Hilton's Q1 earnings call revealed that the hotel company hasn't seen the full effect of the coronavirus outbreak on its business.
Hilton president and CEO Christopher J. Nassetta said: "We are currently experiencing unprecedented times as a result of the COVID-19 pandemic, and our number-one priority remains protecting the safety and security of our guests, team members and owners. We have also taken precautionary measures to protect our business, including securing our liquidity position. Given the strength of our system and dedication of our people, we believe we are well-positioned to navigate this crisis and ultimately recover stronger."
With the exception of the Asia Pacific region, Hilton's first-quarter results were not significantly impacted by the COVID-19 pandemic until March of this year. Occupancy in February in the Americas and Europe, Middle East and Africa ("EMEA") regions were mostly flat. However, For the three months ended March 31, 2020, RevPAR decreased by nearly 22.6 percent as occupancy levels declined. Management and franchise fee revenues decreased by 18 percent.
During its earnings call, Nassetta said that Hilton's first-quarter earnings don't reflect the true impact of the virus, according to Travel Weekly.
"Overall, I do not think our first-quarter results provide clear insight into the current environment, given the timing of the pandemic, and we expect a much more dramatic impact on our second-quarter results," Nassetta told investors.
He did look to recovery, however, later in the year.
[We will] start to see a recovery as we get into Q3, Q4," forecast Nassetta. "But getting back to the sort of levels of occupancy -- which for us, were in the low- to mid-70s -- of 2019, which were all-time highs, that's going to take time. That's going to take two or three years."
He added that Hilton has seen an uptick in requests for reopening.
"We think temporary hotel suspensions have plateaued, and we are now seeing reopening requests," Nassetta added. "In the last week alone, we booked tens of millions of dollars of group business in the Americas. In addition, we are starting to see double-digit increases in digital traffic and booking activity across all segments."
For the latest travel news, updates and deals, subscribe to the daily TravelPulse newsletter.
Topics From This Article to Explore
