Recovery to former levels is two to three years away, Hilton CEO says
Despite a relatively quick ramp-up in systemwide occupancy over the summer, Hilton Worldwide CEO Chris Nassetta said he expects recovery trends to moderate come fall, as leisure travel demand tapers off and economic pressures intensify.
"By the end of the summer and early fall, [it will] then be a grind up, because as you get through the health elements of this crisis, you're going to be dealing with an economic crisis or a recessionary environment," Nassetta said during the company's Q2 earnings call on Thursday.
Overall, Nassetta added that he expects it will take "two or three years to get back to demand levels experienced in 2018 or 2019."
Occupancy across the company's global portfolio is currently at approximately 45%, versus a low of around 13% in April. The rate was bolstered primarily by increased demand for limited-service hotels and drive-to leisure markets.
For the quarter, Hilton saw systemwide RevPAR fall 81% year over year.
Around 96% of Hilton's systemwide hotels are currently open.
Nassetta said he hopes an extension of the U.S. summer travel season will help buoy Hilton in the latter half of the year, with a modest comeback in business transient demand also forecasted to potentially boost performance.
"Kids aren't going back to school, or they are but virtually, and a lot of offices aren't opening up, so there's a lot more flexibility to extend the leisure travel season and we can already see early telltale signs of that," he explained. "It's been very hard to get availability in certain locations in July and August, so it's extending into September and maybe October."
Nassetta also highlighted a particularly strong Fourth of July performance, with around 800 U.S. hotels running over 80% occupancy during that holiday weekend.
In China, Hilton reported that solid leisure and business transient demand has driven occupancy in that market to over 60%, while across Europe, the Middle East and Africa, occupancy levels are hovering significantly lower, at around 30%.
