncompliance with brand standards. If a franchise contract is terminated by us because of a franchisee’s default, the franchisee is contractually required to pay us liquidated damages.
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Ownership
As a hotel owner and lessee, we focus on maximizing cost efficiency and profitability of the portfolio by, among other things, maximizing hotel revenues, implementing cost-effective labor management practices and systems and reducing fixed costs. Through our disciplined approach to hotel and asset management, we develop and execute on strategic plans for each of our hotels to enhance their competitive position and we invest in renovating guest rooms and public spaces and adding or enhancing meeting and retail space for properties where we believe such investments will improve profitability. As of December 31, 2023, the ownership segment included 51 hotels totaling 17,491 rooms, comprising 44 hotels that we leased, two hotels that were each leased by a consolidated variable interest entity ("VIE") and five hotels owned or leased by unconsolidated affiliates.
Environmental, Social and Governance
Hilton strives to create long-term value for all of our stakeholders and strengthen the resilience of our business while also advancing responsible travel and tourism globally through our ESG strategy, which is grounded in our Travel with Purpose goals. As one of the world’s largest hospitality companies, Hilton recognizes its responsibility to create positive environmental and social impact across our operations, supply chain and communities to ensure our hotel properties and surrounding communities remain vibrant and resilient for generations of travelers to come.
We continue to make progress towards our Travel With Purpose 2030 Goals, including: (i) environmental — aiming toward a net zero future with well-defined targets for watts (carbon and energy), water and waste; (ii) social — supporting and advancing careers, communities and responsible conduct; and (iii) governance — advancing and measuring our goals with a focus on integrity and transparency through our company policies and reporting mechanisms, our external partnerships and our public affairs work. Hilton was named to both the World and North America Dow Jones Sustainability Indices ("DJSI") for the seventh consecutive year and was recognized by IR Magazine with “Best ESG Reporting – Large Cap” in 2023 and earned a 2022 “Gold Medal” sustainability rating from EcoVadis, reflecting third-party recognition of Hilton's ESG efforts.
Our 2030 Goals align with the global Sustainable Development Goals ("SDGs") adopted by the United Nations in 2015 and are guided by our evaluation of the social and environmental issues that are critical to the long-term success of our business. Further, our ESG efforts are supported by a governance structure that is designed to ensure the objectives are an important part of our business and strategic priorities as we work towards our 2030 Goals. Our executive committee receives at least quarterly updates on our ESG programs and progress on our 2030 Goals. The Nominating & ESG Committee, one of the three standing committees of Hilton's board of directors, also receives quarterly reports on this progress, reviews and assesses our related strategy and makes recommendations to the board and management as appropriate. The board of directors also receives annual updates on progress towards our 2030 Goals.
We engage with stakeholders to help align our ESG programs with the issues that matter the most to them in the context of our business. As part of this effort, we have completed an ESG materiality assessment, leveraging guidance from the Global Reporting Initiative ("GRI"), Sustainability Accounting Standards Board ("SASB") and the World Economic Forum. We determined that our stakeholders were most focused on climate action; employee development and well-being; an inclusive culture; employee and guest health, safety and security; human rights; and ethical business practices and regulatory compliance. These are topics aligned with our significant ESG risks, which are integrated in Hilton’s Enterprise Risk Management program and are reviewed by our executive committee and board of directors, including the Audit Committee, to inform enterprise-wide strategic planning.
LightStay, our proprietary and award-winning ESG management system, aligns with the criteria of the Global Sustainable Tourism Council ("GSTC") and is used to measure, manage and report many of Hilton's key environmental and social performance metrics, including, carbon emissions, energy, water, waste, volunteer hours, in-kind donations and efficiency projects. It provides owners with visibility into utility performance and allows Hilton to analyze and report collective progress toward achieving our 2030 Goals while delivering meaningful data and reporting to our customers.
The Hilton Global Foundation supports nonprofits and local community organizations that serve as partners to amplify our positive environmental and social impact around the world. The Hilton Global Foundation is our primary international philanthropic arm and is registered as a U.S.-based 501(c)(3) charitable organization.
