In line with its preliminary first-quarter results, Hyatt Hotels Corp. reported Thursday that comparable systemwide revenue per available room for the quarter declined 28.1 percent year over year. The drop was steeper than the declines reported so far by its competitors, including Wyndham Hotels & Resorts, Hilton Worldwide and InterContinental Hotels Group—all of which are experiencing the negative effects of the coronavirus pandemic.
Comparable U.S. RevPAR decreased 24.5 percent year over year, with full-service hotels down 25.2 percent and select-service down 23 percent. Hyatt's full-service portfolio includes several meetings properties, and that segment has taken a particular hit, with many U.S. states legislating no-gathering restrictions.
"Group [business] is going to be down significantly this year, with improvement in 2021," said Hyatt president and CEO Mark Hoplamazian on a Thursday earnings call. "Transient in general will lead the recovery, with leisure perhaps the first to come back. Business transient will follow. Group business will be the slowest to recover, given lingering concerns about group gatherings."
When asked about the fall request-for-proposals season and how the company was working with corporate travel planners and third parties to address pricing and volume strategies, Hoplamazian said it was too early to know what business would look like at that time.
"We are extremely engaged with our transient customers, our group customers and associations to understand what the outlook is with respect to activity," he said. "It's still early for many corporations to make definitive plans. Once we get into fall, the outlook for 2021 will have more visibility."
Hyatt began the year with a solid performance, said Hyatt CFO Joan Bottarini, with global systemwide RevPAR excluding Asia/Pacific up 1.6 percent year over year through February. As March progressed and Covid-19 spread, the company began to see reductions in occupancy. "The rate of decline accelerated over March, and by April demand fell to the worst levels ever seen," she said, adding that occupancy was down 64 percent year over year in March and 96 percent in April.
As of April 30, operations were suspended at about 35 percent of Hyatt's hotels systemwide, with approximately 62 percent of full-service and 19 percent of select-service hotels in the Americas closed. Global occupancy rates at that time were averaging around 15 percent for hotels that remained open. Greater China, though, has begun to show improvement, with occupancy approaching 25 percent at the end of April after reporting single digits at its lowest point.
Hyatt posted a first-quarter net loss of $103 million compared with net income of $63 million in the first quarter of 2019. Hyatt opened 12 hotels with 1,820 rooms in the first quarter, a 6.3 percent increase in net rooms compared with the first quarter of 2019. Hoplamazian said the company expects some delays in planned openings for the coming year and disruption in new deal activity, but that the pipeline looked strong with new hotels scheduled to open over the next four to five years.
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