Hilton Worldwide Lowers Forecasts

By Doyinsola Oladipo and Aishwarya Jain

(Reuters) – Hilton Worldwide has lowered its annual room revenue growth and net income forecasts amid steady travel demand in Europe, which couldn't offset weaknesses in markets like the U.S. and China.

Shares of Hilton, known for hotel brands such as Waldorf Astoria and DoubleTree, plummeted 4.7% in premarket trading, while rival Marriott International fell by 3.5%.

Global travel demand has faced challenges this year as American and Chinese consumers remain cautious about macroeconomic trends, leading to a shift toward low-cost and budget alternatives, or even avoiding travel entirely.

Hilton's system-wide comparable RevPAR (revenue per available room) saw a 1.4% increase in the third quarter compared to last year, although room revenue dropped 3.4% in Asia and rose 1% in the United States.

CEO Christopher Nassetta expressed satisfaction with the strong bottom line results that exceeded guidance, despite sluggish top line growth impacted by macro trends, weather conditions, and unfavorable calendar shifts.

The company is now expecting system-wide room revenue growth for 2024 to be between 2% and 2.5%, down from the previous estimate range of 2% to 3%.

Adjusted for the quarter, Hilton earned $1.92 per share, surpassing analysts' expectations of $1.85 according to data from LSEG.

Quarterly net income fell 9% to $344 million, leading to reduced full-year projections between $1.4 billion and $1.42 billion, down from the previous forecast of $1.53 billion to $1.56 billion.

Hilton's net unit growth, indicated by new room additions, increased by 7.8% during the quarter, with expectations of 7% to 7.5% for the full year.

Total quarterly revenue was reported at $2.87 billion, slightly below estimates of $2.9 billion.