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Environmental Impact
We remain committed to reducing greenhouse gas emissions in line with climate science. Hilton was the first global hospitality company to set science-based targets in 2018 that were validated by the Science Based Targets initiative ("SBTi"), in our effort to reduce carbon emissions in line with the goals outlined in the Paris Climate Agreement. As climate science has continued to evolve, we reevaluated our environmental impact 2030 Goals and set more ambitious targets in 2022. In 2022, SBTi verified our near-term targets (1.5°C by 2030) to cut carbon emissions intensity of our managed hotel portfolio by 75 percent and of our franchised hotel portfolio by 56 percent, with 2008 as our baseline. We continue to work toward our 2030 Goal of reducing water and waste intensity at the hotels we operate, including those that are owned, leased and managed, by 50 percent, with 2008 as our baseline. To achieve our reduction targets, in 2022, we partnered with a global leader in the field of sustainability and energy procurement to help map out a phased implementation strategy to help us make informed decisions and chart a path to achieving our energy reduction goals. To further strengthen our commitment to climate action, we have invested in two Fifth Wall Climate Technology Funds to accelerate the adoption of innovative decarbonization technologies. Although we believe that our environmental impact 2030 Goals are ambitious yet attainable, there can be no assurance that we will be able to meet them. As climate science continues to evolve we may further refine our environmental impact 2030 Goals. We evaluate our climate change risks and report annually on our progress, with our reporting prepared in accordance with the GRI standards, while integrating the recommendations of the SASB and the Task Force on Climate-related Financial Disclosures ("TCFD").
In 2023, we continued to make steady progress towards our 2030 Goals by engaging in partnerships and creating resources that will help facilitate sustainable development and meeting our customers evolving needs, including, but not limited to: (i) announcing our plans to install up to 20,000 Tesla Universal Wall Connectors at 2,000 hotels beginning in 2024 across North America; (ii) launching an LED lighting program in line with our LED global brand standard, to help make the transition to LED lighting easier and more cost-effective for owners; and (iii) developing sustainable design checklists for new construction, renovation, and conversion projects, as well as guidance on electrification and retrofits.
Our portfolio of properties are certified to ISO 9001 (Quality), ISO 14001 (Environmental) and ISO 50001 (Energy) standards, which marks 12 years of certification to ISO 14001 and ISO 9001 and nine years for ISO 50001. Further, in alignment with our science-based targets, we continue to take steps to increase our sourcing of renewable energy at our hotels around the world. In the Europe, Middle East and Africa ("EMEA") region, nearly 30 percent of the hotels we operated, which includes our owned and leased hotels, as well as our Watford and Glasgow corporate offices, were supplied with 100 percent renewable energy during 2023. In the U.S., we continue to have a renewable energy option for our managed hotels. Additionally, through our Meet with Purpose offering, we partner with our corporate customers to quantify and plan sustainable meetings by providing them with reporting that projects carbon emissions for their event, as well as options to reduce those emissions. For any remaining unavoidable emissions, Hilton offers customers the opportunity to purchase high quality, verified Gold Standard or Verified Carbon Standard carbon offsets from a third party to address the environmental footprint.
We continued our focus on our food waste reduction and food donation initiatives, with many of our managed hotels in the U.S. and EMEA piloting donation programs and analytical software to help reduce food waste and associated costs. We have made progress on our commitment to reduce single use plastics at our hotels, offering a Digital Key option at more than 80 percent of our hotels and, in 2023, we required all hotels to comply with the adoption of bulk amenities, such as soap, shampoo and conditioner in our hotel rooms.
We have achieved the following reductions in environmental impact since 2008:
Percent Reduction Achieved Since 2008 (1)
Water consumption per square meter (2)
26 %
Landfilled waste per square meter (2)
64
Carbon dioxide emissions per square meter (2)
45
Energy consumption per square meter (2)
33
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(1) Reflects data as of December 31, 2023 that has been reviewed by an independent third party.
(2) Reflects performance across Hilton's owned, leased and managed properties, which totaled approximately 29.8 million square meters as of December 31, 2023. Although consumption and waste per square meter were higher in 2023 than in 2022 and 2021, correlated with the increase in occupancy resulting from our recovery from the COVID-19 pandemic, they remain below 2019 levels.
