Citing the return of group business at a pace that "was significantly ahead of our expectations," Hyatt hotels Corp. on Tuesday reported first-quarter performance that, like its competitors, started slowly but accelerated based on red-hot leisure demand and burgeoning corporate travel bookings.
Group bookings, though, were "where we saw the most pronounced recovery during the quarter," Hyatt president and CEO Mark Hoplamazian said on an earnings call with analysts. Systemwide group revenue in April 2022 was 14 percent below 2019 levels, he said, up from 25 percent in March and 43 percent in the fourth quarter of 2021.
"We've heard repeatedly from meeting planners how impactful it is the reconnecting person for association and corporate customers alike, a sentiment that is evident in our group booking momentum," Hoplamazian said. "Large group bookings driven by corporations with strong food and beverage spend are contributing significantly to our recovery."
At full-service Hyatt properties in the Americas, the group booking pace through December 2022 is 12 percent off 2019 levels. "The continued strength in short-term bookings, the vast majority of which are corporate, gives us full conviction that group will continue to narrow the gap to 2019 levels over the course of this year," Hoplamazian said.
April systemwide business transient levels reached 53 percent of 2019 levels, a figure that stood at 59 percent in the Americas, he said. Large national accounts improved to 54 percent recovered in April from 36 percent in February. Future business transient bookings in April were about 65 percent of 2019 levels, he said.
"Consulting companies and industries with a heavy focus on sales of products and services are leading the recovery with some of those firms now running in excess of 2019 travel levels, and demand continues to broaden across industries with each passing week," Hoplamazian said. "We remain optimistic about the recovery of business transient and its continued momentum over the back half of the year."
Q1 Performance
Hyatt's comparable first-quarter systemwide revenue per available room increased 107 percent year over year to $93.98, and in the U.S. increased 126 percent to $104.45. Systemwide RevPAR in April was 9 percent below 2019 levels, Hoplamazian said.
Increasing rates outside of China have fueled Hyatt's RevPAR recovery, Hoplamazian said. Hyatt's average daily rate in March was $195 and in April was $199, "the two highest ADR months in Hyatt's history," he said.
Hyatt's first-quarter earnings before interest, taxes, depreciation and amortization increased to $169 million, compared with a loss of $20 million one year prior. The company in Q1 had a net loss of $73 million, compared with a loss of $304 million in the first quarter of 2021.
Outside of Apple Leisure Group, which Hyatt acquired last year, adding about 100 properties to its portfolio, Hyatt as of March 31 had executed management or franchised contracts for approximately 105,000 rooms, up about 5 percent year over year.
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