Hilton Worldwide Holdings Inc. raised its forecast for room revenue growth in 2026, citing strong demand in most markets, but warned that the ongoing Middle East conflict could weigh on travel in the region. The company now expects system-wide comparable revenue per available room (RevPAR) to increase by 2% to 4% in 2026, up from a prior range of 1% to 3%.
Positive Outlook Despite Geopolitical Risks
The revised forecast reflects robust leisure and business travel demand in the Americas and Europe, partially offset by softer performance in the Middle East and Africa. Hilton CEO Christopher Nassetta said in a statement that the company is "cautiously optimistic" about the year ahead, but noted that "geopolitical tensions, particularly in the Middle East, create uncertainty."
Regional Performance
In North America, RevPAR is expected to grow 3% to 5%, driven by strong group and transient demand. Europe is projected to see 2% to 4% growth, while the Asia-Pacific region is forecast to expand 4% to 6%. However, the Middle East and Africa region is expected to see flat to slightly negative RevPAR due to the conflict's impact on travel.
Hilton also reported first-quarter earnings that beat analyst expectations, with adjusted earnings per share of $1.82, compared to the consensus estimate of $1.76. Revenue rose 7% to $2.9 billion.
Industry Context
The hotel industry has been recovering from the pandemic, but faces headwinds from inflation, labor shortages, and geopolitical instability. Hilton's forecast aligns with broader trends, as Marriott International and Hyatt Hotels have also reported strong demand in most regions except the Middle East.
Hilton shares rose 1.5% in early trading following the announcement.
