H - Earnings call transcript Q4 2019 | Hyatt Hotels Corporation

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Operator

Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2019 Hyatt Hotels Corporation Earnings Conference Call. My name is Kenzie and I will be your conference operator today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded for replay purposes.

to Brad conference Vice O'Bryan, Relations Corporate like host to President now and today for Treasurer Finance. would turn over the your Investor I and Senior proceed. Please

Brad O'Bryan

for XXXX earnings Hyatt's and call. morning and Good Hoplamazian, Kenzie. with in Joan Chief conference for Chief Hyatt's you, quarter thank Bottarini, President I'm Thank and you fourth Hyatt's joining Chicago everyone Officer. Mark here Financial us Officer; Executive

forward-looking as comments statements would by I like remind from today started, SEC These will cause risks expressed our are our on risks include our or filings. federal get to we Before materially could other those in Report our statements under everyone to XX-K laws. described securities numerous that results and actual Annual implied differ These Form subject and comments. in uncertainties to

in with along only not Forward-looking unfold. actual issued release are the of events comments earnings be today statements we made this and will call as as that yesterday the updated on

In available reconciliation remarks addition of earnings archive for to call financial on under in our hyatt.com link Investor you days. today's and website be reporting of referred measures the Relations An at can will yesterday's in of non-GAAP on our website financial our release. find section XX this a

With that Mark. to I'll turn the call over

Mark Hoplamazian

which by with in operate living have welcome to associated a are our communities Thank owners, colleagues guests who for and customers, the hotels and for recognizing COVIDXX. for Hyatt's that profound you, in call. fourth for in Asia-Pacific hotel Good families, this hit and travel morning region morning by to the our hard circumstances commitment I'll our Brad. extraordinary and our the been reduction quarter begin care and XXXX earnings our their through teams our demonstrating

to movements in purpose are in of unable is in matters the many people circumstances to their go their It be best. types at a they for and our these restricted many most. our our is Hyatt's purpose colleagues that especially to so work can company of care as when cases, hotels

Kong over COVIDXX, teams they whose our care tirelessly worked also for Hong were impacted ensure colleagues their by for caring best past in weeks Our support to and for can be four have and our significantly colleagues while travel to Shanghai plans the their families. that

reduce the teams at In low a our meantime, rate undertaken hotels. variety the expenses to actions wide of occupancy run have very

World extensions of series announced the Our Asia-Pacific team our members. and needs a Hyatt members for assessing yesterday those quickly tier and status agility in demonstrated and of of

the and other in in owners to family what Hyatt hotel we financial our markets where strain the disrupted. our patterns Asia-Pacific are in doing have of is fulfill that been that travel purpose Greater China are experiencing proud in Very to aggressive ensure limiting and

which provide to with strategy a We one some like our of year very fourth line our expectations ahead I'd in finished Now, and active capital on especially expectations. quarter was strong fronts. of RevPAR highlights earnings growth the delivering and our the growth

of number number front, a of that signed growth in record resulted franchise hotels on pipeline we the XX% growth record year-over-year management new and On a opened a and basis. of agreements approximately

agreement. ensuring Grand XX-year We while a for million, Seoul brand sale presence our completed long-term with Hyatt the $XXX management of

of continue estate. capital strategy We to net demonstrating executing same and drive real at our our industry-leading hotel time, growth value while rooms the the

acquisition an XXXX. Two on provide in Roads of completed fourth our update like quarter to I'd the

and Joie first de of Vivre, We under Destination brands are operations acquired pleased Alila, with our Thompson, year hotels. our

and efforts line were integration Our timing. well-executed with budget and in expected

following in processes our penetration the for we're of room brands and months Hyatt hotels the the these night Over inclusion our program the rate into past by exploration year, on brands four average. the members in we brand by of running and World integrated with mid-XXs seeing about systems

We additions also pipeline. to meaningful lifestyle our around world and strong resort interest see from the with developers

presence I'm on the world, our Moving focus our over to excited past the around growing made the years. about several we've progress

industry-leading drive gross a basis and rooms hotels the addition levels XX continue XX,XXX over growth with We of during to on XXXX.

we continue alone markets added having Most both expansion and the of XXX to with increase our luxury openings importantly, hotel the new collaboration materially markets new around that in excludes significant our presence a through over XX we added small conversions hotels. XXXX world through new and

we signings, in interest new brands. to developer respect strong our see continue With to

Our openings. of an of after signings, driving even in a of pipeline, development teams record year record another our year delivered increase over XX%

Our approximately our XX% pipeline of amounts existing system. now to

fashion excellent similar our we established to driving of have mix capital strategy agenda, lighter growth asset are our in the and advanced we've In execution an momentum earnings. and materially

As we've is times, in owned-asset our profile our of many an fee our accelerate outcome evolution discussed business capital important a the strategy through to earnings growth outsized reduction our concurrent of exposure. of and

continue successfully will and both. ability to an demonstrate We to accomplish have demonstrated

sale the the commitment Grand our to other addition completed strategy. we demonstrate I Seoul, capital In mentioned Hyatt as that our earlier, two also to of transactions

this $XX Portland, time and was we've what closing. to this on realized recently room magnificent our a a center. important hotel First, Convention XXX million a hotel partner, Regency strategically now Hyatt approximately headquarter sold of a this the upon We've at gain is the develop long right to transaction opportunity Oregon to acquire

recently in years important market this in an Centric Centric a brand three was developing in to we then Second, our by which ago Hyatt an opportunity are we U.S. hotel the introduced over grow Hyatt underrepresented. Philadelphia, identified

hotel proceeds. interest in We last sale million the closed week received on and of ownership of this XX% approximately our $XX approximately in

hotel open summer of in the XXXX. expect this to We

the adjusted average last of long-term at billion multiple times every real have sold. two more contract we estimated approximately $X.X owned over estate years, management XX.X an EBITDA summary, a sold retained In than of and hotel for annualized

implied valuation in our leased our the the our of valuations joint market in on embedded and our business. venture assets has in The those materially placed remaining are and excess realized hotels, dispositions owned including

past, growth, will drive cash we demonstrated to earnings free believe continue we've capital in into we reduced and intensity As the expand generation flow the future.

