Hilton profit forecast misses Street as traveling to U.S. gets costlier

(Reuters) - Hilton Worldwide Holdings Inc , owner of the Waldorf Astoria hotel brand, forecast lower-than-expected earnings for the first quarter and full year as a strong dollar makes it more expensive for foreigners to travel to the United States.

Hilton's quarterly adjusted profit narrowly missed market expectations despite a 7 percent rise in revenue.

The company, which also owns the Conrad brand, gets about three-quarters of its revenue from the United States.

International visitors to the United States spend more than $200 billion annually on hotels, travel, dining and shopping. But growth is expected to slow in 2015 as a strong dollar and weak economies at home deter potential visitors.

A 10 percent appreciation in the dollar typically results in about 2 percent fewer international visitors annually, Adam Sacks, president of Tourism Economics, told Reuters last month.

The dollar <.DXY> widely is expected to keep rising after gaining nearly 13 percent against a basket of major currencies in 2014.

Fewer foreign tourists would especially hurt Hilton's key markets in New York and Hawaii.

Hilton's owned hotels business was "pretty reliant" on New York even after selling the Waldorf Astoria New York, Macquarie Research analyst Chad Beynon said.

"That's probably part of the reason why Q1 guidance could be a little conservative ... also from an international (foreign exchange) standpoint."

The company said on Wednesday it expected an adjusted profit of 10-12 cents per share for the first quarter and 78-83 cents per share for the full year.

Analysts were expecting earnings of 15 cents per share for the first quarter and 85 cents for the year, according to Thomson Reuters I/B/E/S.

Hilton shares were down 1.2 percent at $28.30 in late morning trading on the New York Stock Exchange.

Shares of rival Hyatt Hotels Corp, which also reported on Wednesday, were down 1.4 percent after its fourth-quarter revenue missed expectations, also largely due to a stronger dollar.

Starwood Hotels & Resorts Worldwide Inc , owner of the Sheraton and Westin brands, also blamed a rising dollar for its lower-than-expected profit forecast last week.

Hilton's revenue per available room (RevPAR), a key metric for the hotel industry, increased 6.8 percent at U.S. hotels open for at least a year in the fourth quarter. Worldwide comparable RevPAR rose 6.6 percent.

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

(Editing by Joyjeet Das)

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