(Reuters) -Hotel operator Hilton Worldwide slashed its forecast for 2025 room revenue, signalling that weak travel demand would persist as consumers dial down discretionary spending.
Travel demand in the U.S. has taken a hit as households worry that a shifting tariff policy could push up the price of goods and eat into their purchasing power.
CEO Chritospher Nassetta said in July that he expected demand in the U.S. market, which accounts for roughly 65% of the company’s total rooms, to only begin normalizing by the fourth quarter.
Hilton’s U.S. revenue per available room (RevPAR), a crucial metric for the hospitality industry, fell 2.3% during the third quarter. Its mid-scale and budget hotels also declined, reflecting tighter budgets and a cut in discretionary spending among cost-conscious guests.
In contrast, RevPAR at its luxury properties, such as the LXR and Conrad, saw strong growth as affluent, economically reslient travelers continued to spend.
This helped Hilton’s total revenue for the quarter ended September, which came in at $3.12 billion, above analysts’ average estimate of $3.01 billion, according to data compiled by LSEG, lifting shares up 3% in premarket trading.
The Waldorf Astoria-parent also posted an adjusted profit of $2.11 per share, compared with Wall Street estimates of $2.06.
The McLean, Virginia-based company now expects full-year RevPAR to grow up to 1%, compared with its earlier forecast of an up to 2% rise.
It sees 2025 adjusted profit per share of $7.97 and $8.06, higher than the $7.83 to $8 per share it had previously forecast.
(Reporting by Aishwarya Jain in Bengaluru; Editing by Shinjini Ganguli)
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