COVID-XX like I'd over comment outbreak. it turn the on to further John, I to Before

As you know impact travel has significant also China and having a virus this patterns on globally. affected is Greater

colleague many number authorities Guests our cooperation with to significant local manage the one locations in in have safety associated And the taken priority. is measures been and virus. risks with

will on relates are situation we this effects on some Joan provide color how XXXX. as to assessing it the

continue. the of and results. time, travel of on unclear remains the outbreak this patterns the of virus impact At it are long the unable on we will to However, our magnitude estimate impact year how full the

Thanks the and brand positions our strength to future experience past which leadership that a teams for presence these our to and important the in we've strong decades, our years, and allowed five markets. we're of hotel confident constructive over highly effective our Hyatt relationships know, us and owners. you for China pipeline As operated Greater with Asia in Pacific over XX expand in

this we conclude of prepared conditions to share executed by my and gain performance in XXXX solid business. well I'll the the saying, year drive remarks market parts in in face challenging operating morning our which was a of

results gives will of the continue our around to solid even conditions The operating our if world forward. the and teams brands going confidence we challenging persist us operating excellence that strength drive of

our $X the which target. we approximately our year billion XX% was asset of sell of also execution stated sales demonstrate continue with a in capital to XXXX down in almost successful strategy

number and signed of pipeline with record a ended opened year Finally, we in hotels history. the number record largest a of our deals

over you. turn our now additional to to expectations detail XXXX. for I'll Joan XXXX results it Joan, to and over provide on our

Joan Bottarini

Hyatt Thanks, of and yesterday, earnings Mark, reported good adjusted everyone. per million attributable $XX and diluted items. quarter morning, $X.XX share for fourth of income Late to adjusted we net special

and in The Jewish of in had RevPAR timing shift the Adjusted RevPAR was impact dollars. of holidays for a of quarter system-wide basis additional negative constant million negative a EBITDA of on approximately Hong Kong points. with the an basis XXX $XXX XX drove impact the system-wide decline points X.X%

Excluding currency of for approximately and our Roads Two costs quarter adjusted constant both transactions on to the the a the EBITDA basis. earnings impact X% integration grew net and related

and line our As our with our our expectations adjusted Mark EBITDA results in expectations. higher was mentioned, RevPAR than were

fourth Regency of hotel a reimbursement by Our earnings lower driven SG&A from fees benefited as of license Hyatt and expenses management. result receipt quarter transaction of cost residences branded Portland strong the earlier-than-expected pre-opening

our and compared other corporate segment to of franchised and XX% our quarter year for of before to results, mix from business basis on earnings managed the and in full was As XXXX. EBITDA fourth at adjusted XX% a XX%

fee second XXXX sales with business will half growth Asset during more toward mix shift earnings profile. our a in to further continue this the the fee-based continued combined of

quarter, pressure management of fourth currency basis RevPAR to level growth with the incentive fee low primary the fees on and from the constant on during of franchise in fees hotel quarter of a lower were the quarter and base, placed growth as earnings. levels incentive compared the over Base XXXX. drivers X% of franchise fees a contribution fourth delivered During we growth operating

would which our lodging of franchising for RevPAR the the management full-service excluding EBITDA adjusted on up segments holidays. The XX% starting for Americas with briefly Jewish fourth Americas, declined shift the I the and accounted the the segment X.X%, in impact three cover of was our approximately X.X% quarter quarter. and

Base X.X% basis. growth with of with Select-service X% X.X% RevPAR incentive down constant currency growth approximately of X.X% X% U.S. U.S. similar U.S. adjusted impact approximately on declined EBITDA fee with franchise X.X%. quarter select-service holiday declined the the a quarter. shift the RevPAR Total down both drove a full-service and for for

the in fourth association revenue U.S. business room nights quarter by impacted an entirely Full-service Jewish decrease by in by shift was group and The offset driven partially X.X% in business. the the holidays. business, increase was in the decreased group corporate in driven rooms lower by quarter group

Fourth levels years all a periods during X%, XXXX. in XXXX we bookings of third-party commissions of to three were association to primarily in sales anticipation for quarter out due the down approximately of fourth mid-single for four decrease the down in early quarter quarter the higher In digits. production years bookings implemented was quarter for

and which our of on for XX, the XXXX strong be group X% years to Looking booking business the December is books already for also business was each for XXXX is slightly. XXXX. XXXX, down group ahead it except a XXXX XX% next three up At we to group up year compared approximately expect of approximately pace for and for

presence revenue nights, markets such have full-service offset an Chicago. in significant As rates. largely we a increase a up as by U.S. room reminder, in quarter the decrease transient driven where weak was slightly in had by a for we XXXX, particularly some

