"Thank You Federal Reserve": Hilton CEO Says Company Is Hedged Against Inflation Because Room Rates Reset Every Night
Not everybody is feeling the "sting" of inflation. In fact, a few business owners are happy about it.
Take, for instance, Hilton Hotels, where the room rates reset every single night. It's a luxury that most stores and business owners don't have: the ability to change prices daily. Hilton can constantly update (raise) its prices on a day-by-day basis, making it easy to keep up with our totally normal, totally in-control inflation.
In fact, Hilton's CEO took to Bloomberg to thank the Fed for the job they're doing and explain how his business is hedged against inflation.
Chief Executive Officer Christopher Nassetta said: “We can reprice our product every second of every day. We’re a very good hedge in that way to inflation and we’re being very thoughtful about how we’re pricing our product.”
Raising prices has helped the hotels offset higher wages, he told investors on a call this week. The hotel is anticipating better margins as the effect of the pandemic continues to fade, the CEO commented.
“If you look at the $3 trillion of incremental savings during Covid, there’s a long way to go to spend it all. Thank you Federal Reserve and the U.S. Congress for fiscal and monetary stimulus,” Nassetta said.
The chain has recorded average daily rates of $140.57 across its global system for the three months ended September. This is down just 3.1% from Q3 2019, prior to the pandemic. Occupancy rates are currently about 19% lower than the same pre-pandemic period, Bloomberg notes.
Shares of the hotel operator were up this week, hitting an all-time high, on the news. Hilton is up more than 30% this year as the lodging and travel recovery from Covid continues.
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