Hilton sees 2025 profit below estimates on weak leisure travel demand

Corrects paragraph 8 to say incentive management fees rose 11.7% from a year ago, not fell 10.5%

Feb 6 (Reuters) - Hotel operator Hilton Worldwide HLT.N forecast 2025 profit below Wall Street estimates on Thursday, weighed down by weak leisure travel demand in the U.S.

While wealthy Americans are taking advantage of a strong dollar and traveling abroad, low- to middle-income people are grappling with increasing costs and have cut back on discretionary expenses like vacations.

The McLean, Virginia-based company expects 2025 adjusted profit between $7.71 and $7.82 per share, compared with analysts' average estimate of $8.02 per share, according to data compiled by LSEG.

It expects systemwide revenue per available room (RevPAR) to increase between 2% and 3% from a year earlier, and net unit growth of about 6% to 7%.

Hilton's RevPAR grew 3.5% for the fourth quarter, while occupancy remained fairly steady at 69.9%, up 110 basis points from a year earlier.

RevPAR in the U.S., the company's biggest market in terms of hotel rooms, came in at $114.18, up 2.9% from a year earlier, but down nearly 10.7% on a sequential basis.

Quarterly RevPAR in Asia-Pacific rose 1.7% as travel demand in China remains muted, but the region is now showing signs of recovery after contracting 3.4% in the third quarter.

Hilton's development pipeline during the quarter grew 8% to 498,600 rooms. Incentive management fees came in at $86 million, up 11.7% from a year earlier.

The company posted a fourth-quarter profit of $1.76 per share, compared with analysts' average estimate of $1.68. It reported a total revenue of $2.78 billion, roughly in-line with expectations of $2.77 billion.