Hyatt Hotels Corp. is set to finalize its ambitious $2 billion hotel asset sale plan this month. Despite this milestone, the company remains active in the transactions market, targeting strategic acquisitions and partnerships to fuel future growth.
During the recent second-quarter earnings call, President and CEO Mark Hoplamazian emphasized Hyatt's ongoing pursuit of "strategic partnership portfolio deals" and the acquisition of hotel brands or management platforms. "We have both in the hopper at this point and have been working on several that we feel really good about," Hoplamazian stated. However, he remains uncertain if these deals will close by year-end.
ALSO SEE: U.S. Hotel Construction Pipeline Reaches Record High
Hoplamazian highlighted the company's extensive research to identify ideal acquisition targets. "We've applied a tremendous level of data and analytics to the markets that we believe would provide the biggest network effect," he said. This analysis, conducted in late 2023, has been crucial in focusing Hyatt's resources.
Hyatt’s Strategic Moves
This meticulous process paved the way for Hyatt's recent acquisition of the Me and All Hotels brand from Germany-based Lindner Hotels. Hyatt officials also disclosed a pending deal to sell a hotel property for approximately $500 million. This sale would complete Hyatt's $2 billion commitment made in 2021 and bring the total to $3.6 billion in hotels sold since adopting an asset-light business model in 2019.
In 2024, Hyatt has already sold properties like the Park Hyatt Zurich, the Hyatt Regency San Antonio Riverwalk, and the Hyatt Regency Green Bay. When questioned by analysts about using acquisitions to drive growth, Hoplamazian stressed the importance of "embedded growth" in potential targets.
Hyatt achieved a 4.6% net rooms growth in the quarter, driven by increased conversion activity and moderate improvements in the financing environment. The company opened 18 new hotels with 3,251 rooms in Q2, including notable additions such as the Park Hyatt Changsha and the first Hyatt Vivid Hotels & Resorts property — the Hyatt Vivid Grand Island. The pipeline includes around 670 hotels with 130,000 rooms.
Financial Performance and Future Outlook
Hyatt reported a 4.7% year-over-year increase in revenue per available room (RevPAR) in Q2. Chief Financial Officer Joan Bottarini attributed this to strong business travel and group demand. The performance mirrored that of many international hotel brands, with weakness in China but strength in other regions. RevPAR was up 2.3% in the U.S. but down 3.2% in China for the quarter.
"RevPAR in the Americas, excluding the United States, increased approximately 9%, with notable strength in Canada and South America," Bottarini noted. However, China faced a tough comparison from Q2 2023, when it experienced a significant recovery in domestic travel.
Hyatt's total revenues for the quarter were $1.7 billion, flat compared to the previous year, with a net income of $359 million. The company adjusted its full-year guidance, projecting RevPAR growth between 3% and 4%, down from earlier projections of 3% to 5%. They maintained full-year net unit growth projections of 5.5% to 6%.
As of publication, Hyatt's stock was trading at $133.38 per share, up 2.6% year to date, while the NYSE Composite was up 7.1% for the same period.
Source: CoStar