Hilton Worldwide Holdings Inc., owner of the Waldorf Astoria hotel chain, reaffirmed its 2017 forecast for a key revenue metric and said it felt more confident about achieving it, as US economic growth gains steam.
The Conrad and Double Tree hotels owner said it expected RevPAR to grow 1-3 per cent in 2017. RevPAR is calculated by multiplying a hotel’s average daily room rate by its occupancy rate.
The hotel operator said it expected adjusted earnings between $1.65 and $1.75 per share.
“While we believe the high end of [RevPAR] guidance may still be a bit aggressive, we consider the 2017 guide to be more realistic than what was assumed the same time last year for 2016,” SunTrust Robinson Humphrey analyst Patrick Scholes wrote in a note.
Chief executive Christopher Nassetta said the company has now started to see a pick-up in key macro indicators, including gross domestic product growth.
We consider the 2017 guide to be more realistic than what was assumed the same time last year for 2016
There was a boost in corporate transients post-election, the company said on a conference call. Corporate transient demand reflects individuals travelling for business purposes.
“We believe initial cynicism around FY17 RevPAR guidance when issued has dissipated as the outlook for the economy and corporate transient travel trends have significantly improved,” MKM Partners analyst Christopher Agnew wrote in a note.
Virginia-based Hilton forecast RevPAR growth of 1-3 per cent in the current quarter and adjusted profit of 24 cents-29 cents. Net loss attributable to Hilton stockholders was $387 million, or $1.17 per share, in the quarter ended December 31, compared with a profit of $814 million, or $2.47 per share, in the year-ago period.
Excluding items, the company earned 70 cents per share versus the average analyst estimate of 65 cents.
Revenue rose to $2.92 billion from $2.86 billion.
Marriott International Inc., which operates Marriott, Courtyard and Ritz Carlton brands, reported better-than-expected fourth-quarter revenue and profit as it gained from the acquisition of Starwood Hotels and Resorts Worldwide.
The company also raised its worldwide RevPAR forecast to 0.5-2.5 per cent, excluding the impact of currency rate fluctuations. The company had previously forecast RevPAR for the combined entity to be flat to up two per cent.
Marriott completed the roughly $13 billion acquisition of Starwood Hotels and Resorts Worldwide in September.