Hyatt Reports First Quarter 2024 Results
Hyatt Hotels reported its first quarter 2024 results, with highlights including a 5.5% increase in comparable system-wide hotels RevPAR, 11% increase in Net Package RevPAR for all-inclusive resorts, and $522 million in Net Income. The company repurchased shares, projected full-year RevPAR growth of 3% to 5%, and expects Net Income between $1,135 million and $1,195 million for 2024.
Record gross fee revenue of $262 million in the quarter
New record pipeline of 129,000 rooms and 46 million World of Hyatt members
Projected full-year RevPAR growth of 3% to 5%
Adjusted EBITDA decreased by 5.9% to $252 million
Owned and leased segment's Adjusted EBITDA decreased by 9%
Distribution segment performance impacted by challenging year-over-year comparisons
Insights
Hyatt Hotels Corporation's first-quarter financial performance showcases a mixed outcome with some key financial metrics reflecting growth, while others indicate areas for improvement. The 5.5% increase in RevPAR (Revenue Per Available Room) is a positive sign of recovery and demand in the hospitality industry, yet, when viewed alongside the 5.9% decline in Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), it suggests that cost pressures and investment might be weighing on profitability. The net income figure of
Hyatt's stock repurchase activity, which is often a sign of confidence from management in the company's valuation, might be viewed favorably by investors, particularly as the company has committed to a further
The projected full-year Net Income and Adjusted EBITDA figures, while robust, must be tempered by the acknowledgment of asset disposals which contribute to an 'asset-light' strategy. This strategy could benefit the company in the long run by focusing on management and franchising, which traditionally have higher margin profiles. However, this comes at the short-term cost of reduced EBITDA due to these transactions.
For retail investors, understanding the nuances between reported net income and adjusted figures, as well as the implications of an asset-light strategy, is critical for evaluating the performance and the future direction of the company.
Hyatt’s pipeline expansion to 129,000 rooms indicates a 10% growth year-over-year, signifying an aggressive expansion strategy and an optimistic outlook on travel and hospitality industry growth. With the recent recovery in travel post-COVID-19 disruptions, such an expansion could capitalize on pent-up demand. However, with the owned and leased segment reporting a 16.5% decrease and the distribution segment down by 31.7% in Adjusted EBITDA, these figures suggest there are market segments within the company that are underperforming.
The mention of strong outbound travel from Greater China is notable, given the region's previous travel restrictions. This might indicate a shift in the global travel landscape with a potential increase in outbound tourism from Asia, benefitting the company’s properties in popular destinations like Japan, Thailand and South Korea. The growth of the World of Hyatt membership by 22% also indicates a solidifying customer base, which could ensure recurring revenue through loyalty programs.
For retail investors, looking at the diversified growth — through geographic expansion and customer loyalty — can provide insights into the longer-term stability of the company. However, the variability in segment performance underlines the importance of operational efficiency and market adaptability in sustaining growth.
Hyatt's ongoing shift towards an asset-light business model is evident from its recent real estate sales and commitment to reduce owned real estate. The proceeds from these sales, recorded at impressive multiples such as the 14.7x multiple realized from recent hotel sales, highlight the potential for capital redeployment into higher ROI (Return on Investment) areas such as franchising and management contracts, which could lead to a more resilient business model.
The strategic financing involvement in the Park Hyatt Zurich deal, where Hyatt provided
For investors, the impact of these transactions on the balance sheet should be scrutinized, along with the potential benefits of reduced capital expenditure and operational costs associated with property ownership. However, a thorough assessment would also consider the potential risks of losing control over the asset base and the implications for long-term branding and customer experience.
