Record Total Fee Revenue Led to the Highest
Cash Flow from Operations in Company History
Full Year System-Wide RevPAR Increased
17%
Hyatt Hotels Corporation ("Hyatt" or the "Company") (NYSE: H)
today reported fourth quarter and full year 2023 financial results.
Highlights include:
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Hyatt Q4 and Full Year 2023
Infographic
- Net income was $26 million in the fourth quarter and
$220 million for the full year of 2023, and exceeded the full year
outlook for 2023. Adjusted net income was $68 million in the fourth
quarter and $276 million for the full year of 2023.
- Diluted EPS was $0.25 in the fourth quarter and $2.05
for the full year of 2023. Adjusted Diluted EPS was $0.64 in the
fourth quarter and $2.56 for the full year of 2023.
- Adjusted EBITDA was $241 million in the fourth quarter
and $1,029 million for the full year of 2023, and exceeded the full
year outlook range for 2023.
- Adjusted EBITDA does not include Net Deferrals and Net Financed
Contracts of $33 million1 in the fourth quarter or Net Deferrals
and Net Financed Contracts of $158 million1 for the full year of
2023.
- Comparable system-wide RevPAR increased 9.1% in the
fourth quarter and 17.0% for the full year of 2023, compared to the
same periods in 2022, and exceeded the full year outlook for
2023.
- Comparable owned and leased hotels RevPAR increased 5.9%
in the fourth quarter and 15.5% for the full year of 2023, compared
to the same periods in 2022. Comparable owned and leased hotels
operating margin was 26.2% in the fourth quarter and 25.4% for the
full year of 2023.
- Comparable Net Package RevPAR increased 11.3% in the
fourth quarter and 15.3% for the full year of 2023 compared to the
same periods in 2022.
- Net Rooms Growth was 5.9% for the full year of 2023, in
line with the full year outlook for 2023.
- Pipeline of executed management or franchise contracts
was approximately 127,000 rooms.
- Share Repurchases were approximately 890 thousand Class
A shares for $95 million in the fourth quarter and approximately
4.1 million Class A shares for $453 million for the full year of
2023.
- Capital Returns to Shareholders were $500 million for
the full year of 2023, inclusive of dividends and share
repurchases, in line with the full year outlook for 2023.
1 Represents the sum of Net Deferrals and
Net Financed Contracts. Refer to Apple Leisure Group Segment
Statistics on schedule A-18 for additional details.
Mark S. Hoplamazian, President and Chief Executive Officer of
Hyatt, said, "The fourth quarter marks the completion of a
transformative year and demonstrates the progress towards our
strategic vision and earnings evolution. RevPAR growth exceeded the
high end of our guidance range and we had industry leading net
rooms growth for the seventh consecutive year. This led to a record
level of fees and the highest free cash flow in Hyatt's history. We
returned $500 million to our shareholders and achieved an
asset-light earnings mix of approximately 76% for the full year, a
testament to the successful execution of our strategy."
Operational Update
A record level of management, franchise, license, and other fees
of $256 million were generated in the fourth quarter of 2023 driven
by continued strong global demand for travel and net rooms
growth.
Comparable system-wide RevPAR increased 9.1% in the fourth
quarter and increased 17.0% for the full year of 2023, compared to
the same periods in 2022, driven by the rapid recovery in Greater
China and strengthening group demand in the United States. Group
booking pace for Americas full service managed properties is
currently up 8% for full year 2024 compared to 2023.
Comparable Net Package RevPAR for ALG properties increased 9.2%
in the fourth quarter and 13.6% for the full year of 2023, compared
to the same periods in 2022. The fourth quarter benefited from
improved results in Cancun, with Comparable Net Package RevPAR up
approximately 10% compared to the same period in 2022. In the first
quarter of 2024, booking pace for ALG all-inclusive properties in
the Americas is up 11% for the first quarter of 2024.
