Hyatt Hotels Corp. on Tuesday reported year-over-year first-quarter
occupancy and average daily rate growth in both group and transient business in
the Americas.
"First-quarter earnings came in above our expectations,"
CEO Mark Hoplamazian said during an earnings call. "Occupancies are at
record levels, and we continue to grow average daily rates, as demand from
both group and transient guests continues to be strong."
Hyatt's demand boost is consistent with those reported last
week by Hilton Worldwide and Marriott International, as well as Starwood
Hotels & Resorts Worldwide. Group and transient business is growing, according
to the companies, and North American markets are leading the charge.
Group room revenue at comparable Hyatt U.S. full-service hotels
during the quarter rose 10 percent year over year, with average daily rates up
approximately 6 percent. The first quarter of 2015 was Hyatt's strongest since
2007, Hoplamazian said.
Revenue from corporate and association customers is "healthy,"
he said. Increased room nights have boosted association revenue, and higher room
rates have improved corporate revenue. New Orleans, San Francisco and Chicago
saw the strongest association demand, while corporate demand fueled the San
Diego, Phoenix and Maui markets. Hyatt reported that the U.S. group revenue
pace for the year is up more than 7 percent from 2014.
Hoplamazian credited strong corporate food and beverage revenue
to group business, particularly from technology companies. "The terms on
which business is being booked include higher F&B components. Our hotel
teams have become more selective in the types of groups that they book, making
sure that they are high-quality in average room rate, paying attention to when
they are scheduled during the week, the amount of meeting space required and,
of course, being mindful of the services we're providing outside of the room,
including F&B."
Transient room revenue at comparable Hyatt U.S. full-service
hotels grew 6.7 percent. Strong transient markets included Washington, D.C.,
San Diego, San Francisco and Atlanta.
Hoplamazian said Europe and the Middle East continue to
underperform the United States economically, and revenue in most Asia/Pacific
markets remained steady or grew.
Worldwide, Hyatt reported a first-quarter ADR of $218.18, up
1.7 percent from the same period in 2014. Occupancy reached 75.2 percent, up
from 73.7 percent, and net income dropped to $22 million from $56 million.
Almost a week after Starwood announced it would explore strategic
alternatives, including a possible sale of the company, Hoplamazian fielded questions
about where Hyatt would fit in a consolidated lodging landscape by discussing
brand development.
Hyatt expects to open about 25 select-service hotels around the world and 25 full-service hotels mostly in China and India during 2015, Hoplamazian said. The company has opened 16 hotels this year, including its first Hyatt Centric-branded property, which opened in Chicago in April.