Pacific of Kong. and the excluding quarter. RevPAR was and Asia in Full-service XX% our X.X% this Hong decreased up quarter to for EBITDA on segment the franchising Moving X.X% in adjusted fourth accounted segment, our management

very in flat, while Asia, was excluding was Southeast and Japan and Kong. RevPAR Korea in saw about full-service growth China strong South Hong we also Greater

unit to new the fee benefiting contribution the with in Base quarter, RevPAR which revenue X% approximately during experienced franchise increased overcoming incentive approximately fees and Total recognized an XX% efficiency quarter. the residence SG&A, constant with led branded along Pacific in pressure Asia basis. EBITDA fees adjusted of increase currency a increased during the X% on from

accounted quarter. the Southwest showed X.X% the driven of by the with Moving strongest and East our and segment Europe, in of Asia EBITDA this gains. management RevPAR and XX% adjusted Middle fourth segment, quarter. for a All on Full-service combination for segment regions our to occupancy during approximately rate results Africa, this delivering this increased Europe accounted growth franchising – RevPAR

quarter adjusted for and both Solid in and drive to increase RevPAR a currency growth incentive and in segment franchise the base, new approximately a helped XX% on constant XX% basis. of revenue fee an EBITDA increase this for unit

full owned fourth Turning the the shift XX% before This or our and of for Jewish quarter and the EBITDA, Owned accounted X.X% segment leased the approximately excluding fourth in the in RevPAR and timing. year. adjusted business. XX% and increased corporate in X.X% to holiday for leased other our quarter

the constant by Adjusted this of sales. impact asset X% decreased EBITDA in segment for approximately currency driven

the have segment of these in impact currency X%. net EBITDA decreased Excluding would approximately adjusted transactions, constant

which given we quarter and the XXXX owned growth combined margins quarter wage RevPAR flat were with impressive and fourth the are to result operating. environment Our of comparable low inflation compared leased in during the

reviewed dividends operating returns. shareholder to like million our capital our in Now returned guidance. of in XXXX over repurchases We cover $XXX share million million that prior and shareholders including performance, with consistent I to I'd $XXX $XX

share million under authorization the approximately of we as $XXX authorization, existing Additionally repurchase our million during new XX. announced fourth February $XXX quarter, remains share a repurchase

Turning XXXX. to

includes which to in in expect approximately We approximately to year, XX. $XXX through completed million capital return February this share million $XX shareholders repurchases

per per combination share from Our on with to $X.XX will through XXXX dividend of to share March return and capital increased have our quarterly repurchases shareholders X. come which dividend we of XXXX a be our in $X.XX of quarterly share paid to first

also prioritize growth reinvesting capital of and reminder, business shareholders additional returns to over drive significant way have to in our time. we By demonstrated

some expected want do performance providing of include will XXXX, After COVID-XX. to that Turning I of impact other our numbers clarify I you in guidance our our aspects in I'll business. provide of I not filed can to this impact the the have virus reminder on however, the color be guidance, first release could morning guidance potential potential cover our yesterday. a XXXX late And our as details the earnings find on

in full X.X% expect to range the We negative growth X.X%. XXXX year system-wide of RevPAR

lower in growth And We a continue the be to growth select-service growth. to in full-service expect than RevPAR bit U.S. lag the RevPAR U.S. growth RevPAR to internationally. expect

$XX to million net from real of the to sales estate Two $XXX acquisition. range related onetime a We that also in from reduction expect approximately XXXX. EBITDA $XX of reflects million adjusted our And elimination reflects to XXXX completed incurred million integration the costs XXXX adjusted million during range EBITDA $XXX during Roads

midpoint integration of the the reduction items, approximately to costs. Excluding XXXX from range. costs, by $XXX the for impact Adjusted The Roads we using versus offset of compensation-related SG&A is the EBITDA by XXXX of Two increases partially million decrease be to million. our $XXX about expected in in grow adjusted of adjusted expect X% reflects XXXX SG&A these

be are $XXX million than Capital million expenditures XXXX. for XXXX approximately more less $XXX expected than to

which through to year. sale reduced an strategy property during Miraval our relates Hyatt open construction-related execution to material Berkshires, approximate Centric interest second Philadelphia. the significantly of the of capital recent XX% expenditures of We expenditure this our the have including The only we completion in we our capital quarter have continued the expect in of the the

of operation Ocean for growth the a had room the the X.X% range X% fee X,XXX to due is XXXX of of modest Resort inclusive in expected to rooms significant the while at XXXX. count The termination in room franchise the beginning was of Net to be Resort contract. of Ocean very a nature that the contribution

Resort be Ocean would X.X% net XXXX our in X% the Excluding to growth range. termination, the rooms

noted double-digit a signings growth of record notwithstanding year delivered Mark our had a we XXXX. of year and in openings earlier, record As in pipeline

Our robust can confidence into strong rooms the pipeline future. deliver us net gives we growth well

there impact Concerns contain the China of of additional are XXXX our specific running question low related closure on the some is in be our actions very that early information to the remain the and provide potential now I'll impact financial at it's open XX occupancies. what to caused of There complete business reasonably might year to quantify have but full impact and no too to hotels our COVID-XX. it virus taken in Greater many others to results, an will simply be.

assessing I'd evolves. three share we're situation like to illustrate as to points how the the impact

sold the have we region forward Grand going no of the First, Hyatt sale the leased and last virtually late exposure after owned in year.

