Hilton Hotels Corp. today announced robust first-quarter earnings boosted by strong demand from business travelers, which drove up average daily rates and resulted in a 9 percent spike in Q1 revenue per available room. Hilton's announcement comes on the heels of first-quarter reports from Marriott International and Starwood Hotels & Resorts that were equally strong.
Hilton said that strong demand from business travelers translated into single-digit or double-digit percentage-point average daily rate increases in many of its U.S. markets. Both Marriott and Starwood, which each posted gains in systemwide revenue per available room in the first quarter, also credited their thriving RevPARs to gains in ADR.
Hilton's first-quarter success was punctuated by its reunification with Hilton International, which will enable the company to leverage its worldwide presence
(BTN, Jan. 23). "Solid operating results both in the U.S. and internationally, combined with the closing of the Hilton International transaction and our new position as the global industry leader, made for a very successful and exciting first quarter," said Stephen Bollenbach, co-chairman and CEO of Hilton Hotels Corp., in a company statement. "Business fundamentals continue to be very strong, with high demand among both business and leisure travelers for our hotels in gateway cities. High occupancy levels are enabling us to achieve a more desirable mix of business."
Strong economic indicators coupled with favorable industry trends explained Marriott's hearty first-quarter numbers, according to J.W. Marriott Jr., Marriott International's chairman and CEO. "North American business and leisure transient demand remained strong during the quarter, driving RevPAR and house profit margins higher," Marriott said in his company's release. "While hotel industry supply in North America is still growing only modestly, particularly in the full-service segment, we are taking a greater share of new hotels being developed around the world." PricewaterhouseCoopers forecasted that construction of119,800 rooms would begin in the United States this year, a 45 percent increase over last year.
Starwood cited continued travel demand, rising ADRs and the integration of the Le Meridien brand, which it acquired in November
(BTNonline, Nov. 28, 2005), as the reasons for a similarly strong first quarter. "It was an outstanding quarter," said Starwood CEO Steven Heyer in a statement. Starwood also completed the sale of 28 properties to Host Marriott early last month with the transaction valued at upwards of $4.23 billion for the portfolio.