Hyatt Hotels Corp. President and CEO Mark Hoplamazian said the company is benefiting from strong demand across different demand segments, with signs that both business travel and groups are coming back strong.
During the company’s third-quarter earnings call Thursday morning, Hoplamazian said leisure travel demand is “still elevated” compared to pre-pandemic levels, while business transient is inching closer to 2019 levels and group demand has already surpassed that threshold.
“Business transient is up 19% and has recovered to 90% compared to [the third quarter of] 2019,” he said, adding that rates are likely to increase in the high-single digits for corporate negotiated contracts.
At the same time, group demand is up 5% compared to 2019, and in September group revenues were 13% higher than the same month a year ago.
Hyatt’s latest outlook for full-year 2023 projects revenue-per-available-room growth between 15% and 16% with net rooms growth of 6%.
The company also progressed in its plans to sell off $2 billion in owned hotels by the end of 2024, executives said.
The company’s third-quarter earnings release noted Hyatt “has signed a definitive purchase and sale agreement in October for one asset, expected to close in the fourth quarter of 2023, and has signed a letter of intent for an asset previously marketed for sale, expected to close in the first half of 2024. The company has a signed letter of intent for one additional asset and expects the transaction to close in the first half of 2024. The company launched the marketing process for an additional asset and separately, the company has been advancing discussions for off-market transactions related to other properties in the portfolio.”
Hyatt has closed on the sale of $721 million in assets since announcing its disposition plan in August 2021.
Hyatt also sold off its vacation rental management business Destination Residences Management in the quarter to Lowe. The deal included a $2 million base price and up to $48 million more based on “the achievement of certain performance-based metrics and contract extensions.”
Hyatt reported strong metrics across the board in the third quarter.
Hyatt’s net income was $68 million, up from $28 million in the same period the year prior, and adjusted earnings before interest, taxes, depreciation and amortization was $247 million. Total revenue for the quarter came in slightly higher than $1.6 billion, compared to $1.5 billion the year prior.
System-wide RevPAR was up 8.9% year over year, with net rooms growth of 6.2%. Key openings in the quarter include the Andaz Macau, the Calistoga Motor Lodge & Spa and seven UrCove properties.
As of publication time, Hyatt’s stock was trading at $104 a share, up 17.12% year to date. The NYSE Composite was down 1% for the same period.
Source: By Sean McCracken Costar.com