Powered by gains in business transient and small corporate
group revenue, Hilton Worldwide on Wednesday reported an overall fourth-quarter
year-over-year revenue per available room increase of 5.7 percent. Meanwhile,
Hilton announced a loyalty partnership with the Small Luxury Hotels of the
World boutique hotel collection.
Fourth-quarter business transient RevPAR increased 4 percent
year over year on higher occupancy and rates, Hilton president and CEO
Christopher Nassetta said Wednesday during an earnings call. The gains again
were led by small and midsized enterprises, he said, but noted that larger
companies were recovering too.
“The big corporates finished the year still a bit off,
probably 5 percent off of where they were but still growing,” Nassetta
said. “Most segments were relatively strong and either back to or beyond
prior to pandemic levels, with the exception of probably banking, technology
and consulting, which were less. But blended together, they weren’t that far
off.”
The big corporates finished the year still a bit off, probably 5 percent off of where they were but still growing.”
Hilton’s Chris Nassetta
SMEs accounted for about 85 percent of Hilton’s business
transient mix, as well as a “meaningful and growing percentage of our
group mix,” he said, and that segment’s RevPAR has surpassed pre-pandemic
levels.
In Q4, “from a RevPAR point of view, business transient
was ahead, but from an occupancy point of view was still a bit behind,”
Nassetta said. “We do think that by the time we finish this year, assuming
the broader consensus view of a reasonably soft landing … we think will be at
more normalized levels of demand.”
“Thousands” of organizations have registered for
the company’s Hilton for Business rewards program, designed for SMEs, since it
was unveiled
in January, he said.
Small company meetings helped Hilton’s fourth-quarter group
RevPAR increase 6 percent year over year, Nassetta said, and the sector remains
red-hot. “Demand is really strong, he said. “Every quarter is the
next new high-water mark in terms of bookings for all future periods.”
Q4 Metrics, 2024 Outlook
Hilton projected year-over-year increases in first-quarter
and full-year 2024 RevPAR of 2 percent to 4 percent, a figure below that of
some recent industry projections, including that of STR and Tourism Economics, which
forecast 4.1 percent 2024 growth. Still, Nassetta projected Hilton would
have “pricing power” in the business transient segment and
“everywhere else,” given “very low supply numbers that are
continuing and continued decent economic growth.”
Hilton’s systemwide fourth-quarter average daily rate was
$156.07, up 2.7 percent year over year. Occupancy increased 2 percentage points
to 69 percent. RevPAR increased 5.7 percent to $107.69.
Total fourth-quarter revenue increased 6.7 percent to $2.6
billion. Net income was $150 million, compared with $333 million in the fourth
quarter of 2022.
Hilton’s development pipeline at the end of the fourth
quarter comprised 462,400 rooms, a record and an 11 percent increase year over
year.
Small Luxury Hotels of the World Partnership
Hilton also announced a partnership with Small Luxury Hotels
of the World in which customers will be able to book through Hilton channels
participating properties in the boutique hotelier’s 560-property collection,
and Hilton Honors loyalty program members will be able to earn and redeem
loyalty points. Hilton said the partnership would “ramp up in the months
ahead.”
While many SLH properties are in resort locations, a number
are in urban locations, Nassetta said, and “I think business transient
will be a meaningful component of it, particularly in those hotels in the right
locations.”
SLH formerly had formed a similar loyalty
alliance with Hyatt Hotels Corp., but a Hyatt spokesperson confirmed to BTN
that the companies had “mutually made the decision to end our relationship
with SLH in the near future,” though World of Hyatt loyalty program members
still can book participating SLH Hotels on Hyatt booking channels. Hyatt in
2024 plans to integrate boutique properties listed in Mr & Mrs Smith, the
London-based booking platform it acquired last year, according to the
spokesperson.
[email protected] (Chris Davis)
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