Increased Business Transients

Hilton: Increased Business Transients, Led By SMEsThrough Q2

Hilton Worldwide’s business-transient segment saw an improvement during the second quarter. June revenue per room increased 20 percent compared to the first quarter. This was disclosed Thursday by Christopher Nassetta, Hilton CEO and president. He said that he saw positive momentum in larger accounts and small- and medium-sized business results.

Hilton: Increased Business Transients, Led By SMEsThrough Q2

He said that June’s business transient night demand reached 70 percent. The average daily rate was more than 80 percent. Similar progress was made in July with room demand maintaining at 70 percent and rates at 90% of the 2019 levels.

Nassetta pointed out that the systemwide U.S. occupation rate was 74% on July 28, to illustrate how business travel has improved. He stated, “If we are running 74 percent it’s not leisure.” We have many business-oriented hotels as well as leisure-oriented hotels. Mid-week occupancy at this level is definitely indicative of business travel being back.

According to him, weekday occupancy rates after Memorial Day rose 10 percent or 20% and that this was due to the dominance of small and medium-sized companies. But even pre-Covid 80 percent of business travel we did was small or medium-sized businesses.

According to Nassetta, the group segment was mainly driven by social events and improved in the second quarter. It grew nearly 20 percent from the first quarter. June ended at over half the 2019 levels. For 2022, group bookings are available at rates that exceed 2019 peak levels.

Hilton reports Q2 systemwide revenue for available rooms grew 233.8% year-over-year, but was down 36% compared to the second quarter 2019. The June RevPAR increased 24 points over the previous quarter, but was 29 points lower than June 2019. Comparable occupancy systemwide was 58.5% for the quarter. This is an increase of 36.1 percentage points over last year. The average daily rate was $124.75, an increase of 28 percent over that in the same period in 2020.

Hilton opened 119 new hotels in the quarter, with almost 20,000 rooms. Nassetta stated that net units rose by 7 percent over the previous year due to “strong openings in America and fewer overall withdrawals”.

About 401,000 new rooms were completed by the company at the end of quarter. More than half of these rooms are still under construction. Nassetta said that Hilton had also recorded a record number conversion signings during the quarter. These 40 hotels accounted for around 30 percent of all total signings. The company anticipates that net unit growth will be between 5 and 5.5 percent in 2021.

Hilton opened the Signia Orlando Bonnet Creek in its first meeting-oriented Signia by Hilton property. The Signia Atlanta is scheduled for opening in 2023. Currently, 99 percent of Hilton hotels are open.

Hilton posted net income of $128million for the quarter. This is an increase from last year’s loss of $432million.

Publited at Thu 29 July 2021 21.55:04 +0000

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