Hilton Worldwide was boosted by significant contributions from business travel and group bookings in the first quarter of 2022, as the market showed signs of recovery after an overall “choppy start” of the year.
The global hotel company posted a net profit of 1 211 million in the first quarter, compared to a net loss of 10 109 million in 2021.
During the company’s first-quarter earnings call on Tuesday (May 3), Hilton said the per-room income (reaper) available from business trips in March was only 9 percent lower than in March 2019 figures.
Christopher Nasseta, president and CEO, said there was an “improvement trend” for bookings from large organizations, with “uninterrupted power” from SMEs in March, as well as revenue from these accounts falling just 12 percent in 2019.
Nasseta says business trips currently account for 45 percent of Hilton’s overall business mix, compared to 55 percent for pre-Covid. He predicted that the gap would close by the end of 2022 due to rising corporate profits, growing business demand and easing travel restrictions.
For groups, Hilton’s Raver reached more than 75 percent of the 2019 level by the end of March, leading to an increase in small events and social gatherings.
“Group bookings for the first quarter for all future periods were only 4 percent lower than the 2019 level, and total lead for all future periods increased by 3.5 percent,” Nasseta added.
Hilton is projecting that by the end of 2022, about 90 percent of the 2019 level will be restored.
But the company warned that while companies could expect higher prices this year than in 2019, the company’s meeting rate has risen by more than 13 percent and new group bookings have been boosted by “high single numbers” at pre-coupid rates.
Hilton’s first-quarter global holdings reached 58.1 percent – a 14.6 percentage point improvement over the same period in 2021. In Europe, Hilton’s assets rose 47.9 percent in the quarter, up 29.2 points from a year earlier.
Hilton’s global average daily rate was $ 139.17 for the quarter, up 35.2 percent year-over-year, while Reaper reached $ 80.84, up nearly 80 percent from last year.
In Europe, Hilton’s average daily rate was $ 120.70 in the first quarter, up 75 percent in 2021, while Reaper rose 350 percent year-on-year to $ 57.70.
Hilton added 13,200 rooms to its global portfolio in the first quarter, contributing to a net growth of 7,800 rooms during the period.
The company has approved 22,200 new rooms for development, upgrading Hilton’s existing pipeline to more than 410,000 rooms.