Strong demand in major U.S. cities underpins Hyatt's Q2 numbers1 Aug, 2012 By: David Eisen
|Hyatt French Quarter Double Room|
Hyatt Hotels Corporation had a healthy second quarter that was boosted by strong demand in its higher-end hotels located in gateway U.S. cities. The result was a 5.4-percent gain in earnings from a year prior.
Mark Hoplamazian, president and CEO of Hyatt Hotels Corporation, said, "Our second quarter results were strong, with adjusted EBITDA increasing over 19 percent compared to last year. RevPAR increased over 8 percent in North America as we experienced strong transient demand. Owned and leased RevPAR grew over 9 percent in constant dollars as we benefited from last year's significant renovations."
For the second quarter, Hyatt's net income rose to $39 million from $37 million at the same time last year. Nikhil Bhalla, a senior lodging analyst at FBR & Co., told Bloomberg that Hyatt is benefiting from steady bookings at its high-end hotels in gateway U.S. cities. According to STR, hotel occupancy in the top 25 U.S. markets climbed to 69 percent this year through June, a rise of three percent from a year earlier.
Bhalla added that the U.S. hotel market has held up better than other regions.
Hyatt's second-quarter revenue rose to $1.01 billion from $936 million a year earlier. Revenue per available room increased 8.7 percent for full-service hotels in North America. Overseas, RevPAR climbed 3.8 percent.
"Over the last 18 months, we have completed hotel acquisitions totaling over $900 million," Hoplamazian continued. "These properties are performing well, with re-branding largely complete and the benefits of our system leading to strong growth in RevPAR and in market share. Looking ahead, we are encouraged by recent trends in transient travel and positive group pace as compared to last year. Our base of executed contracts for future openings is the largest it has ever been, at 175 hotels. We are on track to open over 20 hotels this year, including our first select-service hotel outside the U.S. In addition, the company is well positioned to take advantage of growth opportunities, as our balance sheet remains strong. Our organizational realignment is progressing well and slated for completion during the fourth quarter of 2012."
Hyatt is also in the process of shifting its operations into three regions—Asia, the Americas and Europe/Africa/Middle East—which will be supported by a newly formed global operations center.
The following four hotels were added to the portfolio during the second quarter as franchises: Hyatt French Quarter, Hyatt Chicago Magnificent Mile, Hyatt Place Boston/Braintree and Hyatt Place Riverside/Downtown.
Topic : Hyatt Hotels Corporation, Second Quarter
External Source : Bloomberg, The Wall Street Journal, Market Watch