Hilton's CEO Christopher Nassetta reported a downturn in travel demand attributed to economic uncertainty, stating consumers are in a 'wait-and-see mode'. While Hilton's revenue per available room saw modest growth in early 2023, broader economic challenges emerged in March, affecting especially leisure travel. Consequently, Hilton revised its 2025 growth forecast down to a range of 0 to 2%. Similar trends are observed across the travel industry, with airlines also adjusting schedules due to weakening demand during the summer months. Nassetta alluded to market reactions being overly negative despite potential for recovery.
We believe travelers are largely in a wait-and-see mode, as the rapidly-changing macro environment continues to unfold.
Weaker trends have continued into the second quarter, with short-term bookings roughly flat year-over-year.
I think at the moment the risk in the marketplace is sort of weighted too heavily to the downside.
Hilton has downgraded its guidance for the year, projecting revenue per available room growth of 0 to 2%.
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