[ad_1]
Hilton Hotels Corp.’s fourth-quarter business travel revenue increased 3 percent from 2019 levels, company executives said during a Thursday earnings call, and “nearly all industries saw continued recovery compared to the prior quarter.”
Business transient and group proved sturdy sectors in the fourth quarter for the company. According to Hilton president and CEO Christopher Nassetta, small- and mid-sized businesses were a “growing part of our business travel segment.” Additionally, “group travel accounted to roughly 85 percent of our segment mix and enhanced the company’s overall resiliency,” he said.
According to Hilton executives, group travel in Q4 improved the most of all segments quarter over quarter, with revenue per available room fully recovering to 2019 levels. “Driven by both occupancy and [average daily rate] gains, company meetings boosted performance, improving more than seven points versus the third quarter,” Nassetta said.
In Q4, Hilton’s systemwide RevPAR increased 24.8 percent year over year to $101.72, up 7.5 percent compared with 2019. Thanks to “continued recovery in occupancy and strong rate in the Americas outside of the U.S. fourth quarter, RevPAR increased 53 percent year over year and 25 percent versus 2019,” Hilton CFO Kevin Jacobs said.
Systemwide occupancy increased 5.5 percent year over year reaching 67 percent, just three-points shy of prior peak levels, Nassetta added.
Hilton’s fourth-quarter systemwide ADR was up 14.5 percent from 2021 levels to $151.81.
Looking Ahead
“Even with robust forward bookings, the [group] pipeline still remains strong with tentative bookings up more than 20 percent versus last year, helped by rising demand for company meetings as organizations bring their teams back together,” Nassetta said.
While China’s reopening was too late to boost the company’s fourth-quarter numbers, it’s a source of optimism for Hilton executives.
“You’re already starting to see significant travel within China in terms of uptick. And we expect, particularly in the second half of the year, you’re going to have a big tail tailwind from that,” Nassetta said.
Hilton executives also have high expectations surrounding Spark, the “premium economy” brand the company unveiled last month. With 100 percent of Spark properties opening in 2023 slated to be conversions, Nassetta said the brand will have a “meaningful impact” on Hilton’s numbers next year. Nassetta also expects the brand to become the biggest Hilton has in terms of units, over time.
“We think we have cracked the code,” Nassetta said. “We will have to prove it.”
Looking ahead, Hilton executives acknowledged “macroeconomic uncertainty,” but project a “soft to bumpy landing.” Nassetta said he expects “systemwide top line growth of 4 [percent] to 8 percent versus 2022” with performance driven by continued growth in all segments. The company expects “meaningful recovery across Asia and solid growth in U.S. urban markets as group business continues to recover,” Nassetta said.
Additional Q4 Results
In the U.S., Hilton’s ADR increased 11.9 percent year over year to $157.20, while U.S.-only RevPAR rose 19.6 percent to $106.99. Hilton’s U.S. occupancy reached 68.1 percent, 4.4 percentage points over 2021.
Hilton’s fourth-quarter total revenue was $2.44 billion, up 33 percent year over year. The company reported net income of $333 million in the fourth quarter—up from $148 million one year prior.
For the full year, Hilton added 355 new hotels with another 2,820 in the pipeline.
[ad_2]
Image and article originally from www.businesstravelnews.com. Read the original article here.