By Anshuman Tripathy
Feb 11 (Reuters) – Hilton Worldwide Holdings on Wednesday forecast 2026 room revenue growth below Wall Street expectations, reflecting lowered spending by budget-conscious travelers, even as strong demand for premium travel helped it beat fourth-quarter profit estimates.
Budget-conscious travelers have cut back amid a tougher economic backdrop, softening demand for budget and mid-scale hotel offerings.
Affluent guests continue to spend on premium experiences, with higher margins from luxury properties offsetting weakness elsewhere.
“Systemwide RevPAR (a key lodging metric that tracks average daily rate and occupancy) increased 50 basis points year-over-year for the quarter as strong international performance and solid group demand were offset by softer U.S. government demand and weaker international inbound into the country,” said CEO Christopher Nassetta.
More foreign visitors are expected to travel to the U.S. as the country prepares to host the FIFA World Cup this year. Earlier this week, peer Marriott signaled growth in its global RevPAR from the World Cup.
The company’s fourth-quarter revenue per available room at its mid-scale and budget properties fell, while its luxury hotels, which include Waldorf Astoria and Conrad, posted strong growth.
The McLean, Virginia-based company expects its full-year room revenue growth of 1% to 2%, compared with analysts’ estimates of 2.05%, according to data compiled by LSEG. It added that first-quarter RevPAR forecast included the impact from the recent storms in the continental U.S..
“We believe most of the earnings upside was baked into the stock after the entire sector outperformed yesterday on Marriott’s strong earnings/outlook,” said Raymond James analyst RJ Milligan. The company’s shares rose as much as 2.2% in morning trade.
The DoubleTree-parent posted an adjusted profit of $2.08 per share in the fourth quarter, up from $1.76 per share a year ago. Analysts on average expected $2.02 per share.
Total revenue for the quarter ended December 31 was $3.09 billion, up from $2.78 billion a year earlier. Analysts on average estimated $2.99 billion.
(Reporting by Anshuman Tripathy in Bengaluru; Editing by Tasim Zahid)
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