BENGALURU, REUTERS -- Hotel operator Hilton Worldwide Holdings Inc reported fourth-quarter profit and revenue above Wall Street estimates, powered by rising demand for rooms in China as travel picks up pace in the world's second largest economy.
The hotel operator said it recorded the strongest growth in international business, which accounts for less than 25 percent of its overall revenue, from the Asia-Pacific region.
Revenue per available room (RevPAR) from the region, a key performance metric for the hotel industry, rose 7.6 percent as the company benefited from addition of more hotels in China.
Shares of Hilton, owner of the hotel chain Waldorf Astoria, rose as much as 4 percent to $86.51 on Wednesday.
Hilton said its overall revenue per available room rose 3.8 percent in the quarter as more people booked rooms at higher prices, helping the hotel operator reaffirm its 2018 RevPAR growth forecast to be between 1 percent and 3 percent.
The company forecast adjusted earnings per share of $2.49 and $2.60 for 2018, while analysts were expecting $2.56 per share.
That helped total revenue surge 24 percent to $2.28 billion, beating analysts' estimates of $2.24 billion, according to Thomson Reuters I/B/E/S.
Hilton said it also expects higher occupancy rate in China as demand from individual travelers as well as corporate groups continues to improve in 2018.
Excluding one-time items, Hilton earned 54 cents in the quarter, beating analysts estimates of 45 cents.
Export recovery has helped China post its first annual rise in growth in seven years with the country's economy growing faster than expected in the fourth quarter of 2017.
The company said overall occupancy rose 1.8 percent in the reporting quarter, while the average daily room rate rose 1.2 percent.
Scholes said, like Hilton, larger rival Marriot, which reports fourth-quarter results after markets close on Wednesday, could also benefit from its higher exposure to international markets.
Hilton said it also benefited from rise in both group and individual bookings in the country, with holiday shifts and hurricane displacement boosting its overall RevPAR.
SunTrust analyst Patrick Scholes said Beijing's "Belt and Road" initiative, a project aiming to build a modern-day 'Silk Road' was helping hotel demand.
Baird analyst Michael Bellisario said China is getting to that "golden age of travel," where its growing middle class is boosting increased demand for inbound and outbound travel.
The rise in Asia Pacific RevPAR was led by China where it grew 9 percent, Chief Financial Officer Kevin Jacobs said on a conference call.