Segment Results and
Highlights
(in millions)
Three Months Ended December
31,
Year Ended December
31,
2023
2022
Change (%)
2023
2022
Change (%)
Owned and leased hotels
$
90
$
88
3.0
%
$
312
$
307
1.7
%
Americas management and franchising
114
106
7.6
%
469
422
11.2
%
ASPAC management and franchising (a)
36
20
76.9
%
126
54
131.9
%
EAME management and franchising (a)
17
15
19.7
%
61
47
30.4
%
Apple Leisure Group
21
43
(52.8
)%
199
231
(14.0
)%
Corporate and other
(37
)
(40
)
6.6
%
(139
)
(154
)
9.9
%
Eliminations
—
—
772.6
%
1
1
33.1
%
Adjusted EBITDA
$
241
$
232
4.0
%
$
1,029
$
908
13.4
%
Three Months Ended December
31,
Year Ended December
31,
2023
2022
Change (%)
2023
2022
Change (%)
Net Deferrals
$
18
$
28
(37.2
)%
$
91
$
94
(3.4
)%
Net Financed Contracts
$
15
$
15
1.7
%
$
67
$
63
6.9
%
(a) Effective January 1, 2023, the Company
has changed the strategic and operational oversight for our
properties located in the Indian subcontinent. Revenues associated
with these properties are now reported in the ASPAC management and
franchising segment. The segment changes have been reflected
retrospectively for the three months and year ended December 31,
2022.
- Owned and leased hotels segment: Results in the fourth quarter
were driven by the recovery of group demand and increased rate
growth across group and transient customers which contributed to
strong RevPAR growth over the fourth quarter of 2022. Comparable
owned and leased hotels operating margin expanded 240 basis points
compared to the fourth quarter of 2019 and 310 basis points
compared to the full year of 2019.
- Americas management and franchising segment: Results in the
fourth quarter were driven by improved group and business transient
results along with resilient leisure demand. Total fees in the
quarter increased 6% compared to the fourth quarter of 2022, with
RevPAR in the United States up 3% in the fourth quarter compared to
the same period in 2022, driven by strong group rate.
- ASPAC management and franchising segment: Results in the fourth
quarter were driven by strength in all customer segments which
contributed to RevPAR growth across the sub regions, with Greater
China improving 84% compared to the fourth quarter of 2022.
- EAME management and franchising segment: Results in the fourth
quarter were driven by resilient leisure demand and strong business
transient and group performance, despite the impact of the 2022
World Cup in Qatar. The region benefited from increased airlift
from the United States, Middle East, and China.
- Apple Leisure Group segment: Results in the fourth quarter
benefited from improved results in Cancun. ALG segment Adjusted
EBITDA for the quarter increased 33% when adjusted for the $23
million non-cash benefit in the fourth quarter of 2022, that did
not repeat in 2023, and the unfavorable impact of foreign currency
exchange rates from the strengthening Mexican Peso.
Openings and Development
In the fourth quarter, 29 new hotels (or 9,648 rooms) joined
Hyatt's portfolio, inclusive of six hotels in Greater China that
converted to a Hyatt brand through a strategic relationship with an
affiliate of Mumian Hotels. Notable openings included the 2,500
room Rio Hotel & Casino in Las Vegas, Nevada, and the 1,100
room Sunscape Coco Punta Cana and 900 room Sunscape Dominicus La
Romana in the Dominican Republic. Hotel Toranomon Hills, part of
The Unbound Collection by Hyatt, in Japan, and Ronil Goa, a JdV by
Hyatt hotel, in India, also opened during the quarter.
For the full year of 2023, 101 new hotels (or 23,965 rooms)
joined Hyatt's portfolio, inclusive of 43 hotels (or 13,223 rooms)
which converted to a Hyatt brand.
As of December 31, 2023, the Company had a pipeline of executed
management or franchise contracts for approximately 650 hotels
(approximately 127,000 rooms), inclusive of 17 Hyatt Studios hotels
(approximately 2,000 rooms). During the fourth quarter, the first
Hyatt Studios hotel broke ground in Mobile, Alabama.
