Hyatt Hotels Corporation, for the first quarter ended March 31, reported comparable systemwide hotel RevPAR increased 5.5% compared to the same period in 2023. In the U.S., RevPAR was up approximately 2%, excluding the impact of Easter.
“The year is off to a great start with gross fee revenue reaching a record of $262 million in the quarter,” said Mark S. Hoplamazian, president/CEO, Hyatt, “Our pipeline also reached a new record, expanding 10% year-over-year (YOY) to 129,000 rooms, and we realized net rooms growth of 5.5%. World of Hyatt membership has grown by 22%, reaching a new record of 46 million members. Significant progress on asset dispositions is further expanding our asset-light earnings mix, reflecting our execution to permanently reduce owned real estate.”
Highlights include:
- Comparable systemwide all-inclusive resorts net package RevPAR increased 11% compared to the same period in 2023
- Net rooms growth was approximately 5.5%
- Net income was $522 million and adjusted net income was $75 million
- Diluted EPS was $4.93 and adjusted diluted EPS was $0.71
- Adjusted EBITDA was $252 million
- Pipeline of executed management or franchise contracts was approximately 129,000 rooms
- Full-year comparable systemwide hotels RevPAR is projected to increase 3% to 5% on a constant currency basis compared to full-year 2023
- Full-year net Income is projected between $1.135 billion and $1.195 billion
- Full-year adjusted EBITDA is projected between $1.150 billion and $1.190 billion and is in line with previously provided 2024 outlook when adjusting for $30 million of reduced adjusted EBITDA due to transactions
Segment results and highlights
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 as Japan, Thailand and South Korea. Leisure demand was strong in Mexico and the Caribbean for hotels and all-inclusive resorts. European all-inclusive properties produced impressive net package RevPAR growth driven by high demand for resorts in the Canary Islands. In the U.S., RevPAR was up approximately 2%, 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 in Phoenix, higher real estate taxes, higher wages and transaction costs related to asset sales in process.
Distribution: The segment performance was impacted by challenging YOY 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 (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 China and Hyatt Regency Nairobi Westlands, marking the first hotel in Kenya.
As of March 31, 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 Hyatt selling 80% of the entity that owns the Unlimited Vacation Club business and the closing on the sale of Hyatt Regency Aruba Resort Spa and Casino, which were previously announced, the company is sharing the following updates:
- Sold Park Hyatt Zurich on April 4, Hyatt Regency San Antonio Riverwalk on April 23 and Hyatt Regency Green Bay on May 1 to unrelated third parties for combined proceeds of $535 million 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 $45 million of seller financing.
- 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 $2 billion asset sell-down commitment.
- As previously disclosed, another asset remains in the marketing process.
As of May 9, the company has realized $1.5 billion of gross proceeds from the net disposition of real estate at a 13.3x multiple and remains committed to successfully executing plans to realize $2 billion of gross proceeds from the sale of real estate, net of acquisitions, by the end of 2024 as part of its expanded asset disposition commitment announced in August 2021.
On Feb. 28, Juniper Hotels, one of the company’s unconsolidated hospitality ventures in India, completed an initial public offering on the BSE Limited and National Stock Exchange of India. The Company holds approximately 86 million equity shares and following the IPO, retained a 38.8% ownership interest in the unconsolidated hospitality venture. The company’s shares were valued at approximately $536 million at March 31.
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 $30 million reduction attributed to these transactions. Free cash flow remains in line with previously provided outlook including the $30 million reduction to adjusted EBITDA and $25 million of cash tax payments related to the three asset sales.
- Systemwide hotels RevPAR between 3% and 5%
- Net rooms growth between 5.5% and 6.0%
- Net income between $1.135 billion and $1.195 billion
- Adjusted EBITDA between $1.150 billion and $1.190 billion
- Free cash flow between $575 million and $625 million