Pacific and most our incentive approximately fees being full are China base the Greater XX% significant and proportion Asia XX% of year coming Second, where for from effects is franchise the the in consolidated felt.

impact is Asia there an markets to Chinese coupled region. those Pacific restrictions the third, with of other due the to And the current pattern outbound in travel certainly markets travel on

into And revenue. global reference, our However, Pacific U.S. less revenue. small than the -- very the rooms Chinese of of outbound rooms travel Asia inbound markets up as makes rooms a up percentage of point U.S. to X% of outside total Chinese makes a travel

in too decline every our $X in later range scheduled to Greater in our the will adjusted one consolidated for could provides cushion China few million. EBITDA construction to we Greater impact With the markets. of $X the that the on impact those year, point RevPAR, be a for do rooms million analysis, Using year to of originally months estimate China of up our we to progress it basis majority the XX may were growth points XX guidance, on the delays hotels assess the should have which impact outbreak our which is growth year. to first early Greater have net room’s full net construction to is China our this of open you planned year, of negative three occur that some in tell full openings to What a the but have can respect guidance of I in half

the closely monitor working to situation results. COVID-XX and financial both continue We our our are our and financial negative aggressively teams minimize the impact to on owners on

the the through I'm say have deep confidence region. prepared our capabilities my and I I we that of in strong and and in Overall, industry-leading the manage thoughtfully by Asia and remarks team to in to are region. the current great Asia a of and results will conclude our Greater in proud to Pacific challenges resilience strong XXXX have proactively with owners China our ability excellent brand operating reputation long-term drive outlook continued growth. relationships growth our an with pleased Pacific and we saying levels

to continue preserving our in earnings earnings time. while levels our towards strategy, our fee-driven over successfully driving We absolute shift business a capital execute of

And with Q&A. for that, to I'll turn Canzie it back

Operator

Thank of from comes go from question Smedes Rose the you. first Our line [Operator Citi. Instructions] ahead. Please

line Your open. is

Smedes Rose

Hi, $X overall one China-related to $X decline. date you mentioned, so you Could for RevPAR good far think seen your just -- million point have just of decline you I in in Maybe what every morning. China RevPAR for terms of fees -- to million exposure?

Joan Bottarini

I'll a that think you how give bit more expand more little mentioned. I'll just about a and I what seeing the on Smedes. we sensitivity color. bit little Thanks we're

with down as of reporting in the closed occupancies. and hotels remaining month-to-date February, through So the hotels we've single China Greater I XX% mentioned seen XX%

the restrictions strong the started region. given And not to first declining the XX% use leading half the In in we and Asia us very place in through New travel the is conditions last the February out general Lunar Pacific China benchmark Year. good January are currently month-to-date Greater the two a that outbound weeks, overall, month with is in in down as sharply into excluding for and

I'll think just to to up minute sensitivity. But about you back the give way a a now

of said expect annual impact X% includes on I equal EBITDA remarks, China as travel. the million $X of So and my outbound that basis decline to Greater in an we prepared RevPAR of million to $X

midpoint. XX%, at example, would for $XX China about was $XX $XX full full year So, be impact or the down year RevPAR million to if million the million

full if So the midpoint. declined at China $XX XX%, Greater the RevPAR million be impact year would

in and extent on recovery where So of depends period don't for the are stabilization that period presently believe the we will range extended current nature the persist an and of time. and we conditions the

Mark Hoplamazian

Okay, thanks.

I a couple So sorry. Smedes, add that just to things of want to

all might that. just hotels now closed, just of think actually not to cited I hotels First that closed have of XX% Joan it's clear XX the XX% be are about are

is. the But thing we everyone that same other I in would only the operating else is, add are market

the We key manage in tell fourth and we six quarter share the how on almost that and focused had Beijing, we've we're our markets, were points Hangzhou, proactively in responding engage five which market China, now Shanghai, of we think in momentum. is the are come top fourth with this you China gains issue into in Guangzhou that And share I significant right Shenzen, situation. great I can include the can XXXX teams us for up how quarter. and

market which Hong China Kong, Macau, over points structural our Taiwan, up, four market points casino And were were Hong share we headwind a for up even excluding we excluding basis had because XXX two points. including and block, Greater look you at almost in If Macau Kong, of over us, China, -- room of share.

performance. tremendous relative in of fact quite this we've So, And strong, into weeks China. come first with throughout January, in were the our year two momentum,

think, how what can going tell I the us on, and yes a the mitigate year. of relative The strength I and the our I market us, I on of maintaining is, from you'll we guess performance for our along we this else. And is, think you to that's So, the strength we're that the live impacts is key in everyone forth. with basis. what, see And relationships, so would focus fact

SmedesRose

full-service. the appreciate continue -- detail. to to the I relative just wanted to you ask And you I Thanks. underperforming that select-service the extra U.S. you in see mentioned that,

getting where shown any mean, wondering, just relative if I to the the point your we're comps I'm you're front But color for a weakness. terms RevPAR negative to properties you're or there's on probably is And sector lap And provide, in just I of wondering there. it what has think you supply just I'm in index? -- starting could seeing general

Joan Bottarini

Thanks, Yes. Smedes.

some that that under, year, And talked the seen as have to over pressure and from concentration maybe have supply with demand. We markets of in respect our pressure course about last of been outsized the hotels, we've particular year, front.

have we But of lapping are results course our that programming brand we And the year mentioned. seen you changes the over the improved.

some results off better QX, the in we've previous seen year we've relative to results And the quarters. So started better seeing you. in to Thank segment.

Mark Hoplamazian

better sector a to where more rate results that took And would month I we another actions entered ago, over we is. of at basically also that show of January where kind as our in -- we segment this from a year just are we believe with lapping maybe to that least of in dislocation the year, got the line a comparisons. run Yeah. or terms -- that get some that, add the so we

high room just to of the for So penetration and we're the penetration reminder, within the reason actions over in of -- our members, night House ago, by way, up Place a those we took that in build than achieved, by more which world the we loyalty XXX%, brand's, feel of way Hyatt brands. was brands, for terms and Hyatt year we've

that, in we the better with or be move we as than segments, believe accomplished line forward. -- we we've will And So, will that. we back

SmedesRose

you. Okay, thank I appreciate it.

