Hilton hotels lifts profit outlook following strong international demand

Travel companies benefiting from a sustained rise in international travel

The Hilton hotel at Charlemont Place in Dublin.

Hotel operator Hilton Worldwide raised its forecast for 2024 profit after beating estimates for its second quarter as robust demand for international travel offset losses from normalising domestic travel in the US.

The company operates a number of hotels around Dublin including the five-star Conrad near St Stephen’s Green.

It now expects full-year profit to be between $6.93 (€6.34) and $7.03 (€6.44) per share, compared with its previous forecast of $6.89 to $7.03.

Travel companies have been benefiting from a sustained rise in international travel as tourists flock to destinations in the Middle East and Europe.

Internationally, quarterly revenue per available room grew 3.5%, led by 10.7% growth in the Middle East and Africa and 6.7% in Europe.

American market

Meanwhile, domestic travel in the US has been weak as Americans grow cautious about travel spending in an increasingly uncertain economy.

Revenue per available room in the US grew at a sluggish 2.9%, while the rest of the Americas gained 6.5% during the quarter.

Hilton lowered its 2024 revenue per available room growth forecast to a range of 2% to 3%, compared with its previous forecast of 2% to 4%.

Quarterly adjusted profit came in at $1.91 per share, compared with Wall Street estimates of $1.86 per share.

Total revenue for the quarter ended June 30 was $2.95bn, up nearly 11% but lower than analysts' estimates of $2.93bn.

Hilton is not the only hotel company currently experiencing an uptick in fortunes with Holiday Inn-owner InterContinental Hotels Group recently reporting a 3.2% rise in revenue per available room in the second quarter following a strong rebound in the US offset weakness in China.

IHG, which also owns the Crowne Plaza, Regent and Hualuxe hotel chains, said the industry had seen a shift in pattern of demand this year from domestic tourism in China to overseas travel to other Asia Pacific countries.

The company’s revenue for the first half of the year rose 4% to over €2.3bn.

However, another rival hotel chain Marriott International — which operates brands such as the Ritz-Carlton and Westin — lowered its forecast for 2024 room revenue growth, citing softer domestic travel demand in China and North America. 

Marriott expects its revenue per available room to grow between 3% and 4% this year, lowering the top end of the range from 5%.

Reuters