Hilton warns revenue per room could worsen due to coronavirus crisis

(Reuters) - Hilton Worldwide Holdings Inc HLT.N said on Thursday it expects first-quarter revenue per room to fall between 22% and 24%, and warned that the coronavirus outbreak could further erode the key performance measure for hotels this year.

FILE PHOTO: The logo of Hilton hotel is seen in Batumi, Georgia, May 2, 2016. REUTERS/David Mdzinarishvili

The owner of Waldorf Astoria and Conrad hotel chains, which had to shut operations at several hotels, said it anticipates additional suspensions as coronavirus-led travel bans pummel operations globally.

“We cannot presently estimate the financial impact of this unprecedented situation... but we expect it will continue to have a significant adverse impact on our results of operations,” Hilton said in a statement.

As of April 14, the U.S. hotel operator had suspended here operations at nearly 1,000 hotels, which represents about 16% of its global hotel properties.

“The revenue per available room update is in-line with industry trends and expectations, but we consider results for the next several quarters to be less consequential for the stock’s trajectory than any prospective indications for 2021,” said David Katz, an analyst at Jefferies, in a note.

Earlier this week, larger rival Marriott International MAR.O had estimated a 23% drop in first-quarter revenue per available room, hurt by the pandemic.

Both hotel operators have already abandoned their full-year outlooks and furloughed workers to save costs.

However, Hilton joined Marriott in signaling early signs of recovery in China, with current occupancy of about 22%. Hilton’s 130 of the nearly 150 hotels in China that had previously suspended operations have re-opened.

Marriott on Tuesday said its occupancy in Greater China rose to about 20% in the first week of April as restrictions on movement and quarantine measures were eased.

Hilton's shares fell as much as 3% to $67.77 in morning trading. The stock has lost nearly 40% of its value this year, compared with the Dow Jones U.S. Consumer Services index's .DJUSCY 10% decline.

Reporting by Ankit Ajmera in Bengaluru; Editing by Amy Caren Daniel