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Markets News

UPDATE 2-Hilton signals gradual recovery as cost cuts power surprise profit

(Compares with estimates, further details about quarter)

Nov 4 (Reuters) - Hilton Worldwide Holdings Inc said on Wednesday it had seen a gradual improvement in demand from a coronavirus-induced slump after cost cuts helped the U.S. hotel operator post a surprise quarterly profit.

The company’s comparable RevPAR - a key performance measure for the hotel industry - fell 59.9% for the third quarter ended Sept. 30, albeit at a slower pace than the prior quarter’s 81% drop.

“The vast majority of our properties around the world are now open and have gradually begun to recover from the limitations that the COVID-19 pandemic has imposed on the travel industry,” Chief Executive Officer Christopher Nassetta said in a statement.

Hilton’s results come at a time when air travel remains challenged due to rising coronavirus cases in Europe and the United States.

The company last month said demand in its Chinese and Japanese markets was rebounding to normal levels and that revenue at leisure-focused Chinese hotels could surpass 2019 levels next year.

Total expenses fell 52.9% to $922 million. System-wide occupancy was 42.5%, compared with 22.3% in the prior quarter. A year ago, it was 79.1%

Net loss attributable to stockholders was $79 million, or 28 cents per share, in the third quarter, compared with a net income of $288 million, or $1.00 per share, a year earlier.

On an adjusted basis, Hilton earned 6 cents per share, beating analysts’ estimates for a loss of 2 cents per share, according to Refinitiv data.

Revenue dropped 61% to $933 million. (Reporting by Ashwini Raj and Sanjana Shivdas in Bengaluru; Editing by Subhranshu Sahu)

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