HomeHotelHyatt achieves record income from management fees

Hyatt achieves record income from management fees

Hyatt Hotels Corporation has released its 2023 financial results, according to which the group achieved a net profit of 220 million dollars, exceeding expectations by 5 million. The company’s adjusted EBITDA reaches $1,029 million, compared to $908 million the previous year. Growth in rooms is close to 6% in 2023.

The annual results confirm the positive evolution of the group in 2023, reinforced by the data for the fourth quarter. According to the company, fourth-quarter results were driven by the recovery in group travel demand and the higher growth rate of group and transit customers, which contributed to strong RevPAR growth ( revenue per available room) compared to the fourth quarter of 2022.

In fact, the RevPAR comparable system-wide increase by 9.1% in the fourth quarter and 17.0% in fiscal 2023 compared to the same periods in 2022, and exceeded forecasts for fiscal 2023.

In owned and leased hotels, RevPAR increased by 15.5% in 2023 compared to 2022, while comparable operating margins for owned and leased hotels rose to 26.2% in the fourth quarter and 25.4% in the fourth quarter. % in fiscal year 2023.

Hyatt almost achieved &% room growth in 2023. Source: Hyatt

As he said Mark S. HoplamazianChairman and CEO of Hyatt, “The fourth quarter marks the conclusion of a year of transformation and demonstrates progress toward our strategic vision as well as the evolution of our results. RevPAR growth exceeded the upper end of our guidance band , and for the seventh consecutive year we led the industry in net room growth. This has led to record rates and the highest free cash flow in Hyatt’s history. We returned $500 million to our shareholders and achieved a combination of the benefits derived from light assets (asset-light) of approximately 76% in the year, proof of the successful execution of our strategy.”

Almost 6% more rooms

Regarding the net growth of rooms, in 2023 it was close to 6% (5.9%) and the portfolio of formalized management or franchise contracts comprised approximately 127,000 rooms. The results report details that in fiscal 2023, 101 new hotels (23,965 rooms) became part of the Hyatt portfolio, including 43 hotels (13,223 rooms) that were converted to a Hyatt brand.

As of December 31, 2023, the company had a portfolio of formalized management or franchise contracts for around 650 hotels (approximately 127,000 rooms), including 17 Hyatt Studios hotels (around 2,000 rooms). During the fourth quarter, construction began on the first Hyatt Studios hotel in Mobile, Alabama.

Results by operating segments

In owned and leased hotels: Fourth quarter results were driven by recovering group travel demand and higher growth rates of group and pass-through customers, which contributed to strong RevPAR growth over the fourth quarter 2022. The comparable operating margin for owned and leased hotels increased by 240 basis points compared to the fourth quarter of 2019 and by 310 basis points compared to fiscal 2019.

In management and franchising in the Americas, Fourth-quarter results were also driven by improved group and business travel results, along with resilient leisure travel demand. Total rates in the quarter increased 6% compared to the fourth quarter of 2022, with US RevPAR increasing 3% in the fourth quarter.

In ASPAC management and franchise, Q4 results were driven by “strength across all customer segments contributing to RevPAR growth across subregions, with Greater China improving 84% compared to Q4 2022.”

Refering to EAME management and franchise: Once again, fourth quarter results were driven by resilient demand for leisure travel and the solid performance of business, transit and group travel, despite the impact of the 2022 World Cup in Qatar. The region benefited from an increase in air travel from the United States, the Middle East and China.

In the segment Apple Leisure Group, The results in Cancun benefited the fourth quarter data. Regarding the adjusted EBITDA of the ALG segment in the quarter “increased by 33% once the adjustment was made for the non-cash benefit of $23 million in the fourth quarter of 2022, which was not repeated in 2023, and the unfavorable effect of currency exchange rates due to the strengthening of the Mexican peso”.

Forecasts for 2024

For this year, the company estimates net profit to be approximately $560 million and adjusted EBITDA to be between $1,175 and $1,225 million. Regarding the RevPAR of the entire system, the company anticipates that it will be between 3 and 5% while the growth in rooms will remain at similar figures to last year, between 5 and 6%.

Learn more about Hyatt

– The second Thompson hotel in Spain will open its doors in 2026

– Hyatt strengthens its luxury portfolio with more than 35 new hotels and resorts

– Inclusive Collection will open 6 hotels in the Caribbean until April

– Javier Coll, Hyatt: “Institutional capital provides and energizes the market”

Source: Hosteltur

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