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Travel demand boosts Hilton earnings

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Yahoo Finance Live anchors discuss quarterly earnings for Hilton.

Video Transcript

- All right, from snacks to travel, Hilton earnings are out, with a rising outlook on spiking travel demand. You're seeing Hilton shares pop here in the early, going up close to 5%. And I would say finally, that is a justified move in response to earnings.

We've been talking about all morning long how a lot of these earnings reports are seeing pops, maybe they don't deserve it. Hilton deserves it. RevPAR, revenue per available room, a key industry metric for the hotel industry, up 54.3% year over year. You saw occupancy gains strongly across all of Hilton's brands.

You had them also come out here and say voice confidence in continuing to buy back stock. We saw the similar type of move here by Alphabet. But by and large, [INAUDIBLE] from Hilton. Likely, one coming in a few days from Marriott as well. And later on, we'll talk to Hilton CFO Kevin Jacobs all about it.

- Two things-- and this totally makes sense to what you were mentioning a moment ago, because of what we've also heard from other players within the travel space. Even as Delta CEO Ed Bastian was telling us about how they're not reducing fares actively because the demand is there, and they have the opportunity to lock in certain revenue rates as of right now. The same thing is going to be the case for the accommodation space. As long as there is the demand that is still set in place that customers are not balking at, then they're going to say, all right, well, that is just the-- that's the rate that we're charging.

And I think going forward from right now, it's going to come also back down to the number of rooms that they continue to add on in capacity. They added, I believe it was 14,400 rooms to their system during the second quarter. That contributed to 13,300 net additional rooms in Hilton's system during the period.

And so moving forward from here, it's going to be about the capacity. It's about where we see even more of the travel spending remain intact. Because a lot of the travel spending this year, let's be real, it was revenge travel spending. And so if that remains the case, depending upon where the pricing strategies and mechanisms are, that's in this shift from goods to services where Hilton has been a beneficiary, but question is, does that continue to be the case?

- I'll just add quickly-- you mention rooms. So they now have Hilton 23,400 rooms in development. That is huge. That is an acceleration from what we saw in the second quarter from Hilton. If they believe demand was going to fall off a map, they're not putting that-- those-- that type of number into the development pipeline. I mean, that is a huge, huge number.

- Yeah, absolutely.