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The hotel giant Hilton is seeing evidence of improvement at its US middle-market brands, including more mid-week business travel, signs the middle class is starting to participate in a recovery that has been led by high earners, CEO Chris Nassetta said Tuesday at Semafor World Economy.
Demand for hotel rooms has provided a case-in-point for the so-called “K-shaped” recovery, in which high-income households drive an outsize share of demand. Mid-tier hotels like Hampton and Hilton Garden Inn have struggled as luxury hotel brands post higher occupancy and nightly room rates.
But that is changing, Nassetta said, thanks to a combination of factors including favorable tax policy, lower interest rates, private-sector spending on AI, and public-sector infrastructure spending launched by the Biden administration. He called it a “C” recovery, for convergence.
“The middle and the bottom is going to come up ultimately to meet the top,” Nassetta said, adding later: “The tide is coming in, and the tide is unstoppable.”
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Despite the Iran war, Nassetta said he remains optimistic about hotel growth in the Middle East, where Hilton operates 80 hotels and plans to build 100 more over the next few years. He said there are no plans to pause its expansion with partners there. The company licenses its brand but does not own hotels.
“I think the Middle East will be fine,” Nassetta said. “I think it will continue, in the long run, to be one of the greatest growth markets we have.”