Hilton Beats Expectations on Heavy Demand for U.S. Vacations
(Bloomberg) — Hilton Worldwide Holdings Inc. reported better-than-expected results for the second quarter, as travelers made up for lost vacations.
- The company reported adjusted earnings per share of 56 cents, according to a statement Thursday, beating the average analyst estimate of 39 cents. Its shares surged as much as 4.2%, the biggest intraday jump in more than five months.
Key Insights
- Leisure travel surged in the U.S., which accounts for the largest share of Hilton’s revenue, helping push occupancy rates and room prices higher. Strong demand from vacationers offset sluggish corporate travel, helping U.S. hotels match pre-pandemic performance in recent weeks.
- Revenue per available room, or Revpar, more than tripled from a year earlier, benefiting from a comparison to a period when global travel was locked down. Revpar was down 62% from the second quarter of 2019, before Covid-19 roiled global travel.
- U.S. Room demand continued to improve in July even as Covid-cases spiked, Chief Executive Officer Christopher Nassetta said on a conference call with investors. With occupancy rates rising, labor availability remains a key issue, Nassetta said.
- Still, the spread of the highly transmissible delta variant is threatening the travel rebound. Hilton is seeing a slower recovery in parts of the world with lower vaccination rates. Occupancy rates were 64% in the U.S., compared to 56% in Asia and 32% in Europe.
Market Reaction
- Hilton shares jumped to $134.99 on Thursday in New York. The stock had gained 16% this year through Wednesday’s close, compared with a 2% gain for the Bloomberg Americas Lodging Index.
(Updates share price and adds CEO comments from earnings call.)
More stories like this are available on bloomberg.com
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