Hotel operator Hilton Worldwide raised its annual adjusted profit forecast on Wednesday, banking on international travel demand to offset normalizing domestic travel in the US.
International travel demand is expected to remain strong this year as global air connectivity increases and travelers flock to Asian and Latin American countries, while demand for domestic travel plateaus in North America.
Global Travel Demand
The company forecast 2024 adjusted profit of between $6.89 and $7.03 per share, up from the previously forecast $6.80 to $6.94 per share.
Hilton, which also owns brands such as Waldorf Astoria Hotels & Resorts, reported quarterly revenue per available room (RevPAR) of $104.16, up 2% from the same period last year.
"US RevPAR turned negative but Americas and Middle East & Africa accelerated ... implying global travel demand still robust," Richard Clarke, analyst at Bernstein, wrote in a note.
Shares
Hilton's shares were up 2.5% in light premarket trade.
The hotel operator reported an adjusted profit of $1.53 per share for the first quarter, compared to analysts' average estimate of $1.42 per share, according to LSEG data.
Total quarterly revenue was $2.57 billion (€2.40 billion). Analysts were expecting revenue of $2.53 billion.
Graduate Hotels
Hilton said in March it will buy Graduate Hotels from Adventurous Journeys Capital Partners for $210 million (€192 million), marking its first brand acquisition in over two decades as pressure in the hotel industry creates opportunity for consolidations.
Hilton said it believes the addressable market for the Graduate brand that primarily caters to locations near major colleges and universities in the United States and the United Kingdom, is 400-500 hotels globally.
The transaction is expected to close in the second quarter, and Hilton sees the fee contribution for the first full-year of ownership to be about $16 million (€14.6 million).
