Hilton Shares Turn Positive for 2020 on Hopes of Pent-Up Demand

Hilton Worldwide Holdings Inc., like most of the hotel industry, has had a terrible year. But by one metric, the company is faring well: its share price.

The stock climbed Thursday, eking out a 0.3% gain for the year as investors bet that Covid-19 vaccines will unleash a surge of pent-up demand for lodging. The shares have more than doubled since mid-March — a surprising vote of confidence for a company enduring perhaps the worst year in its century-long history.

The company temporarilyshuttered nearly 1,000 hotels in the early days of the pandemic, furloughing thousands of employees. In thefirst nine months of 2020, revenue plummeted more than 50% from a year earlier. And Hilton was forced to raise cash through bond issues and loyalty-pointssales to shore up its finances for the lean times ahead.

Now, asCovid-19 shots get distributed, investors are betting that newly vaccinated travelers will set out on vacations, and that corporate road warriors and meeting planners are a step closer to booking rooms again.

They’re also wagering that Hilton will benefit from industry consolidation that typically happens during downturns, and that cost-cutting during the worst months of the pandemic will translate to better margins when business bounces back.

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