We primarily generate carbon emissions from the operation of our hotels. The increases in occupancy at our hotels during the years ended December 31, 2023, 2022 and 2021, including the recovery from the COVID-19 pandemic, were directly
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correlated with and impacted the consumption of energy, water and waste at our hotels during these periods, resulting in increases in our environmental impact measures. Additionally, we added new properties, on a net basis, that were operated by us during these periods, which also directly impacted our measures with regard to absolute consumption. However, our consumption generally remained below 2019 levels.
The data in the following tables, which have been reviewed by an independent third party, reflect the key sustainability metrics that we emphasize for the hotels we operate, as well as metrics recommended by the SASB within their Hotel & Lodging and Restaurant Standards:
Year Ended December 31,
Metric 2023 2022 2021
Energy management
Total energy consumed, in gigajoules per square meter 0.90 0.86 0.81
Percent total energy from grid electricity 57.0 % 56.7 % 56.3 %
Carbon emissions
Total emissions (Scope 1 and 2 (1) ), in metric tons CO 2 e per square meter
0.086 0.083 0.079
Water management
Amount withdrawn, in cubic meters per square meter 2.14 1.94 1.79
Amount consumed, in cubic meters per square meter 0.536 0.485 0.447
Percent in regions with high or extremely high baseline water stress (2)
39 % 39 % 37 %
Waste management
Amount generated, in metric tons per square meter 0.0056 0.0051 0.0042
Percent diverted from landfills (3)
39.2 % 35.7 % 32.0 %
Year Ended December 31,
Absolute Consumption (4)
2023 2022 2021
Total energy consumed, in million gigajoules 26.8 24.5 22.2
Direct emissions (Scope 1), in million metric tons CO 2 e
0.49 0.45 0.42
Indirect emissions (Scope 2 (1) ), in million metric tons CO 2 e
2.08 1.90 1.76
Water withdrawn, in million cubic meters (m 3 )
64.0 55.1 49.1
Water consumed, in million cubic meters (m 3 )
16.0 13.8 12.3
Waste generated, in million metric tons 0.17 0.14 0.11
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(1) Scope 2 market-based emissions as defined by The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (Revised Edition).
(2) Water stress as defined by the World Resources Institute. Represents the percentage (by square meter) of owned, leased and managed hotels in regions with baseline water stress, that have high or extremely high baseline water stress.
(3) Amount of waste not diverted from landfills in metric tons per square meter was 0.0034, 0.0033 and 0.0029 for the years ended December 31, 2023, 2022 and 2021, respectively.
(4) Total floor area of Hilton's owned, leased and managed properties, for which absolute consumption is reflected, was 29.8 million square meters, 28.4 million square meters and 27.5 million square meters as of December 31, 2023, 2022 and 2021, respectively. Absolute consumption increased during the periods due to increased floor area and increased occupancy at our hotels, as described above.
Social Impact
With a presence in 126 countries and territories, we use our global scale to be an engine of opportunity by focusing on creating learning and career growth opportunities, positively impacting our communities and promoting responsible, inclusive conduct across our value chain operations.
Our social impact 2030 Goals include: (i) providing 5 million learning and career growth opportunities for our employees and our communities with a focus on underrepresented groups; (ii) impacting 20 million community members through local support, disaster relief and economic opportunities; and (iii) promoting responsible, inclusive conduct across 100 percent of our value chain operations.
Through the Hilton Global Foundation, we partner with the International Youth Foundation by providing our Passport to Success Concierge program, an online course that is free to youth around the globe who are interested in building the core skills for a career in travel and tourism. Since its launch in 2021, over 57,000 youth and Hilton employees have accessed the program through 2023. Further, we partner with organizations around the globe supporting hospitality career development. The Hilton
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UK Foundation made its inaugural grants in 2023 to organizations that create learning and career growth opportunities for individuals with learning disabilities, previously incarcerated individuals and underserved youth.
Hilton also remains committed to combating human trafficking, and we require all hotel-based employees to complete an annual training on identifying signs of trafficking. We partner with organizations such as It’s a Penalty and PACT (formerly ECPAT), to help prevent trafficking through the Sustainable Hospitality Alliance, World Travel and Tourism Council, American Hotel & Lodging Association ("AHLA") and United Kingdom ("U.K.") Stop Slavery Hotel Industry Network. The Hilton Global Foundation has committed to support the AHLA Foundation's No Room for Trafficking ("NRFT") Survivor Fund, which aims to equip community-based organizations to engage and support trafficking survivors.