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Comparable system-wide hotels RevPAR increased
5.5% compared to the same period in 2023
-
Comparable system-wide all-inclusive resorts Net Package RevPAR increased
11.0% compared to the same period in 2023
-
Net Rooms Growth was approximately
5.5%
-
Net Income was
and Adjusted Net Income was$522 million $75 million
-
Diluted EPS was
and Adjusted Diluted EPS was$4.93 $0.71
-
Adjusted EBITDA was
$252 million
- Pipeline of executed management or franchise contracts was approximately 129,000 rooms
-
Repurchased approximately 2.5 million shares of Class A and Class B common stock for an aggregate purchase price of
$388 million
-
Full year comparable system-wide hotels RevPAR is projected to increase
3% to5% on a constant currency basis compared to full year 2023
-
Full year Net Income is projected between
and$1,135 million $1,195 million
-
Full year Adjusted EBITDA is projected between
and$1,150 million and is in line with previously provided 2024 Outlook when adjusting for$1,190 million of reduced Adjusted EBITDA due to transactions$30 million
-
Full year Capital Returns to Shareholders is projected between
and$800 million $850 million
Mark S. Hoplamazian, President and Chief Executive Officer of Hyatt, said, "The year is off to a great start with gross fee revenue reaching a record of
Segment Results and Highlights
(in millions) |
|
Three Months Ended March 31, |
|
|
|||||||
|
|
2024 |
|
2023 |
|
Change (%) |
|||||
Management and franchising |
|
$ |
203 |
|
|
$ |
184 |
|
|
10.2 |
% |
Owned and leased |
|
|
60 |
|
|
|
71 |
|
|
(16.5 |
)% |
Distribution |
|
|
39 |
|
|
|
58 |
|
|
(31.7 |
)% |
Overhead |
|
|
(51 |
) |
|
|
(46 |
) |
|
(9.0 |
)% |
Eliminations |
|
|
1 |
|
|
|
1 |
|
|
(33.0 |
)% |
Adjusted EBITDA |
|
$ |
252 |
|
|
$ |
268 |
|
|
(5.9 |
)% |
-
Management and franchising: Results in the first quarter were driven by solid demand across all customer segments. Regional highlights include strong outbound travel from
Greater China , benefiting markets such asJapan ,Thailand , andSouth Korea . Leisure demand was strong inMexico and theCaribbean for hotels and all-inclusive resorts. European all-inclusive properties produced impressive Net Package RevPAR growth driven by high demand for resorts in theCanary Islands . Inthe United States , RevPAR was up approximately2% , excluding the impact of Easter, reflecting normalized growth.
-
Owned and leased: Adjusted EBITDA in the first quarter decreased by
9% compared to the first quarter of 2023, when adjusted for asset dispositions. The decline was driven by difficult comparisons to 2023, including the Super Bowl inPhoenix , higher real estate taxes, higher wages, and transaction costs related to asset sales in process.
- Distribution: The segment performance was impacted by challenging year-over-year comparisons particularly due to ALG Vacations which lapped a strong quarter in the previous year.
Openings and Development
In the first quarter, 12 new hotels (or 2,425 rooms) joined Hyatt's portfolio. Notable openings included Thompson Houston, Secrets Tides Punta Cana, Secrets Playa Blanca Costa Mujeres, five UrCove properties in
As of March 31, 2024, the Company had a pipeline of executed management or franchise contracts for approximately 670 hotels (approximately 129,000 rooms).
Transactions and Capital Strategy
In addition to the completion of the transaction that resulted in the Company selling
-
Sold Park Hyatt Zurich on April 4, 2024, Hyatt Regency San Antonio Riverwalk on April 23, 2024, and Hyatt Regency Green Bay on May 1, 2024 to unrelated third parties for combined proceeds of
at a 14.7x multiple. The Company entered into long-term management agreements for Park Hyatt Zurich and Hyatt Regency San Antonio Riverwalk, and a long-term franchise agreement for Hyatt Regency Green Bay. In connection with the Park Hyatt Zurich transaction, the Company provided approximately$535 million of seller financing.$45 million
-
Signed a purchase and sale agreement for an asset that, upon closing, would generate gross proceeds that exceed the remaining portion of the Company's
asset sell-down commitment.$2.0 billion
- As previously disclosed, another asset remains in the marketing process.
