Hilton Worldwide will spin off most of its real estate business into a publicly traded REIT, and, separately, spin off its Hilton Grand Vacations timeshare business into a publicly traded company. Bobbi Rebell reports.
Hilton Worldwide making some big moves. The owner of the iconic Waldorf Astoria hotel will spin off most of its real estate assets into a real estate investment trust. The REIT will have about seventy properties, in both, the U.S. and abroad. Keith Bliss of Cuttone and Company: (SOUNDBITE) KEITH BLISS, SENIOR VICE PRESIDENT, CUTTONE AND COMPANY (ENGLISH) SAYING: "They get out of the business of actually managing all those assets, and turn it over to a different company, and it just makes more economic and operational sense." Hilton is also spinning off its time share business, Hilton Grand Vacations, into a separate publicly traded company. Hilton stock has been down heavily over the last twelve months, but got a boost on the news. The sector has been under pressure in large part because of a drop in business travel, tied to weakness in the energy business. Patrick Scholes covers Hilton at SunTrust Robinson Humphrey- and says the company is successfully focusing on expansion. (SOUNDBITE) PATRICK SCHOLES, MANAGING DIRECTOR OF LODGING AND LEISURE EQUITY RESEARCH, SUNTRUST ROBINSON HUMPHREY (ENGLISH) SAYING: "I have been published as being negative bias on the overall lodging sector since last March. That said, I do have a buy rating on the stock, and I do see it as a relative outperformer. " Hilton also reported a one percent rise in fourth quarter revenue, helped by higher room rates.