Hyatt Rides Business Travel Wave but Trims Hotel Outlook

06.08.2024 - 19:07 / skift.com / Mark Hoplamazian / Sean Oneill

Hyatt enjoyed a continued recovery in travel demand in the second quarter but did lower its full-year guidance for room revenue on Tuesday ahead of a possible softening to come.

“What we’re seeing is a sort of evening out of demand over time,” said Hyatt president and CEO Mark Hoplamazian on an earnings call.

“Overall, I would say that the general level of demand has been maintained at a very high level — significantly above the levels that we experienced in pre-pandemic times,” Hoplamazian said.

Hyatt’s global revenue per available room rose 4.7% year-over-year. European hotels jumped 11.8% as many well-off Americans visited Britain and continental Europe.

“Our business transient customer segment had the largest growth rate [among segments] during the quarter, with revenue up approximately 14%,” Hoplamazian said.

Room revenue from group bookings increased by about 8%. Looking ahead, Hyatt saw group bookings up 7% for the second half of 2024 and 7.5% for 2025.

Hyatt lowered its full-year guidance for revenue per available room growth between 3% and 4%, a tighter range than the previous 3% to 5%.

Executives explained the modest pullback in the outlook by mentioning a potential hurricane impact, China’s domestic weakness, and the Crowdstrike disruption on airline systems — which had a side effect of hurting hotel bookings in July.

“The high end of Hyatt’s RevPAR [revenue per available room] range coming down 100 basis points is similar to what Marriott did last week,” noted Truist Securities analysts in a flash report.

U.S. domestic leisure travel may be normalizing to pre-pandemic trends.

“Our outlook is informed by what we think is going to be a somewhat tougher third quarter but a more robust fourth quarter,” Hoplamazian said.

Hyatt did report signs of what Skift has called a “wealth gap” in travel demand.

“Although domestic travel declined, we’re seeing demand for travel from affluent customers increase,” noted Joan Bottarini, chief financial officer. “However, they are prioritizing international travel.”

However, all vacation spending worldwide has been steady. Leisure revenue per available room dipped 2% in the second quarter because Easter was earlier than a year ago and two key resorts underwent full renovations, executives said.

In late July, Hyatt was reportedly nearing closing a transaction with Standard International, owner of the luxury lifestyle brand The Standard and other brands. However, the company didn’t comment on the reports or hint at any likely merger or acquisition activity.

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