HILTON Worldwide Holdings raised its forecast for full-year room revenue growth on Tuesday betting on growing travel demand, especially among affluent customers, and to reflect a boost from the recently concluded soccer World Cup.
Wealthier households have continued to spend on luxury experiences despite persistent inflation and weaker revenue from the Middle East region.
The FIFA World Cup — held in the United States, Canada and Mexico — also boosted tourism in the region, and its conclusion on July 19 is seen boosting demand for even budget and mid-scale hotels in the third quarter.
Demand for such properties had been lackluster last year as budget-conscious customers curtailed discretionary spending due to economic uncertainties.
CEO Christopher Nassetta said its operations, especially luxury hotels, got “extra torque” in the second quarter from the World Cup as it was focused on lots of inbound, high-end international travel and in urban markets.
While Hilton said its outlook reflected potential benefits from the World Cup, its third-quarter adjusted earnings forecast of $2.28 to $2.34 per share was below analysts’ average estimate of $2.42 per share, according to data compiled by LSEG.
The company also expects the fourth quarter to be affected by “unfavorable calendar shifts” and midterm elections.
Shares of the hotel operator were down about 4 percent.
Hilton’s revenue per available room rose across its segments, including luxury, mid-scale and budget hotels, in the second quarter.
The McLean, Virginia-based company expects RevPAR — a key lodging metric that tracks average daily rate and occupancy — to grow between 3 percent and 3.5 percent for fiscal 2026, compared with its previous forecast of 2 percent to 3 percent.
However, room revenue from its Middle East and Africa region plummeted 29.5 percent, reflecting dampened travel to the region where conflict has entered its fifth month, creating uncertainty over the second half of the year.
Hilton on Tuesday raised its annual adjusted earnings-per-share forecast to between $8.89 and $9.01, from a range of $8.79 to $8.91 earlier.
The per-share outlook assumes share repurchases completed through the second quarter, but excludes the impact of any additional buybacks for the rest of the year.
On an adjusted basis, Hilton earned $2.29 per share for the quarter, higher than $2.20 a year earlier and in line with analysts’ estimates, according to data compiled by LSEG.
Total revenue for the quarter ended June 30 was $3.34 billion, up 6.5 percent from a year earlier, compared with estimates of $3.33 billion.
