Hilton expects all of its hotels to reopen by midyear
Hilton is optimistic about 2021.
In its fourth-quarter 2020 earnings call on Wednesday, the hotel chain said that despite last year being the toughest in its 101-year history, it expects to emerge from this crisis a stronger company poised for further growth in the future.
For more TPG news delivered each morning to your inbox, sign up for our daily newsletter.
As of Feb. 10, 2021, 97% of Hilton's hotels in its system are operational and CEO Chris Nassetta said his company would have "essentially all system-wide rooms reopened by the end of the second quarter" of this year -- a significant milestone after seeing the lowest demand in its history throughout 2020.
Last year, the chain managed to notch increases in market share across every region in which it operates and opened more than 400 hotels, though it still saw systemwide RevPAR (revenue per available room) decline by 57% for the year and recorded a $225 million net loss for the fourth quarter last year.
The fourth quarter of 2020 mirrored trends we've seen since the outset of the pandemic, with the state of the virus dictating travel behavior.
Positive demand momentum slowed in November and December because of skyrocketing COVID-19 case counts, increased travel restrictions and hotels suspending operations, particularly in Europe. And, the majority of the demand that was there came from last-minute bookings (Hilton said that 70% of its bookings are made within one week of travel) to hotels in destinations that are easy to drive to. Demand for business and group travel, while showing moderate improvements, remained very low.
Nassetta alluded to trends Hilton is seeing now, saying that so far, this quarter looks very similar to the last quarter of 2020, with modest increases in demand within the U.S. contrasting weaker numbers in Europe and much of the Asia-Pacific region.
Looking forward, Mr. Nassetta sees a fuller recovery manifesting in the latter half of this year. He's encouraged by the prospect that the COVID-19 vaccine rollout, while slow, will soon accelerate and allow restrictions to be eased on a meaningful scale and thus unleash much of the pent-up demand for travel that the chain is seeing.
He also cites a significant increase in personal savings across the country, which he believes will lead to even more leisure travel as more people become inoculated to COVID-19.
Despite being stuck in a "holding pattern" of sorts and waiting for the vaccine rollout to make a significant impact on the state of the coronavirus pandemic both in the U.S. and worldwide, it appears that Hilton is gearing up for its recovery to begin in earnest around the middle of this year.
As travelers, it's heartening to see that at least one of the world's hotel giants will restore operations at virtually all its hotels by this summer and we hope this is a harbinger of further signs of recovery to come throughout the industry.