Hilton Worldwide’s first-quarter business travel revenue again topped 2019 benchmarks while revenue per available room increased 30 percent year over year, Hilton executives said on a Wednesday earnings call.
The company reported first-quarter travel demand helped the company exceeded the “high end of our guidance for system-wide RevPAR,” Hilton president and CEO Christopher Nassetta said during the call.
Hilton’s business transient revenue “continued to improve,” and was up 4 percent over 2019 levels, Nassetta said. The improvement reflects the resiliency of business travel among small and midsize businesses, which make up roughly 85 percent of Hilton’s business segment mix, according to Hilton executives.
As for group recovery, group RevPAR in Q1 finished roughly in line with 2019 levels with “steady” month-over-month improvement, with March exceeding pre-pandemic benchmarks by 5 percent, according to Hilton.
In Q1, Hilton’s systemwide RevPAR increased 30 percent year over year to $103.72, up 8 percent compared with 2019. Hilton’s first-quarter systemwide average daily rate increased 11.2 percent year over year to $153.20. Systemwide occupancy increased 9.8 percentage points year over year to 67.7 percent, two percentage points shy of peak levels, Nassetta said.
Development and Pipeline
By the end of the first quarter, Hilton’s development pipeline totaled 428,100 rooms, a record for the company, across approximately 2,930 hotels globally. Among the new hotels in the development pipeline is the Waldorf Astoria Jaipur, which will be the company’s first from the brand in India.
“As we move forward, fundamentals remain strong and we expect secular tailwinds to continue to support growth,” Nassetta said, adding that the company remains optimistic despite any macroeconomic uncertainty.
Additional Q1 Results
In the U.S., Hilton’s ADR increased 10 percent over 2022 levels to $159.67, while U.S. RevPAR increased 21.4 percent to $109.56. Hilton’s U.S. occupancy reached 68.6 percent, a slight climb from the quarter prior and a 6.5 percentage-point increase over 2022.
Systemwide RevPAR in the month of March exceeded 2019 levels in all regions and segments for the first time since the pandemic began, executives said on the call.
Hilton’s fourth-quarter total revenue was $2.29 billion, up 33.1 percent over 2022. The company reported net income of $209 million in the first quarter, down from $211 million in 2022.
