‘Not a gusher’ but Hilton confident under new regime

We’ve been here before with ‘hey, isn’t having a hotelier as a president in the US going to be great for the sector’ and the short answer is ‘no, not if he bans foreign-looking people from coming into the country and hands the Federal Aviation Administration over to AI’.

But it’s possible there’s more nuance available out there and earnings season is just the place to find it.

First up was Hilton, led by sector Golden Retriever Chris Nassetta who, true to type, was pretty bouncy about it all and anticipating some pretty high-value liver snacks in the form of deregulation.

He told analysts: “There is a broad belief amongst the folks that I talk to across a broad range of industries that the opportunity for economic growth in the short to intermediate term will be better.

“Why? Because while there's a lot of noise, you're going to be in a lighter regulatory environment across the board, financial services, [a] range of industries…tax policy. when you lift up above all that this is going to be good for the US economy and to a degree that will have some knock on impact in various economies around the world as a result.”

And the initial signs are indeed that the regime is indeed planning to have an impact on various economies, with a revolving 30-day tariff threat schedule. And yes, some countries have already gamed the system by offering up ‘concessions’ which were already give to President Biden, but surely we can’t all hire fentanyl tsars.

Nassetta was confident that the tariffs were more of a negotiating tactic than a fun way for everyone to pay even more for tomatoes than they had been, which was already more than in living memory. He said: “My guess is that we will end up in most cases in a place where we get some form of trade deal done that will not involve major tariffs.

“I think when you lift above it all …we’re going to have broad economic growth… even with the risk of various negotiations and short-term tariffs.”

Back to that lighter regulatory environment and Nassetta believed that, within the group’s owner community, while he wasn’t seeing “raging optimism”, there was hope that the regulatory environment was going to get a lot easier on the financial system. That’s to say, more, cheaper money.

Add into this the anticipated cuts in interest rates - there was an executive order for that, so it must be - and Nassetta was happy to predict “not a gusher”, but more availability of cash. Cash which he thought would go not just to development, but to M&A. And not just, one hopes, of the buying Greenland variety.

It was a big year for Hilton, reaching a NUG of 7.3%? - the single biggest increase in rooms in Hilton's more than 100-year history - with luxury and lifestyle hotels accounting for roughly half of its system wide openings in the year.

The sector will hope to follow Nassetta’s lead and rise above, while also benefiting from the relaxations below. In the short time, all Trump’s broligarchs will need hotels to stay in while they design the new world order, so it will at least be good for local DC revpar.

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