Hyatt reported results for the first months of the year, highlighting the hotel group's growth amid broader resilience across the travel industry.
The Chicago-based hotel chain saw a significant increase in bookings, thanks in part to strong demand from business travelers, guests at all-inclusive resorts, and a surge in its loyalty base.
Here are some highlights from Thursday's earnings call.
taylor swift effect
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“We see a number of things that support this year to be a strong year,” President and CEO Mark Hopramazian said on an earnings call. “Yes, the elections will have a negative impact on the Washington DC area and the fourth quarter will take place in November. It is also true that the Olympics will have a positive impact on the third quarter in Europe.”
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“Of course, we have to mention Taylor Swift, who continues to grow the world's GDP,” Hopramazian said. “She's impacting every market she's in.”
Business travel recovery
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One-time revenue for the business was particularly strong for bookings from the first quarter onwards. Business non-recurring revenue in April showed a significant 21% increase globally compared to 2023. Executives said they are optimistic that the pace of growth will remain positive through the remainder of this year.
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The company's banquet hall is also booming. Looking ahead to group bookings from May to December, Hyatt's full-service managed properties in the U.S. expect meeting and event demand to increase by 7% year over year.
Increased loyalty
Hyatt grew membership in its loyalty program to 46 million, an increase of 22% year over year.
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Increased loyalty is important for profitability. Loyalty members tend to stay longer, spend more, and book primarily through Hyatt's sites and apps, which are cheaper channels than online travel agents.
all inclusive resort
Hyatt's move to acquire all-inclusive resort company Apple Leisure Group for $2.7 billion in 2021 appears to be paying off.
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For all-inclusive lodging properties in the Americas, net package revenue per available room, a key industry metric, grew 10% year-over-year in the first quarter. We found that leisure demand was particularly strong in Mexico and the Caribbean.
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Looking ahead, all-inclusive resorts in the Americas saw a 4% year-over-year increase in bookings through June. Bookings to Cancun were particularly strong, increasing by 6%.
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Still, overall demand in the Americas and Europe is normalizing, executives said. For the remainder of this year, management expects overall operating results to be similar to last year.
Hyatt first quarter
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Hyatt's revenue per available room, a key industry metric, increased 5.5% year over year. All-inclusive resorts fared even better, up 11%.
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Future growth prospects for the hotel chain look promising. The pipeline of executed management or franchise agreements grew to approximately 129,000 rooms, a 10% increase year-over-year.
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Analysts at Trust Securities said in a preliminary report, “The profit margin of owned hotels was 19.4%, which was lower than our estimate of 23.3% and the analyst consensus of 23%.'' “Hyatt pointed to difficult compensation, including the 2023 Super Bowl in Phoenix, higher real estate taxes, higher wages, and transaction costs from ongoing asset sales.”
Year-to-date performance of the Lodging Sector Stock Index
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