Similar to other major hotel companies during
the third-quarter earnings season, Hyatt Hotels Corp. reported that leisure
continues to drive the recovery, but there is "progression of group and
business transient demand." Revenue from those two segments improved more
than 40 percent from the prior quarter, according to the company.
"While [corporate transient and group] demand did not
accelerate immediately following Labor Day due to the delta variant, the upward
momentum has been steady throughout September and October," said Hyatt
president and CEO Mark Hoplamazian on Thursday's quarterly earnings call.
"The rate of improvement in group during October has been particularly
meaningful after seeing elevated levels of cancellations in August and early September
due to the delta variant. Since that time, cancellations have receded while
short-term group demand has strengthened."
Hyatt's systemwide group revenue jumped 16 percent in
October compared with September and is trending at 50 percent of fully recovered
levels, Hoplamazian said, adding that group bookings for 2022 are also showing
significant improvement. "In October, our leads for 2022 grew by 38
percent compared to September, and we are now 10 percent ahead of 2019 levels
for group business that is likely to book," he said.
Group pace for 2022 is approximately 80 percent, a bit
weaker than reported for the second quarter, but the company is confident that
with growing lead volume, the momentum will build into 2022.
Business transient recovery has been softer than group,
"but it is still showing steady momentum, with demand recovering to 46
percent of 2019 levels in October," Hoplamazian said. "We continue to
see stronger growth in our regional as compared to our larger national accounts,
however that gap is narrowing. Our largest corporate accounts have grown by 50
percent since June, and we continue to be encouraged by dialogue with corporate
customers who are returning to offices in bigger numbers, with many planning a
more robust return to travel in 2022."
Q3 Key Performance Metrics
Hyatt's third-quarter 2021 comparable systemwide revenue per
available room was $93.70, representing a decrease of 31.8 percent compared
with the third quarter of 2019, according to the company. Both occupancy and average
daily rate contributed to the sequential growth, with occupancy improving by
700 basis points and rate growing by 12 percent from the second quarter, said
Hyatt CFO Joan Bottarini. "The improvement in rate is especially notable
as it reached 96 percent of 2019 levels on a systemwide basis," she said.
Hotels in resort locations were the primary driver of the
recovery during the first two months of the quarter, with a more notable
improvement from urban locations in September driven by growing demand for
business transient and group, Bottarini added.
Hyatt opened 20 new hotels with about 4,600 rooms during the
quarter, contributing to a 6.9 percent year-over-year increase. The company
executed management or franchised contracts for approximately 103,000 rooms for
its pipeline for a year-over-year increase of 2 percent for the quarter.
Earlier this week, the company completed its acquisition
of Apple Leisure Group.
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