The trend of luxury demand driving hotel performance is shifting, according to Hilton CEO Christopher Nasseta[HC1] , speaking on a first quarter earnings call. He said broad-based demand growth fueled a stronger-than-expected first quarter. Nassetta said the “K-shaped economy” — with luxury hotels outperforming and economy hotels performing poorly — could be ending.
“We expect improving performance in the lower and mid-chain scales with RevPAR strength continuing to move downstream from luxury and upper upscale toward a more balanced convergence demand shape, or what I have been calling a ‘C-shaped economy,’ ” Nassetta said.
Hilton hotels saw systemwide revenue per available room (RevPAR) increase 3.6% year over year in the first quarter, with Nassetta noting much of that demand came from further down the chain scales than the luxury demand that largely fueled performance in 2025.
Nassetta attributed the growth in demand partly to a “broad deregulatory regime,” the 2025 tax cuts and “very, very business-friendly” tax attributes.
Nassetta noted that prior to the conflict in the Middle East, that region had been among the best-performing parts of the world for Hilton. He added he’s hopeful that things can normalize sooner rather than later, but the company’s full-year projections account for a wide range of scenarios in the area. “The Middle East creates some uncertainty, but I think you can make an argument that we’re being reasonably conservative with our guidance,” he said.
Hilton now projects a 2%-3% increase in RevPAR for full-year 2026, compared with earlier projections of 1%-2%. Hilton officials are also expecting net income of slightly more than $1.9 billion and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of slightly more than $4 billion.
Hilton had $2.9 billion in revenue in the first quarter, according to an earnings report. The company also realized $383 million in net income during the first quarter, with $901 million in adjusted EBITDA.
[HC1]I’m seeing Nassetta with two t’s
