Hotel operator Hilton Worldwide Holdings Inc. raised its 2024 profit forecast after first-quarter sales beat analysts’ expectations, counting on international travel demand to offset a trend toward normalization in the United States.
International travel demand is expected to continue to recover this year as global air connectivity increases and destinations in Asia and Latin America are flooded with travelers, while domestic travel demand plateaus in North America.
The hotel operator’s first-quarter revenue rose 12% year-on-year to $2.57 billion (€2.4 billion), compared with analysts’ expectations of $2.53 billion (€2.37 billion), according to LSEG data. exceeded.
The company expects full-year adjusted earnings to be between $6.89 (6.45 euros) and $7.03 (6.58 euros) per share, up from the previous range of $6.80 (6.36 euros) and $6.94 (6.49 euros) per share. .
Hilton, which owns brands such as Waldorf Astoria Hotels & Resorts, reported quarterly revenue per available room, or RevPar, a key metric in the hospitality industry, of $104.16.
“Renovations, inclement weather and unfavorable holiday shifts weighed on our results more than expected, resulting in system-wide RevPAR increasing 2%,” Chief Executive Officer Christopher Nassetta said in a statement.
“RevPAR turned negative in the U.S., but accelerated in the Americas and the Middle East and Africa…suggesting that global travel demand remains strong,” Bernstein analyst Richard Clark said in a research note. “
First-quarter RevPAR increased 14.8% in the Middle East and Africa, higher than any other region, but decreased 0.6% in the United States. The company reported adjusted earnings of $1.53 per share (€1.53) in the quarter, compared with analysts’ expectations. The average estimate was $1.42 (€1.33) per share.
Hilton expects net room growth, or room additions, of 6% to 6.5% in 2024, excluding the impact of its planned acquisition of the Graduate Hotel brand.
Hilton Worldwide announced this month that it will acquire a controlling stake in hospitality company Sidel Group in a deal that expands the Nomad Hotels brand and further enhances Hilton’s luxury offerings.
Chris Silcock, Hilton’s president of global brand and commercial services, said the deal sets the stage for broader expansion into major cities around the world.
