Hilton Worldwide (HLT.N), opens new tab cut its forecast for 2025 room revenue growth on Tuesday, becoming the first U.S.-based hotel operator to temper its outlook as consumer spending on travel takes a hit from a global trade war.
American consumers are growing cautious about discretionary spending such as travel, after President Donald Trump’s sweeping tariffs and the resulting trade war sparked fears of an economic recession.
U.S. consumer sentiment shrank for the fourth month in a row in April, while inflation expectations were at their highest since 1981.
“Travelers are largely in a wait-and-see mode as the rapidly changing macro environment continues to unfold,” CEO Chris Nassetta said on the earnings call.
The McLean, Virginia-based company now expects full-year revenue per available room (RevPAR), a key metric in the hospitality industry, to be flat to up 2%, compared to 2% to 3% previously.
“For now, we believe the lower-end of the FY guidance range is the more likely outcome than the higher-end of guidance,” Truist Securities analyst Patrick Scholes said.
Earlier this month, legacy US carriers Delta Air Lines (DAL.N), opens new tab, Southwest (LUV.N), opens new tab, and American (AAL.O), opens new tab pulled their financial forecast for 2025. Delta added that travel demand has "largely stalled" due to the economic uncertainty fueled by tariffs.
It expects full-year net income to be in the range of $1.71 billion and $1.75 billion, compared to $1.83 billion to $1.86 billion previously.
The Waldorf Astoria-parent posted first-quarter adjusted profit of $1.72 per share, beating Wall Street estimates of $1.61 per share, according to data compiled by LSEG.
It was helped by a 7.7% rise in room revenue in the Americas, a region which covers popular tourist destinations in Canada, Mexico and the Caribbean but excludes the U.S..
The company’s total revenue for the first quarter ended March 31 came in at $2.70 billion, up 4.7% from a year earlier.
Hilton’s results will be followed by Airbnb (ABNB.O), opens new tab on Thursday and Marriott International (MAR.O), opens new tab next week.
Explore RevTech News for the latest advancements in Revenue, Business & Marketing Operations with insightful updates from industry experts!
