US Entering ‘C-Shaped Economy,' Hilton CEO Says

The American economy may be transitioning to a new phase in which growth is no longer reserved for the wealthiest consumers, according to the CEO of the hospitality giant Hilton, who believes rising demand at lower- and mid-priced hotels points to what he calls a "C‑shaped" recovery.

Speaking on Hilton's first‑quarter 2026 earnings call on Tuesday, Christopher Nassetta said the company expects "improving performance" among these groups going forward, with revenue per available room (RevPAR) "continuing to move downstream" from luxury properties.

Why This Matters Now

The optimistic comments from one of the world's largest hotel chains, with unique insights into consumer habits, counteract the increasingly common framing of America's economic trajectory.

Growing debt burdens and affordability pressures have been linked to weaker consumer spending among less-wealthy Americans. The affluent sectors, meanwhile, have benefited from surging stock and asset values while largely spared the impacts of inflation and a labor market slowdown, giving rise to the "K-shaped" divide many economists see in the U.S. economy.

What Is a C-Shaped Economy and Who Will Benefit?

As Nassetta said on Tuesday, the C-shaped economic recovery means demand is more evenly split across income groups, rather than being driven solely by the top earners.

The shift toward a "more balanced, convergence demand shape," Nassetta said, reflects expectations of lower interest rates and increased technology investments that are "benefitting the middle- and lower-income consumer and driving broader demand growth" after years of uneven economic recovery.

If correct, this would ease affordability pressures for consumers currently struggling, but also benefit sectors such as hospitality, which remain reliant on a broad, spend-heavy customer base.

And Nassetta said recent shifts had proved a boost for Hilton, which on Tuesday raised its full-year guidance on the back of year-over-year growth in RevPAR and profits.

He also predicted that the U.S. would see lower inflation once the Iran war "sort of settled down," allowing Federal Reserve officials to lower interest rates and "stimulate the real economy."

How This Differs From a K-Shaped Economy

Nassetta's vision contrasts with the more common diagnosis of America's "K-shaped" economy-a term that entered the economic vernacular following the COVID-19 pandemic, which gave way to an uneven recovery and greater bifurcation between the country's lower and upper classes.

Despite headline indicators such as GDP and U.S. stock indexes proving resilient, the struggles of the former group have become increasingly evident over the past few years. Policymakers have also noted the emergence of a "K-shaped" split, particularly in consumer spending.

“We hear about this a lot,” Federal Reserve Chairman Jerome Powell said in December. “If you listen to the earnings reports for consumer-facing companies that tend to deal with low- and moderate-income people, they'll all say that we're seeing people tightening their belts, changing products that they buy, buying less, and that sort of thing. And so it's clearly a thing.

"It's also clearly a thing that, asset values-housing values and securities values are high, and they tend to be owned by people more at the higher end of the income and wealth.”

Where Is the Economy Going?

Despite Nassetta's optimism, other industry figures and experts continue to warn that consumers on the upper and lower ends remain divided.

"What is clear is that across lower- to middle-income households, growth in spending has begun to slow," the National Retail Federation wrote in an analysis from February. "However, top-line spending remains robust, and some sectors have even managed to retain or grow their share across income groups."

"The majority of our share gains came from households making more than $100,000," Walmart CEO John Furner said during an earnings call in February. "For households earning below $50,000, we continue to see that wallets are stretched. And in some cases, people are managing spending paycheck to paycheck."

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This story was originally published April 29, 2026 at 1:31 PM.