Hilton Worldwide's first-quarter business transient travel revenue per available room among large corporate clients increased more than 3 percent year over year on "strong demand in consulting and government contracting," president and CEO Christopher Nassetta said Wednesday during an earnings call.
"Business transient recovery remained steady," Nassetta said.
The company expects full-year overall business transient RevPAR to increase at "the midpoint" of a projected year-over-year systemwide RevPAR increase of 2 percent to 4 percent.
"When you talk to customers … you get a very positive view about their people traveling more for business transient," Nassetta said. "And because the economy has been resilient and employment has been strong, I think it helps with the underpinning."
Should that projected growth occur, Nassetta said by year-end business transient occupancy and demand could fully return to 2019 levels. Business transient revenue, he noted, already has eclipsed pre-pandemic levels. Demand levels currently are "modestly" below 2019 levels, he said, with small and midsized enterprises already having reached that level but not larger corporate clients.
Still, he noted the "pretty big growth" in demand in that segment in the first quarter. "That’s what we're hearing from our big corporate customers as they're traveling more," Nassetta said. "So that is coming back. Their balance sheets are strong. Earnings are still … relatively strong. And so our expectation is by the end of the year from a demand point of view, we think there’s an awfully good chance that BT will get there, too, with continued growth in the big corporates and very resilient SMB business."
Group RevPAR continued to show strength, with that segment's RevPAR up 5 percent year over year, and Nassetta said "corporate groups continue to grow as a percentage of booking mix, and booking windows continue to lengthen."
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Q1 Metrics, 2024 Outlook
Hilton systemwide RevPAR increased 2 percent year over year in the first quarter, at the low end of the projection the company issued a quarter before. U.S. RevPAR declined by 0.4 percent. Nassetta blamed "renovations, inclement weather and unfavorable holiday shifts" that "weighed on results more than we anticipated."
Hilton's systemwide first-quarter average daily rate was $154.91, up 1.7 percent year over year. Occupancy increased 0.2 percentage points to 67.2 percent.
In the United States, occupancy declined 0.6 percentage points year over year, while ADR increased 0.5 percent to $161.67.
Total first-quarter revenue increased 12.2 percent to $2.57 billion. Net income was $268 million, compared with $209 million in the first quarter of 2023.
The company projected full-year and second-quarter systemwide RevPAR each to increase 2 percent to 4 percent year over year. Nassetta projected U.S. full-year RevPAR would be "towards the low end of the range."
Hilton's development pipeline at the end of the first quarter comprised 472,300 rooms, up 10 percent year over year.
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