Hyatt Hotels Corporation ("Hyatt" or the "Company") (NYSE: H)
today reported second quarter 2024 results. Highlights include:
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- Comparable system-wide hotels RevPAR increased 4.7%
compared to the same period in 2023
- Comparable system-wide all-inclusive resorts Net Package
RevPAR increased 3.0% compared to the same period in 2023
- Net Rooms Growth was approximately 4.6%
- Net Income was $359 million and Adjusted Net Income was
$158 million
- Diluted EPS was $3.46 and Adjusted Diluted EPS was
$1.53
- Adjusted EBITDA1 was $307 million
- Pipeline of executed management or franchise contracts
was approximately 130,000 rooms
- Repurchased approximately 907 thousand shares of Class A
common stock for $134 million
- Full year comparable system-wide hotels RevPAR is
projected to increase 3.0% to 4.0% on a constant currency basis
compared to full year 2023
- Full year Net Income is projected between $1,055 million
and $1,115 million
- Full year Adjusted EBITDA1 is projected between $1,135
million and $1,175 million
- Full year Capital Returns to Shareholders is projected
between $800 million and $850 million
1 During the quarter ended June 30, 2024,
the Company revised its definition of Adjusted EBITDA to exclude
transaction and integration costs and recast prior period results
to provide comparability. Refer to page A-5 of the schedules for
additional detail.
Mark S. Hoplamazian, President and Chief Executive Officer of
Hyatt, said, "We posted solid second quarter results
demonstrating our differentiated positioning and continued
momentum. System-wide RevPAR grew by 4.7% and net rooms growth was
4.6%, generating record gross fee revenue of $275 million in the
quarter. Our pipeline reached a new record of 130,000 rooms, up 9%
year-over-year, reflecting strong developer interest in our brands.
We saw continued growth of the World of Hyatt loyalty program, with
membership increasing by 21% year-over-year to a record 48 million
members. These achievements demonstrated the strength of our
asset-light earnings model, which is designed to deliver strong
free cash flow and enhance shareholder value."
Segment Results and
Highlights
(in millions)
Three Months Ended June
30,
2024
2023
Change (%)
Management and franchising
$
222
$
201
10.5
%
Owned and leased
79
85
(7.4
)%
Distribution
43
34
23.9
%
Overhead
(37
)
(41
)
11.6
%
Eliminations
—
—
248.0
%
Adjusted EBITDA1
$
307
$
279
10.1
%
1 Results for the three months ended June
30, 2023 have been recast for comparability as a result of the
Company's revised definition of Adjusted EBITDA. Refer to page A-5
of the schedules for additional detail.
- Management and franchising: Second quarter results
reflected strong performance in business transient and group
travel. In the United States, RevPAR increased over 2% from strong
group and business travel while leisure travel was negatively
impacted by the timing of Easter, renovations at large resort
properties, and continued impact from the 2023 Maui wildfires.
Travel within Europe remains strong driven by inbound travel from
the United States and large one-time events. Greater China was
impacted by strong outbound travel from Greater China to other
markets within Asia, including Japan and South Korea. In Asia
Pacific excluding Greater China, RevPAR increased approximately 18%
during the quarter.
- Owned and leased: Adjusted EBITDA in the second quarter
increased 9% compared to the second quarter of 2023, when adjusted
for the net impact of transactions. Comparable margins increased
110 bps compared to the second quarter of 2023, as revenue growth
outpaced expenses.
- Distribution: Adjusted EBITDA in the second quarter
increased $9 million compared to the second quarter of 2023.
Excluding Unlimited Vacation Club, Adjusted EBITDA was below 2023
by approximately $5 million, consistent with the expectations
communicated previously because of ALG Vacations lapping a strong
second quarter last year.
Openings and Development
In the second quarter, 18 new hotels (or 3,251 rooms) joined
Hyatt's portfolio. Notable openings included Park Hyatt Changsha,
Maison Métier, The Legend Paracas Resort, the first Destination by
Hyatt property in Peru, and Hyatt Vivid Grand Island, the first
open Hyatt Vivid Hotels & Resorts property. Additionally, the
first Caption by Hyatt properties outside the United States opened
in the quarter: Caption by Hyatt Namba Osaka and Caption by Hyatt
Zhongshan Park Shanghai. The first Hyatt Centric in Shanghai,
China, Hyatt Centric Zhongshan Park Shanghai, also opened in the
quarter.
As of June 30, 2024, the Company had a pipeline of executed
management or franchise contracts for approximately 670 hotels
(approximately 130,000 rooms).
