Hilton Hotels Corp.'s earnings soared 62 percent for the fourth quarter, trumping estimates, fueled by strong demand which led to higher room rates.
The Beverly Hills-based hotelier reported fourth-quarter net income of $105 million (26 cents per share), compared with $65 million (16 cents) for the like period a year earlier. Revenue rose 3 percent to $1.08 billion from $1.05 billion in the year-prior period.
Analysts expected earnings of 19 cents per share on revenue of $1.05 billion.
Across all Hilton hotel brands, the average price of a night stay increased 9.7 percent to $195.53 in the fourth quarter from $178.26 a year earlier. The revenue per available room, a key indicator in the hotel industry, climbed to an average of $145.08 in the fourth quarter, compared to $127.83 a year ago. The occupancy rate for all Hilton hotels rose 2.5 percentage points to 74.2 percent, from 71.7 percent a year earlier.
The Hilton chain, which includes the brands Hampton, Hilton Garden Inn, Doubletree and Embassy Suites, added 48 hotels and removed 17 in the fourth quarter, pushing the chain's total properties to 2,388. The company's development pipeline included 600 hotels as of Dec. 31, and it expects to add about 200 hotels to its system in 2006.
Hilton said full-year revenue per available room would increase 8 percent to 10 percent. A more extensive earnings outlook is expected in the first quarter. Hilton recently acquired Hilton Group plc, the London-based company that operates Hilton-flagged hotels outside of the U.S. The $5.7 billion transaction is expected to close this quarter.
Shares of Hilton fell 1.4 percent to settle at $24.93 on Tuesday.
For reprint and licensing requests for this article, CLICK HERE.