Hyatt reports third quarter 2016 results

Published on : Friday, November 4, 2016

hyattHyatt Hotels Corporation reported third quarter 2016 financial results. Net income attributable to Hyatt was $62 million, or $0.47 per diluted share, in the third quarter of 2016, compared to $25 million, or $0.18 per diluted share, in the third quarter of 2015. Adjusted net income attributable to Hyatt was $61 million, or $0.47 per diluted share, in the third quarter of 2016 compared to $42 million, or $0.30 per diluted share, in the third quarter of 2015. Refer to the table on page 3 of the schedules for a summary of special items impacting adjusted net income and adjusted earnings per share in the three months ended September 30, 2016.

 

 

Mark S. Hoplamazian, president and chief executive officer of Hyatt Hotels Corporation, said, “We reported another quarter of solid growth, propelled by the strength of our brands. Adjusted EBITDA grew about 12% in the quarter, excluding the impact of transactions and foreign currency translation. Once again, we saw relative strength in the Americas region, driven primarily by group business. Our outlook for the overall business for the remainder of 2016 is positive, and we reconfirm our expectations for comparable systemwide RevPAR growth in a range of approximately 2% to 3% for the year.”

 

Third quarter 2016 financial highlights as compared to the third quarter of 2015 are as follows:

 

Mr. Hoplamazian continued, “Looking ahead, we believe we are well positioned to deliver against our growth strategy, by serving the needs of high-end travelers. Additionally, given our executed contract base of approximately 61,000 rooms, or more than 35% of our current room base, we believe our portfolio of high-quality brands is poised for meaningful and sustainable growth. Last week, we announced an exciting new loyalty program, World of Hyatt, which we expect will drive even higher levels of guest preference once it officially launches in March of next year. With the positive momentum we see in our business, we expect another year of solid growth in 2017.”

 

Third quarter 2016 segment results as compared to the third quarter of 2015 are as follows. Hyatt evaluates segment operating performance using segment revenue and segment Adjusted EBITDA.

 

Owned and Leased Hotels Segment

 

Total owned and leased hotels segment Adjusted EBITDA increased 9.1% (10.1% in constant currency) including a 9.5% increase in pro rata share of unconsolidated hospitality ventures Adjusted EBITDA. Refer to the table on page 17 of the schedules for a detailed list of portfolio changes and the year-over-year net impact to third quarter owned and leased hotels segment Adjusted EBITDA. Owned and leased hotels revenue increased 3.8% (4.6% in constant currency) and expenses increased 4.4%.

 

RevPAR for comparable owned and leased hotels increased 1.0%. Occupancy increased 100 basis points and ADR decreased 0.3%.

 

Comparable owned and leased hotels revenue increased 1.2%. Excluding expenses related to benefit programs funded through rabbi trusts and non-comparable hotel expenses, expenses increased 0.3%. Comparable owned and leased hotels segment operating margins increased 80 basis points to 23.2%, largely due to non-operational items. Refer to the table on page 11 of the schedules for a reconciliation of comparable owned and leased hotels expenses to owned and leased hotels expenses.

 

The following hotel was added to the portfolio in the third quarter:

 

Royal Palms Resort and Spa in Arizona, part of The Unbound Collection by Hyatt (owned, 119 rooms)

The following hotel was removed from the owned and leased hotels portfolio due to the sale in the third quarter:

 

Hyatt Regency Birmingham in the United Kingdom (319 rooms). The Company entered into a long-term management agreement with the buyer; therefore, the hotel remains in the Hyatt system.

Management and Franchise Fees

 

Total fee revenue increased 6.8% (consistent with change in constant currency) to $110 million. Base management fees increased 4.3% to $49 million and incentive management fees increased 8.7% to $25 million. Franchise fees increased 12.5% to $27 million, primarily due to new and converted hotels and improved performance at existing hotels in the Americas. Other fee revenues were flat at $9 million.

 

Americas Management and Franchising Segment

 

Americas management and franchising segment Adjusted EBITDA increased 4.1% (consistent with change in constant currency). RevPAR for comparable Americas full service hotels increased 3.8%; occupancy increased 70 basis points and ADR increased 2.9%. RevPAR for comparable Americas select service hotels increased 4.6%; occupancy increased 80 basis points and ADR increased 3.6%. Revenue from management, franchise and other fees increased 5.9% (consistent with change in constant currency).

 

Group rooms revenue at comparable U.S. full service hotels increased approximately 6%, with most of the increase coming from ADR. Group revenue in the third quarter benefited from the timing of Jewish holidays which shifted into October this year from September last year. The year-over-year comparison benefit of these holiday shifts is likely to reverse in the fourth quarter. Transient rooms revenue at comparable U.S. full service hotels increased approximately 2%, driven primarily by increased ADR.

 

The following eight hotels were added to the portfolio in the third quarter:

 

 

ASPAC management and franchising segment Adjusted EBITDA increased 16.7% (consistent with change in constant currency). RevPAR for comparable ASPAC full service hotels increased 1.8%, driven by strength in Southeast Asia, Hong Kong, and the Pacific, offset by softness in Japan. RevPAR growth in China was broadly in-line with the overall segment. Occupancy increased 300 basis points and ADR decreased 2.4%. Revenue from management, franchise and other fees increased 9.5% (consistent with change in constant currency).

 

The following three hotels were added to the portfolio in the third quarter:

 

 

EAME/SW Asia management segment Adjusted EBITDA increased 14.3% (consistent with change in constant currency). RevPAR for comparable EAME/SW Asia full service hotels decreased 7.8%, driven by softness in France, Switzerland, and Turkey, and offset by strength in Eastern Europe and India. Segment RevPAR growth was favorably impacted by approximately 300 basis points driven by the removal of the 950-room Hyatt Regency Paris √Čtoile from the comparable set, due to the longer-than-expected renovation period. Occupancy increased 80 basis points and ADR decreased 8.8%. Revenue from management and other fees decreased 6.3% (consistent with change in constant currency).

 

Selling, General, and Administrative Expenses

 

Selling, general, and administrative expenses increased 37.0%. Adjusted selling, general, and administrative expenses decreased 6.0%, due in part to a reduction in professional fees. Refer to the table on page 10 of the schedules for a reconciliation of Adjusted selling, general, and administrative expenses to selling, general, and administrative expenses.

Tags: , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *

CAPTCHA Image

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

arrow2Follow TTW
 
facebook-logo  twitter-logo  LinkedIn_logo  stumbleupon-logo   rss_logo 
ttw_blogger_logo  ttw_blogger_logo  ttw_blogger_logo

ADVERTISEMENT

  • 02 wtm_london16
  • 03 itb-berlin 2017
  • 09 aime17
  • 09 conventa 2016
  • 10 travelturkeyexpo 2016
  • 10 uitt16
  • 11 arabian-travel-mart 2017
  • 12 mitt 2016
  • 12 ttfotm 16
  • 16 EMITT 2017
  • 21 IITM 2016
  • 43 PATA
  • 45 T2G Logo

TRAVEL INDUSTRY EVENTS

More Events...
Get our toolbar!
Review www.travelandtourworld.com on alexa.com