Dive Brief:
- Hyatt posted a system-wide hotel RevPAR increase of 5.5% year on year in first-quarter 2024 earnings results Thursday. U.S. RevPAR, in particular, was up 2% excluding the impact of Easter, which the company said reflects normalized growth.
- The company’s adjusted EBITDA fell 5.9% year on year. Hyatt attributed the decline to a particularly strong first quarter of 2023, which included the Super Bowl in Phoenix, and current conditions including higher real estate taxes, wages and transaction costs related to asset sales.
- The results show that 2024 is “off to a great start,” according to Hyatt CEO and President Mark Hoplamazian, who also pointed to “significant progress” made toward the company’s goal of offloading real estate.
Dive Insight:
“Travel across all customer segments remains very healthy,” said Hoplamazian in a first-quarter earnings call with analysts. “As anticipated, the timing of Easter compared to 2023 positively impacted leisure travel in March and negatively impacted group and business travel.”
Business transient revenue increased 6% year over year in the quarter, and “similar” in the U.S., Hoplamazian said, “a clear sign that business travel continues to recover.”
Hyatt’s pipeline reached a new record in Q1, expanding 10% year on year to 129,000 rooms. The company added 12 new hotels to its portfolio in the quarter, including Thompson Houston.
The World of Hyatt loyalty program also grew in the first quarter, with membership up 22% over last year, reaching a new high of approximately 46 million members at the end of Q1.
“Loyalty room penetration increased in the quarter, highlighting the strong engagement of our expanding membership base, which is highly valuable because our members stay longer, they spend more and they book through Hyatt channels,” the CEO said, noting that World of Hyatt members can now access more than 700 additional luxury hotels through the company’s partnership with Mr & Mrs Smith.
Meanwhile, Hyatt made “significant progress on asset dispositions.”
Within the past two months, Hyatt has sold Park Hyatt Zurich, Hyatt Regency San Antonio Riverwalk and Hyatt Regency Green Bay for combined proceeds of $535 million, the company said. It has since entered into long-term management agreements with Park Hyatt Zurich and Hyatt Regency San Antonio Riverwalk, and a long-term franchise agreement for Hyatt Regency Green Bay.
“We have realized $1.5 billion dollars of gross proceeds from the net disposition of real estate since our $2 billion commitment announced in August of 2021,” Hoplamazian said, adding, “We remain confident that we will complete the remaining portion of our disposition commitment before the end of this year.”
The company first made its decision to go “asset-lighter” in 2017, Hoplamazian said in an interview last month with The Wall Street Journal.
Hyatt expects full-year 2024 RevPAR growth of from 3% to 5% compared to 2023, with group and business transient customer segments contributing “meaningfully” and U.S. RevPAR growth at “the lower end” of the global range, CFO Joan Bottarini said on the call.
