Group demand is strengthening at Hyatt Hotels Corp. properties,
particularly for events more than a year out, as the company closed 2013 with
higher average daily rates, occupancy and profits than the prior year.
In the company’s fourth-quarter earnings conference call on
Friday, Hyatt president and CEO Mark Hoplamazian said both corporate and
association group business in the Americas is up, particularly in Dallas, San
Antonio and San Francisco. Event bookings in 2014 are up in the
low-single-digit percentage range, with 2015 and 2016 “incrementally stronger,”
he said.
“Our overall confidence in group has grown over the last several
quarters,” Hoplamazian said. “I’m encouraged to see a continued level of high
production, and I do believe we will see good demand throughout 2014.”
During the fourth quarter of 2013, group room nights at
full-service hotels in the Americas were up 3.9 percent compared with the prior-year
period, and the average daily rate on those room nights was up 2.4 percent.
Transient room nights at those hotels were up 3.3 percent during the quarter,
and ADR was up 4.1 percent.
In the Americas overall, ADR at full-service hotels
increased by 3.2 percent to $180.20 during the quarter, and select-service ADR
increased by 2.8 percent to $106.38. Full-service occupancy increased by 2.3
percentage points to 70.4 percent, and select-service occupancy increased by
0.7 percentage points to 73 percent.
Growth outside the United States was slower, Hoplamazian
said. In Europe, Africa, the Middle East and Southwest Asia, full-service ADR
increased by 1.7 percent to $247.47, and occupancy increased by a percentage
point to 65.4 percent. In the rest of the Asia/Pacific region, ADR declined by
4.7 percent to $233.44, and occupancy increased by 2.4 percentage points to 71
percent.
Hyatt CFO Gebhard Rainer noted that much of the Asia/Pacific
ADR decline was related to foreign exchange, and revenue per available room in
the region was up 4.2 percent measured in constant currency. RevPAR in China
was up 5 percent in the fourth quarter—the year’s only quarterly increase from
2012 levels. That number should remain positive in the coming months as travel
demand stabilizes and hotels face easier year-over-year comparisons, Rainer
said.
RevPAR softness in China has had no noticeable effect on
Hyatt’s development efforts there, with 16 hotels currently in the pipeline, Hoplamazian
added. Globally, Hyatt expects to open 40 hotels this year, including Park
Hyatt properties in New York and Vienna, an Andaz in Tokyo and China’s first
Hyatt Place, he said.
Hyatt’s net income for the quarter was $32 million, double
Hyatt's fourth-quarter 2012 income. Net income for the full year was $207
million, up from $88 million in 2012.