Major hotel chain Hilton Worldwide Holdings has upgraded its revenue growth predictions for 2026, banking on strengthening domestic travel patterns to drive business across its hotel portfolio.
The hospitality sector is emerging from a challenging period marked by economic uncertainty and rising inflation that caused consumers to cut back on travel spending, particularly affecting mid-tier and budget accommodations.
Hilton’s budget and mid-market properties showed improvement during the first quarter, with room revenue and guest occupancy climbing steadily. The company’s Tapestry Collection brand led the way with a 9.2% jump in revenue per available room (revPAR).
Wealthy travelers have continued booking luxury accommodations despite economic pressures. Hilton’s premium LXR Hotels brand recorded the strongest performance among upscale properties, posting a 20.2% year-over-year revPAR increase for the quarter.
The Virginia-based hospitality company now projects revPAR growth of 2% to 3% for fiscal 2026, up from previous estimates of 1% to 2% growth. RevPAR is a crucial industry measurement combining average room rates with occupancy levels.
Looking ahead, uncertainty remains for the latter half of the year as trade tensions and ongoing conflicts could drive up consumer costs, potentially reducing global travel spending and undermining recent gains in U.S. market demand.
Hilton acknowledged that current quarter earnings may suffer due to decreased travel activity in the Middle East region, which represents approximately 3% of company operations, following conflict escalation that began in late February. Company stock dropped 2% following the announcement.
Middle East and North Africa room revenues declined 1.7% compared to the previous year’s first quarter, while occupancy rates fell 4.1%.
“Expectations, momentum and valuation were high ahead of the print, and Hilton’s overall update came up a bit short, in our opinion, and HLT shares are likely to be weaker over the near term,” Baird analysts said.
The company increased its annual adjusted earnings forecast to $8.79-$8.91 per share, up from the previous range of $8.65-$8.77. Wall Street analysts had anticipated $9.05 per share on average, according to LSEG data.
Hilton reported quarterly adjusted earnings of $2.01 per share, surpassing analyst expectations of $1.97.
