Hilton shares good and bad news during Q1 earnings call

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Hilton shares good and bad news during Q1 earnings call
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Hilton is bracing for what CEO Chris Nassetta said will be a “very bad” second quarter, with the company reporting a systemwide revenue per available room (RevPAR) decline of roughly 90% for the month of April alone.

“Overall, I do not think our first-quarter results provide clear insight into the current environment, given the timing of the pandemic, and we expect a much more dramatic impact on our second-quarter results,” Nassetta told investors during the group’s Q1 earnings call on May 7. 

Earlier in the first quarter, Hilton said RevPAR plunged 23% in February and 57% in March. For the full three-month period, RevPAR was down 22.6%.

“[We will] start to see a recovery as we get into Q3, Q4,” forecast Nassetta. “But getting back to the sort of levels of occupancy -- which for us, were in the low- to mid-70s -- of 2019, which were all-time highs, that’s going to take time. That’s going to take two or three years.”

Still, Nassetta pointed to bright spots, including the reopening of nearly all of Hilton’s 150 hotels in China. Occupancy in China surged past 50% on May 1 versus a low of 9% in early February.

Hilton’s worldwide occupancy has risen from a low of 13% to 23%.

“We think temporary hotel suspensions have plateaued, and we are now seeing reopening requests,” Nassetta added. “In the last week alone, we booked tens of millions of dollars of group business in the Americas. In addition, we are starting to see double-digit increases in digital traffic and booking activity across all segments.”

Hilton’s first-quarter revenue fell approximately 12.9%, to $1.92 billion. Net income plummeted 88.6%, to $18 million.

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