Hilton sees growth

Third-quarter results at Hilton Worldwide suggest the pent-up demand for travel after the pandemic still has room to run.

Hilton, whose brands include Conrad and Waldorf Astoria, plus others with the Hilton name attached, raised its profit forecast for 2022 after seeing a surge in earnings. In the third quarter, the company generated a net income of $347m on revenue of $2.37bn. It predicted that the rest of the year would also be strong as the company runs the highest margins in its history.

“While we’re not naive to what’s going on with the Fed here and with central banks in other parts of the world in trying to tame inflation by slowing economies, we do think we have a reasonably unique setup that is maybe different than some other industries for a period of time that is going to benefit us, not just in the fourth quarter, but into next year”, said Christopher Nassetta, President and CEO, during a call with analysts.

In the third quarter, a stronger Dollar relative to the Euro led many Americans to fly to Europe in droves, helping to boost Hilton’s overall revenue. Hilton boosted its system-wide revenue per available room – a key industry metric – by 5% over the comparable period in 2019. That was the first time the metric had exceeded the prior peak since the pandemic began.

Nassetta pointed out that the hotel sector was hurt more by the pandemic than other industries and it makes sense that its recovery would be more robust. “Mega-events such as large international conferences are continuing to return, and consumers are shifting from spending on things to experiences”, he said.

Hilton has around 6, 500 hotels in its current portfolio, mostly franchised, and is a public company listed on the New York Stock Exchange.

www.hilton.com

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