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

Hilton Worldwide Holdings Inc. HLT entered 2025 with steady momentum, driven by a diversified travel demand base. In the first quarter, system-wide RevPAR grew 2.5% year over year, supported by increased occupancy rates and average daily rates. While March softened due to macro uncertainty, RevPAR was led by Group travel, which rose more than 6% year over year, followed by gains in Business and Leisure Transient.

Business Transient’s RevPAR rose 2% year over year, with small and mid-sized companies making up around 85% of the segment mix. Hilton noted that these businesses continue to show stable travel patterns. Leisure Transient’s RevPAR increased 1% year over year, with robust activity early in the quarter, though some slowdown was noted later, reflecting broader sentiment trends. Despite near-term choppiness, Hilton expects Group to remain the strongest segment for the remainder of the year.

With continued demand from leisure, business and group travelers, Hilton appears well-positioned to navigate near-term volatility and support RevPAR growth through 2025. Going forward, Hilton reaffirmed its full-year system-wide RevPAR guidance of flat to up 2%. The company remains optimistic about the second half of 2025, expecting Group and Business Transient to lead. The company’s current bookings support this outlook, with stronger forward-looking trends in Group business, including mid-single-digit gains and a healthy pipeline into 2026.

Peers Capitalize on RevPAR Momentum Amid Travel Resilience

As Hilton builds on steady demand across travel segments, Marriott International, Inc. MAR and Hyatt Hotels Corporation H are also leveraging strong booking trends and robust recovery in group and business travel to drive RevPAR growth.

Marriott is benefiting from solid global booking trends and sustained leisure travel demand. In the first quarter of 2025, Marriott reported a 5.2% rise in global RevPAR, fueled by increases in both ADR and occupancy. With continued momentum in group, business transient and leisure segments, the company expects global RevPAR to climb 1.5-3.5% in 2025.

Hyatt delivered a strong performance in the first quarter of 2025, with RevPAR up 5.7% and luxury brands driving notable index gains. The company saw a more than 8% rise in RevPAR across its luxury portfolio, with business transient and group travel leading the recovery. Hyatt expects 2025 system-wide RevPAR to grow 1-3%, with stronger contributions from international markets.

HLT’s Price Performance, Valuation and Estimates

Hilton’s shares have risen 29.9% in the past three months compared with the Zacks Hotels and Motels industry’s 9% growth. 

HLT stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-earnings ratio of 32.22X.

Hilton’s earnings estimates for 2025 and 2026 have increased over the past 30 days to $7.91 and $9.04 per share, respectively. These projections imply year-over-year growth of 11.1% for 2025 and 14.3% for 2026.

Hilton currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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