Hilton Worldwide Holdings reported a better-than-expected quarterly profit on Wednesday, as healthy travel demand helped the US hotel operator boost room prices at a time when concerns linger around slowing global economic growth.
Shares of the owner of Waldorf Astoria and Conrad hotel chains were up 4.4 per cent at $77.51 (€88.46) before the opening bell.
The hotel industry in the US has thrived against the backdrop of a robust economy, allowing corporations to raise their travel budgets which helped hotel occupancy rates hit a record high last year.
Though both Hilton and larger rival Marriott International have pointed to a deceleration in revenue growth per room in 2019, investors are closely monitoring the progress of trade talks between the US and China. The trade issues, if resolved, could have a positive impact on business travel.
Hilton cut its 2019 outlook for growth in RevPAR – a key performance metric for the hotel industry – to a range of 1 per cent to 3 per cent, from an earlier forecast of an increase between 2 per cent and 4 per cent.
Analysts said Hilton’s lowered outlook was expected.
On an adjusted basis, Hilton earned 79 cents per share in the quarter, beating analysts’ estimates of 69 cents, according to IBES data from Refinitiv.
Revenue rose 10.6 per cent to $2.29 billion, beating Wall Street estimates of $2.27 billion. - Reuters