Dive Brief:
- Hilton’s systemwide comparable RevPAR declined 1.1% year over year in the third quarter of 2025, with U.S. RevPAR, specifically, down 2.3% year over year amid economic uncertainty, CEO Christopher Nassetta said on a Wednesday earnings call.
- Meanwhile, the company downgraded its full-year 2025 RevPAR outlook to a growth range of 0% to 1% — lower than its previously projected range of 0% to 2% — in an earnings report published Wednesday.
- Despite “softer-than-expected industry RevPAR performance,” Nassetta said he remains optimistic about an acceleration of economic growth and meaningful travel demand in the U.S., which, coupled with limited supply growth, could spur stronger RevPAR results in years to come.
Dive Insight:
Pressure across the business transient and group travel segments, along with declined U.S. government travel spending and softened international inbound demand, weighed on Hilton’s performance in the third quarter, according to Nassetta.
In Q3, Hilton’s business transient RevPAR decreased approximately 1% while group RevPAR decreased approximately 4%, Nassetta said.
The results come after Hilton, among several other hotel companies, posted RevPAR declines last quarter.
Despite U.S. hotels seeing modestly negative top-line results in Q3, Nassetta said that “really good things are coming.”
“Listen, I don’t have my head in the sand,” he said, calling out the impacts of tariffs and geopolitical tensions, “but I like to try and lift up above the noise.”
Nassetta said that “lower interest rates, a more favorable regulatory environment, certainty on tax policy and a significant investment cycle” are likely to contribute to improved RevPAR.
On the development front, hotel conversions are slated to drive growth for Hilton, as well. In Q3, the company saw net unit growth of 6.5% year over year, adding a Signia-brand property in Texas Hill Country as well as Florida’s 785-key Sunseeker Resort Charlotte Harbor to its system.
“Conversions remain integral to our growth story,” Nassetta said, adding that “the conversion opportunity is immense, globally.”
Looking to capitalize on that opportunity, Hilton launched upscale collection brand Outset Collection by Hilton just after Q3’s close. “The upper midscale to upscale collection space represents an enormous opportunity,” Nassetta said on the call.
Ahead of The Lodging Conference this month, Marriott International and Wyndham Hotels & Resorts also unveiled new collection brands, though Wyndham’s is positioned in the economy segment.
Wyndham will report its third-quarter earnings Wednesday afternoon. Hilton’s RevPAR is “likely to remain stronger than Wyndham’s, as the lower income household continues to feel more economic pressure than the higher income household,” Dan Wasiolek, senior equity analyst at Morningstar Research, told Hotel Dive Tuesday.
The hotel industry is currently experiencing a wealth bifurcation, executives said at The Lodging Conference.
