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Posted by
Two Blokes May 18, 2025 -
Filed in
Stock
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Hilton's franchise model, akin to McDonald's, allows for profitable growth without heavy capital expenditures, making it a strong long-term investment in the hotel sector. The shift to franchising has significantly improved Hilton's margins, with gross margins rising from 45% to 75% and operating margins from 20% to 45%. Hilton's capital-light model reduces Capex needs, enhancing resilience and reducing cyclicality, although the high debt for share buybacks is a concern.