Transactions and Capital
Strategy
On February 14, 2024, the Company completed a transaction that
resulted in the restructuring of the entity that owns our Unlimited
Vacation Club (“UVC”) business by selling 80% of the entity to an
investor unaffiliated with Hyatt for $80 million. Hyatt will
continue to manage the Unlimited Vacation Club business under a
long-term management agreement and license and royalty agreement,
ensuring a seamless transition for colleagues, UVC members and
hotel owners. As a result of the transaction, the Company will
receive management fees and royalty fees in relation to the
exclusive arrangement between the Hyatt Inclusive Collection brands
and UVC, and the Company will no longer report Net Deferrals and
Net Financed Contracts.
On February 9, 2024, the Company sold Hyatt Regency Aruba Resort
Spa and Casino for approximately $240 million to an unrelated third
party and entered into a long-term management agreement. As part of
the transaction, the Company provided approximately $41 million of
seller financing.
The Company is providing updates on the progress for five asset
sales. The Company has signed definitive purchase and sale
agreements for two assets that aggregate to approximately $310
million of expected gross proceeds. Further, the Company is
marketing one additional asset for sale and is engaged in
off-market discussions for two other assets.
The Company 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. As
of February 23, 2024, the Company has realized $961 million of
gross proceeds from the net disposition of real estate, inclusive
of Hyatt Regency Aruba Resort Spa and Casino.
Balance Sheet and
Liquidity
As of December 31, 2023, the Company reported the following:
- Total debt of $3,056 million.
- Pro rata share of unconsolidated hospitality venture debt of
$548 million, substantially all of which is non-recourse to Hyatt
and a portion of which Hyatt guarantees pursuant to separate
agreements.
- Total liquidity of approximately $2.4 billion with $896 million
of cash and cash equivalents and short-term investments, and
borrowing availability of $1,496 million under Hyatt's revolving
credit facility, net of letters of credit outstanding.
The Company repurchased a total of 889,902 Class A common shares
for approximately $95 million in the fourth quarter and repurchased
a total of 4,123,828 Class A common shares for approximately $453
million during the full year of 2023. The Company ended the fourth
quarter with 44,275,818 Class A and 58,757,123 Class B shares
issued and outstanding. During the full year of 2023, the Company
returned $500 million to shareholders, inclusive of dividends and
share repurchases.
From January 1 through February 15, 2024, the Company
repurchased 227,958 Class A common shares for approximately $30
million. As of February 15, 2024, the Company has approximately
$1.1 billion remaining under its share repurchase
authorization.
Segment Realignment
During the quarter ending March 31, 2024, the Company has
realigned its financial reporting segments to align with Hyatt's
business strategy, the organizational changes for certain members
of Hyatt's leadership team, and the manner in which the Company's
President and Chief Executive Officer, who is also its chief
operating decision maker, assesses performance of the business and
makes decisions regarding allocation of resources. As a result of
the realignment, a summary of Hyatt's reportable segments is as
follows:
- Management and franchising, which consists of the
provision of management, franchising, and hotel services, or the
licensing of our intellectual property to, (i) our property
portfolio, (ii) our co-branded credit card programs, and (iii)
other hospitality-related businesses, including the Unlimited
Vacation Club;
- Owned and leased, which consists of our owned and leased
hotel portfolio and, for purposes of owned and leased segment
Adjusted EBITDA, our pro rata share of unconsolidated hospitality
ventures' Adjusted EBITDA based on our ownership percentage of each
venture; and
- Distribution, which consists of distribution and
destination management services offered through ALG Vacations and
the boutique and luxury global travel platform offered through Mr
& Mrs Smith.
2024 Outlook
The Company is providing the following outlook for the 2024
fiscal year. Please refer to the table on schedule A-22 which
bridges 2023 full year reported actual results to illustrative 2023
results that adjust for the sale of Hyatt Regency Aruba Resort Spa
and Casino, the Unlimited Vacation Club transaction, and the
reporting of Mr & Mrs Smith commissions and SG&A in the
Distribution segment within distribution revenues and distribution
expenses, in connection with the segment realignment.
