Hilton doubles down on Middle East after Iran war dents revenue by 30%

Hilton plans to continue expanding its presence in the Middle East, despite a 30% drop in revenue caused by the Iran war, according to Simon Vincent, the company's president for Europe, Middle East, and Africa. The revenue decline was most severe in the second quarter, but it recovered to a 2% year-on-year decrease by the third quarter. Hilton expects to return to pre-war revenue levels next year.

Despite the revenue drop, Hilton remains committed to its development plans for the region. The company aims to introduce new brands from its global portfolio of 28 to the Middle East, representing about 3% of Hilton's total business. This expansion is expected to nearly double the regional hotel portfolio, reaching over 230 hotels, which would create approximately 32,000 job opportunities.

The UAE is Hilton's largest operating market in the region, with 36 trading hotels and 13 more in the pipeline. Saudi Arabia accounts for over 50% of Hilton's Middle East pipeline, with more than 85 hotels in development. The company is introducing new brands such as Spark and Tempo to Saudi Arabia to cater to a diverse range of luxury, lifestyle, and mid-market properties.

Hilton maintained its hotel teams during the Iran conflict, reducing working hours instead of cutting staff. The company is now focusing on rebuilding demand for meetings, incentives, conferences, and exhibitions (MICE), which is crucial for strengthening Dubai's appeal as a destination. Leisure demand is expected to return first, while the company works with government and tourism authorities to rebuild business travel and events.

Hilton is also expanding its use of artificial intelligence (AI) across the customer journey and back-office operations. AI will be used for holiday research, booking, itinerary planning, and hotel preparation, with the goal of improving customer service rather than replacing human staff. AI may also enhance back-office efficiency, including recruitment, finance, and human resources. However, Vincent stresses that AI is more likely to change how hotel employees work than eliminate a significant number of jobs.