Please ensure Javascript is enabled for purposes of website accessibility

Hilton Reports up to a 45% Drop in Quarterly Revenue Per Room Compared to Last Year

By Rhian Hunt - Apr 16, 2020 at 12:15PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Rebounding occupancy in China provides a note of hope, however.

Like other industries related to travel, hotels and resorts have taken a major blow from coronavirus-related travel restrictions and quarantines -- a fact underlined this morning by data released by Hilton Worldwide Holdings (HLT 2.04%) in an SEC filing. The company shows its revenue per available room (RevPAR) plunged as much as 76% year over year in some regions, pushing three-month revenue deep into negative territory.

According to Hilton Worldwide's Current Report, the hardest-hit region was Asia-Pacific. With the coronavirus pandemic already under way in China at the start of the year -- and probably earlier, as U.S. intelligence reports in November 2019 apparently indicated a potentially "cataclysmic" contagion loose in and near Wuhan  -- Asia-Pacific room revenue had already fallen 6% in January 2020 compared to January 2019. By March, the region's RevPAR figure plummeted by 74% to 76%.

The exterior of the Hilton Pilar against a sunset.

Image source: Hilton Worldwide Holdings.

The Americas and the Europe, Middle East, and Africa (EMEA) regions showed single-digit room revenue growth in the year's first month. By March, however, COVID-19 slammed these areas as well, with room revenue nosediving 54% to 64%. Overall, systemwide RevPAR dropped 22% to 24% during the year's first calendar quarter, with Asia-Pacific quarterly declines almost double that percentage (up to 45%).

However, Hilton Worldwide's filing also conveyed a hint of guarded optimism. It has reopened 130 of its approximately 150 previously shuttered Chinese hotels, while occupancy rates at Asia-Pacific locations have risen from 9% in February to 22% as of today, April 16.

The company says its current cash position of approximately $1.8 billion, augmented by a proposed $500 million bond offering of senior notes, can keep it liquid and operational for 18 to 24 months, giving it plenty of time to successfully weather COVID-19.

Rhian Hunt has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Hilton Worldwide Holdings Inc. Stock Quote
Hilton Worldwide Holdings Inc.
HLT
$137.44 (2.04%) $2.75

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/14/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.