By Aishwarya Jain
(Reuters) – Hilton Worldwide beat Wall Street estimates for fourth-quarter profit on Thursday, as strong demand for business travel led to higher bookings for the hotel operator, sending its shares up 5% in morning trading.
The company said bookings for company meetings, conventions and social events were strong and drove higher rates.
“Business transient revenue per available room (RevPAR) increased more than 3%, led by continued recovery in large corporates, with big tech and big banks meaningfully outperforming,” a Hilton executive said on a post-earnings conference call.
The company also said that leisure travel trends were better than expected, despite a slowdown after a post-pandemic boom.
“Despite a mixed operating environment for the industry, HLT continues to demonstrate solid growth momentum with new brands in new markets,” said David Katz, analyst at Jefferies.
In November, Hilton launched its Spark brand hotel in India, and said it expects to quadruple the number of hotel rooms in the country in the next five years.
The McLean, Virginia-based company posted an adjusted profit of $1.76 per share in the fourth quarter, compared with analysts’ average estimate of $1.68, according to data compiled by LSEG.
Its total revenue of $2.78 billion also came in slightly above expectations of $2.77 billion.
Quarterly RevPAR in the U.S., the company’s biggest market in terms of hotel rooms, rose 2.9% from a year earlier. Asia-Pacific also rose 1.7%, showing signs of recovery after a 3.4% decline in the third quarter.
Hilton’s development pipeline grew 8% to 498,600 rooms in the quarter, and the company now expects net unit growth of 6% to 7% in 2025.
However, it forecast 2025 net income between $1.829 billion and $1.858 billion, below analysts’ expectations of $1.896 billion.
(Reporting by Aishwarya Jain; Editing by Shinjini Ganguli)
