Hyatt Hotels Corporation, for 2023, reported net income of $26 million in the fourth quarter and $220 million for the full year, which exceeded the full-year outlook for last year. Comparable systemwide RevPAR increased 9.1% in the fourth quarter and 17.0% for the full year compared to the same periods in 2022, and exceeded the full-year outlook for 2023.
“The fourth quarter marks the completion of a transformative year and demonstrates the progress towards our strategic vision and earnings evolution,” said Mark S. Hoplamazian, president/CEO, Hyatt. “RevPAR growth exceeded the high end of our guidance range and we had industry-leading net rooms growth for the seventh consecutive year. This led to a record level of fees and the highest free cash flow in Hyatt’s history. We returned $500 million to our shareholders and achieved an asset-light earnings mix of approximately 76% for the full year, a testament to the successful execution of our strategy.”
Fourth-quarter and full-year 2023 highlights include:
- Adjusted net income was $68 million in the fourth quarter and $276 million for the full year.
- Adjusted EBITDA was $241 million in the fourth quarter and $1.029 billion for the full year, which exceeded the full-year outlook range for 2023. Adjusted EBITDA does not include net deferrals and net financed contracts of $33 million in the fourth quarter or net deferrals and net financed contracts of $158 million for the full year of 2023.
- Comparable owned and leased hotels RevPAR increased 5.9% in the fourth quarter and 15.5% for the full year compared to the same periods in 2022. Comparable owned and leased hotels operating margin was 26.2% in the fourth quarter and 25.4% for the full year.
- Comparable net package RevPAR increased 11.3% in the fourth quarter and 15.3% for the full year compared to the same periods in 2022.
- Net rooms growth was 5.9% for the full year, in line with the full-year outlook for 2023.
- Pipeline of executed management or franchise contracts was approximately 127,000 rooms.
Operational update
A record level of management, franchise, license and other fees of $256 million were generated in the fourth quarter of 2023 driven by continued strong global demand for travel and net rooms growth.
Comparable systemwide RevPAR increased 9.1% in the fourth quarter and increased 17.0% for the full year of 2023, compared to the same periods in 2022, driven by the rapid recovery in Greater China and strengthening group demand in the U.S. Group booking pace for Americas full-service managed properties is currently up 8% for full year 2024 compared to 2023.
Comparable net package RevPAR for ALG properties increased 9.2% in the fourth quarter and 13.6% for the full year of 2023, compared to the same periods in 2022. The fourth quarter benefited from improved results in Cancun, with comparable net package RevPAR up approximately 10% compared to the same period in 2022. In the first quarter of 2024, booking pace for ALG all-inclusive properties in the Americas is up 11% for the first quarter of 2024.
Segment results and highlights
Owned and leased hotels segment: Results in the fourth quarter were driven by the recovery of group demand and increased rate growth across group and transient customers which contributed to strong RevPAR growth over the fourth quarter of 2022. Comparable owned and leased hotels operating margin expanded 240 basis points compared to the fourth quarter of 2019 and 310 basis points compared to the full year of 2019.
Americas management and franchising segment: Results in the fourth quarter were driven by improved group and business transient results along with resilient leisure demand. Total fees in the quarter increased 6% compared to the fourth quarter of 2022, with RevPAR in the U.S. up 3% in the fourth quarter compared to the same period in 2022, driven by strong group rate.
ASPAC management and franchising segment: Results in the fourth quarter were driven by strength in all customer segments which contributed to RevPAR growth across the subregions, with Greater China improving 84% compared to the fourth quarter of 2022.
EAME management and franchising segment: Results in the fourth quarter were driven by resilient leisure demand and strong business transient and group performance, despite the impact of the 2022 World Cup in Qatar. The region benefited from increased airlift from the U.S., Middle East and China.
Apple Leisure Group segment: Results in the fourth quarter benefited from improved results in Cancun. ALG segment Adjusted EBITDA for the quarter increased 33% when adjusted for the $23 million non-cash benefit in the fourth quarter of 2022, that did not repeat in 2023, and the unfavorable impact of foreign currency exchange rates from the strengthening Mexican Peso.
Openings and development
In the fourth quarter, 29 new hotels (9,648 rooms) joined Hyatt’s portfolio, inclusive of six hotels in Greater China that converted to a Hyatt brand through a strategic relationship with an affiliate of Mumian Hotels. Notable openings included the 2,500-room Rio Hotel & Casino in Las Vegas, and the 1,100-room Sunscape Coco Punta Cana and 900-room Sunscape Dominicus La Romana in the Dominican Republic. Hotel Toranomon Hills, part of The Unbound Collection by Hyatt, in Japan, and Ronil Goa, a JdV by Hyatt hotel, in India, also opened during the quarter.
For the full year of 2023, 101 new hotels (23,965 rooms) joined Hyatt’s portfolio, inclusive of 43 hotels (13,223 rooms) which converted to a Hyatt brand.
As of Dec. 31, 2023, the company had a pipeline of executed management or franchise contracts for approximately 650 hotels (approximately 127,000 rooms), inclusive of 17 Hyatt Studios hotels (approximately 2,000 rooms). During the fourth quarter, the first Hyatt Studios hotel broke ground in Mobile, AL.
2024 Outlook
The Company is providing the following outlook for the 2024 fiscal year:
- Systemwide RevPAR growth between 3% and 5%
- Net rooms growth between 5.5% and 6%
- Net income of approximately $560 million
- Adjusted EBITDA between $1.175 billion and $1.225 billion
