Hilton has been thriving with an increase in vacationers, but now looks towards the return of corporate trips and conferences to drive its growth. The company predicts that corporate road warriors and conference-goers will soon return to pre-pandemic levels, with small business travelers already staying above 2019 levels. The increase in travel is attributed to strong balance sheets and earnings of large corporations. Hilton anticipates a full recovery of conferences and events to pre-pandemic volumes by the end of the year, supported by underlying strength in the space.
The hotel giant also expects to retain its strong pricing power, despite potential slight occupancy declines in leisure. Executives predict a modest deceleration in revenue per available room but still anticipate growth between 2% and 4% compared to the previous year. Analysts are optimistic about Hilton’s growth potential, with some predicting a 4% growth in revenue per available room for the full year. The company’s first-quarter earnings demonstrated strong financial performance, with a net income of $268 million and an adjusted EBITDA of $750 million.
Hilton surprised the hotel sector by making two acquisitions earlier this year, the largest being with Graduate Hotels for $210 million. The company had not acquired a hotel brand in 16 years, but they do not plan to make any further additions to net room growth through acquisitions in the near future. Instead, Hilton plans to focus on expanding its property count through its existing brands or by creating new ones in-house. The acquisitions were seen as a one-time event, and the company does not anticipate any similar moves in the near future.
The performance of hotels and short-term rental sector stocks within the ST200 index is monitored to provide insights into the overall accommodations sector. The index includes companies publicly traded across global markets, such as international and regional hotel brands, hotel REITs, hotel management companies, alternative accommodations, and timeshares. The Skift Travel 200 combines the financial performance of nearly 200 travel companies worth over a trillion dollars into a single number, allowing for a comprehensive view of the industry’s performance.
Overall, Hilton is optimistic about the future, expecting a strong recovery in corporate travel and conferences that will drive its growth in the coming months. The company’s strong pricing power and financial position in the first quarter of the year have set a positive tone for its future prospects. Although Hilton recently made notable acquisitions, it does not plan on pursuing similar opportunities in the near future, opting to focus on expanding through its existing brands. The performance of hotels and short-term rental sector stocks within the ST200 index offers valuable insights into the accommodations sector’s overall performance in the current market.
