Hilton Earnings: Owner and Traveler Demand for the Brand Remained Strong, but Macro Pressures Remain

Hilton’s third quarter posted strong demand with its revenue per available room, or revPAR, up 7%, ahead of our 5% forecast, driven by all segments and key regions. As a result, Hilton raised its 2023 revPAR growth target to 12%-12.5% from 10%-12%, and we plan to lift our 10.7% toward the low end of the new range. While we have been steadfast on travel demand resiliency since the summer of 2020, we expect Hilton’s revPAR growth to decelerate to 2%-3% in 2024 (down from our 4% prior forecast), driven by mounting headwinds, such as lasting inflation and depleted consumer savings. We plan to hold Hilton’s $159 fair value estimate.