Dive Brief:
- Hilton’s U.S. RevPAR dipped 1.5% year on year in the second quarter of 2025, dragging down the company’s global RevPAR, which fell 0.5% year on year on the back of strong growth in other regions, according to the company’s Q2 earnings report.
- The quarter “turned out to be a bit noisier than expected,” CEO Chris Nassetta said on a Wednesday earnings call, pointing to a 2% decrease in business travel driven by “government spending declines, weaker international inbound business and broader economic uncertainty.”
- Despite the RevPAR dip, Nassetta expressed optimism about future growth in the U.S. — the company’s largest market — and teased new brands, some of which he expects to be launched later this year.
Dive Insight:
In the second quarter of 2025, Hilton’s group RevPAR was “roughly flat,” with “favorable trends in company meetings largely offset by soft convention business,” Nassetta said on the call.
The company expects its overall RevPAR growth to be “flat to modestly down again” in the third quarter.
While recent U.S. government actions have impacted travel, Nassetta said a more favorable regulatory environment, including certainty on tax reform and global trade policy, as well as government investments across industries such as AI, should "accelerate economic growth and unlock meaningful increases in travel demand” in the future.
The sentiments echoed what Nassetta said on Hilton’s Q1 call, in which he called himself an “an optimist by nature,” adding that he believed economic uncertainty would “wane over the next couple quarters, and that will allow the underlying strength of the economy to shine through again.”
Meanwhile, Nassetta added Wednesday that Hilton is working on “several” new brands in the lifestyle and alternative accommodations spaces, “a number of which are conversion-friendly,” he said.
“We have done the research with our customers and have already received tremendous feedback from our owners on these new brands, a couple of which will be launched by year-end,” he shared.
The company is doubling down on its lifestyle portfolio in particular, and has plans to open three new luxury and lifestyle hotels per week in 2025, Nassetta added.
Last summer, Hilton pledged to double the number of hotels in its lifestyle category within four years.
On the call, however, Nassetta stressed that luxury and lifestyle hotels were just one part of Hilton’s broader strategy to grow its network.
At last month’s NYU International Hospitality Investment Forum, Nassetta said: “When we come out in our wheelchairs in 20 years and [ask], ‘All right, what did we all do?’ It’ll be a mid-market story. It isn’t going to be that we opened thousands of luxury hotels.
“The real story is what’s going on in the broader environment — growth in the middle class, more disposable income, desire for experiences.”