During 2023, Hilton and the Hilton Global Foundation supported our hotel teams and surrounding communities through disasters and crises, including the Türkiye and Morocco earthquakes, Canada and Maui Wildfires and the Middle Eastern humanitarian crisis. This included donating to organizations at the frontlines of the crises, supporting the delivery of meals, medical care and other basic needs, as well as support for the families of impacted employees through Hilton's third-party operated Team Member Assistance Fund ("TMAF"). Hilton's TMAF also supports employees experiencing undue financial hardship due to unexpected personal circumstances and larger crisis situations. Hilton employees, as well as individuals working at managed and franchised hotels who are not employed by Hilton, can apply for financial assistance when impacted by disaster and extreme hardship. In 2023, the TMAF provided assistance grants to over 3,400 individuals.
During 2023, our employees around the world reported approximately 377,000 volunteer hours in their local communities, including during our Travel with Purpose Week, an annual week of volunteering.
In addition to collaboration across our industry and within the business community, we are focused on achieving change by leveraging the scale of our supply chain. To that end, our Supplier Diversity Program engages women-, minority-, veteran-, disabled- and LGTBQ+ owned businesses in sourcing opportunities across the Hilton organization.
Human Capital Management
As of December 31, 2023, we employed or managed approximately 178,000 individuals at our owned, leased and managed hotels and corporate offices. There were approximately 288,000 additional individuals employed by third-party owners working at our franchised properties.
Our human capital management strategy focuses on attracting, developing and retaining the best talent in the industry, and our executive committee reviews talent strategy and succession plans on a quarterly basis to assess current and future talent needs. We want to build a strong employee-centered culture that creates connectivity, camaraderie and trust among all employees, which then supports our employees to deliver positive experiences to guests at our hotels. Hilton's commitment to building strong culture through an unwavering focus on creating a workplace that is inclusive, offers strong growth opportunities and is driven by purpose was recognized by Fortune magazine and Great Place to Work and earned Hilton the top spot as their 2023 #1 World's Best Workplace.
While our hiring levels in 2023 were higher than they were before the onset of the COVID-19 pandemic and recruiting volume is normalizing in regions where the labor market has recovered from the pandemic, recruiting challenges continue in select regions and for select roles. We continue to review our compensation policies to maintain competitiveness and invest in employee benefits programs and enhance our recruiting strategies to tap into new pools of talent.
Thrive at Hilton
Our benefits and programs include paid time off, parental leave, adoption assistance, subsidized health insurance, education assistance and flexible work arrangements and Go Hilton travel programs, which make discounted rooms available to hotel and corporate employees, as well as their families and friends.
Our medical and mental health care programs include a global platform focused on caregiving that provides resources for employee self-care, as well as enabling employees to care for others, including sick, disabled or elderly family members, children and pets; a concierge service supporting eligible employees with logistical and administrative tasks related to caregiving; education, training and resources on substance use disorders to eligible employees; an Employee Assistance Program; and parental and bereavement leave and education resources for expecting and new parents.
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We regularly survey our employees to monitor levels of engagement, trust, and management effectiveness, among other targeted topics, and use their feedback to inspire program enhancements and new offerings. We strive to maximize employee retention and minimize attrition with these and other measures. Approximately 32 percent of our U.S. employees have been with Hilton for at least 10 years.
Inclusive Culture
We are committed to an equitable and inclusive workforce that embraces all ages, gender, sexual orientation, nationalities, ethnicities, disabilities, military and veteran status, cultures and viewpoints. Our leaders are committed to our diversity and inclusion efforts, and we hold them accountable through our organizational objectives that measure their performance against our commitments.
As of December 31, 2023, the global workforce that we employ or manage was approximately 43 percent women. Globally, corporate leadership was approximately 42 percent women and hotel leadership was approximately 24 percent women. As of December 31, 2023, in the U.S., our workforce was approximately 72 percent ethnically diverse, with U.S. corporate leadership being approximately 20 percent ethnically diverse and U.S. hotel leadership being approximately 29 percent ethnically diverse. As of December 31, 2023, our board of directors, excluding management directors, was 50 percent women and 25 percent ethnically diverse.
