Fellow
Shareholders

For nearly 100 years, one name has been synonymous with hospitality: Hilton.

It all starts with our award-winning culture, which guides our shared purpose to be the most hospitable company in the world by positively impacting our guests, team members, hotel owners, communities and, of course, all of you.

At our core, we are a business of people serving people, and our team members strive to provide exceptional experiences at every hotel, for every guest, every time. We are incredibly proud to have shared our unparalleled hospitality with 160 million guests at more than 4,900 properties throughout 104 countries and territories in the last year.

We significantly simplified our company through the spin-offs of our timeshare business and the majority of our real estate assets into Hilton Grand Vacations and Park Hotels & Resorts, respectively. As a result, the new Hilton is a fee-driven, capital-efficient company with a more resilient earnings profile.

Our portfolio of 14 exceptional brands is the best performing in the industry. This, combined with our award-winning loyalty program, Hilton Honors, creates a powerful network effect, delivering value for our customers and hotel owners as we continue our rapid expansion. Hotel owners continue to invest in our growth at an unparalleled rate, committing more than $50 billion to a record pipeline of nearly 310,000 rooms, enabling us to remain the fastest-growing global hospitality company.

In 2016, we opened nearly a hotel a day. Additionally, more than one in five hotel rooms under construction is being developed as a Hilton brand, representing 4.5 times our existing share of rooms globally.

Our growth is balanced, driven by existing brands in current markets, expansion into new markets and organically-developed new brands targeted at incremental market segments. In the last seven years, we have launched five new brands: Canopy, Curio, Home2, Tru and Tapestry, which now make up more than 20 percent of our pipeline. Last year, we introduced Tru by Hilton to the midscale segment, and it became the fastest-growing brand in our history, as well as, we believe the most successful brand launch in the industry. We have nearly 400 deals signed or in progress, and the first Tru by Hilton will open in the second quarter of 2017.

We are also taking full advantage of our global scale to roll out industry-leading innovations. Guests continue to prefer our web-direct channels, which made up nearly 30 percent of distribution mix in 2016, our highest level ever. Our Hilton Honors app is downloaded every eight seconds, and is the highest-rated travel app, providing unprecedented choice and control for guests. Through this app, guests can check-in, download their Digital Key on their mobile device and head straight to their self-selected room upon arrival. By the end of this year, we expect to have Digital Key capability at 2,500 hotels globally, including all of our hotels in 80 major North American markets.

We are leveraging our vast global footprint to provide local solutions for the communities where we operate. Our Travel with Purpose corporate responsibility strategy includes commitments to youth opportunity, environmental stewardship and community resiliency. Around the world, our team members apply their passion for hospitality to make a lasting, positive difference in people’s lives.

In summary, 2016 was a transformative year for Hilton, setting us up for even greater future success. Our simplified business model, together with tremendous growth potential globally and continued discipline in capital allocation, should generate meaningful returns for shareholders.

On behalf of all our team members, thank you for your continued support as we deliver on our commitment to be the most hospitable company in the world.

Sincerely,

Christopher J. Nassetta
President & Chief Executive Officer