Hilton Net Off 38% in Quarter; Slump Cited

Hilton Hotels Corp., suffering from a lingering recession and a nationwide glut of hotel rooms, reported Tuesday that second-quarter profit fell 38% from a year ago to $23.6 million.

Lodging analysts said they expected that the Beverly Hills-based hotel and gambling concern would suffer in the second quarter because, like many other hotels nationwide, the recession is keeping many potential business and pleasure travelers at home.

Hilton Hotels, which owns, manages or franchises more than 250 hotels nationwide and overseas, caters especially to business travelers. But business people have not traveled as much lately because “businesses are not loosing up the purse strings” until the effects of the recession fade, according to David Jackson, a lodging industry analyst at the Western Group, a Los Angeles-based brokerage.

Meanwhile, Hilton Hotels, along with the rest of the hotel industry, has too many rooms for the number of travelers nationwide. Echoing what several analysts said Tuesday, Chairman Barron Hilton said in a statement: “The second half of 1991 will be a difficult period for Hilton and the lodging industry. The lodging industry typically lags economic fluctuations by four to six months.”

Second-quarter profit this year fell from $38.2 million during the same period in 1990. Operating income for the second quarter declined 23% to $52 million, with the hotel division dropping 27% to $32.9 million and the gaming division sliding 13% to $25.2 million.

Total revenue for the three-month-period ending June 30 was $287.2 million, compared to $273.8 million a year ago.

Investors apparently anticipated the drop in second-quarter profit because Hilton shares on the New York Stock Exchange closed Tuesday at $42.50, up 25 cents.