Hilton Hawaiian's renovations weigh on corporate revenue

BEVERLY HILLS, Calif. » Hilton Hotels Corp., which operates its namesake hotels along with the Doubletree Inn and Embassy Suites chains, said today third-quarter earnings climbed 31 percent as revenue from U.S. company-owned hotels rose.

The company said its revenue per available room was "significantly impacted" by re-novations at the Hilton Hawaiian Village in Waikiki -- which include construction of the Grand Waikikian timeshare tower, plus upgrades to the Tapa Tower and refurbishment of a lagoon on the property -- as well as the Waldorf-Astoria in New York.

However, Hilton also cited Hawaii as one of the three markets where it was experiencing its strongest demand. The other two were New York and Chicago.

Quarterly earnings grew to $117 million, or 29 cents per share, for the three months ended Sept. 30 compared with $89 million, or 22 cents per share, during the same period last year. Revenue doubled to $2.2 billion from $1.1 billion last year. Revenue from company-owned hotels grew 33 percent to $649 million.

Analysts polled by Thomson Financial expected net income of 28 cents per share, on revenue of $2.17 billion.

To provide comparable operating figures for the year, Hilton prepared pro-forma results assuming its acquisition of Hilton International occurred Jan. 1, 2005, adjusted from the actual takeover date of Feb. 23, 2006. On that basis, revenue per available room, a key measure in the lodging industry, grew 7.4 percent in North America. Results were helped by growth at company-owned hotels in Boston, Chicago and New York.

Revenue per available room at international, comparable owned hotels grew 17.5 percent, helped by results in London, Dresden, Zurich and Paris.

Revenue from leased hotels jumped to $679 million, from $28 million in the year-ago quarter.