Will Strong Travel Demand Support Hilton's RevPAR Growth in 2025?

Core Insights - Hilton Worldwide Holdings Inc. (HLT) entered 2025 with steady momentum, driven by a diversified travel demand base, with system-wide RevPAR growing 2.5% year over year in Q1 2025 [2][9] - Group travel led RevPAR growth, increasing more than 6% year over year, while Business Transient and Leisure Transient also contributed positively [2][3] Company Performance - Business Transient's RevPAR rose 2% year over year, primarily from stable travel patterns of small and mid-sized companies, which constitute around 85% of the segment [3][9] - Leisure Transient's RevPAR increased by 1% year over year, showing robust activity early in the quarter but some slowdown later due to broader sentiment trends [3] - Hilton expects Group travel to remain the strongest segment for the remainder of 2025, supported by strong bookings and a healthy pipeline into 2026 [4][9] Industry Context - Peers such as Marriott International, Inc. (MAR) and Hyatt Hotels Corporation (H) are also experiencing RevPAR growth, benefiting from strong booking trends and recovery in group and business travel [5] - Marriott reported a 5.2% rise in global RevPAR in Q1 2025, while Hyatt's RevPAR increased by 5.7%, with luxury brands driving notable gains [6][7] Financial Outlook - Hilton reaffirmed its full-year system-wide RevPAR guidance of flat to up 2% for 2025, with expectations for Group and Business Transient to lead [4] - Earnings estimates for Hilton have increased to $7.91 and $9.04 per share for 2025 and 2026, respectively, indicating year-over-year growth of 11.1% for 2025 and 14.3% for 2026 [11] - Hilton's shares have risen 29.9% in the past three months, outperforming the Zacks Hotels and Motels industry, which grew by 9% [8]