Dive Brief:
- Hyatt Hotels Corporation posted its third-quarter 2023 earnings on Thursday, including 8.9% system-wide RevPAR growth year over year. The company’s adjusted EBITDA declined by about 2% year over year, going from $252 million at the end of Q3 2022 to $247 million this year.
- Hyatt saw 6.2% net rooms growth year over year in the third quarter, and the company’s pipeline reached record levels, with executed management or franchise contracts at approximately 123,000 rooms at quarter-end, according to the earnings report. In the third quarter, Hyatt made a pipeline push in the luxury space specifically.
- In the report, Hyatt President and CEO Mark Hoplamazian attributed the “tremendous quarter” of development growth to “higher levels of conversion opportunities combined with robust demand for travel around the globe.” Hyatt joins Marriott and Hilton in reaching a record pipeline this quarter.
Dive Insight:
Growth in Hyatt’s Americas management and franchising segment, particularly, was a result of resilient leisure demand and continued recovery of group demand, the company’s earnings report detailed.
In the Americas management and franchising segment, total fees were up 6.6% compared to the third quarter of 2022, and new hotels added to the system since the start of 2019 contributed $22 million in fee revenue in the quarter. Hoplamazian anticipates fee gains will continue, “fueled by [Hyatt’s] record pipeline and higher levels of conversion opportunities.”
Industry-wide in Q3, conversion projects and rooms hit the highest counts ever, ending the quarter at 1,100 projects, or 146,757 rooms, according to Lodging Econometrics. The hotel conversions and renovations pipeline has seen continued growth throughout 2023.
Other hotel companies have noted heightened conversion activity as well. In an earnings call with analysts Thursday, Marriott President and CEO Anthony Capuano said the company saw strong interest in conversions in the third quarter, with conversion representing 20% of Marriott signings and nearly 30% of its openings in the quarter.
Hilton also saw pipeline growth driven by conversion demand. During an earnings call on Oct. 25, CEO Chris Nassetta shared that the company’s development pipeline reached record levels in the third quarter, with 35% of new signings being conversions. He also touted a 1,000-room conversion project set to open soon, which the company announced this week as Hilton Boston Park Plaza in Boston’s Back Bay.
Hyatt anticipates continued growth in its development pipeline, Hoplamazian noted, as it continues to execute on its growth strategy, which includes expansion in the luxury segment.
In September, the company announced plans to open more than 30 hotels and resorts in the luxury lifestyle space across the Americas through 2025, including for its Thompson Hotels, Caption by Hyatt, Andaz and Grand Hyatt brands.
