Hilton Warns Revenue Per Room Could Worsen Due To COVID-19 Crisis
Hilton Worldwide Holdings Inc has said that it expects its first-quarter revenue per available room (RevPAR) to fall between 22% and 24%, and warned that the coronavirus outbreak could further erode the key performance measure for its hotels this year.
The owner of Waldorf Astoria and Conrad hotel chains, which has had to shut operations at several hotels, said that it anticipates additional suspensions due to coronavirus-related travel bans.
"We cannot presently estimate the financial impact of this unprecedented situation...but we expect it will continue to have a significant adverse impact on our results of operations," Hilton said in a statement.
As of April 14, the US hotel operator had suspended operations at nearly 1,000 hotels, which represents approximately 16% of its global hotel properties.
"The revenue per available room update is in-line with industry trends and expectations, but we consider results for the next several quarters to be less consequential for the stock's trajectory than any prospective indications for 2021," said David Katz, an analyst at Jefferies, in a note.
Hilton has already abandoned its full-year outlook and furloughed workers to save costs.
Signs Of Recovery In China
However, Hilton said that it is seeing early signs of recovery in China, with current occupancy of approximately 22%. 130 of Hilton's nearly 150 hotels in China that previously suspended operations have re-opened.