Full Year 2024 vs.
2023
System-Wide RevPAR1
3% to 5%
Net Rooms Growth
5.5% to 6%
(in millions)
Full Year 2024
Net Income
Approx. $560
Management, Franchise, License, and Other
Fees
$1,100 - $1,130
Adjusted SG&A2, 3
$425 - $435
Adjusted EBITDA2
$1,175 - $1,225
Net Deferrals + Net Financed Contracts
N/A - Refer to Transactions and
Capital Strategy section of the Earnings Release
Capital Expenditures
Approx. $170
Free Cash Flow2
$625 - $675
Capital Returns to Shareholders4
$550 - $600
1 RevPAR is based on constant currency
whereby previous periods are translated based on the current period
exchange rate. RevPAR percentage for 2024 vs. 2023 is based on
comparable hotels.
2 Refer to the tables beginning with
schedule A-15 for a reconciliation of estimated net income
attributable to Hyatt Hotels Corporation to EBITDA and EBITDA to
Adjusted EBITDA, selling, general, and administrative expenses to
Adjusted selling, general, and administrative expenses, and net
cash provided by operating activities to Free Cash Flow.
3 Adjusted SG&A outlook excludes
integration related expenses.
4 The Company expects to return capital to
shareholders through a combination of cash dividends on its common
stock and share repurchases.
No disposition or acquisition activity
beyond what has been completed as of the date of this release has
been included in the 2024 Outlook. The Company's 2024 Outlook is
based on a number of assumptions that are subject to change and
many of which are outside the control of the Company. If actual
results vary from these assumptions, the Company's expectations may
change. There can be no assurance that Hyatt will achieve these
results.
Conference Call
Information
The Company will hold an investor conference call this morning,
February 23, 2024, at 9:00 a.m. CT.
Participants may listen to a simultaneous webcast of the
conference call, which may be accessed through the Company's
website at investors.hyatt.com. Alternatively, participants may
access the live call by dialing: 800-715-9871 (U.S. Toll-Free) or
646-307-1963 (International Toll Number) using conference ID#
2303828 approximately 15 minutes prior to the scheduled start
time.
A replay of the call will be available Friday, February 23, 2024
at 12:00 p.m. CT until Thursday, February 29, 2024 at 10:59 p.m. CT
by dialing: 800-770-2030 (U.S. Toll-Free) or 647-362-9199
(International Toll Number) using conference ID# 2303828. An
archive of the webcast will be available on the Company's website
for 90 days.
Forward-Looking
Statements
Forward-Looking Statements in this press release, which are not
historical facts, are forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. These
statements include statements about our plans, strategies, outlook,
occupancy, the amount by which the Company intends to reduce its
real estate asset base, the expected amount of gross proceeds from
the sale of such assets, and the anticipated timeframe for such
asset dispositions, the number of properties we expect to open in
the future, pace and booking trends, the amount and timing of
company share repurchases, RevPAR trends, our 2024 outlook,
including our expected System-Wide RevPAR, Net Rooms Growth, Net
Income, Management, Franchise, License, and Other Fees, Adjusted
SG&A expense, Adjusted EBITDA, Net Deferrals, Net Financed
Contracts, Capital Expenditures, Free Cash Flow, and Capital Return
to Shareholders, and our anticipated financial performance,
prospects or future events and which involve known and unknown
risks that are difficult to predict. As a result, our actual
results, performance or achievements may differ materially from
those expressed or implied by these forward-looking statements. In
some cases, you can identify forward-looking statements by the use
of words such as "may," "could," "expect," "intend," "plan,"
"seek," "anticipate," "believe," "estimate," "predict,"
"potential," "continue," "likely," "will," "would" and variations
of these terms and similar expressions, or the negative of these
terms or similar expressions. Such forward-looking statements are
necessarily based upon estimates and assumptions that, while
considered reasonable by us and our management, are inherently
uncertain. Factors that may cause actual results to differ
materially from current expectations include, but are not limited
to: general economic uncertainty in key global markets and a
worsening of global economic conditions or low levels of economic
growth; the rate and pace of economic recovery following economic
downturns; global supply chain constraints and interruptions,
