{"id":24202,"date":"2023-04-26T19:03:11","date_gmt":"2023-04-26T19:03:11","guid":{"rendered":"https:\/\/lynettelockhart.com\/client\/hilton-boosts-annual-profit\/"},"modified":"2023-04-26T19:03:20","modified_gmt":"2023-04-26T19:03:20","slug":"hilton-signals-travel-demand","status":"publish","type":"post","link":"http:\/\/lynettelockhart.com\/client\/hilton-signals-travel-demand\/","title":{"rendered":"Hilton signals travel demand recovery may hit inflation wall soon"},"content":{"rendered":"

By Priyamvada C and Doyinsola Oladipo<\/p>\n

(Reuters) – The pent-up travel demand that helped Hilton Worldwide Holdings Inc boost its annual profit outlook may run out of steam in the second half of 2023 as rising risks of a recession threaten consumer spending, the company signaled on Wednesday.<\/p>\n

Hilton’s comments marked a somber start to first-quarter earnings for hotel operators, dousing optimism around its estimate-beating results and dragging the company’s shares down nearly 5%. Rivals Marriott International and Hyatt Hotels also lost more than 4%.<\/p>\n

“We know here in the U.S. and in many other places around the world, there’s an inflation issue,” said Hilton CEO Christopher Nassetta in a post-earnings call with analysts, adding that a slowdown in the broader economic environment will have an impact on the company.<\/p>\n

The travel industry, unlike several others in the discretionary space, had so far largely evaded the effects of higher interest rates on consumer spending. It was set for a full recovery after major market China reopened from COVID curbs.<\/p>\n

While lockdowns had forced construction of some luxury properties to halt, “lifting of COVID restrictions in China drove significant recovery in demand across Asia Pacific throughout the quarter”, Nassetta said. <\/p>\n

Executives still remained confident about the momentum in demand continuing in the near-term, including in international travel, led by U.S. travelers and China’s reopening.<\/p>\n

Hilton now expects full-year adjusted profit per share between $5.68 and $5.88, compared with a prior forecast of $5.42 to $5.68. <\/p>\n

The company’s net unit growth – which reflects room additions – fell 32% to 5,300 rooms in the first quarter. The company reaffirmed its full-year forecast of between 5% and 5.5%. <\/p>\n

“We predicted this air pocket (fall in net unit growth), and expect it to be short-term… but this will play to key investor concern on financing risk,” Bernstein analyst Richard Clarke said, adding that investor focus was more on unit growth than demand.<\/p>\n

Hilton reported an adjusted profit of $1.24 per share, compared with analysts’ average estimates of $1.13, according to Refinitiv data.<\/p>\n

\n

(Reporting by Priyamvada C in Bengaluru and Doyinsola Oladipo in New York; Editing by Devika Syamnath)<\/p>\n

\"tagreuters.com2023binary_LYNXMPEJ3P0EK-VIEWIMAGE\"<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By Priyamvada C and Doyinsola Oladipo (Reuters) – The pent-up travel demand that helped Hilton Worldwide Holdings Inc boost its annual profit outlook may run out of steam in the second half of 2023 as rising risks of a recession threaten consumer spending, the company signaled on Wednesday. Hilton’s comments marked a somber start to […]<\/p>\n","protected":false},"author":8,"featured_media":24203,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":""},"categories":[1213],"tags":[1223],"class_list":["post-24202","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-u-s-business","tag-updated"],"jetpack_featured_media_url":"http:\/\/lynettelockhart.com\/client\/wp-content\/uploads\/Reuters_Direct_Media\/USOnlineReportBusinessNews\/tagreuters.com2023binary_LYNXMPEJ3P0EK-VIEWIMAGE.jpg","_links":{"self":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/24202","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/comments?post=24202"}],"version-history":[{"count":2,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/24202\/revisions"}],"predecessor-version":[{"id":24981,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/24202\/revisions\/24981"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/media\/24203"}],"wp:attachment":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/media?parent=24202"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/categories?post=24202"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/tags?post=24202"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}