(Reuters) - Hotel operator Hilton Worldwide Holdings Inc reported a bigger-than-expected quarterly profit and raised its full-year financial outlook on Thursday, buoyed by strong demand for rooms in Europe and the Asia Pacific region.
The owner of the Hilton and Waldorf Astoria hotel chains said it now expected 2018 revenue per available room (RevPAR) - a performance metric for the hotel industry – to grow 2-4 percent versus a previous forecast of 1-3 percent growth.
Shares in the company were almost untraded before opening in New York but some analysts said the results bode well for the stock after the bell.
“(RevPAR) is up about 50 basis points more than we expected and we believe the Street will react positively to the news,” SunTrust Robinson Humphrey Capital Markets analyst Patrick Scholes said.
Strength in the global economy is boosting business travel and driving up demand for hotel rooms and Hilton has seen strong growth in China and Asia’s other developing economies.
RevPAR growth was the strongest in Asia Pacific at 11 percent in the quarter, followed by Europe at 7.1 percent, where the strongest economic growth in a decade has lifted revenues for hotel operators. In the United States, Hilton’s biggest market, RevPAR rose 2.8 percent.
Earlier this month, Hilton’s main shareholder HNA Tourism Group sold its 82.5 million shares in the company, partially to Hilton and partially in a public sale, in a deal seen as removing risk to the hotel group’s ownership structure and allowing it to focus on its own business.
Hilton, which also owns the Conrad and Double Tree hotels, raised it full-year adjusted earnings expectations to $2.62-$2.71 per share, from $2.49-$2.60 per share.
Excluding one-time items, Hilton earned 55 cents per share in the first quarter, beating analysts’ average expectation of 51 cents, according to Thomson Reuters I/B/E/S.
Revenue rose 9.4 percent to $2.07 billion.
Reporting by Sanjana Shivdas and Ankit Ajmera in Bengaluru; Editing by Maju Samuel