Hyatt Hotels Expects Room Rate Rebound to Roll On Through 2023

25.08.2023 - 14:11 / skift.com / Asia Pacific / Mark Hoplamazian / Sean Oneill / Hyatt Hotels

Hyatt Hotels Corp., which enjoyed a blockbuster financial performance in 2022, forecasted Thursday continued success this year, especially in the first half. The company expects to benefit from growing consumer interest in its lifestyle, luxury, and resort properties, returning group reservations for its banquet halls, and an expanding room count.

“We concluded the year with another record-breaking quarter,” said president and CEO Mark Hoplamazian. “Rates remained strong, up 14 percent above 2019 levels during the quarter, while occupancy continued to recover.”

Looking ahead, Hyatt forecasted that it would generate 2023 system-wide revenue per room growth in the range of 10 percent to 15 percent compared to 2022. Executives implied that gains in room rates and occupancy for leisure travelers worldwide would primarily drive the outsized performance.

Group bookings will also help, they said. Hyatt’s system-wide revenue from group reservations fully recovered to 2019 levels in the quarter — a trend that executives anticipated would continue this year, too.

In the fourth quarter, Hyatt saw 2.4 percent growth in its system-wide revenue per available room — a key industry metric — compared to the pre-pandemic quarter in 2019. That figure was up 6.6 percent when excluding pandemic-struck China.

The company chalked up the performance to strong pricing power. Its leisure transient average rates were up 19 percent over the pre-pandemic level, and its rates for group bookings were up 15 percent compared with 2019.

Occupancy across the company’s 912 managed and franchised hotels in the quarter was 63.5 percent — below the 72 percent level of 2019.

During the fourth quarter, the Chicago, Illinois-based hotel operator produced a profit of $294 million on $1.59 billion in revenue. Net income was down about 9 percent versus 2019. Revenue was up 24 percent versus 2019’s comparable quarter.

Hyatt generated in the quarter $232 million in adjusted earnings before interest, taxes, depreciation, and amortization — which was 21 percent above the comparable figure for the pre-pandemic period in 2019.

The company largely credited its robust performance to a record level of fees for managing hotels on behalf of partner owners. The company’s luxury hotel performance in the Americas was 23 percent higher in the quarter than in 2019.

Resorts were another driver. The company’s all-inclusive resorts, organized under its Apple Leisure Group, generated net package revenue per available room that was 24.4 percent higher in the quarter than in the same period in 2019 for the same set of properties.

Hyatt executives expected that the return of Asia Pacific travel to historical levels will help boost occupancy worldwide. It believes the