Hilton misses revenue estimates, warns of Middle East impact

MCLEAN, Virginia: Hilton Worldwide Holdings missed third-quarter revenue estimates on Tuesday and warned that the US midterm elections and the Middle East conflict could weigh on its fourth-quarter performance. Its shares fell 5%.

According to Reuters, total revenue rose 6.6% from a year earlier to $3.33 billion. Analysts had expected $3.37 billion.

Adjusted profit came in at $2.45 per share, against $2.11 a year ago. The average analyst estimate, compiled by LSEG, was $2.36.

The latest escalation in the US-Iran war has added uncertainty for hotel operators and online travel agencies. Leisure and business travel demand stayed steady in the quarter and supported spending across hotel segments, from budget accommodation to luxury stays.

Room revenue from the Middle East and Africa region fell 5.6% year-on-year in the quarter ended 30 September. In the United States, it rose 7%.

"Middle East is a little more beaten up than we thought," Chief Executive Christopher Nassetta said on a call after the results.

Hilton said it still expects to expand in the Middle East and Africa. It recorded more than 20 hotel signings in the region during the third quarter.

Marriott International chief executive Anthony Capuano said last month that Middle East hotel revenue declines had eased in July. He said the conflict was still delaying development projects.

Hilton raised its forecast for revenue per available room (RevPAR) for fiscal 2026 to growth of 4% to 4.5%. It had earlier forecast 3% to 3.5%. The measure tracks average daily rate and occupancy.

RevPAR at its luxury brands Waldorf Astoria and LXR rose 13.9% and 14.3% respectively in the third quarter.

The company expects net unit growth, which measures rooms added, of 6% to 7% in 2026. It cited higher net room additions in the fourth quarter.

Jefferies analyst David Katz said sustained strength in net unit growth signalled higher investment in luxury brands.