Although Hilton saw "positive momentum" in mid-2020 taper off by November and December, the company is expecting "improved fundamentals heading into s
Although Hilton saw “positive momentum” in mid-2020 taper off by November and December, the company is expecting “improved fundamentals heading into spring,” according to Hilton CEO Chris Nassetta.
“As we look to the year ahead, we remain optimistic that accelerated vaccine distribution will lead to easing government restrictions and unlocked pent-up travel demand,” Nassetta told investors during Hilton’s fourth-quarter earnings call today, adding that the company expects all rooms systemwide to be reopened by the end of the second quarter.
As of earlier this month, 97% of Hilton’s global hotel properties were open, with approximately 220 hotels still temporarily closed.
In addition to wider vaccine availability, Nassetta said he expected increased savings levels to play a key role in boosting leisure travel demand in the U.S.
“Over the last year, the personal savings rate in the U.S. has nearly doubled, increasing by more than $1.6 trillion to $2.9 trillion, with the potential to go even higher given additional stimulus,” he said. “We expect this to drive greater leisure demand.”
Nassetta added that Hilton’s current booking pace appears to indicate some level of pent-up demand for business travel, as well, with the company also reporting a “meaningful step up” in new group demand in January.
“You see the infection rate coming down, and you’re starting [to see that reflected] in the booking trends,” Nassetta said. “The business trends are clearly, sort of week by week, marching up. People are more interested in travel for leisure and business, and our polling [shows that] over 80% of them say they want to get back out on the road, which is the highest number we’ve seen since this mess began.”
For the fourth quarter, Hilton saw systemwide RevPAR decline 59.2% from the same period in 2019.
Hilton posted a fourth-quarter revenue decline of just over 62%, to $890 million, as well as a fourth-quarter net loss of $225 million. For the year, the group reported a net loss of $720 million.