Second-quarter systemwide Hilton Worldwide revenue per available room (RevPAR) generated by large corporates increased 5 per cent year over year, officials said during an earnings call on Wednesday (7 August), adding that technology companies had a "notable recovery."
Hilton's overall second-quarter systemwide RevPAR increased 3.5 per cent year over year, CEO Christopher Nassetta said, and transient RevPAR — including business and leisure — increased 2 per cent for the same period.
"If you break apart the segments, group is still raging, business transient is still grinding up, not at a rapid pace, but still grinding up," Nassetta said during the earnings call.
"Both of those segments [are] maintaining great pricing power. And then leisure transient has been normalising, because we're just getting back to a more normal life, and it was at very elevated levels, particularly on weekends."
Second-quarter systemwide group RevPAR increased 10 per cent year over year, Nassetta said, "led by strong demand for corporate and social meetings and events, and booking windows continued to lengthen”.
Nassetta added that Hilton, as it adds group business to the books for the next few years, sees "no sense of slowing on demand and pricing."
However, Hilton, like Hyatt Hotels, Marriott International and Wyndham Hotels & Resorts, lowered its projected full-year RevPAR increase. Hilton now projects a 2 to 3 per cent increase in 2024 RevPAR above 2023 levels, down from its prior projection of between 2 and 4 per cent.
"We tempered the high end of our expectations versus prior guidance due to softer trends in certain international markets and normalising leisure growth more broadly," Nassetta said.
"With continued strength in group and steady recovery in business transient, we expect higher-end chain scales to continue to outperform."
Hilton Q2 metrics
Hilton's systemwide second-quarter occupancy increased 1.3 percentage points year over year to 75.3 per cent, and its average daily rate increased 1.7 per cent to $163.70. Systemwide second-quarter RevPAR was $123.30.
In Europe, second-quarter occupancy increased 2.4 percentage points year over year to 77.4 per cent, while ADR increased 3.4 per cent to $173.38 and RevPAR rose 6.7 per cent to $134.12.
Meanwhile, the US, the group’s largest market, saw Q2 occupancy increase 1.1 percentage points to 76.8 per cent, while ADR increased 1.4 per cent to $172.36 and RevPAR rose 2.9 per cent to $132.33.
Second-quarter revenue increased about 11 per cent year over year to $2.95 billion, and net income rose to $422 million from $413 million one year ago.
Hilton also projects a 2 to 3 per cent increase in third-quarter systemwide RevPAR year over year.
Hilton's development pipeline at the end of the second quarter totalled 3,870 hotels, representing 508,300 rooms and up 15 per cent year over year.