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Hilton's revenue beats Street estimates on record lodging prices

Published Oct 25, 2023 06:13AM ET Updated Oct 26, 2023 10:37AM ET
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© Reuters. FILE PHOTO: A Hilton employee pushes a luggage cart in front of the the New York Stock Exchange to celebrate of the company's IPO, December 13, 2013. REUTERS/Brendan McDermid/File Photo
 
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By Doyinsola Oladipo and Priyamvada C

(Reuters) -Hilton Worldwide Holdings beat Wall Street estimates for third-quarter revenue and lifted its annual forecast on Wednesday, as higher room rates and occupancy levels boosted the hospitality company's results.

Hotel and resort operators are benefiting from the global rebound in travel as consumers continue to plan vacations despite inflation and the higher cost of travel compared to before the COVID-19 pandemic.

Hilton shares were up 1.6% at $151.90 in early trading.

The company, which owns brands including Waldorf Astoria Hotels & Resorts, said its third-quarter revenue per available room, an important metric in the hospitality industry, rose 6.8% from a year earlier.

"As we look to the fourth quarter, we expect continued strength in international markets, along with continued improvement in business transient and group demand," Hilton CEO Christopher Nassetta said during a conference call with analysts.

System-wide occupancy levels for the quarter reached the highest levels post-pandemic, Nassetta said.

Fellow hospitality firms such as Marriott International (NASDAQ:MAR) and Airbnb are set to report results next week.

Hilton's revenue per available room in the third quarter saw a significant recovery in Asia Pacific, up 39.3% compared to the year earlier. Occupancy levels rose 11.7% in the same period.

The company's third-quarter revenue rose to $2.67 billion, exceeding the average Wall Street estimate of $2.64 billion, according to LSEG data.

The company lifted its full-year revenue per room outlook to increase between 12.0% to 12.5% from a year earlier, compared to the prior outlook for 10.0% to 12%.

Investors are focused on the expected acceleration in net unit growth - which reflects room additions - for 2024, said Patrick Scholes, an equity analyst at Truist.

Hilton expects net unit growth in 2024 to be between 5.5% to 6.0% after tempering its 2023 outlook to 5% in the prior quarter.

The hotel operator now expects annual adjusted profit between $6.04 and $6.09 per share, compared with its prior estimate of $5.93 to $6.06 per share.

Hilton's revenue beats Street estimates on record lodging prices
 

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