"The year is off to a great start" for Hyatt Hotels, according to President and CEO Mark Hoplamazian. "Our pipeline also reached a new record, expanding 10 percent year-over-year to 129,000 rooms, and we realized net rooms growth of 5.5 percent. World of Hyatt membership has grown by 22 percent, reaching a new record of 46 million members. Significant progress on asset dispositions is further expanding our asset-light earnings mix, reflecting our execution to permanently reduce owned real estate."
Operational Update
Reporting Q1 2024 financial results to investors, highlights included systemwide revenue per available room increased 5.5 percent compared to 2023, while comparable systemwide all-inclusive resorts net package RevPAR increased 11.0 percent. Net rooms growth was approximately 5.5 percent.
Adjusted earnings before interest, taxes, depreciation or amortization was was $252 million. Adjusted EBITDA in the first quarter decreased by 9 percent compared to the first quarter of 2023; the decline was driven by the Super Bowl in Phoenix, higher real estate taxes, higher wages, and transaction costs related to asset sales in process. Net income was $522 million and adjusted net income was $75 million.
Additional highlights include:
- Full year comparable systemwide hotels RevPAR is projected to increase 3 percent to 5 percent on a constant currency basis compared to full year 2023
- Full year net income is projected between $1,135 million and $1,195 million
- Full year adjusted EBITDA is projected between $1,150 million and $1,190 million and is in line with previously provided 2024 outlook when adjusting for $30 million of reduced Adjusted EBITDA due to transactions
- Full year capital returns to shareholders is projected between $800 million and $850 million
World of Hyatt
"Loyalty room night penetration increased in the quarter highlighting the strong engagement of our expanding membership base, which is highly valuable because our members stay longer, they spend more and they booked through Hyatt channels," Hoplamazian said. "I'm also thrilled to share that more than 700 Mr. & Mrs. Smith boutique and luxury hotels and villas around the world are now available through higher channels including World of Hyatt. We now have more than twice the number of properties previously available through our alliances with Small Luxury Hotels with offerings in 25 additional countries and hundreds of new markets. We expect to have approximately 1,000 Mr. & Mrs. Smith properties available through Hyatt channels and World of Hyatt by the end of this year."
Management and Franchising
Results in the first quarter were driven by solid demand across all customer segments. Regional highlights include strong outbound travel from Greater China, benefiting markets such as Japan, Thailand, and South Korea. Leisure demand was strong in Mexico and the Caribbean for hotels and all-inclusive resorts. European all-inclusive properties produced impressive net package revPAR growth driven by high demand for resorts in the Canary Islands. In the United States, revPAR was up approximately 2 percent, excluding the impact of Easter.
Segment performance was impacted by challenging year-over-year comparisons particularly due to ALG Vacations,which lapped a strong quarter in the previous year.
Openings and Development
In the first quarter, 12 new hotels (or 2,425 rooms) joined Hyatt's portfolio. Notable openings included Thompson Houston, Secrets Tides Punta Cana, Secrets Playa Blanca Costa Mujeres, five UrCove properties in China, and Hyatt Regency Nairobi Westlands, marking the first hotel in Kenya.
As of March 31, the company had a pipeline of executed management or franchise contracts for approximately 670 hotels (approximately 129,000 rooms).
Transactions and Capital Strategy
In addition to the completion of the transaction that resulted in the company selling 80 percent of the entity that owns the Unlimited Vacation Club business and the closing on the sale of Hyatt Regency Aruba Resort Spa and Casino, which were previously announced, the Company is sharing the following updates:
As of May 9, 2024, the company realized $1.5 billion of gross proceeds from the net disposition of real estate at a 13.3x multiple and remains committed to successfully executing plans to realize $2.0 billion of gross proceeds from the sale of real estate, net of acquisitions, by the end of 2024 as part of its expanded asset disposition commitment announced in August 2021.
2024 Outlook
Reflecting the sales of Park Hyatt Zurich, Hyatt Regency San Antonio Riverwalk, Hyatt Regency Green Bay, and the UVC transaction, full year 2024 outlook for adjusted EBITDA remains in line with previously provided outlook when adjusted for $30 million reduction attributed to these transactions. Free cash flow remains in line with previously provided outlook including the $30 million reduction to adjusted EBITDA and $25 million of cash tax payments related to the three asset sales.