Hyatt Hotels Corporation ("Hyatt" or the "Company") (NYSE: H)
today reported first quarter 2024 results. Highlights include:
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- Comparable system-wide hotels RevPAR increased 5.5%
compared to the same period in 2023
- Comparable system-wide all-inclusive resorts Net Package
RevPAR increased 11.0% compared to the same period in 2023
- Net Rooms Growth was approximately 5.5%
- Net Income was $522 million and Adjusted Net Income was
$75 million
- Diluted EPS was $4.93 and Adjusted Diluted EPS was
$0.71
- Adjusted EBITDA was $252 million
- Pipeline of executed management or franchise contracts
was approximately 129,000 rooms
- Repurchased approximately 2.5 million shares of Class A
and Class B common stock for an aggregate purchase price of $388
million
- Full year comparable system-wide hotels RevPAR is
projected to increase 3% to 5% on a constant currency basis
compared to full year 2023
- Full year Net Income is projected between $1,135 million
and $1,195 million
- Full year Adjusted EBITDA is projected between $1,150
million and $1,190 million and is in line with previously provided
2024 Outlook when adjusting for $30 million of reduced Adjusted
EBITDA due to transactions
- Full year Capital Returns to Shareholders is projected
between $800 million and $850 million
Mark S. Hoplamazian, President and Chief Executive Officer of
Hyatt, said, "The year is off to a great start with gross fee
revenue reaching a record of $262 million in the quarter. Our
pipeline also reached a new record, expanding 10% year-over-year to
129,000 rooms, and we realized net rooms growth of 5.5%. World of
Hyatt membership has grown by 22%, reaching a new record of 46
million members. Significant progress on asset dispositions is
further expanding our asset-light earnings mix, reflecting our
execution to permanently reduce owned real estate."
Segment Results and
Highlights
(in millions)
Three Months Ended March
31,
2024
2023
Change (%)
Management and franchising
$
203
$
184
10.2
%
Owned and leased
60
71
(16.5
)%
Distribution
39
58
(31.7
)%
Overhead
(51
)
(46
)
(9.0
)%
Eliminations
1
1
(33.0
)%
Adjusted EBITDA
$
252
$
268
(5.9
)%
- Management and franchising: Results in the first quarter
were driven by solid demand across all customer segments. Regional
highlights include strong outbound travel from Greater China,
benefiting markets such as Japan, Thailand, and South Korea.
Leisure demand was strong in Mexico and the Caribbean for hotels
and all-inclusive resorts. European all-inclusive properties
produced impressive Net Package RevPAR growth driven by high demand
for resorts in the Canary Islands. In the United States, RevPAR was
up approximately 2%, excluding the impact of Easter, reflecting
normalized growth.
- Owned and leased: Adjusted EBITDA in the first quarter
decreased by 9% compared to the first quarter of 2023, when
adjusted for asset dispositions. The decline was driven by
difficult comparisons to 2023, including the Super Bowl in Phoenix,
higher real estate taxes, higher wages, and transaction costs
related to asset sales in process.
- Distribution: The segment performance was impacted by
challenging year-over-year comparisons particularly due to ALG
Vacations which lapped a strong quarter in the previous year.
Openings and Development
In the first quarter, 12 new hotels (or 2,425 rooms) joined
Hyatt's portfolio. Notable openings included Thompson Houston,
Secrets Tides Punta Cana, Secrets Playa Blanca Costa Mujeres, five
UrCove properties in China, and Hyatt Regency Nairobi Westlands,
marking the first hotel in Kenya.
As of March 31, 2024, the Company had a pipeline of executed
management or franchise contracts for approximately 670 hotels
(approximately 129,000 rooms).
Transactions and Capital
Strategy
In addition to the completion of the transaction that resulted
in the Company selling 80% of the entity that owns the Unlimited
Vacation Club business (the "UVC Transaction") and the closing on
the sale of Hyatt Regency Aruba Resort Spa and Casino, which were
previously announced, the Company is sharing the following
updates:
- Sold 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 to unrelated third parties for combined proceeds of
$535 million at a 14.7x multiple. The Company entered into
long-term management agreements for Park Hyatt Zurich and Hyatt
Regency San Antonio Riverwalk, and a long-term franchise agreement
for Hyatt Regency Green Bay. In connection with the Park Hyatt
Zurich transaction, the Company provided approximately $45 million
of seller financing.
- Signed a purchase and sale agreement for an asset that, upon
closing, would generate gross proceeds that exceed the remaining
portion of the Company's $2.0 billion asset sell-down
commitment.
- As previously disclosed, another asset remains in the marketing
process.
As of May 9, 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 successfully executing plans to
realize $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.
On February 28, 2024, Juniper Hotels, one of the Company's
unconsolidated hospitality ventures in India, completed an initial
public offering ("IPO") on the BSE Limited and National Stock
Exchange of India. The Company holds approximately 86 million
equity shares and following the IPO, retained a 38.8% ownership
interest in the unconsolidated hospitality venture. The Company's
shares were valued at approximately $536 million at March 31,
2024.
Balance Sheet and
Liquidity
As of March 31, 2024, the Company reported the following:
- Total debt of $3,055 million.
- Pro rata share of unconsolidated hospitality venture debt of
$457 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 $2.3 billion with $794 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 first quarter, the Company repurchased a total of
528,427 shares of Class A common stock for approximately $76
million and 1,987,229 shares of Class B common stock for
approximately $312 million. The Company's board of directors has
authorized the repurchase of up to an additional $1 billion of the
Company's common stock. These repurchases may be made from time to
time in the open market, in privately negotiated transactions, or
otherwise, including pursuant to a Rule 10b5-1 plan or an
accelerated share repurchase transaction, at prices that the
Company deems appropriate and subject to market conditions,
applicable law and other factors deemed relevant in the Company's
sole discretion. The share repurchase authorization applies to the
Company's Class A common stock and/or Class B common stock, does
not obligate the Company to repurchase any dollar amount or number
of shares of common stock, and may be suspended or discontinued at
any time. As of May 9, 2024, the Company has approximately $1.8
billion remaining under the share repurchase authorization.
The Company's board of directors has declared a cash dividend of
$0.15 per share for the second quarter of 2024. The dividend is
payable on June 11, 2024 to Class A and Class B stockholders of
record as of May 29, 2024.
2024 Outlook
The Company is providing the following outlook for the 2024
fiscal year reflecting the sales of Park Hyatt Zurich, Hyatt
Regency San Antonio Riverwalk, Hyatt Regency Green Bay, and the UVC
Transaction. Full year 2024 outlook for Adjusted EBITDA remains in
line with previously provided outlook when adjusted for $30 million
reduction attributed to these transactions. Free Cash Flow remains
in line with previously provided outlook including the $30 million
reduction to Adjusted EBITDA and $25 million of cash tax payments
related to the three asset sales.
Full Year 2024 vs.
2023
System-Wide Hotels RevPAR1
3% to 5%
Net Rooms Growth
5.5% to 6.0%
(in millions)
Full Year 2024
Net Income
$1,135 - $1,195
Gross Fees
$1,100 - $1,130
Adjusted G&A Expenses2
$425 - $435
Adjusted EBITDA2
$1,150 - $1,190
Capital Expenditures
Approx. $170
Free Cash Flow2
$575 - $625
Capital Returns to Shareholders3
$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
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.
Conference Call
Information
The Company will hold an investor conference call this morning,
May 9, 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
Thursday, May 9, 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 March 31, 2024, the
Company's portfolio included more than 1,300 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.
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 March 31, 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.
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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