By Doyinsola Oladipo and Aishwarya Jain
(Reuters) -Hilton Worldwide lowered its annual room revenue growth and net income forecasts on Wednesday, as steady travel demand in Europe was not enough to counter weakness in the company’s markets such as the U.S. and China.
Shares of Hilton, which houses hotel brands such as Waldorf Astoria and DoubleTree, were down 4.7% in premarket trading. Rival Marriott International was also down 3.5%.
Global travel demand has been facing challenges since the beginning of the year as American and Chinese consumers remain wary of macroeconomic trends, prompting some travelers to trade down, pick low-cost and budget alternatives or avoid travel altogether.
Hilton’s system-wide comparable RevPAR, or revenue per available room, increased 1.4% in the third quarter from the year earlier, as room revenue fell 3.4% in Asia and rose 1% in the United States.
“We were pleased to deliver continued strong bottom line results that exceeded our guidance, despite slower top line growth, which was driven by modestly slower macro trends, weather impacts and unfavorable calendar shifts,” Hilton CEO Christopher Nassetta said.
The company expects system-wide 2024 room revenue growth to be between 2% and 2.5%, compared with its prior range of a 2% to 3% increase.
On an adjusted basis, Hilton earned $1.92 per share for the third quarter, compared with analysts’ average estimate of $1.85, according to data compiled by LSEG.
The hotel operator’s quarterly net income fell 9% to $344 million. Full-year net income is now projected to be between $1.4 billion and $1.42 billion, down from its previous forecast of $1.53 billion to $1.56 billion.
Hilton’s net unit growth, which reflects room additions, increased 7.8% during the quarter. The company expects room additions to be between 7% to 7.5% for the full year.
Quarterly total revenue was $2.87 billion, compared with estimates of $2.9 billion.
(Reporting by Aishwarya Jain in Bengaluru and Doyinsola Oladipo in New York; Editing by Shilpi Majumdar and Shounak Dasgupta)
