Share

Hilton forecast disappoints

New York - Hilton Worldwide Holdings, owner of the Waldorf Astoria hotel brand, forecast lower-than-expected earnings for the first quarter as a strong dollar makes it more expensive for foreigners to travel to the United States.

Hilton expects "recent sharp movements" of the dollar against the euro, Australian dollar and yen to hurt adjusted earnings before interest, tax, depreciation and amortisation by $35m to $45m, CFO Kevin Jacobs said.

Hilton and rival Marriott International reported a rise in fourth-quarter RevPAR, a key metric for the hotel industry.

Marriott's international systemwide RevPAR rose just 0.5%. On a constant currency basis, however, international RevPAR rose 4.6%.

Starwood Hotels & Resorts Worldwide Inc, owner of the Sheraton and Westin brands, forecast a profit below market estimates last week, citing the strengthening of dollar that lowers revenue from outside the United States.

Marriott reported a better-than-expected fourth-quarter profit and revenue and forecast worldwide systemwide constant dollar RevPAR to rise 5% to 7% in the first quarter.

"Based on signings to date, we expect special corporate room rates across all our managed North American hotels will increase 5% to 6% in 2015," Marriott chief executive Arne Sorenson said.

Marriott shares were up 3.5% in trading after the bell.

Hyatt Hotels reported lower-than-expected quarterly revenue on Wednesday.

Hilton CFO said the impact from the dollar would be the hardest in the company's leased business. A significant portion of leased properties are outside the United States.

The owned and leased business brought in about 40% of Hilton's 2014 revenue.

The dollar is expected to keep rising after gaining nearly 13% against a basket of major currencies in 2014.

Hilton's owned hotels business was "pretty reliant" on New York even after selling the Waldorf Astoria New York, Macquarie Research analyst Chad Beynon said.

The company, which also owns the Conrad brand, gets about three-quarters of its revenue from the United States.

The company said on Wednesday it expected an adjusted profit of 10cents to 12c per share for the first quarter and 78 cents to 83c per share for the full year.

Analysts were expecting earnings of 15c per share for the first quarter and 85c for the year, according to Thomson Reuters I/B/E/S.

Hilton's quarterly adjusted profit narrowly missed market expectations despite a 7% rise in revenue.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.97
-0.3%
Rand - Pound
23.97
-0.3%
Rand - Euro
20.48
-0.1%
Rand - Aus dollar
12.36
-0.1%
Rand - Yen
0.13
-0.4%
Platinum
911.60
+1.6%
Palladium
1,012.97
+1.1%
Gold
2,214.54
+0.9%
Silver
24.90
+1.0%
Brent-ruolie
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.9%
Resource 10
57,251
+2.9%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders