HILTON Worldwide lowered its annual room revenue growth and net income forecasts as steady demand in Europe and business travel were not enough to counter a fall in demand in China and disruptions to its US business during the third quarter.
Shares of Hilton, which owns hotel brands such as Waldorf Astoria and DoubleTree, were down 2 per cent on Wednesday (Oct 23). Rival Marriott International also fell 3 per cent.
Global travel demand has been facing challenges as American and Chinese consumers remain wary of macroeconomic trends. Ongoing labour disputes, the upcoming election and weather disruptions in the US also weighed on results, the company said.
Hilton’s system-wide comparable RevPAR, or revenue per available room, increased 1.4 per cent in the third quarter from the year earlier, as room revenue fell 9 per cent in China and rose 1 per cent in the US.
“Demand is flat, maybe even a little bit down,” Hilton CEO Christopher Nassetta told investors. But the company said it may be able to push room rates to offset lower demand.
The company expects system-wide 2024 room revenue growth to be between 2 per cent and 2.5 per cent, compared with its prior range of a 2 to 3 per cent increase.
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On an adjusted basis, Hilton earned US$1.92 per share for the third quarter, compared with analysts’ average estimate of US$1.85, according to data compiled by LSEG.
The hotel operator’s quarterly net income fell 9 per cent to US$344 million. Full-year net income is now projected to be between US$1.4 billion and US$1.42 billion, down from its previous forecast of US$1.53 billion to US$1.56 billion.
Hilton’s net unit growth, which reflects room additions, increased 7.8 per cent during the quarter. The company expects room additions to be between 7 to 7.5 per cent for the full year.
Quarterly total revenue was US$2.87 billion, compared with estimates of US$2.9 billion. REUTERS
