Hilton earnings, revenue top estimates
Hilton Worldwide Holdings Inc on Wednesday reported fourth-quarter profit and revenue above Wall Street estimates, powered by rising demand for rooms in China as travel picks up pace in the world’s second largest economy.
The hotel operator said it recorded the strongest growth in international business, which accounts for less than 25% of its overall revenue, from the Asia-Pacific region.
Revenue per available room (RevPAR) from the region, a key performance metric for the hotel industry, rose 7.6% as the company benefited from addition of more hotels in China.
The rise in Asia Pacific RevPAR was led by China where it grew 9%, Hilton’s chief financial officer Kevin Jacobs said on a conference call.
The hotel operator expects higher occupancy rate in China as demand from individual travellers as well as corporate groups continues to improve in 2018.
Larger rival Marriott International Inc also reported strong RevPAR growth in international markets led by China on Wednesday.
Marriott, which has a higher exposure to international markets than Hilton, said its revenue per available room in China grew 9.1% in the fourth quarter ended Dec 31.
Hilton’s overall revenue per available room rose 3.8% in the quarter, while Marriott’s climbed 4.6%, as more people booked rooms at higher prices, helping the hotel operators reaffirm their 2018 RevPAR growth forecast of between 1% and 3%.
Hilton’s total revenue surged 24% to $2.28 billion, beating analysts’ estimates of $2.24 billion, according to Thomson Reuters I/B/E/S.
Excluding one-time items, Hilton earned 54 cents in the quarter, beating analysts estimates of 45 cents.
The Virginia-based company forecast adjusted earnings per share of $2.49 and $2.60 for 2018.
Marriott, the world’s largest hotel chain, said its revenue rose to $5.88 billion in the quarter ended Dec 31 from $5.46 billion a year earlier.
Net income fell to $201 million, or 54 cents per share, from $244 million, or 62 cents per share, a year earlier.