October 29, 2018

Hilton CEO speaks to corporate sentiment & rate negotiations


Negotiated corporate business makes up only 10 percent of Hilton's overall business, but CEO Christopher Nassett said the segment serves as a positive macro-indicator for 2019.

Hilton president and CEO Christopher Nassetta pegged 2019 corporate rate increases in the 2 percent to 3 percent range during the company's third-quarter earnings call. Last year, Hilton projected rates to end the year between 1 percent and 3 percent higher than in 2016, and the actual increase landed on the modest end of that range, close to 1 percent. However, the outlook is improving and business travel is looking strong for next year.

Other indicators Hilton is looking to for 2019 include the forecasted strength of demand growth, at 2.1 percent, over supply growth, at 1.9 percent, as well as projected strength in international markets based on regional GDP growth forecasts. Growth in group rates are in the "mid- to high-single digits" for 2019 with 70 percent of group business on the books. Hilton projects 2019 revenue per available room growth to land in the range of 2 percent to 4 percent.

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