Hyatt Hotels Corporation, for the first quarter ended March 31, reported comparable systemwide RevPAR was up 43% compared to the first quarter of 2022, or up 6% compared to the first quarter of 2019 for the same set of comparable properties.
“For the fourth consecutive quarter, we posted record results that exceeded our expectations, demonstrating our unique positioning and differentiated model,” said Mark S. Hoplamazian, president/CEO, Hyatt. “We raised our full-year RevPAR outlook while maintaining our record level pipeline and industry-leading net rooms growth. During the quarter, the recovery in Asia-Pacific was particularly remarkable with broad improvements across the region. We continue to experience favorable booking trends and our outlook remains optimistic.”
First-quarter highlights
- Net income was $58 million in the first quarter of 2023 compared to net loss of $73 million in the first quarter of 2022.
- Adjusted net income was $45 million in the first quarter of 2023 compared to adjusted net loss of $36 million in the first quarter of 2022.
- Diluted EPS was 53 cents in the first quarter of 2023 compared to a loss of 67 cents in the first quarter of 2022. Adjusted
- Diluted EPS was 41 cents in the first quarter of 2023 compared to a loss of 33 cents in the first quarter of 2022.
- Adjusted EBITDA was $268 million in the first quarter of 2023 compared to $169 million in the first quarter of 2022.
- Adjusted EBITDA does not include net deferrals of $31 million and net financed contracts of $17 million in the first quarter of 2023, and net deferrals of $24 million and net financed contracts of $7 million in the first quarter of 2022.
- Comparable owned and leased hotels RevPAR increased 52.9% in the first quarter of 2023 compared to 2022.
- Comparable owned and leased hotels operating margin improved to 25.9% in the first quarter of 2023.
- Comparable All-inclusive Net Package RevPAR increased 33.2% in the first quarter of 2023 compared to 2022.
- Net rooms growth was approximately 7% in the first quarter of 2023.
- Pipeline of executed management or franchise contracts was approximately 117,000 rooms.
Operational update
In the first quarter of 2023, the RevPAR recovery continued to be powered by ADR growth, up 12% on a constant currency basis, while occupancy improved 1,400 basis points as compared to the same period in 2022. A record level of total management, franchise, license and other fees of $231 million were generated in the first quarter of 2023, up 50% compared to the first quarter of 2022.
The Apple Leisure Group (ALG) all-inclusive portfolio also experienced strong growth. Comparable net package RevPAR for ALG properties increased 30% in the Americas and increased 36% in Europe in the first quarter of 2023 compared to the same period in 2022. World of Hyatt member contribution accounted for 21% of room nights at ALG properties in the Americas during the quarter.
Segment highlights
- Owned and leased hotels segment: Results were led by continued recovery from group and business travel. Additionally, strong operating performance led to improved margins for the comparable set of properties. Owned and leased hotels adjusted EBITDA increased $44 million, or 151%, when adjusted for the net impact of transactions, in the first quarter compared to the same period in 2022.
- Americas management and franchising segment: Results were led by sustained strength of leisure travel demand and continued improvement in business travel demand. Additionally, group showed notable momentum. New hotels added to the system since the start of 2019 contributed $18 million in fee revenue in the quarter.
- ASPAC management and franchising segment: Results were led by broad recovery across the region. Greater China saw significant improvement following the easing of travel restrictions with Mainland China RevPAR exceeding 2019 levels by 10% during the quarter.
- EAME management and franchising segment: Results were led by Western Europe which benefited from strong international inbound demand and favorable results in the Middle East.
- ALG segment: Results were led by sustained strength of leisure travel demand, favorable pricing and elevated airlift for key Americas destinations.
Openings and development
During the first quarter, 28 new hotels (or 5,128 rooms) joined Hyatt’s system, inclusive of 12 hotels (or 1,893 rooms) from the acquisition of Dream Hotel Group. Notable openings in the quarter included Andaz Mexico City Condesa, Andaz Pattaya Jomtien Beach, Hyatt Regency London Albert Embankment and FirstName Bordeaux, a JdV by Hyatt hotel.
As of March 31, the company had a pipeline of executed management or franchise contracts for approximately 580 hotels (approximately 117,000 rooms).
Transactions and capital strategy
On Feb. 2, Hyatt completed the acquisition of Dream Hotel Group and paid cash of $125 million. The terms of the agreement provide for up to an additional $175 million of contingent consideration through 2028 based on certain milestones associated with signed management contracts for future hotel openings.
The company is currently marketing two assets for sale and intends to successfully execute 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. As of March 31, the company has realized $721 million of proceeds from the net disposition of real estate as part of this commitment.
Balance sheet and liquidity
As of March 31, the company reported the following:
- Total debt of $3.10 billion.
- Pro rata share of unconsolidated hospitality venture debt of $534 million, substantially all of which is non-recourse to Hyatt and a portion of which Hyatt guarantees pursuant to separate agreements.
- Total liquidity of approximately $2.5 billion with $1.05 billion of cash and cash equivalents and short-term investments, and borrowing availability of $1.49 million under Hyatt’s revolving credit facility, net of letters of credit outstanding.
2023 outlook
For full-year 2023, the company is forecasting systemwide RevPAR growth of 12% to 16% and net rooms growth of approximately 6%.
