New York City, February 07, 2024, The Europe Today: Hotel giant Hilton Worldwide announced on Wednesday its 2024 profit forecast, falling below market expectations, attributed to increased expenses and signs of declining demand for leisure travel in the United States. In premarket trade, Hilton’s shares saw a 2.8% dip as the hospitality industry faces challenges amidst changing travel preferences.
While hotel operators like Hilton have benefited from pent-up travel demand post-pandemic, the company now faces a shift in consumer preferences towards alternative travel options such as cruises, coupled with higher room rates, leading to a softening demand for hotel accommodations in the U.S.
CEO Christopher Nassetta acknowledged the challenges, stating, “We delivered another year of strong top- and bottom-line results and continued to deliver on our robust development story.”
Hilton, renowned for its brands like Waldorf Astoria Hotels & Resorts, reported a 5.7% increase in fourth-quarter revenue per available room (RevPAR) to $107.69 compared to the previous year. System-wide occupancy levels experienced a 2-percentage-point rise to 69% in the same quarter, while average daily rates grew by 2.7% to $156.07.
Notably, management and franchise fee revenues surged by 12.2% in the fourth quarter compared to the corresponding period in 2022.
Despite these positive metrics, Hilton’s 2024 profit outlook fell short of analysts’ expectations. The company anticipates a full-year adjusted profit ranging between $6.80 and $6.94 per share, below the projected $7.07 per share, according to LSEG data.
Looking ahead, Hilton expects a modest 2% to 4% increase in 2024 revenue per room compared to the previous year. The company also foresees full-year net income in the range of $1.69 billion to $1.72 billion.
As Hilton navigates the evolving landscape of the hospitality industry, the company remains focused on adapting to changing market dynamics while continuing its commitment to delivering strong financial performance.
