Hospitality company Oyo, once a beacon of India’s startup ecosystem, has seen its valuation drop from a peak of $10 billion in 2019 to $2.4 billion in its latest funding round.
07.08.2024 - 20:59 / skift.com / Christopher Nassetta / Sean Oneill
Hilton raised its forecast for 2024 profit on Wednesday but signaled that the post-pandemic travel surge is leveling off, particularly with American tourism.
While international demand remains robust, Hilton executives flagged a “softening” and “normalization” in domestic U.S. travel during an earnings call.
“It’s definitely softening,” said president and CEO Christopher Nassetta, though he emphasized demand is “not cratering in any way.”
The company now expects full-year revenue per available room growth of 2-3%, with the high end of that range down slightly from prior guidance. This shift suggests the pent-up leisure demand that fueled the pandemic recovery is moderating as travel patterns settle into a new equilibrium.
Hilton continued to forecast growth. It projected its full-year revenue per available room would rise between 2% and 3%, and its full-year adjusted EBITDA would be between $3.375 billion and $3.405 billion.
“The reason I use ‘normalization’ is not to be cute,” Nassetta said. “For the full year, we will globally see growth in all segments. It will be very, very low in leisure transient, but positive; a little bit higher on business transient, and then very, very strong for meetings and events.”
“Leisure transient has been normalizing because we’re just returning to a more normal life,” he said. “And it was at very elevated levels, particularly on weekends.”
Hilton’s commentary points to an emerging bifurcation in travel demand. According to its CEO, higher-income consumers still have “fat bank accounts,” while lower-income travelers face squeezed budgets. This aligns with a “wealth gap” in travel spending noted by Skift.
“If you break it apart, in sort of [income and wealth] segments, the lower sort of half of consumers, maybe even the lower three-quarters, have less disposable income available and less capacity to do anything, including travel,” Nassetta said. “They had money coming out of Covid, They’ve spent all that money. They’re now borrowing more.”
“You go up to the upper echelons and people still have pretty fat bank accounts and checking accounts and wherewithal,” he said. “So the impact of that is some continued normalization on leisure transient.”
The U.S. market accounts for about 70% of the business at the McLean, Virginia-based owner of 24 brands, such as Hampton Inn and Conrad.
Regional trends paint a nuanced, varied picture. U.S. group and business travel continues to strengthen, albeit gradually. Europe remains strong but has softened marginally. The Middle East is thriving, while China lags due to its economic slowdown and limited inbound travel.
Here’s what Nassetta said.
The company’s recent rebalancing of its portfolio mix towards luxury and lifestyle hotels
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