Natural disasters and Rosh Hashana's and Yom Kippur's shifts
into late September dragged on Hyatt Hotels Corp.'s third-quarter results.
Systemwide revenue per available room increased 1.6 percent year over year, but
excluding the impact of those two factors, RevPAR increased 2.6 percent.
Even prior to hurricanes Maria, Irma and Harvey and the
7.1-magnitude earthquake in Mexico in September, CEO Mark Hoplamazian said, the
company had expected the third quarter to be its weakest of the year. The
RevPAR growth Hyatt experienced was driven by occupancy, which rose 1.1
percentage points year over year to 77.9 percent. Average daily rate increased
0.3 percent to $197.71.
In the U.S., transient room revenue at comparable U.S. full-service
hotels grew 1.5 percent and room nights grew 2.9 percent; both business and
leisure grew at the same pace. Owing to the Jewish holiday shifts and natural
disasters, group room revenue declined 6.6 percent and room nights decreased 8
percent. With 70 percent of group business on the books for 2018, pace is up in
the low single-digits, Hoplamazian said. That pace is softer than the estimate the
company made last quarter. Pace for 2019 is in the low single digits with a
little more than 40 percent of business on the books, and 2020's pace is up
about 10 percent with close to 30 percent of business on the books.
Hoplamazian said group business demand is bifurcating. "The
longer-dated bookings are largely association bookings, and the shorter-dated
bookings are largely corporate bookings." He said corporations' continued
caution has affected demand for four to six quarters. Pharmaceutical demand was
"by far the worst-performing sector" in group business, while banking
and manufacturing also dropped off.
In the broader Americas region, occupancy at full-service
hotels declined 0.3 percentage points while ADR rose 0.4 percent. Across Southeast
Asia, Greater China, Australia, South Korea, Japan and Micronesia, occupancy
increased 4.3 percentage points while ADR fell 1 percent. Across EMEA and
Southwest Asia, occupancy rose 1.6 percentage points and ADR increased 3
percent.
Hyatt added nine hotels, or 1,934 rooms, during the third quarter
and is on track to add at least 60 during 2017. Total revenue rose 1 percent year
over year to $1.1 billion.
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