Hyatt Hotels reported mixed results for its transient and
group business during the first quarter. Transient revenue per available room rose
0.4 percent year over year, and average daily rate increased 1.4 percent. For
comparable U.S. full-service hotels, meanwhile, the number of room nights
decreased 0.9 percent. For group business, RevPAR decreased 0.7 percent and room
nights declined 3.8 percent while ADR increased 3.2 percent. The company
attributed the weaker group quarter to Chicago, where Hyatt's largest
percentage of convention inventory sits; to attrition in attendance for one
large convention; and to some decline in association bookings. But the pace for
2020, which is about 60 percent booked, is up by mid-single digits.
Systemwide RevPAR increased 1.8 percent to $132.17,
occupancy increased 0.3 percentage points to 71.1 percent and ADR increased 1.3
percent to $185.77. For full-service hotels in the Americas, including the U.S.,
RevPAR increased 3.1 percent, occupancy decreased 0.3 percentage points and ADR
increased 3.4 percent. Americas select-service hotels decreased in all three
categories: 1.5 percent for RevPAR, 0.9 percentage points for occupancy and 0.2
percent for ADR. The company attributed this decline to supply outpacing demand
but expects the gap to lessen in the second half of the year.
Hyatt's first-quarter net income decreased 84.6 percent to
$63 million. The significant year-over-year drop owes to the lack of a real
estate sale, whereas such sales increased income year over year for the first
quarter of 2018. Net rooms grew 13.7 percent year over year in the first
quarter of 2019, or 7.3 percent excluding the late 2018 acquisition of Two Roads
Hospitality. The company opened 3,120 rooms across 16 hotels and plans to open
more than 80 hotels in 2019. As of March 31, Hyatt had management or franchise
contracts for 455 hotels, or approximately 91,000 rooms, compared with 445
hotels, or approximately 89,000 rooms, on Dec. 31, 2018.
The company also is integrating the Two Roads brands and
completed the integration of Thompson Hotels in late March; Alila and
Destination will come this summer. In light of Marriott's
announcement this week that it is opening a homesharing brand, Hyatt president
and CEO Mark Hoplamazian said Hyatt learned through its former partnerships
with Onefinestay and Oasis: Maintaining quality consistently for high-end
properties is expensive, and it's hard to reach a sustainable model for
financial returns. "Over time, that true sharing platform model is getting
more challenging because of regulatory issues," he said, and the
regulatory environment has been more stringent in recent years.
Hyatt revised its guidance on net income to a range of $144
million to $183 million, up from the $109 million to $147 million Hyatt
projected as of its fourth-quarter 2018 earnings. The company also is continuing
its shift
from property ownership to a fee-based model.
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