As part of our commitment to an inclusive environment, we offer Team Member Resource Groups to provide support and offer networking and development opportunities, Pathway Programs to help foster economic mobility for historically underrepresented talent and support diversity efforts across our organization and annual trainings on unconscious bias, inclusive culture, preventing human trafficking and anti-harassment.
Compensation and Benefits
Hilton offers competitive pay and benefits to its employees, including a variety of compensation programs and comprehensive benefit programs. We regularly review gender and diversity pay parity among our employees as part of our ongoing talent processes. Through our employee stock purchase plan, eligible employees can purchase Hilton stock through after-tax payroll deductions at a 15 percent discount from the market stock price.
As of December 31, 2023, approximately 30 percent of people employed or managed by us globally and approximately 40 percent of people working in the U.S. were covered by various collective bargaining agreements that generally address pay rates, working hours, other terms and conditions of employment, certain employee benefits and orderly settlement of labor disputes.
Development and Training
Our career development approach emphasizes customized experiences so that employees can follow a training and career path best suited to their goals including a wide array of general business, industry or function-specific technical skills and leadership development courses and programs.
Our GM Academy curriculum is centered on nine core General Manager ("GM") business capabilities, some of which include leadership and people management, asset management, customer engagement and commercial performance. Additionally, Hilton's Signature Leadership Development programs focus on building effective leaders across the enterprise to grow our leadership bench strength. These programs provide opportunities for participants to develop key competencies, network with and learn from senior leaders and enhance business acumen.
Governance, Ethics and Regulatory Compliance
As a core underpinning of our entire organization, our ethics and compliance program is overseen by our board of directors, which expects all Hilton employees to conduct themselves at the highest standards with respect to all ethics and compliance matters. Our Code of Conduct establishes a set of global business principles, with our compliance organization, training, risk management and monitoring activities tailored to address unique risks by geography, business line, function and level. Our Code of Conduct is supported by robust compliance policies addressing risk areas such as corruption, trade sanctions, insider trading, privacy, confidential information, antitrust and escalation of concerns. Our legal and compliance training program, which is an annual requirement for all of our employees, conveys consistent compliance standards across the organization in formats designed to target different knowledge levels, learning styles and functional needs. Our annual training
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calendar includes mandatory training and supplemental training that is supported by company-wide awareness campaigns highlighting Hilton-specific risks and scenarios.
In governing the physical safety of our properties and teams, to help ensure the safety and security of our employees and guests, we constantly monitor threats and incidents around the world through online tools and external networks and partnerships; support our properties globally with crisis alert communications, crisis plans and area crisis teams; provide employees with safety and security training resources; and conduct safety and security audits annually using a risk-based approach.
Our legal compliance team administers a third-party risk management program so that we understand the qualifications, reputation and associations of third parties with whom we transact, particularly third parties who interface with government officials and third parties who act in Hilton’s name, such as owners of our hotels. The third-party risk management program includes due diligence, education materials for third parties, ongoing monitoring of relationships and appropriate contract audit and termination rights. Our legal compliance team also monitors a comprehensive and confidential reporting tool to assist management and employees in addressing fraud, abuse and other misconduct in the workplace. The Audit Committee of our board of directors receives regular updates from our legal compliance team on third-party risk and information from our confidential reporting tool.
Competition
We encounter active and robust competition as a hotel and resort manager, franchisor, owner and lessee. Competition in the hospitality industry is based on several criteria, generally including: the attractiveness of the facility; location; level of service; quality of accommodations; amenities; food and beverage options and outlets; public and meeting spaces and other guest services; consistency of service; room rate; brand reputation; and the ability to earn and redeem loyalty program points through a global system. Our properties and brands compete with other hotels, resorts, motels, inns and other accommodation rental services in their respective geographic markets or customer segments, including facilities owned by local interests, individuals, national and international chains, institutions, investment and pension funds and real estate investment trusts ("REITs"). We believe that our capabilities as a multi-branded manager, franchisor, owner and lessee of hotels with an associated global, system-wide guest loyalty program and commercial platform helps us continue to maintain our position as one of the largest and most geographically diverse hospitality companies in the world.
Our principal competitors include other branded and independent hotel operating companies, national and international hotel brands and ownership companies. While local and independent brand competitors vary, on a global scale, our primary competitors are Accor S.A., Choice Hotels International, Hongkong and Shanghai Hotels, Hyatt Hotels Corporation, Intercontinental Hotel Group, Marriott International, Radisson Hotel Group and Wyndham Hotels & Resorts.
