(Reuters) – Hotel operator Hilton Worldwide Holdings (NYSE:) beat Wall Street estimates for first-quarter revenue and raised 2024 profit forecast on Wednesday, banking on international travel demand to offset normalizing trends in the U.S.
International travel demand is expected to continue to rebound this year as global air connectivity increases and travelers flock to Asian and Latin American destinations, while demand for domestic travel plateaus in North America.
The company forecast annual adjusted profit of between $6.89 and $7.03 per share, up from the previous range of $6.80 to $6.94 per share.
The hotel operator’s first-quarter revenue rose 12% from a year earlier to $2.57 billion, beating analysts’ expectations of $2.53 billion, according to LSEG data.
Hilton, which owns brands such as Waldorf Astoria Hotels & Resorts, reported a quarterly revenue per available room (RevPAR), an important metric in the hospitality industry, of $104.16.
“System-wide RevPAR increased 2.0 percent as renovations, inclement weather and unfavorable holiday shifts weighed on performance more than anticipated,” said CEO Christopher Nassetta.
Hilton’s shares were up 2% in premarket trading.
“US RevPAR turned negative but Americas and Middle East & Africa accelerated … implying global travel demand still robust,” Richard Clarke, analyst at Bernstein, wrote in a note.
RevPAR increased 14.8% in the Middle East and Africa during the first quarter, higher than any other region, but fell 0.4% in the U.S.
The company reported an adjusted profit of $1.53 per share for the quarter, compared to analysts’ average estimate of $1.42 per share.
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Hilton expects net unit growth, or room additions, to be between 6% and 6.5% in 2024, excluding the effect of its planned acquisition of the Graduate Hotels brand.
The company reported net unit growth of 5.6% during the quarter. (This story has been corrected to fix the U.S. RevPAR percentage fall to 0.4 in paragraph 9)
