Earnings call transcript Q2 2023

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Operator

Good morning, and welcome to the Hyatt Second Quarter 2023 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers presentation, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to turn the call over to Joan Bottarini, Chief Financial Officer. you. Thank ahead. go Please

Joan Bottarini

good to and XXXX Second Earnings Call. morning. you, Hyatt's Welcome Quarter Thank

been I'd take Noah past has instrumental like also Hyatt's Investor recognize like Hoppe welcome three begin, to for recently teams. we and and Before years growth to overseeing with the FP&A been of who role Financial and to has Hyatt now the to Adam supporting Hyatt's Global most has management I'm Adam years team. the is leading knowledge and global our I'd strategy. and team asset new global leading who Noah our Relations has Relations XX Investor excited over Planning transactions Analysis a our joining teams. deep Rohman share transitioned to opportunity company that

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

Adam Rohman

welcome the Thank warm you Joan. for

Joan Officer; today's Chief Financial Joining Chief and me Mark Executive President on Hoplamazian, Bottarini, Hyatt's Hyatt's call and are Officer.

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

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

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

that it Mark. turn over With I'll to

Mark Hoplamazian

your you great Thanks, new have in and Adam it's role. to

Adam Rohman

you. Thank

Mark Hoplamazian

morning, everyone. Good

quarter, of and quarter the record the continued contracts For up demonstrating to net deferrals and positioning This acquisitions notable XXXX XXXX. net $X.X unique when we've to finance posted the our real XX% second momentum. of net second beginning the second adjusted especially the that you fifth EBITDA an consecutive sold of of In was results consider XXXX. up estate achievement compared since quarter, compared plus X% we billion and quarter in is

significant our Our the confidence reinforce the strategy transformation Investor ongoing outlined our results to has at momentum continue in quarter executing and in we Day second May.

at significant we beginning as multiple value we Day we've sale Investor the $X.X estate, from of our stock returned multiple highlighted that brand the guests Xx platforms proceeds than preferred for owned XX serve, During and at asset-light while positioning acquired a value acquisitions the and greater of creating fee-based high-end segment shareholders. realizing repurchases transformation real driven net for to approximately $X.X and of Since of $X billion over company of common in by billion hotel through each shareholder the a billion times, XXXX, Hyatt's shareholders of dividends.

lifestyle rooms. growth tripling meaningful rooms rooms, experienced our quadrupling our We've resort doubling our luxury and

much our from of today fee-based increased more conversion to free a a that reported result, As asset-light cash asset-light we We with flow. mix. are earnings and flow cash earnings substantial anticipate higher

maintain will proceeds invest enable return our addition, and to from capital growth, In shareholders profile. dispositions investment-grade the asset us to in

achieve asset-light have outlined XX% an in a Through cash expect flow the where million disciplined mix by execution of $XXX to path free our we XXXX. strategy we earnings and

strength demonstrates growth with our Our asset-light fee-driven rooms industry-leading net earnings durability. model and combined

at the we well The ability long-term journey underway strategy earnings to and outlined execute significantly approximately is Day. to our our also our by expect We run confident to the our profile we in capital expenditures Investor $XXX are million and achieve to of reduce a rate projections transform that XXXX.

the successful strategy months, seven million of Hyatt signed XXX,XXX members led members The significant program, of our XXXX. that at an in World a to May increase strong see enrollments over properties continue the new of which added launch of XX execution XX%. we have ALG since past And new up to our in has loyalty growth of the

the of Legacy compared first in penetration Additionally, of Hyatt points rolled half system-wide XXXX. increased Hyatt XXX XXXX basis room in the period to same

quarter. attract loyalty deepen members World members, and key our initiatives further To announced new Hyatt existing this of several we with

First, been first received the in midscale brand Upper announcement Studios by well the Americas ownership our of has our Hyatt community.

