Hyatt Hotels Corp. finished 2017 above the expectations,
according to president & CEO Mark Hoplamazian.
Full-year systemwide revenue per available room grew 3.3
percent year over year. Going into the fourth quarter, Hyatt had delivered guidance
expecting growth between 2.5 percent and 3 percent. Fourth-quarter systemwide RevPAR
increased 3.8 percent year over year. Both gains came more from rate increases
than from occupancy. "Our strong finish in Q4 gives us confidence as we
look forward to a solid year in 2018," Hoplamazian said.
U.S. full service group room revenue increased 3.4 percent year
over year during the fourth quarter, driven by a shift of Jewish holidays to
the third quarter of 2017. Group room nights rose about 1 percent, while average
daily rate grew almost 3 percent. Fourth-quarter U.S. full-service transient
revenue increased 2 percent, driven equally by occupancy and rate.
With 80 percent of business on the books for 2018, U.S.
full-service group pace is up year over year "in the low-single
digits" With 50 percent of business on the books, group pace is down
slightly for 2019. And for 2020, group pace is up nearly 10 percent with
one-third of the business on the books. While Hoplamazian didn't note any
anomalies in his group-booking outlook, executives from both Marriott
International and Hilton
noted that the booking window for group is lengthening this business cycle so
that near-in business is growing at a slower pace than longer-term business.
World of Hyatt Growth
Hyatt's loyalty program, World of Hyatt, saw a 20 percent
year-over-year increase in new members during 2017. The company added a new
position, global head of loyalty and new business platforms, in
October. "With the addition of new World of Hyatt leadership in 2017,
we have a team that is intensely focused on delivering value and distinctive experiences
for our members," Hoplamazian said.
Asset Sales &
Development
Hyatt continues to shift toward a fee-based business model and
away from asset ownership. The company intends to sell $1.5 billion of its
owned real estate assets by the end of 2020. With that shift come opportunities
to explore other growth platforms, Hoplamazian said, such as its completed acquisitions
of Miraval
and Exhale and investment in Oasis.
Development in new markets is another potential growth
avenue. "Our opportunity to continue to broaden our portfolio to better
meet the needs of the high-end traveler remains robust, as there are a large
number of markets in which we have a relatively modest existing presence,"
Hoplamazian said. "Our development momentum has been and continues to be a
source of significant strength."
Hyatt opened 29 hotels during the fourth quarter, which
Hoplamazian said is a quarterly record for Hyatt. For the full year, Hyatt
opened 71 hotels, of which 48 were select service; net rooms grew 14 percent
year over year. The company ended 2017 with a pipeline of 330 hotels, or 70,000
rooms.
Hyatt's redevelopment efforts for Miraval in Lenox, Mass.,
and Austin are on track. The company expects the Austin property to open by the
end of this year and Lenox to open during the second quarter of 2019.
Hyatt's fourth-quarter net income increased 87.4 percent year
over year to $76 million, and its full-year net income grew 22.3 percent to
$249 million.
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