Transactions and Capital
Strategy
In addition to the previously announced sales of Park Hyatt
Zurich on April 4, 2024, Hyatt Regency San Antonio Riverwalk on
April 23, 2024, and Hyatt Regency Green Bay on May 1, 2024, the
Company is sharing the following updates:
- Acquired the me and all hotels brand from Lindner Hotels AG on
June 28, 2024. There are six me and all hotels with over 1,000
rooms currently open in Germany which joined Hyatt through the
strategic collaboration with Lindner Hotels AG in 2022. The me and
all hotels brand has a healthy pipeline with an additional 1,000
rooms in the executed pipeline and more development deals in
various stages of negotiation.
- Expects to close on the sale of an asset that is under a
purchase and sale agreement by the end of August 2024, which would
complete the Company's $2.0 billion asset sell-down
commitment.
As of June 30, 2024, 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 realizing $2.0 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.
Balance Sheet and
Liquidity
As of June 30, 2024, the Company reported the following:
- Total debt of $3,885 million.
- Pro rata share of unconsolidated hospitality venture debt of
$451 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 $3.5 billion with $1,957
million of cash and cash equivalents and short-term investments,
and borrowing availability of $1,496 million under Hyatt's
revolving credit facility, net of letters of credit
outstanding.
During the second quarter, the Company repurchased a total of
906,875 shares of Class A common stock for approximately $134
million. As of June 30, 2024, the Company has approximately $1.6
billion remaining under the share repurchase authorization.
On June 3, 2024, the Company issued $450 million of 5.250%
senior notes due 2029 at an issue price of 99.496% and $350 million
of 5.500% senior notes due 2034 at an issue price of 98.860%. The
Company received approximately $786 million of net proceeds, after
deducting underwriting discounts and other offering expenses. The
Company invested the net proceeds in marketable securities and
intends to use the net proceeds to repay the outstanding balance on
the $750 million of 1.800% senior notes maturing on October 1,
2024, at or prior to maturity.
The Company's board of directors has declared a cash dividend of
$0.15 per share for the third quarter of 2024. The dividend is
payable on September 10, 2024 to Class A and Class B stockholders
of record as of August 27, 2024.
2024 Outlook
The Company is providing the following outlook for the 2024
fiscal year:
Full Year 2024 vs.
2023
System-Wide Hotels RevPAR1
3.0% to 4.0%
Net Rooms Growth
5.5% to 6.0%
(in millions)
Full Year 2024
Net Income
$1,055 - $1,115
Gross Fees
$1,085 - $1,115
Adjusted G&A Expenses2
$425 - $435
Adjusted EBITDA2, 3
$1,135 - $1,175
Capital Expenditures
Approx. $170
Free Cash Flow2
$560 - $610
Capital Returns to Shareholders4
$800 - $850
1 RevPAR is based on constant currency
whereby previous periods are translated based on the current period
exchange rate. RevPAR percentage for 2024 vs. 2023 is based on
comparable hotels.
2 Refer to the tables on schedule A-9 for
a reconciliation of estimated Net Income attributable to Hyatt
Hotels Corporation to Adjusted EBITDA, G&A expenses to Adjusted
G&A Expenses, and net cash provided by operating activities to
Free Cash Flow.
3 During the quarter ended June 30, 2024,
the Company revised its definition of Adjusted EBITDA to exclude
transaction and integration costs and recast prior-period results
to provide comparability. Adjusted EBITDA outlook reflects the
removal of approximately $10 million relating to this definition
revision. Refer to page A-5 of the schedules for additional
detail.
4 The Company expects to return capital to
shareholders through a combination of cash dividends on its common
stock and share repurchases.
No disposition or acquisition activity
beyond what has been completed as of the date of this release has
been included in the 2024 Outlook. The Company's 2024 Outlook is
based on a number of assumptions that are subject to change and
many of which are outside the control of the Company. If actual
results vary from these assumptions, the Company's expectations may
change. There can be no assurance that Hyatt will achieve these
results.
Refer to the table on page A-7 of the schedules for a summary of
special items impacting Adjusted Net Income and Adjusted Diluted
EPS for the three months ended June 30, 2024.
Note: All RevPAR and ADR percentage changes are in constant
dollars. All Net Package RevPAR and Net Package ADR percentage
changes are in reported dollars. This release includes references
to non-GAAP financial measures. Refer to the non-GAAP
reconciliations included in the schedules and the definitions of
the non-GAAP measures presented beginning on page A-5.
Conference Call
Information
The Company will hold an investor conference call this morning,
August 6, 2024, at 9:00 a.m. CT.