Seasonality
The hospitality industry is seasonal in nature. The periods during which our properties experience higher or lower levels of demand vary from property to property, depending principally upon their location, type of property and competitive mix within the specific location. Based on historical results, we generally expect our revenues to be lower in the first quarter of each year than in each of the three subsequent quarters.
Cyclicality
The hospitality industry is cyclical, and demand generally follows, on a lagged basis, key macroeconomic indicators. There is a history of increases and decreases in the development and supply of and demand for hotel rooms, occupancy levels and room rates realized by hotel owners through economic cycles. The combination of changes in economic conditions and in the supply of hotel rooms can result in significant volatility in results for owners and managers of hotel properties. The costs of running a hotel, including personnel costs, rent, property taxes, insurance and utilities, tend to be more fixed than variable. As a result of such fixed costs, in a negative economic environment, the rate of decline in earnings can be higher than the rate of decline in revenues.
Intellectual Property
In the highly competitive hospitality industry in which we operate, trademarks, service marks, trade names, logos and patents are very important to the success of our business. We have a significant number of trademarks, service marks, trade names, logos, patents and pending registrations and expend significant resources each year on surveillance, registration and
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protection of our IP, which we believe has become synonymous in the hospitality industry with a reputation for excellence in service and authentic hospitality.
Government Regulation
Our business is subject to various foreign and U.S. federal and state laws and regulations, including laws and regulations that govern the offer and sale of franchises, many of which impose substantive requirements on franchise contracts and require that certain materials be registered before franchises can be offered or sold in a particular jurisdiction.
In addition, a number of states regulate the activities of hospitality properties and restaurants, including safety and health standards, as well as the sale of liquor at such properties, by requiring licensing, registration, disclosure statements and compliance with specific standards of conduct. Operators of hospitality properties also are subject to laws governing their relationship with employees, including minimum wage requirements, overtime, working conditions and work permit requirements. Our franchisees are responsible for their own compliance with laws, including with respect to their employees, minimum wage requirements, overtime, working conditions and work permit requirements. Compliance with, or changes in, these laws could reduce the revenue and profitability of our properties and could otherwise adversely affect our operations.
We also manage hotels with casino gaming operations as part of or adjacent to the hotels. However, with the exception of casinos at certain properties in Puerto Rico and Egypt, third parties manage and operate the casinos. We hold and maintain the casino gaming license and manage the casinos located in Puerto Rico and Egypt and employ third-party compliance consultants and service providers. As a result, our business operations at these facilities are subject to the licensing and regulatory control of the local regulatory agency responsible for gaming licenses and operations in those jurisdictions.
For additional information on government regulation, including environmental regulations and requirements, refer to "Part I—Item 1A. Risk Factors."
Insurance
U.S. managed hotels and foreign managed and franchised hotels are permitted to participate in certain of our insurance programs by mutual agreement with the hotel owners; however, if they do not participate in our insurance programs, the hotel owners must purchase insurance programs consistent with our requirements. Generally, U.S. franchised hotels are not permitted to participate in our insurance programs, but rather the hotel owners must purchase insurance programs consistent with our requirements. In addition, our management and franchise contracts typically include provisions requiring the hotel owner to indemnify us against losses arising from the design, development and operation of such hotel.
Most of our insurance policies are written with self-insured retentions or deductibles that are common in the insurance market for similar risks, and we believe such risks are prudent for us to assume. Our third-party insurance policies provide coverage for claim amounts that exceed our self-insurance retentions or deductible obligations. We maintain insurance coverage for general liability, property, business interruption, terrorism and other risks with respect to our business for all of our owned and leased hotels, and we maintain workers' compensation or equivalent coverage for all of our employees. We also are self-insured for health coverages for some of our U.S. and Puerto Rico employees, which include those working at our corporate operations and managed hotels, with third-party insurance protection for costs over specified thresholds.
Where You Can Find More Information
We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the internet at the SEC's website at www.sec.gov. Our SEC filings are also available free of charge on our website at ir.hilton.com as soon as reasonably practicable after they are filed with or furnished to the SEC. Our website and the information contained on or connected to that site are not incorporated into this Annual Report on Form 10-K.
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