New Record Total Fee Revenue of $250
Million
Pipeline Expands to New High of 123,000
Rooms
Hyatt Hotels Corporation ("Hyatt" or the "Company") (NYSE: H)
today reported third quarter 2023 financial results. Highlights
include:
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- Net Income was $68 million in the third quarter of 2023
compared to $28 million in the third quarter of 2022. Adjusted net
income was $75 million in the third quarter of 2023 compared to $72
million in the third quarter of 2022.
- Diluted EPS was $0.63 in the third quarter of 2023
compared to $0.25 in the third quarter of 2022. Adjusted Diluted
EPS was $0.70 in the third quarter of 2023 compared to $0.64 in the
third quarter of 2022.
- Adjusted EBITDA was $247 million in the third quarter of
2023 compared to $252 million in the third quarter of 2022.
- Adjusted EBITDA does not include Net Deferrals and Net Financed
Contracts of $35 million1 in the third quarter of 2023, and Net
Deferrals and Net Financed Contracts of $43 million1 in the third
quarter of 2022.
- Comparable system-wide RevPAR increased 8.9% in the
third quarter of 2023 compared to 2022.
- Comparable owned and leased hotels RevPAR increased 6.3%
in the third quarter of 2023 compared to 2022. Comparable owned and
leased hotels operating margins were 23.5% in the third quarter of
2023.
- Comparable All-inclusive Net Package RevPAR increased
8.6% in the third quarter of 2023 compared to 2022.
- Net Rooms Growth was approximately 6.2% in the third
quarter of 2023.
- Pipeline of executed management or franchise contracts
was approximately 123,000 rooms.
- Share Repurchases were approximately 1.25 million Class
A shares for $144 million in the third quarter of 2023.
1 Represents the sum of Net Deferrals and
Net Financed Contracts. Refer to Apple Leisure Group Segment
Statistics schedule on page A-17 for additional details.
Mark S. Hoplamazian, President and Chief Executive Officer of
Hyatt, said, "We had a tremendous quarter, largely driven by the
strength in our core business. Our third quarter performance
contributed to a 25% improvement in total fees for the first nine
months of the year compared to 2022. We expect strong fee growth to
continue, fueled by our record pipeline of 123,000 rooms and higher
levels of conversion opportunities combined with robust demand for
travel around the globe. We continue to successfully execute our
asset-light transformation and growth strategy while returning
meaningful capital to shareholders."
Operational Update
A record level of total management, franchise, license, and
other fees of $250 million were generated in the third quarter of
2023 driven by continued strong global top-line performance and net
rooms growth.
Comparable system-wide RevPAR increased 8.9% in the third
quarter of 2023, compared to the third quarter of 2022, driven by
occupancy up 420 basis points and Average Daily Rate up 2.6%.
Overall demand remained resilient, particularly among leisure
guests and group customers.
Comparable Net Package RevPAR for ALG properties increased 8.7%
in the third quarter of 2023 compared to the same period in 2022.
Booking pace for luxury all-inclusive ALG resorts in Cancun is up
8% for the festive period and up 12% for the first quarter of
2024.
Segment Results and
Highlights
(in millions)
Three Months Ended September
30,
2023
2022
Change (%)
Owned and leased hotels
$
64
$
66
(4.0)%
Americas management and franchising
114
114
(0.2)%
ASPAC management and franchising (a)
28
18
55.1%
EAME management and franchising (a)
16
18
(14.4)%
Apple Leisure Group
50
78
(35.2)%
Corporate and other
(25)
(42)
41.8%
Eliminations
—
—
114.9%
Adjusted EBITDA
$
247
$
252
(1.7)%
Three Months Ended September
30,
2023
2022
Change (%)
Net Deferrals
$
14
$
17
(17.4)%
Net Financed Contracts
$
21
$
26
(20.7)%
(a) Effective January 1, 2023, the Company
has changed the strategic and operational oversight for our
properties located in the Indian subcontinent. Revenues associated
with these properties are now reported in the ASPAC management and
franchising segment. The segment changes have been reflected
retrospectively for the three months ended September 30, 2022.
- Owned and leased hotels segment: Results were led by group and
sustained leisure travel demand. When adjusted for the net impact
of transactions, owned and leased Adjusted EBITDA increased $3
million, or 5.5%, compared to the third quarter of 2022 and
increased $19 million, or 41.7%, compared to the third quarter of
2019.
- Americas management and franchising segment: Results were led
by resilient leisure demand and continued recovery of group. Total
fees were up 6.6% compared to the third quarter of 2022, offset by
an increase in certain expenses. New hotels added to the system
since the start of 2019 contributed $22 million in fee revenue in
the quarter.
- ASPAC management and franchising segment: Results were led by
recovery across the region. Notably, RevPAR in Greater China was up
56% compared to the third quarter of 2022. Major events, including
the G20 Summit, Women's FIFA World Cup, and Asian Games,
contributed to performance.
- EAME management and franchising segment: Results were impacted
by a significant termination fee from a pipeline hotel recognized
in the third quarter of 2022. Excluding this fee, EAME Adjusted
EBITDA was up 40%, led by Western Europe, strong international
inbound seasonal demand, and increased airlift into the
region.
