Hilton boosts profit outlook as it expects travel demand and economic growth to accelerate

By Steve Gelsi

Hotel-chain operator beats earnings target and raises profit outlook as it predicts less sluggish revenue-per-room figures ahead

The hotel giant beat its earnings target and raised its profit outlook as it sees reduced constraints on revenue on the horizon.

Hilton Worldwide Holdings Inc.'s stock rose Wednesday as the hotel giant lifted its full-year earnings target and said it expects economic tailwinds to help it reverse a drop in revenue per available room.

The company expects more favorable U.S. travel trends to start emerging in the first half of next year due to the FIFA World Cup, the 250th anniversary of American independence and economic activity tied to what's expected to be an active midterm election cycle. While the company continues to expand around the globe, the U.S. accounts for about 75% of all business.

Other tailwinds on the horizon take the form of unspent money in the Biden administration's infrastructure bill, money being put to work by the Trump administration in the chip business, and many billions of dollars being channeled into data centers and other AI infrastructure.

"You can, you know, get caught up in the noise and tariffs and ... there's a lot, you know, geopolitically - I don't have my head in the sand, but I like to try and lift up above noise," Chief Executive Christopher Nassetta told analysts. "I would bet a lot of money that '26 is going to be better than '25, and I'd bet a lot of money '27 is going to be better than '26. The exact slope of that is, you know, is, is difficult to determine."

Hilton's stock (HLT) moved up by 3.9% in morning trading as one of the top gainers among the S&P 500, as the broad index SPX fell 0.3%.

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Hilton Worldwide said lower average daily rates for hotel rooms fell and occupancy was "modest" during its the third quarter of its fiscal year.

That led to a third-quarter drop of 1.1% in comparable revenue per available room, or RevPAR, a key metric in the hotel business and one that's closely watched by Wall Street.

That figure missed the consensus analyst estimate of a 0.8% drop in RevPAR, according to FactSet data.

Looking ahead, Hilton expects RevPar to be flat to up 1% for the full year 2025, compared with an analyst consensus of an increase of 0.4%.

Nassetta said the company is forecasting stronger RevPAR growth over the next several years given the regulatory and economic backdrop and limited growth in the overall supply of hotel rooms.

"We remain optimistic that in the U.S., lower interest rates, a more favorable regulatory environment, certainty on tax policy and a significant investment cycle will accelerate economic growth and travel demand," the CEO said, according to a prepared statement.

The hotel-chain operator is also expecting adjusted 2025 earnings of $7.97 a share to $8.06 a share, up from its earlier range of $6.82 a share to $6.99 a share. The midpoint of the higher outlook is above analyst estimate of $7.99 a share.

Hilton said its third-quarter profit rose to $420 million, or $1.78 a share, from $344 million, or $1.38 a share, in the year-ago quarter.

Adjusted profit of $2.11 a share topped the FactSet consensus estimate of $2.05 a share.

Third-quarter revenue increased to $3.12 billion from $2.87 billion in the year-ago quarter and beat the analyst projection of $2.99 billion.

The industry has been underinvesting in hotel space due to the impact of the COVID-19 downturn in travel in 2020 through 2022, but Hilton has been stepping up room-renovation efforts recently.

Hilton's stock had gained 7.6% in 2025 through Tuesday, while the S&P 500 benchmark was up 14.5%.

-Steve Gelsi

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10-22-25 1121ET