US hotel operator Hilton Worldwide Holdings Inc has recorded a loss for the first quarter of 2021 and results below estimates as a rise in COVID-19 cases and tighter travel curbs in parts of Europe and Asia hurt bookings.
Analysts expect hotels to rebound strongly in the second half of this year but remain reserved about how quickly demand will pick up for business travel, on which major chains including Hilton and rival Marriott rely heavily.
Suspended Operations
Hilton said that it suspended operations at 275 properties, mostly in the US and Europe, during the first quarter due to the pandemic, compared with approximately 730 properties a year earlier.
"Meaningful Improvement" In Bookings
The company said that it saw "meaningful improvement" in bookings in March and April as coronavirus vaccination rates rose and more people feel confident about travelling again.
RevPAR
Hilton's revenue per available room (RevPAR) - a key measure for a hotel's top-line performance - fell by more than 38% to $46.23 in the quarter that ended on March 31 from a year earlier. However, that was an improvement from $40.68 in the prior quarter.
Jefferies Analyst Statements
Jefferies analyst David Katz said that he expects Hilton's results to continue to improve in the US and China through the second quarter and in Europe by the second half of the year.
"Both of these non-US regions are recovering more gradually due to vaccine-related challenges," Katz said in a note.
Missed Expectations
While Hilton cut expenses by 54% to $853 million, it still missed Wall Street's profit expectations and posted a quarterly loss.
On an adjusted basis, Hilton gained 2 cents per share, missing analysts' average estimate for a profit of 8 cents per share, according to Refinitiv data.
Total revenue fell by more than 54% to $874 million and missed estimates of $1.10 billion.
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