Hilton Worldwide raises 2024 profit outlook on international travel boom

Increased international travel demand saw Hilton Worldwide Holdings beat analysts' estimates

International travel demand is expected to continue to rebound this year as global air connectivity increases, leading to increased hotel room demand. 

Hotel operator Hilton Worldwide Holdings beat analysts' estimates for first-quarter revenue and raised 2024 profit forecast, banking on international travel demand to offset normalising trends in the US.

International travel demand is expected to continue to rebound this year as global air connectivity increases and travelers flock to Asian and Latin American destinations, while demand for domestic travel plateaus in North America. 

The hotel operator’s first-quarter revenue rose 12% from last year to $2.57bn (€2.4bn), beating analysts’ expectations of $2.53bn (€2.37bn), according to LSEG data.

The company forecast annual adjusted profit of between $6.89 (€6.45) and $7.03 (€6.58) per share, up from the previous range of $6.80 (€6.36) to $6.94 (€6.49) per share.

Hilton, which owns brands such as Waldorf Astoria Hotels & Resorts, reported a quarterly revenue per available room, or RevPar, an important metric in the hospitality industry, of $104.16.

"System-wide RevPAR increased 2% as renovations, inclement weather and unfavourable holiday shifts weighed on performance more than anticipated," said chief executive Christopher Nassetta.

Robust demand

"US RevPAR turned negative but Americas and Middle East & Africa accelerated...implying global travel demand still robust," Richard Clarke, analyst at Bernstein, wrote in a research note.

RevPAR increased 14.8% in the Middle East and Africa during the first quarter, higher than any other region, but fell 0.6% in the US The company reported an adjusted profit of $1.53 (€1.53) per share for the quarter, compared to analysts’ average estimate of $1.42 (€1.33) per share.

Hilton expects net unit growth, or room additions, to be between 6% and 6.5% in 2024, excluding the effect of its planned acquisition of the Graduate Hotels brand. 

Hilton Worldwide said this month it is acquiring a controlling interest in hospitality firm Sydell Group in a deal to expand the NoMad Hotels brand and add to Hilton’s luxury offerings.

The transaction sets the stage for a wider expansion into key global cities, according to Chris Silcock, Hilton’s president for global brands and commercial services. 

• Reuters and Bloomberg