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Hyatt reports First Quarter 2024 results: Net Income was $522 million

Hyatt
Secrets Moxché Playa del Carmen

Full year Net Income is projected between $1,135 million and $1,195 million.

CHICAGO – Hyatt Hotels Corporation reported first quarter 2024 results. Highlights include:

  • 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.

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.

Co-Founder & Chief Editor - TravelDailyNews Media Network | Website | + Posts

Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.

She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.

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