Hilton and Accor See Revenues Surge

Skift Daily Briefing Podcast

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Good morning from Skift. It’s Thursday, October 27. Here’s what you need to know about the business of travel today.

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Episode Notes

Hilton Hotels joined a growing number of travel companies that, unlike their counterparts in other industries, say they are seeing no warning signs on the horizon from a worsening economy. The global company said Wednesday it expects growing travel demand to help propel it to a continued revenue boom through the new year, reports Senior Hospitality Editor Sean O’Neill.

Hilton, which owns 18 brands, raised its profit forecast for 2022 after recording a jump in earnings during the third quarter. The company also saw its system-wide revenue per available room — a key hotel industry metric — rise 5 percent from the same period in 2019, a first since the start of the pandemic. O’Neill writes the strength of the dollar compared to the euro drove many Americans to travel to Europe during the third quarter, which helped boost Hilton’s revenue.

Hilton CEO Christopher Nassetta acknowledged the prospect of economic slowdowns worldwide. But he said the company’s tailwinds are stronger than its headwinds, citing developments like the return of large international conferences. Hilton executives added most of its hotels will have pricing power through the rest of the year at least.

Next, Paris-based hotel group Accor is trying to figure out ways to deal with inflation just like dozens of other major travel companies. But Accor, which is seeing revenues surge, believes pricing power will help it overcome rising costs, reports Senior Hospitality Editor O’Neill.

The company reported record revenues during its third quarter earnings call on Wednesday, with its revenue per available room up 14 percent from pre-Covid levels. O’Neill writes most of Accor’s gains have come from pricing power. Chief Financial Officer Jean-Jacques Morin said Accor’s third-quarter average pricing was 23 percent higher than 2019 levels. Morin added if Accor can raise average room rates by 5 percent, it should be to cover inflation’s negative effects, including increased labor costs in the head office.

Accor generated roughly $1.1 billion in revenue during the third quarter, a 9 percent increase from the same timeframe in 2019. The company did not reveal its net income for the period.

We end today looking at family travel’s strong recovery. A new survey reveals 85 percent of U.S. parents are planning to travel with their children in the next year, reports Editorial Assistant Rashaad Jorden.

The 2022 U.S. Family Travel Survey, released on Wednesday, also found that family travel spending is poised to surge. Fifty-three percent of respondents said they plan to spend more on domestic travel while 49 expect to increase spending on international travel. The survey also revealed Covid becoming less of a factor in travel decisions. Only 10 percent of respondents not planning to travel said they felt unsafe because of the pandemic, a 14 percentage point drop from last year.