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Companies are spending more on business travel, translating into stronger demand for hotel rooms as well as at hotel restaurants and bars, Christopher Nassetta, CEO of Hilton Worldwide Holdings Inc., said on a conference call Thursday.
Hilton’s revenue from food and beverage sales increased by 6 percent in the first quarter from a year earlier. That gain outpaced growth in revenue per available room, which increased by 3.9 percent.
“Business confidence has been increasing and is at reasonably high levels,” Nassetta said. “They’re feeling good, and they are definitely both traveling more” individually and in groups. “And they’re spending more.”
Hospitality-industry analysts have anticipated stronger demand for business travel following a U.S. corporate tax cut signed into law by President Donald Trump in December. Nassetta said his conversations with corporate customers have also revealed greater optimism thanks to a favorable regulatory environment under the Trump administration.
Other hotel owners and operators have been mixed on whether a strong economy is translating to business spending.
Pebblebrook Hotel Trust reported that business travel was “much stronger than expected” in a recent update of the company’s first-quarter results. Richard Stockton, CEO of Braemar Hotels & Resorts Inc., said in an interview last week that the tax law and strong stock-market results have fueled demand for luxury leisure travel but that “we’re still waiting to see if there’s an impact” on general corporate travel.
©2018 Bloomberg L.P.