Hyatt Hotels Corporation, for the third quarter ended Sept. 30, reported systemwide RevPAR increased 3% compared to the same period in 2023. Q3 net rooms growth was approximately 4.3%.
“We reported solid-third quarter results, with gross fee revenues reaching $268 million,” said Mark S. Hoplamazian, president/CEO, Hyatt. “Our pipeline reached a new record of approximately 135,000 rooms, increasing 10% year-over-year (YOY), and World of Hyatt membership expanded to a record of 51 million members, growing 22% YOY. Our operating results and capital allocation strategy, including the completion of our 2021 asset-disposition commitment, acquisition of Standard International and planned joint-venture transaction to manage Bahia Principe branded hotels and resorts, demonstrate the strength of our asset-light earnings model leading to the return of more than $1.2 billion to shareholders through share repurchases and dividends so far this year.”
Highlights include:
- Comparable systemwide all-inclusive resorts net package RevPAR decreased 0.9% compared to the same period in 2023.
- Net income was $471 million and adjusted net income was $96 million.
- Diluted EPS was $4.63 and adjusted diluted EPS was $0.94.
- Adjusted EBITDA was $275 million.
- Pipeline of executed management or franchise contracts was approximately 135,000 rooms.
- Full-year comparable systemwide hotels RevPAR is projected to increase 3% to 4% on a constant currency basis compared to full-year 2023.
- Full-year net income is projected between $1.4 billion and $1.45 billion.
- Full year adjusted EBITDA is projected between $1.1 billion and $1.12 billion.
Segment results and highlights
Management and franchising: Results reflected strong business transient and group travel demand during the third quarter. In the U.S., performance was driven by business transient and group travel, while leisure was impacted by renovations, weather and increased international outbound to Europe and Asia-Pacific (excluding Greater China). In Europe, RevPAR increased 15% during the period, bolstered by the Summer Olympics in Paris. Greater China continued to experience meaningful international outbound travel to other markets within Asia, with RevPAR in Asia-Pacific (excluding Greater China) up 10% during the quarter.
Owned and leased: Adjusted EBITDA in the third quarter increased 13% compared to the third quarter of 2023, when adjusted for the net impact of transactions. Comparable margins increased 210 bps compared to the third quarter of 2023, led by strong ADR from the Democratic National Convention in Chicago and the Summer Olympics in Paris.
Distribution: Results for the third quarter reflect more seasonal booking patterns compared to last year and the impact of Hurricanes Beryl and Helene, partially offset by Mr & Mrs Smith commissions and certain ALG Vacations travel credits. Excluding the impact of the UVC Transaction, adjusted EBITDA decreased $5 million.
Openings and development
In the third quarter, 16 new hotels (or 2,589 rooms) joined Hyatt’s portfolio. Notable openings included Alila Shanghai; Brunfels Hotel, part of The Unbound Collection by Hyatt; Grand Hyatt Kunming; and Park Hyatt Marrakech. During the quarter, the company announced its exclusive alliance with Under Canvas with 13 outdoor resorts, including ULUM Moab.
As of Sept. 30, the company had a pipeline of executed management or franchise contracts for approximately 690 hotels (approximately 135,000 rooms).
Transactions and capital strategy
As a result of the previously announced sale of Hyatt Regency Orlando and an adjacent undeveloped land parcel on Aug. 16, the company exceeded its $2 billion asset-disposition commitment announced in August 2021. The company has realized $2.6 billion of gross proceeds, net of acquisitions, at a 13.3x multiple over the three-year period and expects to exceed 80% asset-light earnings mix in 2025.
Additionally, as previously announced, the company closed on the acquisition of Standard International on Oct. 1 for approximately $150 million with up to an additional $185 million of contingent consideration.
On Oct. 28, the company announced plans to enter into a long-term, asset-light joint venture with Grupo PiƱero, investing 359 million euros ($380.7 million) at closing for 50% of the joint venture plus an additional 60 million euros ($65.3 million) when certain conditions are met. This transaction is expected to close in the coming months subject to customary closing conditions, and upon closing, will add 23 all-inclusive resorts (or approximately 12,000 rooms) to Hyatt’s managed portfolio.