Unlike several peers touting positive earnings for fourth
quarter and full year 2021, Hyatt continued to see red—posting a $29 million
loss for the fourth quarter and a $203 million loss for the full year. Those
numbers compared favorably to 2020, when the fourth quarter and full year
cratered to $222 million and $703 million in losses, respectively. That said,
hotel industry counterparts are turning profits.
Corporate executives had relatively little to say about corporate
transient travel on Thursday's earnings call. CEO Mark Hoplamazian noted the category
had climbed to 44 percent of 2019 levels in the fourth quarter, compared to reaching
38 percent of 2019 levels in Q3. That's a limited return compared to Hilton,
which reported an 80 percent return to 2019 levels for business transient room
nights in the final quarter.
Peers like Hilton, Choice
and Wyndham
cited small- and midsize corporate travel and blue-collar business travel as
central to improved performance. Those segments, however, tended to book at the
midscale and economy levels—so much so that Wyndham announced it would launch a
new economy extended-stay brand to capture more of it. Hyatt, however, hasn't
concentrated on midscale and economy brands. Rather, it skews to upscale,
upper-upscale and luxury business, including larger meetings. For corporate
business in a pandemic those have proven less resilient in the shorter term.
On the brighter side, execs cited momentum for group revenue
in the fourth quarter. CEO Mark Hoplamazian noted the segment improved 18
percent from the third quarter, and “actualized at nearly 50 percent of 2019
levels," for the quarter, "with the month of December eclipsing 72
percent of 2019 levels." He noted that small and midsize business led the
segment, but that larger group accounts achieved close to 40 percent of 2019
levels for the quarter.
"We expect these levels to continue to improve as more
employees return to the office and travel velocity increases,” he said.
Group cancellations also were on the right trajectory
looking forward, particularly in the U.S.: Almost two thirds of group cancellations for
2022 at American managed hotels were limited to January and February events,
Hoplamazian noted, “with nearly 60 percent of those groups rebooking for a date
later this year.”
He cited gross new group bookings in January 2022 for future
2022 events were up 14 percent, compared to the same period in 2019. “Our full-year
group pace, which includes the headwinds in January, is at 77 percent of 2019
levels with 20 percent more tentative business than at this time in 2019.”
Leisure on Their Minds?
Hyatt execs highlighted the company's Apple Leisure Group
acquisition, which closed in November for $2.7 billion. The ALG acquisition vastly
extended the hotelier's footprint in Europe, adding 99 resorts with
approximately 32,000 rooms, and a pipeline of approximately 9,000 more—largely
in leisure destinations. Including those 9,000 rooms, Hyatt has approximately
113,000 rooms in its total pipeline—a 12 percent expansion over last year.
“Our portfolio now represents 18 percent of global luxury
branded rooms in resort locations, the largest in the world; and 13 percent of
global luxury branded rooms across all locations, which makes us the second
largest in the world," said Hoplamazian. "I’m very proud to share
that over 40 percent of our global portfolio is either a luxury hotel, a
lifestyle hotel, or a resort or combination thereof”—potentially giving a
glimpse of where the hotelier's heart will lie as travel business continues to
recover from its pandemic malaise.
Q4 and Full Year 2021 Performance Metrics
Hyatt's global systemwide revenue per available room
increased reached $96.75 in the fourth quarter, a 131.8 percent increase over
2020 but a 26.1 percent declined compared to the same period in 2019. RevPAR reached
$77.80 for the full year, a 66.5 percent improvement over full year 2020 but a
42.9 percent decrease from full year 2019.
Global systemwide occupancy increased 23.1 percentage points
and 16.9 percentage points for the fourth quarter and full year, respectively,
from the same periods in 2020. Hyatt's global systemwide average daily room
rate increased 35.5 percent in Q4 compared to 2020 and 8.5 for the full year.