Hilton sales plunge in second quarter with frozen trips – Business News

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Hilton lost $ 432 million in the second quarter and occupancy rates began to rise from dismal lows as hotels reopened and coronavirus restrictions were lifted around the world.

After hitting 13% in mid-April, the global hotel occupancy rate is now hovering around 45%, Hilton President and CEO Christopher Nassetta said in a conference call Thursday with investors.

“While these are still terrible numbers, it is a marked improvement over a relatively short period of time,” he said.

Nassetta expects occupancy to climb to 50% this fall, but also that it will take two to three years for business travel to recover.

The hotel could benefit from a long season of leisure travel as the kids may not be in school and work is more flexible at the moment, Nassetta said. Some colleges are also reserving hotel rooms to increase dormitory capacity, he said, while workers are reserving rooms to serve as remote offices.

During the period from April to June, the occupancy rate was on average 22% worldwide, down 56% from the same period a year ago. Occupancy rates were highest in Asia at 29% and lowest in Europe at 7%.

US occupancy rates averaged 24%. Tourism in beach towns like Norfolk, Va. Has recovered faster in the United States than in cities like New York and Seattle, according to STR, a hotel consulting and data company.

McLean, Va., Announced in June it was laying off about 2,100 people, or 22 percent of its workforce, and extended corporate holidays and pay cuts by 90 days.

The adjusted loss of 61 cents per share was much worse than the 31 cents projected on Wall Street, according to an analyst survey by FactSet.

Hilton’s revenue fell 77% to $ 564 million between April and June. Analysts were expecting sales of $ 819 million.

Revenue per available room, a key metric, plunged 81% to $ 21.67. One problem: Business is stronger at low-cost brands like Hampton and Hilton Garden Inn than at more expensive properties like Waldorf Astoria hotels.

That will change eventually, Nassetta said, but for now there is price pressure.

“People are going to expect a good deal for everything,” he said.

The coronavirus pandemic has had a devastating effect on the hospitality industry. A fifth of Hilton hotels have had to close at some point in the past six months, Nassetta said. As of July 31, 96% of its 6,100 hotels were open worldwide.

To woo travelers, Hilton recently launched CleanStay, a cleaning program developed with Lysol and the Mayo Clinic.

Hilton shares were flat on Thursday.

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