Hilton Hotels Corp. reported that its first-quarter profit dropped 25.6% from the year-earlier level because of stiff competition and major refurbishing of some properties.
The company hedged its bets on the future, saying: “We do not believe first-quarter results are necessarily indicative of the year as a whole.”
For the three months ended March 31, Hilton earned $17.4 million on revenue of $158.8 million. A year earlier it netted $23.4 million on revenue of $173.2 million. Hilton’s earnings began sliding in the second half of last year and ended 1985 down 12.1% at $100.2 million.
“The present environment is very competitive,” Chairman and Chief Executive Barron Hilton said.
He noted that the industry’s traditionally slow Easter week was more sluggish than last year’s.
In Nevada, he said, the Las Vegas Hilton had its best first quarter in five years, but a $62-million addition under way at the Flamingo Hilton in Las Vegas resulted in fewer rooms available and lower gambling profits, while bad weather hurt business at the Reno Hilton.
The company also has costly renovations under way at its hotels in Washington and Chicago. All of the renovation projects are expected to be completed this year.
For the quarter, operating incoming from the company’s hotel and gaming segments were down by 38% and 6%, respectively.