Business transient revenue per available room (RevPAR) at Hilton was up about 5% year over year, according to CEO Christopher Nassetta, speaking on a third quarter earnings call. He also said the average percentage increase in 2024 corporate rates, currently in negotiations by some corporate clients, likely would be in the “upper single digits.”
Noting that the contracted corporate segment made up about 6% of Hilton’s transient business, Nassetta said that compares with 85% of the total from small and midsize businesses (SMEs). Most 2024 contracted corporate pricing, he said, would include dynamic rates.
The best-performing segment for Hilton in the third quarter, said Nassetta, was group demand. Group RevPAR in the third quarter grew 8% year over year and outperformed both leisure and business transient RevPAR growth. Nassetta said that in the third quarter, group RevPAR exceeded 2019 peak levels for the first full quarter since the pandemic.
Nassetta called strong group demand the “last leg of the stool” that would allow Hilton to get back to occupancy levels comparable to those of 2019, and predicted the company would reach 2019 occupancy levels in 2024, driven mostly by SMEs.
Hilton reported $2.67 billion in revenue in the quarter, up 12.7% year over year. The company’s net income was $379 million, up from $346 million in the same period of 2022.
Nassetta also hinted at still another new brand, following the recent introduction of multiple brands. They include Spark by Hilton, which had its first opening earlier this month; and the soon-to-be-launched Project H3, an extended-stay product. He said that the “white space” for the company now is luxury lifestyle, adding that he thought Hilton would come out with an entry in that category next year.