Operator

Stephen line go Grambling with Please Goldman from comes the question ahead. next Our Sachs. of

is line open. Your

Stephen Grambling

been not remaining stock. are guess mentioned feel Hi. of on reflected assets morning. Good permanent part in of the not reduction for owned that taking think, questions your you value have you Hi. I commentary, still and my the I asset that, the Thanks that the, still leased

to help any remaining maybe use primary sold? Can you proceeds? And value do of year? buybacks have as currently still sale for you've the follow-up, the being relative generally this of us And assess assets, would properties you the be what shop a

Mark Hoplamazian

Sure.

our have a portfolio So that, spent reasons our time the and of managing preparing understand believe look, for and lot own into around you which that with and sales. all for aftermath of we had own for in And portfolio, very we've asset the visibility good executing, is then I a long-time.

Whether that includes, inherit right about of unique our and actual because very a of that clear a performance. position of -- their I location the and number market properties, think have of value assessment because value their underlying significant their

evolved And with impact we've demonstrated people it. any asserted how which a we respect where the really our viewed to We've didn't frankly just value, value. from company point, catch

we done our over that. we've do And the even continue years, demonstrating last of but will just, certainly what longer estate. the And to real is two deal-after-deal, than quarter-after-quarter, value that continually

JVs the hotels portfolio, that opening time. of We ramping this in believe JV and at are that rather, remaining now a point includes which number only are that

fully not are results, our earnings be will the So in but over reflected time.

more worth a we're than, are where multiple stated Simply from trading. perspective

done we which demonstrate I once will to properly be reflected way only it's it, we'll do. the it we have we still. that, that are convinced continue actually don't So, that believe And and just is

current With at have don't being anything we respect activity, this to marketed point.

several sell practice. way, side the discussions the couple the Both in of with, different on So by side a is and do buy -- which we our parties we're hotels. typical to on speak,

active a We're market, basis. the on regular in

nature an nature some assets, Given in and do some cases very unsolicited of basis. our the approached we unique on -- get

too right of Hard are now. and say, couple would in to we on a say, when we it's so something. And whether discussions, assets to execute early

respect we're finally use with always to doing. expand opportunities proceeds, of to And for looking what

estate. has into in say put started focus looking cases, capital brands without scale acquisitions intensive don't estate In all remains don't and get and fee-based in industry. cases, I or been or and our for expand real evolve many non-real Our would

make really we at real sell cases, we So estate. in focus many going opportunities so we're would were included that we but to first estate, an that that's look include look on down estate, -- real acquisition to if But real to and foremost. what

deals, significantly capital couple years, on started the off of Over guidance return prudent capital backdrop to last of because our and initial in minds, the return with ended expanding have to are but capital being flexibility always up in we the to and shareholders. some of about we shareholders retaining execute

that's So we continue the this of will how we do what to year. balance course over

Stephen Grambling

maybe or asset-light of you That's are of type just helpful. opportunities seeing follow-up pursue still more And Are to as on fee a you or comments. some your quick kind in deals, the mode then Thank would are -- you've than or you digestion the higher those assets within those Two valued on sold Roads? lower JV And say hotels generally are already? you.

Mark Hoplamazian

of is things that into past making to an year that pursued enhancement The over we impact customer customer acquisitions something and and answer been have a fits have strategy an more of base carries the us. and opportunity on us of With look we've the a bunch a fees, respect that not sure more continue the focusing for just and look addition with be. it to to The more rooms we're -- base financial and leverage really had is, where we really strategic what is for number seeing. there but ultimately stand to that that that and issue execute we've at impact the some and

applied. So we've key a screen that's that

number acquisitions past at close other We've had looked item is of growth. the growth. no think year screen potential interesting I over that wonderful the second a embedded but assets

to Two me to which us, not that's leads Roads. so, attractive And particularly

as we far that year. we've complete the I very are past progress integration -- are Roads but from to think has respect look process, been tremendous a a as finalizing with have with I we we're items year actively over some made perspective. at we tumultuous Two the remaining concerned It as portfolio

started brands Roads about We Hyatt XXX historically off with been rooms rooms rooms. about We brands. moved with have except XX,XXX ended into hotel from that Two about XX,XXX for historically

to trying you're track keep if total, in XX,XXX maybe So rooms. it's

very the focus that tremendous has a ultimately have has really how for in increase discussions setting lifestyle to -- we a us, something integration up in yielded great achieved division terms that market that of was we But important go underway.

Our on Pacific Asia team. and our screened with But discussion the X,XXX we operation formal rigorously focused pipeline four under deals of many brands which going to place is that in really and lifestyle for Americas concentrated fold Alila are the now coverage integrated acquired. EAME. and into fully across rooms with market an integrated about That's bet out because is we've very

So really I locked is criteria and would to we're platform. to loaded forward looking underwriting and And that now growth. ready the my do back to say we're what accelerate expand that,

to stand we want were we if and on we into something. acquisition convert take an open or But acquisition, So pipeline have finding capacity new to a the hotels. additional ready capability into and successful those discussions in

Joan Bottarini

Value? JV

Mark Hoplamazian

JV you XX of I us we've to on the years. of the something JVs new in that values, our -- traded out of capital of they've into investments. many in provide out an opened and But we're more what the hotels like forward. think move -- we'll seeing On last is before -- to as opened update we context in X either And cases many, partners other capital over to bring allow the we positions recycle have this

very JVs. Sometimes have really those. serving -- we've actually returns And sold along excellent. or as basis deals and our investments off all the lot healthy these done A on risk-adjusted preferred capital. hotel that share of We've JVs been us a of the the in underlies way include dispose the our

we it are XXXX you head nicely. see a what in is into and opened we which number is that fact numbers new of our would as the opportunity big opened ramping And ramping say of And forward. have I see that we hotels that you newly have in to relatively going that

So I think you'll see twofold.

see to base you'll First, more out with see in and our momentum you'll of volume transactional the JV secondly hotels. earnings JVs; respect

Stephen Grambling

Thanks so Well, much. great color.

