While softer transient demand hurt some hoteliers during the
first quarter, Hyatt Hotels Corp. reported strength in the segment,
particularly in the United States, and expects the trend to continue for the
remainder of the year.
"Transient room revenue at comparable U.S. full-service
hotels increased 9.8 percent in Q1," CEO Mark Hoplamazian said during the
company's earnings call. "This performance is even more impressive when
you consider transient revenue was up 6.7 percent during the first quarter of
2015, which was essentially driven all by rate increase." Hoplamazian said
transient business accounted for about half of U.S. room revenue for the first quarter
of 2016.
Transient room nights increased 6.5 percent and transient
average daily rate increased 3.1 percent. Both Marriott
International and Hilton
Worldwide reported weak transient performance during the quarter,
particularly among the business transient segment. Hyatt, though, didn't parse
its reported transient results for business and leisure stays.
Hoplamazian said Hyatt's expansion into new and urban
markets contributed to the company's strength in transient. "With respect
to openings, we've seen a steady increase over the past few years: 43 hotels in
2014, 49 in 2015 and over 60 hotels expected to open this year." Positive
demand in markets like San Francisco and Hawaii also offset softer performance
in markets like New York.
Hyatt's group room revenue, which fell 3.5 percent year over
year at U.S. full-service hotels, landed more in line with other hoteliers as
the industry suffered from the Easter holiday's shift to March. Group room
nights decreased 4.8 percent and group ADR increased 1.4 percent. Hoplamazian
said room revenue for the remainder of the year looks positive across group and
transient segments.
"We've seen a lengthening in the booking curve, which
we believe is evidence that associations in particular are paying close
attention to the occupancy levels and are sensitive to the need to secure dates
that they rely upon for their large gatherings," he said. "This
period of high occupancy and constrained inventory, coupled with high transient
demand, should provide us with revenue-management opportunities."
Hyatt's systemwide ADR increased 1.6 percent
year over year on a constant dollar basis to $181.35. Occupancy increased 0.5
percentage points to 70.4 percent. Total revenue increased 3.3 percent year
over year to $1.1 billion.