Optimism among corporate executives and economic growth stemming from corporate tax cuts should spur business travel in the coming year, Hilton Worldwide Holdings Inc's CEO said.
Reflecting on recent conversations with large hospitality customers, "I would say it is a very, very different tone, much more positive" than a year ago, President and CEO Christopher Nassetta said on an earnings call. Nassetta credited a Republican-led tax reform law that passed in late 2017, and added: "I think it's also being driven, certainly in the U.S., by the regulatory environment being easier on companies."
Hilton, the world's second-largest hotel operating company, started seeing a positive impact on business transient travel in late 2017, and the bump has continued in 2018, Nassetta said, adding that projected GDP growth in the coming year should lead to stronger corporate bookings compared to 2017, when business travel was "very anemic."
Nassetta said hotel developers also are energized, though he noted that the availability of financing for new hotel development projects is still uncertain.
"I'd say it's hard to find somebody that is in business that's not more optimistic right now than they might have been a year ago, or even, for that matter, six months ago," he said. "And given that our development community are eternal optimists, they were reasonably optimistic before, and they're even more optimistic now."
Hilton is expecting revenue per available room in its U.S. hotels to grow by roughly 2.5% in 2018 — roughly similar to the growth the properties posted in 2017, though there are reasons to believe growth figures could exceed that rate, Nassetta said.