Hilton's first-quarter revenue growth was at the high end of
the company's forecast and beat analyst estimates, as the hotel company
benefited from better-than-expected group demand in the U.S. and growth in
Europe.
Hilton's first-quarter worldwide revenue per available room
(RevPAR) advanced 3% from a year earlier, compared to its February forecast of
1% to 3%, the company said Tuesday. The company's first-quarter revenue of
$2.16 billion beat analysts' estimates by $100 million.
Hilton's Europe RevPAR rose 8.4% on stronger demand in
London, Italy and Greece, while China and Japan demand drove Asia-Pacific
RevPAR up 5.5%. U.S. RevPAR advanced 2.5%.
Among brands, RevPAR for Hilton's Curio collection jumped
17% from a year earlier, while Home2Suites' RevPAR advanced 7.7%. Those results
more than offset the impact of lower demand growth at the Waldorf Astoria and
Conrad luxury brands.
"If you look at systemwide group performance, frankly,
it was a lot better than we thought it would be," Hilton CEO Christopher
Nassetta said on a conference call with analysts Tuesday morning.
Hilton opened the world's first Tru by Hilton midscale hotel
in Oklahoma City last month, and said its first-quarter global development
pipeline widened 16% from a year earlier to more than 2,100 hotels in part
because of its midscale brands.
Nassetta estimated that the company would open 85 Tru
properties by the end of next year and said the first Tapestry collection hotel
will open by the end of next month. Overall, Hilton will increase its room
inventory by about 6.5% this year, or by as many as 55,000 rooms.
"We think we're
one of the very limited people who have the network effect," added
Nassetta, referring to the benefits of offering guests a wide range of brands. "There
are no dogs in the bunch."
Hilton continues to attract more direct bookings via its "Stop
Clicking Around" campaign. First-quarter direct web bookings accounted for
about 30% of Hilton's total bookings, up from about 28% a year ago, according
to Nassetta.
Hilton's
first-quarter net income fell 76% from a year earlier to $75 million because of
a year-earlier income-tax benefit and the year-earlier inclusion of earnings
from its REIT and vacation-rental spinoffs.