As of May 9, 2024, the Company has realized
On February 28, 2024, Juniper Hotels, one of the Company's unconsolidated hospitality ventures in
Balance Sheet and Liquidity
As of March 31, 2024, the Company reported the following:
-
Total debt of
.$3,055 million
-
Pro rata share of unconsolidated hospitality venture debt of
, substantially all of which is non-recourse to Hyatt and a portion of which Hyatt guarantees pursuant to separate agreements.$457 million
-
Total liquidity of approximately
with$2.3 billion of cash and cash equivalents and short-term investments, and borrowing availability of$794 million under Hyatt's revolving credit facility, net of letters of credit outstanding.$1,496 million
During the first quarter, the Company repurchased a total of 528,427 shares of Class A common stock for approximately
The Company's board of directors has declared a cash dividend of
2024 Outlook
The Company is providing the following outlook for the 2024 fiscal year reflecting the sales of Park Hyatt Zurich, Hyatt Regency San Antonio Riverwalk, Hyatt Regency Green Bay, and the UVC Transaction. Full year 2024 outlook for Adjusted EBITDA remains in line with previously provided outlook when adjusted for
|
|
Full Year 2024 vs. 2023 |
System-Wide Hotels RevPAR1 |
|
|
Net Rooms Growth |
|
|
(in millions) |
|
Full Year 2024 |
Net Income |
|
|
Gross Fees |
|
|
Adjusted G&A Expenses2 |
|
|
Adjusted EBITDA2 |
|
|
Capital Expenditures |
|
Approx. |
Free Cash Flow2 |
|
|
Capital Returns to Shareholders3 |
|
|
1 |
RevPAR is based on constant currency whereby previous periods are translated based on the current period exchange rate. RevPAR percentage for 2024 vs. 2023 is based on comparable hotels. |
|
2 |
Refer to the tables on schedule A-9 for a reconciliation of estimated Net Income attributable to Hyatt Hotels Corporation to Adjusted EBITDA, G&A expenses to Adjusted G&A Expenses, and net cash provided by operating activities to Free Cash Flow. |
|
3 |
The Company expects to return capital to shareholders through a combination of cash dividends on its common stock and share repurchases. |
|
No disposition or acquisition activity beyond what has been completed as of the date of this release has been included in the 2024 Outlook. The Company's 2024 Outlook is based on a number of assumptions that are subject to change and many of which are outside the control of the Company. If actual results vary from these assumptions, the Company's expectations may change. There can be no assurance that Hyatt will achieve these results. |
Conference Call Information
The Company will hold an investor conference call this morning, May 9, 2024, at 9:00 a.m. CT.
Participants are encouraged to listen to a simultaneous webcast of the conference call, which may be accessed through the Company's website at investors.hyatt.com. Alternatively, participants may access the live call by dialing: 800.715.9871 (
A replay of the call will be available for one week beginning on Thursday, May 9, 2024, at 11:00 a.m. CT by dialing: 800.770.2030 (
Forward-Looking Statements
Forward-Looking Statements in this press release, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include statements about our plans, strategies, outlook, occupancy, the amount by which the Company intends to reduce its real estate asset base, the expected amount of gross proceeds from the sale of such assets, and the anticipated timeframe for such asset dispositions, the number of properties we expect to open in the future, pace and booking trends, the expected timing and payment of dividends, RevPAR trends, our expected Adjusted G&A Expense, our expected capital expenditures, our expected net rooms growth, our expected system-wide RevPAR, our expected one-time integration-related expenses, financial performance, prospects or future events and involve known and unknown risks that are difficult to predict. As a result, our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "predict," "potential," "continue," "likely," "will," "would" and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth; the rate and pace of economic recovery following economic downturns; global supply chain constraints and interruptions, rising costs of construction-related labor and materials, and increases in costs due to inflation or other factors that may not be fully offset by increases in revenues in our business; risks affecting the luxury, resort, and all-inclusive lodging segments; levels of spending in business, leisure, and group segments, as well as consumer confidence; declines in occupancy and average daily rate; limited visibility with respect to future bookings; loss of key personnel; domestic and international political and geopolitical conditions, including political or civil unrest or changes in trade policy; hostilities, or fear of hostilities, including future terrorist attacks, that affect travel; travel-related accidents; natural or man-made disasters, weather and climate-related events, such as