Hilton Sees Signs of Pandemic's Pent-Up Demand Moderating in 2023


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Skift Take

The stunning year-over-year pace of growth that defined travel in 2022 is starting to slacken as consumers and business travelers succeed in catching up on trips lost in the pandemic and spending down their savings. That said, Hilton's fourth quarter revenue and profits were stellar.

Hilton Worldwide's earnings report on Thursday was a good news-bad news story.

In good news, the owner of 19 brands, such as Waldorf Astoria and DoubleTree, continued to see a strong hunger for travel through the end of 2022 thanks to a post-pandemic surge in trips. The stock price for the McLean, Virginia-based company surged to a nine-month high in reaction.

But in bad news, the hotel operator predicted that 2023 would bring respectable but more muted growth as the industry will return to a normalized trajectory. The company also reported unusually soft signings for its pipeline of new properties.

Strong Quarter, Rebound Year

Hilton's fourth quarter system-wide revenue per available room — a key industry metric — was $102, the company said. That was 7.5 percent above the level in the comparable period in 2019, making for the second consecutive quarter that the figure surpassed pre-pandemic levels.

"Small and medium-sized businesses remained an important and growing part of our business travel segment, accounting for roughly 85 percent of our segment mix," said Chris Nassetta, president and CEO, in a call with analysts on Thursday.

The company said it sold guest rooms, ballrooms, and all-inclusive resort bookings at higher rates because of booming travel demand.

In the fourth quarter, the hotel operator produced $333 million in net income on $2.44 billion in revenue. For the full year of 2022, the company produced $1.255 in