Hyatt Reports Second Quarter 2024 Results

Hyatt Hotels Corporation has reported its second quarter 2024 results.

Highlights from Q2 Results

• 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
• 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

Statement

Mark S. Hoplamazian, president and CEO 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."

Results

• 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 has shared 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.