Hilton Worldwide Holdings Inc posted a bigger-than-expected quarterly loss on Thursday, as the coronavirus pandemic hammered bookings and average room revenue throughout its largely reopened hotel networks.
Shares of the company fell 2.4% in premarket trading after the company also reported an 81% plunge in RevPAR – a key performance measure for the hotel industry – for the second quarter.
The company’s results come amid rising coronavirus cases in the United States and extended disruptions to travel leading to tighter corporate travel budgets, an increasing pace of group cancellations and a dearth of new group bookings.
Hilton’s recovery has been faster in Asia-Pacific and the company has reopened all of its hotels in mainland China. However, its system-wide RevPar continues to be under pressure even as economies reopen gradually.
The company said 96% of its system-wide hotels were open, as of July 31.
“As restrictions are lifting and properties around the world are reopening, we are seeing improved occupancy,” Chief Executive Officer Christopher Nassetta said in a statement.
The hotel chain in March suspended dividend payments and a share repurchase program as it made efforts to preserve cash amidst the pandemic.
The company said in June it would cut about 22% of its corporate workforce, or 2,100 jobs.
Hilton also said on Thursday it has approved 18,400 rooms for development during the quarter, its lowest quarterly level of signings since 2014.
“Despite the lower-than-expected results, we expect a neutral reaction to the results, based on the strong pipeline and liquidity position,” Jefferies analyst David Katz said.
On an adjusted basis, Hilton posted a loss of $0.61 per share. Its Revenue fell 77.3% to $564 million.
Analysts on average had estimated a loss of $0.31 per share and revenue of $848.7 million, according to Refinitiv IBES data.
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