Hilton cuts 2024 room revenue growth forecast on slowing consumer spending
Updates shares in paragraph 2, adds CEO and company comments in paragraph 5
By Doyinsola Oladipo and Aishwarya Jain
Oct 23 (Reuters) -Hilton Worldwide HLT.N lowered its annual room revenue growth and net income forecasts as steady demand in Europe and business travel were not enough to counter a fall in demand in China and disruptions to its U.S. business during the third quarter.
Shares of Hilton, which owns hotel brands such as Waldorf Astoria and DoubleTree, were down 2% on Wednesday. Rival Marriott International MAR.O also fell 3%.
Global travel demand has been facing challenges as American and Chinese consumers remain wary of macroeconomic trends. Ongoing labor disputes, the upcoming election and weather disruptions in the U.S. also weighed on results, the company said.
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 9% in China and rose 1% in the United States.
"Demand is flat, maybe even a little bit down," Hilton CEO Christopher Nassetta told investors. But the company said it may be able to push room rates to offset lower demand.
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
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