Hilton Worldwide Holdings Inc. HLT is scheduled to report third-quarter 2024 results on Oct. 23, before the opening bell. In the last reported quarter, the company registered an earnings surprise of 3.2%.

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How Are Estimates Faring?

The Zacks Consensus Estimate for the third-quarter bottom line is pegged at $1.85 per share, indicating an improvement of 10.8% from $1.67 reported in the year-ago quarter.

For revenues, the consensus mark is pegged at nearly $2.9 billion, suggesting growth of 7.2% from the prior-year quarter’s figure.

Hilton Worldwide Holdings Inc. Price and EPS Surprise

Hilton Worldwide Holdings Inc. price-eps-surprise | Hilton Worldwide Holdings Inc. Quote

Let's look at how things have shaped up in the quarter.

Factors at Play

Hilton’s third-quarter revenues are expected to increase year over year courtesy of robust group bookings, corporate demand and the ongoing recovery of business travel. This and the emphasis on development pipeline and strategic partnerships, such as its collaboration with Small Luxury Hotels of the World are likely to have aided the company’s performance in the to-be-reported quarter.

Improvement in system-wide revenue per available room (RevPAR), attributable to increased occupancy rates and average daily rate, is likely to have driven the company’s third-quarter top line. For third-quarter 2024, the company expects RevPAR growth to be between 2% and 3% year over year.

Strong contributions across the company’s Base and other management fees, Incentive management fees and Owned and leased hotels are likely to get reflected in the third-quarter top line. We expect Franchise and licensing fees, Base and other management fees and Incentive Management Fees to increase 10.2% year over year (to $708.3 million), 19.5% year over year (to $96.8 million) and 12.3% year over year (to $70.8 million), respectively.

For third-quarter 2024, Hilton anticipates net income in the range of $435-$448 million. The company anticipates third-quarter adjusted EBITDA between $875 million and $890 million, while diluted EPS, adjusted for special items, is forecasted to range between $1.80 and $1.85.

However, softer trends in certain international markets and normalization of leisure growth have tempered Hilton’s expectations for the remainder of the year. Also, China’s slower recovery and weaker international inbound travel are likely to have weighed on RevPAR in the Asia-Pacific region. Elevated expenses and interest rates pose challenges to the execution of the company’s growth strategy.