McLEAN, Virginia, May 10 — Hilton Worldwide Holdings Inc raised its full-year profit forecast after increasing business and leisure travel in the United States allowed the company to charge more for its rooms in the first quarter.

Hilton’s shares were up 3.6 per cent in early trading yesterday, after the company also reported better than expected quarterly results.

Hilton, the world’s largest hotel operator by market value, said it now expects a full-year profit of 64-67 cents per share, up from its earlier forecast of 57-61 cents.

Rising consumer confidence in a recovering U.S. economy has boosted the travel industry, allowing hotels to raise room rates.

Hilton’s first-quarter revenue per available room (RevPAR) increased 6.6 per cent at hotels open for at least a year.

The hotelier, whose brands include Conrad and Waldorf Astoria, said it expects RevPAR to rise 5.5-6.5 per cent in the second quarter.

RevPAR is calculated by multiplying a hotel’s average daily room rate by its occupancy rate.

“There’s never been a better time in lodging,” Macquarie Research analyst Chad Beynon said.

“(The industry is) back to peak occupancy. It’s a very healthy place in the cycle right now. We would expect greater increases in pricing,” Beynon added.

Hilton’s total occupancy rose to 69.8 per cent in the quarter from 67.9 per cent last year.

Marriott International Inc, Hyatt Hotels Corp and Starwood Hotels & Resorts Worldwide Inc have also reported better than expected first-quarter earnings and announced plans to return cash to shareholders through stock buybacks.

Hilton, which went public last December, did not announce any stock repurchase plans yesterday.

Beynon said he did not expect the company to buy back shares until it had repaid some of its debt.

“Their goal right now is to reduce leverage ... and once they get closer to investment grade debt, that’s when I think they would look to buy back stock,” he said.

Hilton had debt of about US$12.5 billion (RM40.3 billion) as of March 31.

The company’s net income attributable to shareholders rose to US$123 million, or 12 cents per share, from US$34 million, or 3 cents per share, a year earlier.

On an adjusted basis, Hilton earned 13 cents per share.

Revenue rose 4 per cent to US$2.36 billion.

Analysts on average expected a profit of 9 cents per share on revenue of US$2.34 billion, according to Thomson Reuters I/B/E/S.

The company, founded in 1919 by Conrad Hilton, has 4,155 hotels with nearly 700,000 rooms. Its IPO raised more than US$2.3 billion in what was the second-largest offering in 2013.

Blackstone Group LP, which had taken Hilton private in 2007, has a 76 per cent stake in the company.

Hilton’s shares, which have gained about 5 per cent since their debut, were trading up 2.5 per cent at US$23.20 on the New York Stock Exchange. — Reuters