Mark Hoplamazian

Thank you.

Operator

Please comes SunTrust. Scholes Our go next of the ahead. question Patrick from with line

Your line is open.

Patrick Scholes

the the some for RevPAR concern what or Pacific for more you great you the the everybody is I'm Bali, in realizes for China, and Greater Hi the good of JV seeing hotels of going to trends sort what be to afternoon. do of it's Asia as countries have owned far redo-er example, other you're is locations? sort but virus as those? in for in Question wondering other booking about not certainly impact there And

Mark Hoplamazian

and China to of effective China. ring this, China, Joan the about I start in the That's because I'll about think including I is of the radiating Macau think most in Hong concentric if known the -- just by was has of way That's circle, way is and going as biggest the significant from to team immediate Taiwan. what Greater Mainland but which out tag and that circles it, saying, sort Kong, impact previously sort will you easiest think impact. impact

with issues impacted, And had has you further include include you you ultimately to and Vietnam. go the Indonesia other then countries then then that out out Thailand, as got you include you Australia. Singapore, wildfires. are go Australia you've Japan further their South Korea, and if And and

inbound by Chinese Bali has has travel -- well. in actually significant just seen in And -- a it's significant but reporting So as bookings I is Singapore of But number hotels entirely overall. has in it that including decline Mainland, starting impact pretty epicenter the We've declines the and greatest Japan had are Bali. think then driven in well. February, a market as a of travel radiates. the as

out. we've move I of impact So to dissipate radiate across say seen the the or it the globe. But the you degree would it starts dissipates further

and of very is at we're relatively were. what actually Business had the of world our the beginning we've in with the a in up the across good Asia a Americas, for We're the look expectations solid I very, exclude board. up Europe in year. If second, line rest Pacific

fact, February, probably I As But in forward, cancellations not some where in in look we this. we or -- saw from at -- increase I'm a that extrapolate cancellations increase recent by and have really would increase below we in year to seen just prepared we this were so way, ago. is in the January, data, we no

outside as companies. in point And primarily as can virus. one little small picking bit primarily that India. was the They of But which of in activity Asia-Pacific, relate and seen tell of technology we're like Dubai other meetings. seen market some we've -- there at are and the far and there other from are They're to February, coming into markets we've consulting we XXX% the up in in cancellations are that U.S. cancellations apart Dubai a in places this But

So closely. But it's going to Pacific. that continue we we're monitor -- in Asia is think that. paying group of significant these markets be business that don't special attention to to outside We

Patrick Scholes

Okay. the Thank That's Thank for answer. thorough great. you. you

Operator

of with Your Please line ahead. Research. Shojaian go question from comes Jared next the Wolfe

open. line Your is

Jared Shojaian

talk Can XXXX Hi unit sounds with you I'm if correctly. slightly the guide, about have like the everybody. been little bit the that than Resort And question. Ocean I more just what guess property, for happened would prior excluding growth Thanks higher it that the contract? understanding for taking a

and So to can well? you you. the Thank that puts just help takes as me understand

Mark Hoplamazian

Jared. Thanks Sure.

large has hotel there inventory growth and on operator purposes pervasive casino of with about the hotels, very exception. serving because over industry So net in casino control a X,XXX It's casino of engage large impact a for the owner, no was retain which measure -- affiliates we boardwalk oftentimes, gaming of very with resort an is points throughout a rooms. is their structured rooms as The their which Atlantic City they on is calculation. business, many typical. the hotel a when -- in way this the That our basis for brand is a singular true XX

by was these the system inventory blocks. get really arrangement implemented amount on of resort an were in very We actual virtue way map, which the franchise and selling we agreement in that we signed and the of limited room of had kinds the through helping we structured were our which a

the was So that's why base low. fee

this a ownership channels. as in arrangements, terms different high-quality decided go the have The of really direction in when a but and don't these change. a distribution is to went penetration lot that through asset, casino owners we of market a an We new an of have example

And so that's what happened there.

Did was that? you have a second part of your question, sorry I'm

Jared Shojaian

I think looks Right. X.X% higher mean said to rooms I net it you -- is for year, excluding guess, growth which that I than…? slightly the X%

Mark Hoplamazian

Yeah.

basis XX how can add points. you actually about That's get… just You

Joan Bottarini

That's midpoint the Midpoint. X.X%.

Mark Hoplamazian

Yeah.

Jared Shojaian

Right.