we XXXX. begun second and expect Letters have converting the to for to of signed hotels in property over first contracts open the interest XXX of half

the offerings and completed concentration that and properties luxury than Mr collection a Mrs a our the Smith XXXX we acquisition platform provides globe & boutique enhances luxury of the more travel Europe. in Second to across of with Western access global

plan power choices an leveraging a vacations owners our we the platform, the and for guests. value seen platform Smith We for represented expanding the also the complementary to on have of the ALG enhance Mr of Mrs effective and members distribution hotels while with & proposition segment in

our commitment strategic expand Dream Third loyalty our World role of Hyatt the our of platforms quickly two The These integrated programs of Group Hotels we our strengthen value deliver these Lindner Hyatt and global loyalty to successfully strengthening integration for our presence portfolio. enables speed initiatives in and Hotel Europe deliver owners and to lifestyle program. of experiences, demonstrate us unique guests. into

in trends. same increased the system-wide business quarter latest RevPAR X% share to the properties. the to of XXXX of same for pleased comparable our second the second I'm for and compared comparable to quarter XXXX set XX% the to period Moving compared

second hotels increased Average the to compared for XX% to second of of quarter comparable respectively. robust currency XXXX a X% XXXX higher the quarter set a very and same of compared constant rates basis are on

quarter meaningfully RevPAR same compared to basis contributed last XXX period in occupancy the second growth Additionally, to points the increasing year.

occupancy levels will by is to continue basis XXX Average and remain growth. future XXXX drive post-pandemic reached daily quarter below we occupancy a XX%, absolute second of rates The record with points. gains believe which strong

our These impressive year. and demand quarter third results Turning quarter in strong to revenue the very second particularly pent-up to impact. XXXX Leisure customers. compared the in of quarter second growth of that Omicron's to results due transient the are X% last the sustained increasing drove second considering

basis by quarter increased point to of -- quarter, the moderated the the growth Compared a of year-over-year very leisure that revenue be of prioritize continue first anticipated. from year, compared quarter has second the to the compared this as year second quarter transient travel. realized improvement in with we While XXXX, results continue first in in overall to XXX we growth the XX% quarter the to second this the strong

to second with recovery pleased gain accelerated during and continuing quarter the May June also second XXXX. the business the Led XXXX revenue corporate to XX% compared accounts recovered XX% in the to XX% when see large We're compared transient in the and of same the to to momentum recovered by of in quarter up the recovery quarter Americas, XXXX. months

time quarter surpassed and recovery was in the Asia the XXXX was in X% -- momentum night compared China world. the in XX% RevPAR quarter pre-pandemic even to demand we a second of room revenue Pacific the second in to first the strong up rest down continue results see though up for quarter. geographic From the Group levels Greater perspective, XX%.

the of have and on were year. Shenzhen Markets quarter shown XXXX levels, traditionally compared but to improvement dependent like below inbound second China first meaningful international Shanghai travel quarter this integrator

in of the quarter XX% in up Outside outstanding compared as XXXX. period Greater China, XX% was to to RevPAR second XXXX was Europe same performance the and increased of compared

levels. remains resilient, United XXXX the in to second increasing States RevPAR the of quarter Finally, above X% remains XXXX compared and

Comparable package in XX% ALG. XXXX. RevPAR -- to the first half net of increased Turning

quarter are Resorts thrilled by the one-year World of our to the and of members. we anniversary This of marks introduction see of strong the at Americas, world Hyatt Hyatt ALG in the adoption

Resorts the In at during of of accounted members first of the nights Americas, World for room approximately XX% the year. half Hyatt ALG

to rest as look travel lapping to XXXX, the quarter, result of year, we relative the expect RevPAR moderate we to second of second growth a net the package the half in of As extremely package XXXX. last of in is of condensed strong revenue the half half the Gross year. for leisure season of XXXX ahead X% pacing to XXXX second due second results the

