Hilton Worldwide's second-quarter business transient revenue per available room grew 5.7 per cent year over year, "a three-point step up globally and a four-point step up in the US versus the first quarter," according to CEO Christopher Nassetta.
During the company's earnings call on Tuesday (28 July), Nassetta said that much of the strength in business transient was fuelled by midweek demand from small and medium-sized enterprises – a segment that had previously "not been growing as much" but logged more than 7 per cent year-over-year growth during the second quarter.
Group RevPAR increased 3.7 per cent, owing to growth in company meeting demand and year-over-year event calendar shifts. Nassetta confirmed SMEs also drove some of the gains in group travel and that "the big corporates were growing but at a lower pace”.
Nassetta said Hilton expects the business transient segment to continue to drive results as its recovery gains momentum into the third quarter. He named other "macro tailwinds," including supportive tax and regulatory policy, increased private sector investment in AI, low hotel supply growth and ongoing public infrastructure spending that would benefit the middle- and lower-income consumer and drive broader demand growth across Hilton's system.
Addressing Hilton's recently announced partnership with Navan, Nassetta told investors that the direct connection "bypasses both intermediary connections and other more expensive distribution channels, providing meaningful cost savings for our owners”.
Hilton Q2 metrics
Hilton's second-quarter systemwide revenue per available room increased 3.9 per cent year over year to $125.02. Average daily rate increased 2.5 per cent year over year, while occupancy rose 1 percentage point to 74.9 per cent.
Across Europe, RevPAR increased 4.3 per cent year over year to $143.28, spurred by a 2.2 per cent rise in ADR to $182.96 and a 1.6-percentage-point increase in occupancy to 78.3 per cent.
Meanwhile, in the US, Hilton’s largest market, RevPAR increased 5.4 per cent year over year to $139.28, driven by a 3.2 per cent rise in ADR to $180.16 and a 1.6-percentage-point bump in occupancy to 77.3 per cent.
Hilton raised its full-year RevPAR growth outlook to between 3 per cent and 3.5 per cent, up from the 2 per cent to 3 per cent projection provided one quarter prior.
Systemwide second quarter total revenue rose 6.5 per cent year over year to $3.3 billion. Total net income rose 9 per cent to $482 million.
Hilton's development pipeline as of 30 June included about 541,300 rooms, up 6 per cent from the prior year. Net unit growth was about 6.1 per cent.