Dive Brief:
- Hyatt Hotels posted global RevPAR growth of 1.6% year on year in the second quarter, driven in particular by luxury chain scales, according to an earnings report released Thursday.
- “High-end consumers continue to prioritize travel,” CEO Mark Hoplamazian said on a Wednesday earnings call. Select service hotels in the U.S., however, saw RevPAR decline year on year in the quarter, which Hyatt attributed to the shift in timing of the Easter holiday.
- The earnings were in line with Hyatt’s prior outlook. Hoplamazian said the company is “encouraged by recent booking trends, leaving us optimistic about improving performance in the fourth quarter and into next year,” though lower chain scales will continue to underperform luxury.
Dive Insight:
At U.S. select service hotels, Hyatt’s business transient travel RevPAR declined by 1.5% year on year in the quarter, though business transient RevPAR was up “in the low single digits” for full-service properties, Hoplamazian shared on the call.
“Although booking trends in the second quarter were softer compared to the first quarter, we're seeing an uptick in future bookings for both leisure and business transient travel,” Hoplamazian said.
During the second quarter, Hyatt opened 8,920 rooms, approximately 2,600 of which came from its acquisition of Playa Hotels & Resorts, which closed in June.
Later that month, Hyatt sold real estate assets from the deal for $2 billion to Tortuga Resorts, which Hoplamazian said “demonstrates our commitment to our asset-light business model while continuing to strengthen our brand portfolio and leadership in the luxury all-inclusive segment.”
Hyatt expects that sale to close by the middle of the fourth quarter, Hoplamazian shared on the call.
The company also launched its Unscripted by Hyatt brand in the quarter, which Hoplamazian said “fills a key white space in Hyatt’s portfolio, allowing us to grow in more markets and at an accelerated pace.”
The CEO said Hyatt expects the brand to “scale rapidly through conversions.”
In the third quarter, Hyatt expects lower chain scales to continue to underperform luxury and international markets, in line with expectations the company shared during its first-quarter earnings call, CFO Joan Bottarini said on the call.
Across chain scales, Hyatt expects its U.S. RevPAR growth to improve after Labor Day, per Hoplamazian.
Higher chain scales are outperforming lower ones nationwide, according to a May report from JLL.
