By Priyamvada C
(Reuters) -Hilton Worldwide Holdings Inc on Thursday missed its room growth expectations for 2022, pressured by a volatile COVID-19 environment in China, a key tourism market where hotel operators have struggled to expand last year.
Hilton, which owns brands including Waldorf Astoria Hotels & Resorts, reported a net unit growth of 4.7% in 2022, below its earlier forecast of about 5% growth.
China’s strict COVID-19 curbs, which have now been lifted, had halted construction of some luxury properties and impeded travel to a key global tourism markets. The country had been a black spot in an otherwise bright 2022 for the industry.
“They probably for the first time in quite a while missed on unit growth blaming on China so that obviously one of the reasons that their unit growth has been a bit softer,” Bernstein analyst Richard Clarke said.
However, Hilton reported robust results for the fourth quarter ended Dec. 31, aided by strong travel demand despite mounting economic worries.
For the quarter, Hilton said revenue per available room, or RevPAR – a key metric for investors – rose 24.8% on a currency neutral basis from a year earlier.
Excluding items, Hilton earned $1.59 per share, beating analyst expectations of $1.22 per share. Its revenues rose about 33% to $2.44 billion, compared with $2.38 billion, according to Refinitiv data.
The company forecast an adjusted profit per share between $5.42 and $5.68 per share for 2023. Analysts polled by Refinitiv expect a 2023 profit of $5.60 per share.
Hilton expects annual net unit growth between 5.0% and 5.5%. Capital returns are projected to be between $1.7 billion and $2.1 billion, compared with $1.7 billion last year.
Shares rose 2.5% in early trade.
(Reporting by Priyamvada C in Bengaluru; Editing by Rashmi Aich)
