The devastating impact of the novel coronavirus outbreak (COVID-19) on the global economy has led Hilton Worldwide Holdings Inc. (HLT - Free Report) to withdraw its previously announced first-quarter and 2020 guidance.
This deadly severe acute respiratory syndrome coronavirus 2, or SARS-CoV-2 has claimed too many lives so far and is expected to weigh on the global economy in trillions.
The President & Chief Executive Officer of Hilton, Christopher J. Nassetta said, "With the coronavirus now spreading beyond China and the Asia Pacific region, and the related increase in travel restrictions and cancellations around the world, we believe that the potential negative impact will be greater than our previous estimate and have decided to withdraw our previously announced guidance.”
However, the company remains confident about its prospects on the back of resilient business model, leading brand portfolio and the ability to respond appropriately to market conditions.
Christopher J. Nassetta stated that the first priority is to support the guests and team members affected by coronavirus.
Coronavirus Crisis Hits Hotel Industry
The travel industry has been experiencing its worst phase in the past several years. The company has already closed roughly 150 hotels in China, having 33,000 rooms. Notably, China represented 2.7% of the overall EBITDA and 0.7% of system-wide revenues in 2019.
Other major hoteliers like Wyndham Hotels & Resorts, Inc. (WH - Free Report) , Hyatt Hotels Corp. (H - Free Report) and Marriott International, Inc. (MAR - Free Report) have also been impacted by the coronavirus outbreak.
Per reports, Wyndham Hotels & Resorts has shut 1,000 hotels in China, which represents nearly 75% of its operations in China. Moreover, Hyatt and Marriott have closed nearly 26 and 90 hotels in the country, respectively.
So far this year, shares of the company have declined 21.5%, the industry has decreased 24.6%, while the S&P 500 has plummeted 10.2%.
Hilton currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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