Hilton sales plunge in second quarter with travel frozen

Hilton lost $432 million in the second quarter, and occupancy rates began to lift from dismal lows as hotels reopen and coronavirus restrictions were lifted around the world.

After hitting 13% in mid-April, global hotel occupancy is now running around 45%, Hilton President and CEO Christopher Nassetta said during a conference call Thursday with investors.

“While those are still terrible numbers, that is a lot of improvement over a relatively short period of time,” he said.

Nassetta expects occupancy to climb to the 50% range this fall, but also that it will take business travel two to three years to recover.

The hotel may get a boost from an extended leisure travel season because kids may not be in school and work is more flexible right now, Nassetta said. Some colleges are also booking hotel rooms to expand dorm capacity, he said, while workers are booking rooms to serve as remote offices.

In the April-June period, occupancy averaged 22% worldwide, down 56% from the same period a year ago. Occupancy levels were highest in Asia, at 29%, and lowest in Europe, at 7%.

US occupancy levels averaged 24%. Tourism in beach towns like Norfolk, Virginia, has recovered more quickly in the US than cities like New York and Seattle, according to STR, a hospitality data and consulting firm.

The McLean, Virginia, company announced layoffs of about 2,100 people, 22% of its corporate workforce, in June, and it extended previously announced furloughs and corporate pay cuts for 90 days. (AP)