Hilton Worldwide’s second-quarter business transient revenue per available room dropped 2 percent year over year, but CEO Christopher Nassetta said on a Wednesday earnings call that the company is seeing “really early” signs of a rebound outside of government travel.
Nassetta pointed to “government spending declines, weaker international inbound business and broader economic uncertainty,” along with a shift in the Easter holiday from 2024 to 2025 as key drivers in the RevPAR decrease, as corporates paused travel amid economic turbulence following the introduction and in some cases postponement of a new suite of U.S. tariffs.
But Nassetta noted that “while it’s early in the third quarter, we have seen a pickup in nongovernment business demand,” citing the optimism expressed by the U.S. airlines that have reported Q2 results.
“The green shoots … are what we’re seeing in booking behavior on the group side and what we’re seeing very recently on the corporate business transient side, which is saying that the ‘wait and see,’ it’s thawing,” Nassetta said. “The freeze of April, May and to a degree June, we’re starting to see a thaw, but it’s really early.”
Nassetta also cited “favorable trends in company meetings” as a source of optimism regarding corporate demand. “We did see positive momentum in lead volumes from corporates with month-over-month sequential growth throughout the quarter.”
Hilton Q2 Metrics
Hilton’s systemwide second-quarter RevPAR declined 0.5 percent year over year to $121.79, somewhat below the “roughly flat” projection for Q2 the company issued three months ago.
“The quarter turned out to be a bit noisier than expected,” Nassetta said.
Hilton’s systemwide second-quarter occupancy declined 0.5 percentage points to 74.4 percent, and average daily rate increased 0.2 percent to $163.78.
In the United States, RevPAR declined 1.5 percent year over year to $131.66, while occupancy declined 1 percentage point to 75.8 percent, and ADR declined 0.2 percent to $173.61.
Hilton projected third-quarter RevPAR on a currency-neutral basis would range from flat year over year to “modestly down,” and projected full-year RevPAR to range from flat to an increase of 2 percent.
Total second-quarter revenue increased more than 6 percent year over year to more than $3.1 billion.
Hilton’s development pipeline at the end of the second quarter totaled 510,600 rooms, up 4 percent from the year prior.
Hilton Q1 performance
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