rising costs of construction-related labor and materials, and
increases in costs due to inflation or other factors that may not
be fully offset by increases in revenues in our business; risks
affecting the luxury, resort, and all-inclusive lodging segments;
levels of spending in business, leisure, and group segments, as
well as consumer confidence; declines in occupancy and average
daily rate; limited visibility with respect to future bookings;
loss of key personnel; domestic and international political and
geopolitical conditions, including political or civil unrest or
changes in trade policy; hostilities, or fear of hostilities,
including future terrorist attacks, that affect travel;
travel-related accidents; natural or man-made disasters, weather
and climate-related events, such as earthquakes, tsunamis,
tornadoes, hurricanes, droughts, floods, wildfires, oil spills,
nuclear incidents, and global outbreaks of pandemics or contagious
diseases, or fear of such outbreaks; our ability to successfully
achieve certain levels of operating profits at hotels that have
performance tests or guarantees in favor of our third-party owners;
the impact of hotel renovations and redevelopments; risks
associated with our capital allocation plans, share repurchase
program, and dividend payments, including a reduction in, or
elimination or suspension of, repurchase activity or dividend
payments; the seasonal and cyclical nature of the real estate and
hospitality businesses; changes in distribution arrangements, such
as through internet travel intermediaries; changes in the tastes
and preferences of our customers; relationships with colleagues and
labor unions and changes in labor laws; the financial condition of,
and our relationships with, third-party owners, franchisees, and
hospitality venture partners; the possible inability of third-party
owners, franchisees, or development partners to access the capital
necessary to fund current operations or implement our plans for
growth; risks associated with potential acquisitions and
dispositions and our ability to successfully integrate completed
acquisitions with existing operations; failure to successfully
complete proposed transactions (including the failure to satisfy
closing conditions or obtain required approvals); our ability to
successfully execute our strategy to expand our management and
hotels services and franchising business while at the same time
reducing our real estate asset base within targeted timeframes and
at expected values; our ability to maintain effective internal
control over financial reporting and disclosure controls and
procedures; declines in the value of our real estate assets;
unforeseen terminations of our management and hotels services or
franchise agreements; changes in federal, state, local, or foreign
tax law; increases in interest rates, wages, and other operating
costs; foreign exchange rate fluctuations or currency
restructurings; risks associated with the introduction of new brand
concepts, including lack of acceptance of new brands or innovation;
general volatility of the capital markets and our ability to access
such markets; changes in the competitive environment in our
industry, industry consolidation, and the markets where we operate;
our ability to successfully grow the World of Hyatt loyalty program
and Unlimited Vacation Club paid membership program; cyber
incidents and information technology failures; outcomes of legal or
administrative proceedings; and violations of regulations or laws
related to our franchising business and licensing businesses and
our international operations; and other risks discussed in the
Company's filings with the SEC, including our annual reports on
Form 10-K and quarterly reports on Form 10-Q, which filings are
available from the SEC. All forward-looking statements attributable
to us or persons acting on our behalf are expressly qualified in
their entirety by the cautionary statements set forth above. We
caution you not to place undue reliance on any forward-looking
statements, which are made only as of the date of this press
release. We do not undertake or assume any obligation to update
publicly any of these forward-looking statements to reflect actual
results, new information or future events, changes in assumptions
or changes in other factors affecting forward-looking statements,
except to the extent required by applicable law. If we update one
or more forward-looking statements, no inference should be drawn
that we will make additional updates with respect to those or other
forward-looking statements.
