HYATT REPORTS THIRD QUARTER 2023 RESULTS
New Record Total Fee Revenue of $250 Million Pipeline Expands to New High of 123,000 Rooms |
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HYATT REPORTS THIRD QUARTER 2023 RESULTS
New Record Total Fee Revenue of $250 Million Pipeline Expands to New High of 123,000 Rooms |
Catégorie : Monde - Économie du secteur -
Chiffres et études
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Hyatt Hotels Corporation ("Hyatt" or the "Company") (NYSE: H) today reported third quarter 2023 financial results.
Highlights include:
- 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.
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.
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.
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