Okay.

online guess was that I slightly So coming guide? Because were prior properties than higher faster? other the just

Mark Hoplamazian

not fact really openings. the is think I the year-over-year that is difference

to with hotels fact, headwinds initial we've schedules. had In plenty open getting respect of on

to talked be something true. that that So it about we've remains continues that in the past

wonderful we're drive growth. thing year is rate. that of kind is of I positive news We and deal realized so other net a conversions. that really total XXXX to was that course openings the the additive in good was would that a conversions which maintain the rooms say the The of was able over great continue of full to growth this that pace to hopper our

continue And that some see this we head I believe of will year. as into we that to momentum

have respect I that's so Joan And that think mentioned positive. with risk as some remarks a We in her do in openings to China. prepared

on the outside to openings if the that we of impact, the We've Greater Greater China. respect supply from of believe China. With chain the pipeline the evaluated impact be will openings generally, concentration in any virus of

think that four in – chain supply we terms in diverse relatively and openings, a have risk are new fixture don't area. we have so we significant We equipment, furniture of

furniture fixture or material now going openings I right actually to for look impact some alternatives our do spent some But just are to believe this If coming make year. looking sure we roadblocks that don't that's time developed. time of today equipment we some to we have in suppliers China actively and backwards out have respect on we with a hit alternative that We that if diversifying. have

Jared Shojaian

$XXX Okay. then that with on business still as that capital And planned just leverage to year? guess the more any predictable of become increase flows? Thank cash then well. return to only some is you to just you. deployment as thought more desire I for on now just the there's may because capital models surprised purchase fee-based uncertainty was that there million in XXXX is I what see And a little

XXXX don't said that should capital we if You on as things return to is expect about $XXX well. buy side fair higher some you're you than way looking the And then million anything is a meaningfully at it? and think that buy that

Mark Hoplamazian

You want to start?

Joan Bottarini

is out our with this return We the us provides came preliminary is and flexibility in capital that with $XXX RevPAR responsible guidance as as you some we million a optionality question. believe start and that is year. this I'll reinvestment we environment And lower consider which other us growth level as provides now the the priority. number noted, one into also going our with for year opportunities

Mark Hoplamazian

that cyclical attitude we our say just we're – would will first a question, first to I rule to remember with respect is is, respect in leverage And with business. the

forget first the is rule don't Second rule.

our outlook to leverage. we're So to going current maintain with respect

an find to base But evaluate is current I this point time. opportunities think flexibility. act over when our relative so will investment-grade really We on to We level we and that maintain them. we we make can leverage will capital sure want practice which maintain at our that retain we

Jared Shojaian

very Thank Okay. you much.

Mark Hoplamazian

Thanks.

Operator

comes America. question go Please Bank with Kelley Your of Shaun the line ahead. from of next

Your line is open.

Shaun Kelley

just think. out looking And expecting, I everyone. looking more the XXXX. you pretty growth We looks good clarification strong line. the a Mark you're my in morning, One, guidance venture at little some taking have for like Hi, I it question. bit were of Thank two. that a joint probably to there's

earlier could some any a on there. ventures alluded what But is you – maybe growth callouts the in you either be investments starting could XXXX? specific driving how of think strong prior just or about that up the to were validate and I in that joint what some response add that's

and XXXX? margins think Joan, is another that outlook we in XQ, leased owned and your a more which then were great as would margins, And flattish bit to out look the little I said a follow-up color leased owned be performance. you just on for

seeing up as how you Just you of kind look XXXX? out line are that to

Joan Bottarini

Should I start with the margins?

Mark Hoplamazian

Yes.

Joan Bottarini

the that quarter. RevPAR the improved there environment flat very fourth continued results relates But that attribute the best teams our of margins hotels to this practices of proud application group the I'd the our in lower those as operations it hotels. We profitability. to strong it and focus from in have X.X% growth it So was and margin by results had impacted we're of front in partially owned Shaun, on generated teams for

food is beverage of – measures RevPAR by the rates importantly, And to and productivity the strong improve rates X.X% in and find of we The ways hotels all seen that realizing we've portfolio. We're driven primarily lastly rising of in areas continue wages. growth to across our increased and profitability. and face

as this. continued wages about be this we've – with continued year to respect think rising to see pressures accordingly. And we So respond to we'll and

Mark Hoplamazian

opened a got new several opening. opening select-service amount a but I be after in the that certain life, Boston, which we high-quality hotels that largely last year-over-year of portfolio, hotel On in of Coast, Place, couple are large relatively Portland up. just will have its joint that initial the a from have actually JV, is year ramping our that question, they I amount opened, on say the are partner properties, of a of in Hyatt We've now the mind. progression think us for West a to that comes XX% Hyatt your deal We've some arrangement is in majority that things total with over JV would Centric our in hotels short assets earnings a within venture take very that some out will maybe time ramping coming time got but

So ramp that if we've some portfolio, across progression which got -- XX% you look underway, good the does represent really about but of year-over-year.

Shaun Kelly

XX%? And other what the about

Mark Hoplamazian

joint themselves. the ventures of It's performance

Shaun Kelly

Okay. Great.

Joan Bottarini

And just Shaun, headwind that a as last out in XXXX. year we called

hotels ramping had coming the bit slower were than expected. we little through of Some a

into the XXXX. now of we're seeing the strength going ramp So,

Mark Hoplamazian

Yes. or or has to had in XXXX joint progression, run rate and In high core a you. our if that's that some portfolio will might tough improved. the that on same-store for ventures those outlook that of are other really markets markets the XX% But you our seem

of here. seeing you're So that's what part

those market of of suffered we've outlook number markets. already a challenging in XXXX. the I is in conditions more So, our And for pain think, constructive XXXX

Shaun Kelly

for all Thank detail. you, the

Operator

go Bellisario of Baird. ahead. Our Michael Please next from question from line comes the

is open. line Your

Michael Bellisario

everyone. morning, Good

Mark Hoplamazian

morning. Good

Michael Bellisario

delays on update One are then amount ramp in including more provide up Miraval Can experienced the numbers? construction guidance. then, what you you and an you of that And XXXX there? on

Mark Hoplamazian

do to sure. a transformative to This Miraval be happy year for it. for going Yes is

middle by operating We three opened hotels will finally and have the of all this year.