Participants are encouraged to listen to a simultaneous webcast
of the conference call, which may be accessed through the Company's
website at investors.hyatt.com. Alternatively, participants may
access the live call by dialing: 800.715.9871 (U.S. Toll-Free) or
646.307.1963 (International Toll Number) using conference ID#
2303828 approximately 15 minutes prior to the scheduled start
time.
A replay of the call will be available for one week beginning on
Tuesday, August 6, 2024, at 11:00 a.m. CT by dialing: 800.770.2030
(U.S. Toll-Free) or 609.800.9909 (International Toll Number) using
conference ID# 2303828. An archive of the webcast will be available
on the Company's website for 90 days.
Forward-Looking
Statements
Forward-Looking Statements in this press release, which are not
historical facts, are forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. These
statements include statements about our plans, strategies, outlook,
occupancy, the amount by which the Company intends to reduce its
real estate asset base, the expected amount of gross proceeds from
the sale of such assets, and the anticipated timeframe for such
asset dispositions, the number of properties we expect to open in
the future, pace and booking trends, the expected timing and
payment of dividends, RevPAR trends, our expected Adjusted G&A
Expense, our expected capital expenditures, our expected net rooms
growth, our expected system-wide RevPAR, our expected one-time
integration-related expenses, financial performance, prospects or
future events and involve known and unknown risks that are
difficult to predict. As a result, our actual results, performance
or achievements may differ materially from those expressed or
implied by these forward-looking statements. In some cases, you can
identify forward-looking statements by the use of words such as
"may," "could," "expect," "intend," "plan," "seek," "anticipate,"
"believe," "estimate," "predict," "potential," "continue,"
"likely," "will," "would" and variations of these terms and similar
expressions, or the negative of these terms or similar expressions.
Such forward-looking statements are necessarily based upon
estimates and assumptions that, while considered reasonable by us
and our management, are inherently uncertain. Factors that may
cause actual results to differ materially from current expectations
include, but are not limited to: general economic uncertainty in
key global markets and a worsening of global economic conditions or
low levels of economic growth; the rate and pace of economic
recovery following economic downturns; global supply chain
constraints and interruptions, rising costs of construction-related
labor and materials, and increases in costs due to inflation or
other factors that may not be fully offset by increases in revenues
in our business; risks affecting the luxury, resort, and
all-inclusive lodging segments; levels of spending in business,
leisure, and group segments, as well as consumer confidence;
declines in occupancy and average daily rate; limited visibility
with respect to future bookings; loss of key personnel; domestic
and international political and geopolitical conditions, including
political or civil unrest or changes in trade policy; hostilities,
or fear of hostilities, including future terrorist attacks, that
affect travel; travel-related accidents; natural or man-made
disasters, weather and climate-related events, such as earthquakes,
tsunamis, tornadoes, hurricanes, droughts, floods, wildfires, oil
spills, nuclear incidents, and global outbreaks of pandemics or
contagious diseases, or fear of such outbreaks; our ability to
successfully achieve certain levels of operating profits at hotels
that have performance tests or guarantees in favor of our
third-party owners; the impact of hotel renovations and
redevelopments; risks associated with our capital allocation plans,
share repurchase program, and dividend payments, including a
reduction in, or elimination or suspension of, repurchase activity
or dividend payments; the seasonal and cyclical nature of the real
estate and hospitality businesses; changes in distribution
arrangements, such as through internet travel intermediaries;
changes in the tastes and preferences of our customers;
relationships with colleagues and labor unions and changes in labor
laws; the financial condition of, and our relationships with,
third-party owners, franchisees, and hospitality venture partners;
the possible inability of third-party owners, franchisees, or
development partners to access the capital necessary to fund
current operations or implement our plans for growth; risks
associated with potential acquisitions and dispositions and our
ability to successfully integrate completed acquisitions with
existing operations; failure to successfully complete proposed
transactions (including the failure to satisfy closing conditions
or obtain required approvals); our ability to successfully execute
our strategy to expand our management and hotels services and
franchising business while at the same time reducing our real
estate asset base within targeted timeframes and at expected
values; our ability to maintain effective internal control over
financial reporting and disclosure controls and procedures;
declines in the value of our real estate assets; unforeseen
terminations of our management and hotels services or franchise
agreements; changes in federal, state, local, or foreign tax law;
increases in interest rates, wages, and other operating costs;
foreign exchange rate fluctuations or currency restructurings;
risks associated with the introduction of new brand concepts,
including lack of acceptance of new brands or innovation; general
volatility of the capital markets and our ability to access such
markets; changes in the competitive environment in our industry,
industry consolidation, and the markets where we operate; our
ability to successfully grow the World of Hyatt loyalty program and
Unlimited Vacation Club paid membership program; cyber incidents
and information technology failures; outcomes of legal or
administrative proceedings; and violations of regulations or laws
related to our franchising business and licensing businesses and
our international operations; and other risks discussed in the
Company's filings with the SEC, including our annual reports on
Form 10-K and quarterly reports on Form 10-Q, which filings are
available from the SEC. All forward-looking statements attributable
to us or persons acting on our behalf are expressly qualified in
their entirety by the cautionary statements set forth above. We
caution you not to place undue reliance on any forward-looking
statements, which are made only as of the date of this press
release. We do not undertake or assume any obligation to update
publicly any of these forward-looking statements to reflect actual
results, new information or future events, changes in assumptions
or changes in other factors affecting forward-looking statements,
except to the extent required by applicable law. If we update one
or more forward-looking statements, no inference should be drawn
that we will make additional updates with respect to those or other
forward-looking statements.
