Hilton's corporate negotiated rates for 2018 are
due to increase 2 to 3 percent, according to CEO Christopher Nassetta.
He senses there's still a cautionary slant to the
way corporations are spending money. "There's enough stuff going on
politically and globally that we all read about and we all know about, and I
think it's just holding people back from that incremental decision to spend,"
he said during the company's third-quarter earnings call, "and that
includes incremental spend in travel."
According to Nassetta, many of Hilton's corporate
clients are willing to accept a rate increase, "not a big one, but inflationary"
and that their volume would be relatively constant year over year. He pointed
to tax reform as something that could improve the outlook of companies and
shake off the caution around spending a bit. "I'm much more optimistic
that something gets done," Nassetta said, referencing potential reform. "Knowing
exactly what gets done is the trick, and I'd say we're fairly premature on
that."
He did say the company still sees steady business
from business transient and group. Group business for 2018 is on track to
outpace 2017. He said the macroeconomic environment points to a slightly better
year in 2018 than in 2017, as U.S. GDP and nonresidential fixed investment are projected
to increase year over year.
Q3
Earnings
Hilton occupancy increased 0.5 percentage points
to 79.3 percent in the third quarter, while average daily rate increased 0.6
percent to $145.80. The company's pipeline as of Sept. 30 totaled 335,000
rooms, or 2,191 hotels, across 104 countries and territories. Revenue rose from
$1.9 million in the third quarter of 2016 to $2.4 billion. Net income fell from
$192 million to $181 million.
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