Hyatt Hotels Corp. saw increases in both transient and
corporate demand in the United States during the third quarter.
CEO Mark Hoplamazian said in an earnings call transient room
revenue at U.S. full-service hotels rose 9.2 percent year over year, with
average daily rate up 4.4 percent. Poor performance in New York City hindered
revenue, as new supply and a decrease in inbound international travel due to
the strong U.S. dollar impacted rate growth. U.S. group revenue was soft, as Labor
Day and Yom Kippur occurred later in the year, growing 1.4 percent year over
year. ADR for groups rose 4.7 percent, and group room nights decreased 3.2
percent.
Hyatt’s U.S. corporate demand was robust, as in-the-quarter
bookings for third-quarter stays increased 38 percent year over year. Room
night demand for the company’s top corporate sectors—high tech, pharmaceuticals
and banking and finance—grew 5 percent. Revenue for those three sectors
increased 10 percent.
“This reflects continued strength in demand from corporates
in the U.S. for meetings and events, as corporate profits remain strong,”
Hoplamazian said. At the midpoint of corporate negotiations, Hyatt expects to
achieve rate increases in the mid-single digits or higher.
Systemwide occupancy increased to 77.2 percent from the
third quarter of 2014's 76 percent. The 0.1 percent drop in overall ADR to
$179.29 incorporated major ADR drops in the Europe, Africa, Middle East and
Southwest Asia region (10.3 percent) and Asia/Pacific (8.6 percent), largely as
a result of currency shifts. Revenue decreased 9.9 percent year over year.
A tight-lipped Hoplamazian declined to comment on murmurs
that Hyatt is looking to acquire Starwood Hotels & Resorts. “There have been
recent press reports speculating on our potential interest in a competitor,”
Hoplamazian said. “Consistent with our past practice, we do not comment on
rumors or speculations, and this will be no exception.”
Hyatt added nine hotels during the quarter and is on pace to
have opened approximately 50 during 2015. Hoplamazian said half are
select-service brands.
Responding to questions from analysts
about Airbnb and other sharing economy housing operators, Hoplamazian said
the company isn’t shying away from such entities. “We have for some time looked
at this sharing economy dynamic as a broad consumer issue and a consumer
behavioral change,” he said. “We’ve always been drawn towards it, not away from
it, because we feel like we need to learn from what we’re seeing evolve in the market
and how consumers think and how they behave.”
In June, Hyatt announced it had invested in Airbnb-like
vacation home-rental provider Onefinestay. Hoplamazian told analysts, “It’s
really been experimenting how we could potentially extend the brand experience
for Hyatt customers, as well as how to interface with these providers.”