Non-GAAP Financial
Measures
The Company refers to certain financial measures that are not
recognized under U.S. generally accepted accounting principles
(GAAP) in this press release, including: Adjusted Net Income;
Adjusted Diluted EPS; Adjusted EBITDA; Adjusted G&A Expenses;
and Free Cash Flow. See the schedules to this earnings release,
including the "Definitions" section, for additional information and
reconciliations of such non-GAAP financial measures.
Availability of Information on Hyatt's
Website and Social Media Channels
Investors and others should note that Hyatt routinely announces
material information to investors and the marketplace using U.S.
Securities and Exchange Commission (SEC) filings, press releases,
public conference calls, webcasts and the Hyatt Investor Relations
website. The Company uses these channels as well as social media
channels (e.g., the Hyatt Facebook account (facebook.com/hyatt);
the Hyatt Instagram account (instagram.com/hyatt/); the Hyatt X
account (twitter.com/hyatt); the Hyatt LinkedIn account
(linkedin.com/company/hyatt/); and the Hyatt YouTube account
(youtube.com/user/hyatt)) as a means of disclosing information
about the Company's business to our guests, customers, colleagues,
investors, and the public. While not all of the information that
the Company posts to the Hyatt Investor Relations website or on the
Company's social media channels is of a material nature, some
information could be deemed to be material. Accordingly, the
Company encourages investors, the media, and others interested in
Hyatt to review the information that it shares at the Investor
Relations link located at the bottom of the page on hyatt.com and
on the Company's social media channels. Users may automatically
receive email alerts and other information about the Company when
enrolling an email address by visiting "Investor Email Alerts" in
the "Resources" section of Hyatt's website at investors.hyatt.com.
The contents of these websites are not incorporated by reference
into this press release or any report or document Hyatt files with
the SEC, and any references to the websites are intended to be
inactive textual references only.
About Hyatt Hotels
Corporation
Hyatt Hotels Corporation, headquartered in Chicago, is a leading
global hospitality company guided by its purpose – to care for
people so they can be their best. As of June 30, 2024, the
Company's portfolio included more than 1,350 hotels and
all-inclusive properties in 78 countries across six continents. The
Company's offering includes brands in the Timeless Collection,
including Park Hyatt®, Grand Hyatt®, Hyatt
Regency®, Hyatt®, Hyatt Vacation Club®, Hyatt
Place®, Hyatt House®, Hyatt Studios, and
UrCove; the Boundless Collection, including Miraval®,
Alila®, Andaz®, Thompson Hotels®, Dream®
Hotels, Hyatt Centric®, and Caption by Hyatt®;
the Independent Collection, including The Unbound Collection by
Hyatt®, Destination by Hyatt®, and JdV by Hyatt®;
and the Inclusive Collection, including Impression by
Secrets, Hyatt Ziva®, Hyatt Zilara®, Zoëtry®
Wellness & Spa Resorts, Secrets® Resorts & Spas,
Breathless Resorts & Spas®, Dreams® Resorts &
Spas, Hyatt Vivid Hotels & Resorts, Alua Hotels
& Resorts®, and Sunscape® Resorts & Spas.
Subsidiaries of the Company operate the World of Hyatt® loyalty
program, ALG Vacations®, Mr & Mrs Smith™, Unlimited Vacation
Club®, Amstar DMC destination management services, and Trisept
Solutions® technology services. For more information, please visit
www.hyatt.com.
HHC-FIN
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Investor Contacts Adam
Rohman, 312.780.5834, adam.rohman@hyatt.com Tara Atwood,
312.780.5713, tara.atwood@hyatt.com
Media Contact Franziska
Weber, 312.780.6106, franziska.weber@hyatt.com
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