Hilton CEO Chris Nassetta took an upbeat stance during the company's Q2 earnings call on Wednesday, citing an improvement in macroeconomic outlook for the second half of the year.
"The consensus view last quarter was that the second half of the year would see a little bit more [of a] meaningful slowdown," said Nassetta. "The consensus view right now, broadly, is that it's going to slow down, but it's more of a soft landing. We have reasonable sightlines now into the third quarter, which we feel very good about."
The upgraded forecast comes as Hilton enjoys what Nassetta described as "a wildly strong summer." He acknowledged that a few U.S. markets that enjoyed skyrocketing leisure demand amid the pandemic -- including South Florida, Hawaii and parts of Southern California -- have seen some modest pullback.
"But I mean, they're just sort of coming back, not to Earth, but our universe," said Nassetta. "In those markets, [we're still] way over '19 levels."
Nassetta added that, overall, the company is "not seeing any signs of weakness." International markets that have lagged in their recovery, such as China, are making material progress.
"The group segment remains really, really strong, and obviously leisure is growing at a somewhat slower pace because of the comps, but it's still way over the prior high watermarks," he said. "And business transient keeps grinding up and getting better."
A new luxury brand is in the works
Amid these positive trendlines, Nassetta also discussed continued brand innovation. The company has recently rolled out fresh concepts in the economy and midscale sectors, and now Hilton expects to round out its luxury portfolio with a new lifestyle brand launch sometime next year.
"LXR to a degree is sort of luxury lifestyle, but we don't have a pure hard brand in the luxury lifestyle space," said Nassetta. "We will. We're doing developmental work there."
For the second quarter, Hilton reported that systemwide revenue per available room (RevPAR) increased 12.1% year over year, to $122.02, while occupancy rose 4.2 percentage points, to 74.6%. Average daily rate (ADR) for the quarter rose 5.9%, to $163.47.
Hilton posted Q2 net income of $413 million, up from $367 million a year earlier. The company's second-quarter revenue was up just over 25%, totaling $4.95 billion.