In its second quarter results, Hyatt Hotels Corporation reported net income attributable to Hyatt was $206 million, or $1.85 per diluted share, compared to a net loss attributable to Hyatt of $9 million, or $0.08 per diluted share, in the second quarter of 2021.
“Our second quarter results serve as clear evidence of the earnings power of Hyatt as we continue to transform our business,” said Mark S. Hoplamazian, president/CEO, Hyatt Hotels Corporation. “Total fee revenue exceeded $200 million and was 27% higher than any other quarter in the company’s history, driven by a record level of leisure transient revenue and rapidly improving group and business transient demand. Demand broadened both geographically and by segment, with RevPAR in most of our key geographies exceeding the same period in 2019. Our outlook remains optimistic with strong actualized results and booking trends for future periods continuing in July.”
Adjusted net income attributable to Hyatt was $51 million, or $0.46 per diluted share, in the second quarter of 2022, compared to adjusted net loss attributable to Hyatt of $117 million, or $1.15 per diluted share, in the second quarter of 2021.
Second quarter 2022 financial results as compared to the second quarter 2021 are as follows:
- Net income increased to $206 million from a loss of $9 million.
- Adjusted EBITDA increased to $255 million from $55 million.
- Apple Leisure Group (ALG) contributed $54 million of adjusted EBITDA.
- Adjusted EBITDA does not include ALG’s net deferrals of $25 million and net financed contracts of $15 million.
- Comparable system-wide RevPAR increased 82% to $130.16 and comparable U.S. hotel RevPAR increased 85% to $150.52 in the second quarter of 2022.
- Comparable owned and leased hotels RevPAR increased 140% to $186.34 and comparable owned and leased hotels operating margin improved to 31.9% in the second quarter of 2022.
- All-inclusive net package RevPAR was $182.10 with an ADR of $255.30.
- System-wide net rooms growth was 19% in the second quarter of 2022. Excluding ALG, net rooms growth was 4.6%.
- Pipeline of executed management or franchise contracts was approximately 113,000 rooms. Excluding ALG, the pipeline was approximately 106,000 rooms.
“We had a strong second quarter of gross rooms expansion through the opening of approximately 5,500 rooms during the quarter,” he said. “While there have been delays in the timing of openings across the industry, we are particularly encouraged by the volume of conversion opportunities driven by the compelling value of our brands and expect net rooms growth for the full year to be greater than 6%.”
Comparable system-wide RevPAR experienced rapid improvement in the second quarter and into the third quarter. Comparable system-wide RevPAR was down 5% to 2019 in the second quarter, improving from down 9% to 2019 in April to down 1% to 2019 in June. In July, comparable system-wide RevPAR was up 5% to 2019, marking one of the strongest individual months in Hyatt’s history powered by growth in luxury branded hotels, which were up 28% to 2019 in the Americas and EAME/SW Asia regions combined.
The results in July and favorable forward booking trends reflect continued strength. System-wide comparable transient revenue on the books for the remainder of the year is pacing 1% ahead of the same period in 2019 or 4% ahead when excluding Greater China. Additionally, short-term demand for group business continues to trend significantly ahead of 2019. Gross group room revenue booked in July for stay dates in 2022 for comparable Americas Full Service Managed properties was approximately 40% above July 2019 and group pace for the remainder of the year, from August through December, is approximately 7% below 2019 reflecting steady improvement as a result of strong short-term bookings.
The company’s all-inclusive portfolio also continues to experience strong growth. Based on preliminary results, net package RevPAR in July for ALG resorts in the Americas is approximately 24% higher in comparison with the same properties managed by ALG in July of 2019. Additionally, total package revenue for the entire ALG portfolio is approximately 74% higher than July of 2019, reflecting the impact of net rooms growth. Looking ahead, gross package revenue for ALG resorts in the Americas is pacing more than 44% above 2019 over the months of August through December for the same set of properties.
Second quarter of 2022 financial results as compared to the second quarter of 2021 are as follows:
Management, franchise and other fees
Total management, franchise and other fee revenues increased to $204 million in the second quarter of 2022 compared to $93 million reported in the second quarter of 2021 and reflected a sequential improvement from $154 million reported in the first quarter of 2022. Base management fees increased to $79 million, incentive management fees increased to $45 million and franchise fees increased to $52 million during the quarter. Other fee revenues increased to $28 million during the quarter.
Americas management and franchising segment
Americas management and franchising segment adjusted EBITDA increased to $117 million in the second quarter of 2022 compared to $54 million reported in the second quarter of 2021. Results were led by the continuation of strong leisure demand and building momentum in group and business transient, resulting in increases in base and franchise fees with total franchise fees exceeding 2019 levels by 35% on a reported basis. Americas net rooms increased 3.5% compared to the second quarter of 2021.
ASPAC management and franchising segment
ASPAC management and franchising segment adjusted EBITDA decreased to $6 million in the second quarter of 2022 compared to $10 million reported in the second quarter of 2021. Results reflect lower demand in Greater China while the remainder of the region showed steady improvement led by the easing of travel restrictions as well as increased airlift to meet pent up demand. ASPAC net rooms increased 6.1% compared to the second quarter of 2021.
EAME/SW Asia management and franchising segment
EAME/SW Asia management and franchising segment adjusted EBITDA increased to $13 million in the second quarter of 2022 compared to a loss of $1 million reported in the second quarter of 2021. In the second quarter of 2022, results across the region were led by Europe and the Middle East as travel restrictions eased, cross-border travel strengthened and airlift improved. EAME/SW Asia net rooms increased 7.9% compared to the second quarter of 2021.
Apple Leisure Group segment
ALG segment Adjusted EBITDA was $54 million in the second quarter of 2022. Adjusted EBITDA does not include ALG’s net deferrals of $25 million and net financed contracts of $15 million. Results reflect strong demand for leisure destinations, increased airlift capacity and favorable pricing environment. During the second quarter of 2022, ALG added 10 resorts (or 2,502 rooms).
Owned and leased hotels segment
Owned and leased hotels segment adjusted EBITDA increased to $99 million in the second quarter of 2022 compared to $12 million reported in the second quarter of 2021. Owned and leased hotels segment comparable operating margins improved to 31.9% from the second quarter 2021 as reported, reflecting strong operational execution and growth in average daily rates.
Openings and future expansion
In the second quarter of 2022, 28 new hotels (or 5,510 rooms) joined Hyatt’s system. As of June 30, the company had a pipeline of executed management or franchise contracts for approximately 550 hotels (approximately 113,000 rooms), inclusive of ALG’s pipeline contribution of approximately 20 hotels (or approximately 7,000 rooms).