CHICAGO, Illinois—Hyatt Hotels Corporation reported first quarter 2024 results. Highlights include:
- Comparable system-wide hotels RevPAR increased 5.5 percent compared to the same period in 2023
- Comparable system-wide all-inclusive resorts net package RevPAR increased 11.0 percent compared to the same period in 2023
- Net rooms growth was approximately 5.5 percent
- 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 percent to 5 percent 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 the 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 CEO 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 percent year-over-year to 129,000 rooms, and we realized net rooms growth of 5.5 percent. World of Hyatt membership has grown by 22 percent, 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.”
- 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 percent, excluding the impact of Easter, reflecting normalized growth.
- Owned and leased: Adjusted EBITDA in the first quarter decreased by 9 percent 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 percent ownership interest in the unconsolidated hospitality venture. The company’s shares were valued at approximately $536 million on 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 dlow 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.