- Apple Leisure Group segment: Results faced headwinds from
unfavorable foreign currency, challenging ALG Vacations
year-over-year comparisons, and higher travel credits from the
third quarter of 2022. Additionally, the Unlimited Vacation Club
realized certain incremental costs in part driven by strong
engagement from members.
Openings and Development
During the third quarter, 20 new hotels (or 3,262 rooms) joined
Hyatt's system. Notable openings included Calistoga Motor Lodge
& Spa, seven UrCove properties, and Andaz Macau, the largest
Andaz branded property globally with 715 rooms.
As of September 30, 2023, the Company had a pipeline of executed
management or franchise contracts for approximately 600 hotels
(approximately 123,000 rooms).
Transactions and Capital
Strategy
On September 28, 2023, the Company sold its interests in the
entities which own the Destination Residential Management business
to an unrelated third party for $2 million of base consideration
and up to an additional $48 million of contingent consideration to
be earned within two years following the sale upon the achievement
of certain performance-based metrics and contract extensions.
The Company 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.
The Company 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. As
of September 30, 2023, the Company has realized $721 million of
proceeds from the net disposition of real estate as part of this
commitment.
Balance Sheet and
Liquidity
As of September 30, 2023, the Company reported the
following:
- Total debt of $3,055 million.
- Pro rata share of unconsolidated hospitality venture debt of
$547 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 $2.2 billion with $727 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.
Through the first ten months of the year, the Company has
repurchased a total of 3,706,291 Class A common shares for
approximately $408 million. As of October 31, 2023, the Company had
approximately $1.2 billion remaining under its share repurchase
authorization.
The Company's board of directors has declared a cash dividend of
$0.15 per share for the fourth quarter of 2023. The dividend is
payable on December 6, 2023 to Class A and Class B stockholders of
record as of November 22, 2023.
2023 Outlook
The Company is providing the following guidance for full year
2023:
Full Year 2023 vs.
2022
System-Wide RevPAR1
15% to 16%
Net Rooms Growth
Approx. 6.0%
(in millions)
Full Year 2023
Net Income
Approx. $210
Adjusted EBITDA2
$1,005 - $1,025
Net Deferrals
Approx. $110
Net Financed Contracts
Approx. $60
Total Adjusted SG&A2
$480 - $490
One-Time Integration Costs3 (included
within Total Adjusted SG&A)
Approx. $20
Capital Expenditures
Approx. $190
Free Cash Flow2
Approx. $550
Capital Returns to Shareholders4
Approx. $500
1 RevPAR is based on constant currency whereby previous periods
are translated based on the current period exchange rate. RevPAR
percentage for 2023 vs. 2022 is based on comparable hotels. 2 Refer
to the tables beginning on page A-14 of the schedules for a
reconciliation of estimated net income attributable to Hyatt Hotels
Corporation to EBITDA and EBITDA to Adjusted EBITDA, selling,
general, and administrative expenses to Adjusted selling, general,
and administrative expenses, and net cash provided by operating
activities to Free Cash Flow. 3 One-time integration costs are
related to acquisition activity and are included within Total
Adjusted SG&A outlook. 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 2023 Outlook. The Company's 2023
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,
November 2, 2023, at 8:00 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: 888-412-4131 (U.S. Toll-Free) or
646-960-0134 (International Toll Number) using conference ID#
9019679 approximately 15 minutes prior to the scheduled start
time.
A replay of the call will be available for one week beginning on
Thursday, November 2, 2023, at 11:00 a.m. CT by dialing:
800-770-2030 (U.S. Toll-Free) or 647-362-9199 (International Toll
Number) using conference ID# 9019679. 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 SG&A
expense, our expected capital expenditures, our expected net rooms
growth, our expected system-wide RevPAR, our expected one-time
integration costs, 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 the 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 geo-political conditions, including
the escalating conflict in Israel, Gaza and surrounding areas, and
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; the pace and
consistency of recovery following the COVID-19 pandemic and the
long-term effects of the pandemic, including with respect to global
and regional economic activity, travel limitations or bans, the
demand for travel, transient and group business, and levels of
consumer confidence; the ability of third-party owners,
franchisees, or hospitality venture partners to successfully
navigate the impacts of the COVID-19 pandemic, any additional
resurgence, or COVID-19 variants or other pandemics, epidemics or
other health crises; 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 property 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, including with respect to
our acquisition of Apple Leisure Group and Dream Hotel Group and
the successful integration of each business; failure to
successfully complete proposed transactions (including the failure
to satisfy closing conditions or obtain required approvals); our
ability to successfully execute on our strategy to expand our
management and franchising business while at the same time reducing
our real estate asset base within targeted timeframes and at
expected values; declines in the value of our real estate assets;
unforeseen terminations of our management 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, including as a result
of the COVID-19 pandemic, 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; 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 report on Form 10-K, 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 EBITDA Margin;
Adjusted SG&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 "Email Alerts" in the
"Investor 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 September 30, 2023, the
Company’s portfolio included more than 1,300 hotels and
all-inclusive properties in 76 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 tables beginning on page A-11 of the schedules for
a summary of special items impacting Adjusted net income and
Adjusted Diluted earnings per share for the three months and nine
months ended September 30, 2023 and September 30, 2022.
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-9.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231102623439/en/
Investor Contact Adam
Rohman, 312.780.5834, adam.rohman@hyatt.com Media Contact Franziska Weber, 312.780.6106,
franziska.weber@hyatt.com
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