earthquakes, tsunamis, tornadoes, hurricanes, droughts, floods, wildfires, oil spills, nuclear incidents, and global outbreaks of pandemics or contagious diseases, or fear of such outbreaks; our ability to successfully achieve certain levels of operating profits at hotels that have performance tests or guarantees in favor of our third-party owners; the impact of hotel renovations and redevelopments; risks associated with our capital allocation plans, share repurchase program, and dividend payments, including a reduction in, or elimination or suspension of, repurchase activity or dividend payments; the seasonal and cyclical nature of the real estate and hospitality businesses; changes in distribution arrangements, such as through internet travel intermediaries; changes in the tastes and preferences of our customers; relationships with colleagues and labor unions and changes in labor laws; the financial condition of, and our relationships with, third-party owners, franchisees, and hospitality venture partners; the possible inability of third-party owners, franchisees, or development partners to access the capital necessary to fund current operations or implement our plans for growth; risks associated with potential acquisitions and dispositions and our ability to successfully integrate completed acquisitions with existing operations; failure to successfully complete proposed transactions (including the failure to satisfy closing conditions or obtain required approvals); our ability to successfully execute our strategy to expand our management and hotels services and franchising business while at the same time reducing our real estate asset base within targeted timeframes and at expected values; our ability to maintain effective internal control over financial reporting and disclosure controls and procedures; declines in the value of our real estate assets; unforeseen terminations of our management and hotels services or franchise agreements; changes in federal, state, local, or foreign tax law; increases in interest rates, wages, and other operating costs; foreign exchange rate fluctuations or currency restructurings; risks associated with the introduction of new brand concepts, including lack of acceptance of new brands or innovation; general volatility of the capital markets and our ability to access such markets; changes in the competitive environment in our industry, industry consolidation, and the markets where we operate; our ability to successfully grow the World of Hyatt loyalty program and Unlimited Vacation Club paid membership program; cyber incidents and information technology failures; outcomes of legal or administrative proceedings; and violations of regulations or laws related to our franchising business and licensing businesses and our international operations; and other risks discussed in the Company's filings with the SEC, including our annual reports on Form 10-K and quarterly reports on Form 10-Q, which filings are available from the SEC. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. We caution you not to place undue reliance on any forward-looking statements, which are made only as of the date of this press release. We do not undertake or assume any obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
Non-GAAP Financial Measures
The Company refers to certain financial measures that are not recognized under
Availability of Information on Hyatt's Website and Social Media Channels
Investors and others should note that Hyatt routinely announces material information to investors and the marketplace using
About Hyatt Hotels Corporation
Hyatt Hotels Corporation, headquartered in
Refer to the table on page A-7 of the schedules for a summary of special items impacting Adjusted Net Income and Adjusted Diluted EPS for the three months ended March 31, 2024.
Note: All RevPAR and ADR percentage changes are in constant dollars. All Net Package RevPAR and Net Package ADR percentage changes are in reported dollars. This release includes references to non-GAAP financial measures. Refer to the non-GAAP reconciliations included in the schedules and the definitions of the non-GAAP measures presented beginning on page A-5.
HHC-FIN
View source version on businesswire.com: https://www.businesswire.com/news/home/20240509006668/en/
Investor Contacts
- Adam Rohman, 312.780.5834, adam.rohman@hyatt.com
-
Tara
Atwood , 312.780.5713, tara.atwood@hyatt.com
Media Contact
- Franziska Weber, 312.780.6106, franziska.weber@hyatt.com
Source: Hyatt Hotels Corporation
FAQ
What was Hyatt's Net Income for the first quarter of 2024?
Hyatt's Net Income for the first quarter of 2024 was $522 million.
What is Hyatt's projected full year Net Income range for 2024?
Hyatt's projected full year Net Income for 2024 is between $1,135 million and $1,195 million.
What was the percentage increase in comparable system-wide hotels RevPAR for Hyatt in the first quarter of 2024?
Hyatt saw a 5.5% increase in comparable system-wide hotels RevPAR in the first quarter of 2024.