Hilton Worldwide Holdings (HLT, Financial) just tempered its outlook for 2024, lowering expectations for revenue growth amid softening demand in key markets like the U.S. and China. The company now sees revenue per available room (RevPAR) climbing by 2.0% to 2.5% this year, down from earlier forecasts of up to 3.0%. Even though Hilton outpaced earnings predictions with a $1.92 EPS in Q3, revenue missed the mark at $2.87 billion, leading to a nearly 3% drop in share price. The Q4 guidance isn't exactly inspiring either, with adjusted EPS projections falling short of analyst expectations.
However, Hilton's luxury brands, particularly Waldorf Astoria, kept the company's numbers afloat, boasting a solid 5.3% RevPAR growth. The problem lies elsewhere, with mid-range brands like Hampton by Hilton barely moving the needle. In China, where RevPAR fell by 3.4%, the economic slowdown has clearly hit harder, while other regions, such as Europe, managed stronger gains, with RevPAR surging 7.3%. This uneven performance across Hilton's portfolio shows where the recovery's momentum is—and where it's not.
Still, Hilton isn't backing down from its growth ambitions. The company added an impressive 36,600 rooms in Q3, ramping up its development pipeline by 8% from the previous year. While it has dialed down near-term RevPAR growth expectations, it's sticking to plans for a 6.0% to 7.0% net unit expansion in 2025, focusing heavily on the upscale and luxury segments. CEO Christopher Nassetta remains confident, emphasizing that Hilton's long-term growth strategy stays intact, despite short-term macro challenges creating some turbulence.
