While Marriott International, Hilton and Wyndham Hotels & Resorts all posted profits for the first quarter of 2022, Hyatt Hotels Corp. remained in the red—but after a year of big deals and pandemic-driven uneven travel trends, the company’s leadership is optimistic about strong leisure growth in Q2 and beyond.
Hyatt reported a net loss of $73 million for Q1 this year, compared to a net loss of $304 million in the first quarter of 2021. Adjusted earnings before interest, taxes, depreciation and amortization for the quarter was $169 million.
As the first quarter of 2022 drew to a close, Hyatt reported record-high average daily rates that continued into the start of Q2. The company’s systemwide average rates reached $195 in March and then improved by a further $4 in April. On an earnings call with investors, President and CEO Mark Hoplamazian said these were “the two highest ADR months in Hyatt's history.” Systemwide average daily rate exceeded 2019 approximately 10 percent in April driven by luxury brands in the Americas, which exceeded 2019 by approximately 30 percent.
Hoplamazian told investors that the revenue per available room acceleration for all areas outside of the Asia-Pacific region has been “extraordinary.” Comparable RevPAR in the Americas, Europe, the Middle East, Africa and Southwest Asia was down 33 percent from 2019 in January, down 5 percent in March and up almost 3 percent in April. Comparable systemwide RevPAR increased 107 percent to $93.98 and comparable U.S. hotel RevPAR increased 126 percent to $104.45 in the first quarter of 2022.
Across the company’s system, comparable RevPAR also improved over the first four months of the year, down 37 percent below 2019 in January and 9 percent below 2019 in April. The Americas, EMEA and Southwest Asia regions exceeded 2019 RevPAR in April by 3 percent and 1 percent, respectively.
Hoplamazian noted that the company’s portfolio is “significantly weighted” toward luxury and leisure, with 42 percent of the hotels classified as luxury, lifestyle or a resort. “And nearly [60 percent] of our RevPAR in the first quarter was driven by leisure transient revenue,” he said. Last year’s acquisition of luxury-focused Apple Leisure Group helped boost the company’s leisure presence, and ALG’s RevPAR in the Americas was up 12 percent compared to 2019.
Sales and Unit Growth
In April, Hyatt closed on the sale of the Hyatt Regency Indian Wells (Calif.) Resort & Spa, Grand Hyatt San Antonio River Walk and The Driskill in Austin, Texas, to unrelated third parties and entered into long-term management agreements for each property. The company also signed a purchase and sale agreement in May for The Confidante Miami Beach, which is expected to close in the second quarter. “Combined, these four hotels will generate gross proceeds of $812 million, or over 40 percent of our $2 billion disposition target, marking significant progress on our fee-based earnings evolution,” Hoplamazian said during the earnings call.
In the first quarter of 2022, Hyatt added 13 new hotels with 2,690 rooms to its system for net rooms growth of 18.6 percent—or 5.2 percent when excluding properties in the recently acquired ALG portfolio.
Q2 Outlook
Due to March and April’s numbers and a “strong booking pace for May and beyond,” Hoplamazian predicted the company’s Q2 performance would improve with higher rates and higher volumes of business in all regions other than Asia Pacific.
In terms of unit growth, the company has a pipeline of 540 hotels with 113,000 rooms or approximately 40 percent of its current base, including ALG's pipeline contribution of approximately 30 hotels (or approximately 8,000 rooms).