A Snapshot of 2023 Hotel Rates: Not Pretty

Hilton President and CEO Christopher Nassetta maintains an active presence in the meetings market through stage appearances at events such as Professional Convention Management Association’s Convening Leaders conference, held last month in Columbus, Ohio.  At that conference, he said that “the world is open again and there is a huge pent-up demand for our product, so I think [the hotel industry] can weather the slowing macro environment.”

A few weeks after Convening Leaders, Nassetta led his company’s latest earnings call that reported Q4 2022 results across Hilton’s 18 brands. With a $333 million profit for Q4 completing a year where Hilton realized $1.3 billion in profit, Nassetta’s conclusions regarding the 2023 lodging market probably were not what meeting planners want to hear.

In that February 9 call, Nassetta noted that Hilton’s overall occupancy rate for 2022 was 69 percent, compared to 76 percent in 2019. However, “we can get back [to the 2019 rate] tomorrow if we want. We could drop rates [to get there]—but we don’t want to do that,” he said, hilton-ceo-hotel-deals/?utm_source=pardot&utm_medium=newsletter&utm_campaign=news-junkie&utm_term=organic”>according to this article from travel watchdog website The Points Guy. “We are trying to manage really effectively, particularly given the environment of inflation and everything else, to drive the best bottom-line results for [our hotel] owners.” 

HiltonNassetta0223.jpgFurther, “we’ve assumed not a crash landing but sort of a soft-to-bumpy landing in the U.S. with a moderate recessionary environment in the second half of the year,” added Nassetta (at right). As a result, “we continue to believe we will have good pricing power, at least through this year, because there’s no [guest-room] capacity additions really coming into the market.”

Planners, you’ve been warned.

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