Hilton beat estimates on earnings per share last quarter, but has lowered its guidance as demand in the U.S. declines.
Earnings per share were US$2.11, up from $1.92 year-over-year and above Bloomberg-compiled estimates of $2.05. Revenue was $3.12 billion, rising from $2.87 billion.
“Our third quarter results continued to demonstrate the resilience of our business model, delivering strong bottom line performance despite softer industry RevPAR [revenue per available room],” said Hilton CEO Christopher Nassetta.
“We remain optimistic, that in the U.S., lower interest rates, a more favourable regulatory environment, certainty on tax policy and a significant investment cycle will accelerate economic growth and travel demand, and, when paired with limited industry supply growth, should drive stronger RevPAR growth over the next several years.”
Operating income was $777 million, up from $623 million. Net income grew to $421 million, from $344 million.
Occupancy rates in the U.S. dropped to 74.5%, from 75.5%. System wide occupancy was down by 0.5 percentage points.
European occupancy declined by 0.1 percentage points, while the Americas, excluding the U.S. and the Asia Pacific both reported growth of 0.5. The Middle East and Africa were up 4.5 percentage points.
Revenue per available room fell by 1.1% from the previous year, which the company credited to lower occupancy and average daily rates. In the U.S., it fell by 2.3%, the largest drop of any region.
LXR Hotels & Resorts saw both the largest increase in occupancy and in revenue per available room of Hilton’s brands last quarter, while Embassy Suites by Hilton recorded the largest decreases.
Hilton added 23,200 net rooms last quarter, having opened 199 new hotels during the period. Its development pipeline now includes 3,648 hotels with 515,400 rooms.
The company has lowered its full-year net income guidance to $1.604-1.625 billion, down from its prior estimate of $1.640-1.682 billion, and has included the impact of the ongoing U.S. government shutdown in its outlook. Revenue per available room is expected to rise by 0-1%.
Hilton’s (NYSE: HLT) share price closed at $275.06, up from its previous close at $265.96. Its market capitalisation is $64.69 billion.
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