Hyatt Hotels Corp.'s third-quarter transient business travel revenue increased 19 percent year over year and has recovered to approximately 90 percent of 2019 levels, hotel executives said Thursday during an earnings call.
Although most of the hotel company's corporate accounts use a dynamic pricing model, CEO Mark Hoplamazian said, Hyatt is "about halfway through our discussions for our fixed-rate accounts," and he expects "rates to increase in the high single-digit range in 2024 compared to 2023."
Meanwhile, demand for all customer segments "remains solid," Hoplamazian said, adding that the lines between business transient and group are increasingly blurring.
Hyatt has about 70 percent of its 2024 group business booked—a typical booking level for the hotel company by this time, Hoplamazian said—representing "equal measure of growth" across corporate, association, regional and specialty groups. While the corporate group segment is showing the highest level of growth, "they're all strong and it's balanced," he said.
Hyatt's business mix now features "a continued blurring of the line between what means group and what means business transient," Hoplamazian added. "Some of the use cases have continued to move from what we used to call business transient into what we would call group," which is 10 or more rooms and a room block.
Overall, "whether you want to call it business transient or group in corporate, that total demand level is going to be higher and grow over time from 2019 levels," he added.
In Q3, group room revenue increased 10 percent year over year and was up 5 percent from 2019 levels, according to Hyatt. Growth in group revenue "accelerated during the quarter" and was up 13 percent year over year.
Q3 Results
Hyatt's systemwide revenue per available room in the third quarter was $145.40, up 8.9 percent year over year. Average daily rate was $202.13, up 2.6 percent. Revenue growth was driven by "strong rates and meaningful occupancy growth," Hyatt executives said, highlighting the Asia-Pacific region as a standout performer.
Systemwide occupancy also was on the up, at 71.9 percent in the quarter with a year-over-year increase of 4.2 percentage points. Occupancy levels continued to recover, according to Hyatt, with the month of September slightly below 2019 levels.
In Q3, Hyatt reported $1.62 billion in revenue, up from $1.54 billion in 2022. The hotel company's net income was $68 million, an increase over $28 million in 2022.
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