We in the Berkshires. are you update the to last track Berkshire the -- from Miraval with provided to we the Lenox, respect on

open, So, fully Miraval you'll May. operating by a end see and the property as of that opened

We year have very the strong. opened

the sort is but in year-over-year. XX% range increase running well in of but of last one This -- sort ahead to XX% of are property our still of We in revenue double-digit month, ahead Tucson off. increases year Austin of primarily occupancy an really also indicator significant of for how well rate. in both ramping, we're we're January kicked and by And expectation our getting is driven which just

the And is the these quite cases, hotel revenue. the just the revenue non-rooms are that revenue. increase, lot amount, that positioning getting customer and environment, resorts prepared thing for fact would those of and to. but I in base the a of a we've of but base are in though which plurality comes customer not return fulfilling it encouraged in services is And is a beverage, who base. Actually, those I'm happy both the is the pay to The means to of majority significant hotels, what in -- include majority, plurality a see not describe and right if as from the the positive, got we're a the purpose intended food variances you

is, would penetration surprised of we've Miraval the By Miraval. the Hyatt very way, about thing I say other been that the World at at

we XX between the high-end moment, base. base at actually we're and mid-XXs customer the the is a which the that in maybe World testament have be to it currently to in expected We XX really of very Hyatt and

that's we're operations. on how So, starting

preopening markets have marketing They're Berkshires Boston. of significant because ramp, measure not in. primary the the of expenses for and market York New a to expenses are terms we and In cheap

might doing modeled $X So, than about are less aggressively. ramp have the that range be that initially bit in Miraval from be will total we probably year-over-year little the expect That except of But we we million. would a That's quarter. than fourth that fact year, the we the stronger that Austin properties, open initially in saw we operating Tucson and positive -- and the Miraval had the finished part expected. of the variance much year last for

therefore a actually starting pronounced. last little less did seem the forecast we're a our So, than higher from base may and better year, we progression

are where really Miraval. that's with So, we

Michael Bellisario

helpful. That’s you. Thank very

Brad O'Bryan

Canzie, Sure. we'll last question our take now.

Operator

Please comes Carlo the Santarelli line from question last ahead. Deutsche from go Our Bank. of

line Your is open.

Carlo Santarelli

Hey And it I those tough quarter curious, thanks. books the was XXXX the of everybody. quick. of then, you going Good morning when you the share that XXXX of this hoping clarify challenging XXXX made business on for on as for was year, of kind that? group group be could percentage and pace XXXX, and the if Joan, comp you created kind each What years business through pertains the just and in the XQ XQ quarter? that relatively was could I'll is I the books. XXXX in to the were

Mark Hoplamazian

Actually mind don't I'll if you take Joan, this.

on time of and the to as lot a this out. wanted been a spent subject point of disaggregating couple we've I things have I know, You just numbers

up you The First, actually and that was group in was thematically Jewish X.X% the true. relatively fourth quarter take thing X.X%, down after so but I would say out good. the holiday

strong decline in course published that negative. the our is low strong. total because means of rooms we performance room a revenue revenue actually teens, that group of implication we in actual total terms revenue by Over Very booked terms in corporate of very, had was up -- means very the which in XXXX was association

did of backfilling and especially, associations as XXXX, is meetings side. to wash the significant of transient job happening a was What's the as had at of a what's great number association held we hotels of on group matter with the over large So took attendees even than hit expectations. lot large we our a still transient number happening? of capacity our a our leisure hotels business, And that lower course that convention a meaning

group look down we as So the production almost production was quarter X%. at -- in

association of announced that and reason All happening in and December commission that was significant The rushed What's time. had December. that we shift February the business period to and a time. period of increases of of of XXXX saw meeting was all XXXX intermediaries January that other we during planners during production is XXXX and of book in of because

December we're and January an elevated during now. and we're that February just then lapping levels and production level XXXX the of So of at XXXX

time and That's look rate. Joan balanced you that forward X%. that up over already. the booked I in if But a in XXXX little of over at now demand production look between of we is very evenly corporate it's encouraging. core mentioned is at pace look a as -- If business bit About XX% XX% as the

at look down If modestly. XXXX you it's

mostly nights And All of a mid-single booked up into XX% of in is that rate volume we're over improvement, we're currently. in ADR look room in where if rate currently bit. well XX% about bit is X.X at not as booked about a of driven up XXXX. that ADR, business about demand you is the and And digits, XXXX

means -- encouraging. manufacturing across The high-tech that last real top bookings, all I'll looking which group positive thing four and the very relationships mid single-digits and terms forward the It areas board our terms of that of finance say are I the are very we find high year large up is the productive. have pharma banking to for in customer in

make -- year be and comment head into association as the transient front as corporate. the leisure last the and think corporate was that is way that I'll The the will that year in same XXXX all sorry we it about we And last for more on head on association. is is -- we group balanced front into group

year. with business story of little the bit transient down last of transient course results of with maybe flattish leisure. was over year producer transient Leisure The really the a the our

-- how in solid and relatively attitude base this which the the our year So bookings serve, are very into come They end. that's leisure we remains that vacations least and really good. we've our orientation and higher are core towards at leisure customers

we where So are. that's

Carlo Santarelli

helpful. That’s very Mark. Thanks,

Operator

will concludes remarks. for the call. Brad the now today's session turn I for closing to O'Bryan This Q&A call back

Brad O'Bryan

time join Thanks, for to to Canzie us and everyone thank the you taking today.

Operator

today's concludes you Thank for conference your participation. call. This

You disconnect. may now

Hyatt Hotels (H) 20 Feb 202019 Q4 Earnings call transcript