Non-GAAP Financial
Measures
The Company refers to certain financial measures that are not
recognized in accordance with accounting principles generally
accepted in the United States of America ("GAAP") in this press
release, including: Adjusted Net Income; Adjusted Diluted EPS;
Adjusted EBITDA; Adjusted EBITDA Margin; Adjusted SG&A
Expenses; and Free Cash Flow. See the schedules to this press
release, including the "Definitions" section, for additional
information and reconciliations of such non-GAAP financial
measures.
Availability of Information on Hyatt's
Website and Social Media Channels
Investors and others should note that Hyatt routinely announces
material information to investors and the marketplace using U.S.
Securities and Exchange Commission (SEC) filings, press releases,
public conference calls, webcasts and the Hyatt Investor Relations
website. The Company uses these channels as well as social media
channels (e.g., the Hyatt Facebook account (facebook.com/hyatt);
the Hyatt Instagram account (instagram.com/hyatt/); the Hyatt X
account (twitter.com/hyatt); the Hyatt LinkedIn account
(linkedin.com/company/hyatt/); and the Hyatt YouTube account
(youtube.com/user/hyatt)) as a means of disclosing information
about the Company's business to our guests, customers, colleagues,
investors, and the public. While not all of the information that
the Company posts to the Hyatt Investor Relations website or on the
Company's social media channels is of a material nature, some
information could be deemed to be material. Accordingly, the
Company encourages investors, the media, and others interested in
Hyatt to review the information that it shares at the Investor
Relations link located at the bottom of the page on hyatt.com and
on the Company's social media channels. Users may automatically
receive email alerts and other information about the Company when
enrolling an email address by visiting "Email Alerts" in the
"Investor Resources" section of Hyatt's website at
investors.hyatt.com. The contents of these websites are not
incorporated by reference into this press release or any report or
document Hyatt files with the SEC, and any references to the
websites are intended to be inactive textual references only.
About Hyatt Hotels
Corporation
Hyatt Hotels Corporation, headquartered in Chicago, is a leading
global hospitality company guided by its purpose – to care for
people so they can be their best. As of December 31, 2023, the
Company's portfolio included more than 1,300 hotels and
all-inclusive properties in 77 countries across six continents. The
Company's offering includes brands in the Timeless Collection,
including Park Hyatt®, Grand Hyatt®, Hyatt
Regency®, Hyatt®, Hyatt Vacation Club®, Hyatt
Place®, Hyatt House®, Hyatt Studios, and
UrCove; the Boundless Collection, including Miraval®,
Alila®, Andaz®, Thompson Hotels®, Dream®
Hotels, Hyatt Centric®, and Caption by Hyatt®;
the Independent Collection, including The Unbound Collection by
Hyatt®, Destination by Hyatt®, and JdV by Hyatt®;
and the Inclusive Collection, including Impression by
Secrets, Hyatt Ziva®, Hyatt Zilara®, Zoëtry®
Wellness & Spa Resorts, Secrets® Resorts & Spas,
Breathless Resorts & Spas®, Dreams® Resorts &
Spas, Hyatt Vivid Hotels & Resorts, Alua Hotels
& Resorts®, and Sunscape® Resorts & Spas.
Subsidiaries of the Company operate the World of Hyatt® loyalty
program, ALG Vacations®, Mr & Mrs Smith™, Unlimited Vacation
Club®, Amstar DMC destination management services, and Trisept
Solutions® technology services. For more information, please visit
www.hyatt.com.
Refer to the tables beginning with schedule A-11 for a summary
of special items impacting Adjusted net income and Adjusted diluted
earnings per share in the three months and year ended December 31,
2023 and December 31, 2022.
Note: All RevPAR and ADR percentage changes are in constant
dollars. This release includes references to non-GAAP financial
measures. Refer to the non-GAAP reconciliations included in the
schedules and the definitions of the non-GAAP measures presented
beginning with schedule A-9.
Tag: HHC-FIN
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240223670386/en/
Investor Contact Adam
Rohman, 312.780.5834, adam.rohman@hyatt.com Media Contact Franziska Weber, 312.780.6106,
franziska.weber@hyatt.com
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