Hilton Foresees Solid US Leisure Travel Demand and Embarks on Luxury Expansion
Hilton remains optimistic about the consistent demand for leisure travel within the United States while embarking on a strategic luxury expansion through a partnership with the prestigious Small Luxury Hotels of the World (SLH). This collaboration marks a significant move towards diversifying Hilton’s luxury accommodation offerings on a global scale.
In the hotel industry, revenue per available room (RevPAR) serves as a crucial performance indicator. Hilton reported a 5.7 percent increase in RevPAR year-over-year in 2023, reaching $107.69. However, projections for the coming year suggest a slight leveling off, with expected profits ranging between $6.80 and $6.94 per share, slightly below the anticipated $7.07 per share by analysts.
During the earnings call, Hilton’s President and CEO, Chris Nassetta, expressed confidence in the company’s trajectory. “We foresee our performance being buoyed by growth across all major regions, with international markets slightly outpacing the US. Anticipated positive RevPAR growth across all segments will be driven by the ongoing recovery in business transient and group segments, supported by a stable leisure demand,” Nassetta explained. He also highlighted the expected uplift in small company meetings and significant association and convention businesses as key drivers for robust group performance.
Looking ahead, Hilton projects a 2 to 4 percent increase in RevPAR from 2023, factoring in both rising costs and new development ventures, with a forecasted full-year net income ranging between $1.69 and $1.72 billion. Last year, Hilton witnessed a record-breaking number of hotel signings, boasting over 3,300 new hotels in its development pipeline, showcasing the brand’s commitment to growth and expansion.
The partnership with Small Luxury Hotels of the World is poised to further enhance Hilton’s luxury hotel portfolio. SLH, known for its collection of 560 boutique luxury hotels across 90 countries, will now be accessible for booking and earning loyalty rewards through Hilton Honors. This collaboration not only enriches Hilton’s luxury brand offerings, including Waldorf Astoria Hotels & Resorts, but also provides Hilton customers, especially Hilton Honors members, with an unparalleled selection of exquisite boutique hotels.
Shaun Leleu, Chairman of Small Luxury Hotels of the World, expressed enthusiasm about the partnership: “We’re thrilled to begin this win-win relationship with Hilton, opening up exciting opportunities for both brands. Hilton customers gain access to our unmatched collection of boutique luxury hotels, while our properties benefit from extended reach to a loyal and discerning audience.”
This partnership signifies a transformative moment for independently owned hotels worldwide, offering them a unique opportunity to connect with Hilton’s extensive customer base while maintaining their distinctive identity and high standards of luxury and service. As Hilton forges ahead with its luxury expansion and maintains a positive outlook on US leisure travel demand, the partnership with SLH is set to redefine the luxury travel experience for discerning travelers globally.