Hilton earnings disappoint as pandemic pains linger, shares fall
(Reuters) -Hilton Worldwide on Wednesday posted quarterly results below estimates as a rise in COVID-19 cases and tighter travel curbs in parts of Europe and Asia hurt bookings, sending shares of the U.S. hotel operator down more than 1% before the bell.
Analysts expect hotels to rebound strongly in the second half of this year but remain reserved about how quickly demand would pick up for business travel, on which major chains including Hilton and rival Marriott rely heavily.
Hilton said it suspended operations at 275 properties, mostly in the United States and Europe, during the first quarter due to the pandemic, compared with about 730 properties a year earlier.
The company said it has seen "meaningful improvement" in bookings in March and April as coronavirus vaccination rates rise and more people feel confident about traveling again.
Hilton's revenue per available room (RevPAR) - a key measure for a hotel's top-line performance - fell more than 38% to $46.23 in the quarter ended March 31 from a year earlier. That, however, was an improvement from $40.68 in the prior quarter.
Jefferies analyst David Katz said he expects Hilton's results to continue to improve in the United States and China through the second quarter and in Europe by the second half of the year.
"Both of these non-U.S. regions are recovering more gradually due to vaccine-related challenges," Katz said in a note.
While Hilton cut expenses by 54% to $853 million, it still missed Wall Street's profit expectations and posted a quarterly loss.
On an adjusted basis, Hilton gained 2 cents per share, missing analysts' average estimate for a profit of 8 cents per share, according to Refinitiv data.
Total revenue fell more than 54% to $874 million and missed estimates of $1.10 billion.
(Reporting by Shreyasee Raj in Bengaluru; Editing by Ramakrishnan M.)