Group revenue service had strong in XXXX increase We of is Group an nearly in for extremely the of periods XX% since million first Group in up of highest quarter the the XXXX. half of first half the quarter of full an compared X% booking XXXX. the Group second second up production Pace future quarter all Pace the properties. this to $XXX the business was periods, for the XXXX XX% and Turning quarter Americas and same to XXXX, managed was for to

opportunities strong production group beyond lengthening, the up approximately dates seeing We're to into for us of booking window XXXX with yield the booked future. setting for rates two-thirds

about back we and May. that XX% our reinforces room room specifically, with is future, to trends provided approximately levels. Day and group during The achieve growth pace to extremely XXXX, range nights up rates each continues excited as Group night confidence of the XXXX Pace, production X% recover our demand For group and XXXX up average illustrative group the combination RevPAR Investor in to I'm

a for tailwinds combination preference, leisure platforms teams the groups best-in-class transient and driving loyalty hotel we're result, demand owner of demand of sustained We commercial higher believe China travel from and profits benefiting our strong increasing -- the as and sustained travel, summary In events. recovery Greater from hotel for and business preference. is

our growth The preferring of brands. is the outcome our pipeline and footprint in direct owners

significant that including to achieved by We net rooms position, Impression Isla quarter, largest period. Notably, introduced newly opened a remained the second all-inclusive in an net this our in brand, trailing contributor manager by Mexico. Secrets impressive conversion the the growth inclusive resorts luxury the luxury Secrets of During quarter. Mujeres quarter, brand this we Impression world, solidifies ultra rooms opportunities to our the as collection the XX-month X.X% further over an growth the

luxury the China Manga & cities London For our while in Andaz expanded presence Club adding Nanjing Grand Golf offerings La the City, Spa with and Hyatt our we portfolio, Mexico Legacy Hexi also in of and key Spain. like openings in Hyatt

future. X% rooms existing into record from a brand pipeline reached up first openings. to outpacing the the of hotels Our expansion representing will growth The our new gives realize our with and confidence to new and to quarter, a sequentially ability we signings year-over-year us convert continue pipeline increase outsized new of XXX,XXX

provide to an our on real update transactions. estate want I

buyer progress have be expect asset make to and select under a continue one currently and sale soon. on for on asset assets other contract that for two the We market the we for to we

to management We by XXXX. to in remain durable our $X end confident remain franchise long-term And or commitment highly our of most the realizing ability the agreements. securing attractive valuations billion focused and achieve we on continue sell-down

we advance continued Care, pleased for people which of world. I'm alignment thriving Lastly, support around Hyatt the report how planet World care to to business on destinations progress to and responsible drives across and the remain

We just planet week of conservation environmental teams XXXX published care this our and actions towards reduction, our advancing report through continued and the Care our XXXX water sourcing. that World carbon goals responsible address are for global

XXXX to our teams and pilot are in meet hotel goals Renewable Food bringing Hyatt-owned Our of as Waste such XXX% Electricity Reduction these US hotels. innovative solutions adoption program

we of that experiences and In in for connection across people, operates positions diversity Hyatt should with our believe leadership diversity our advancing teams to in And workforce. support which the we care that continue communities hotels. reflect the

banks expand XXXX suppliers communities markets. new minority-owned support with goal spend diverse through to our of for efforts exceeded also underinvested deposits to have in opportunities our and several expansion like businesses in identified at suppliers holding businesses helping and We

success environmental institutional the investor ESG recognized The lodging goals and three meeting and our top creativity mid-cap main social category. is of World program a gaming our in is in passion of sustainability of reasons powering XXXX teams the in one and as why, Care our and

their I'm very Hyatt results. my want brand positioning colleagues, entire Hyatt pleased strategy as in gratitude extend quarter and guests, In of for executing to another our for preferred dedication I closing, customers to and the the record with family owners.

mix flow, ability exceptional our we to stakeholders. for confident in Our and asset-light our remain drive is results yielding cash free strong earnings all

results. operating over Joan, will to you. our Joan, provide more now details on

Joan Bottarini

This Mark. Hyatt attributable earnings quarter to we Thank $XX share of million of income diluted morning, per $X.XX. reported you, net second and

net As contracts deferrals mentioned, million was million $XXX record $XX second finance this a quarter and net adjusted Mark with $XX of million. of EBITDA of

XX% quarter the results Excluding XXXX. of were of transactions, to up compared impact second the

in increase record total In company XXXX other the transformation the our second license the million, experienced a of of and an of we recovery quarter in from continued management driven the fees generated by quarter, success XX% the franchise of quarter the and global we've quarter. $XXX continued of asset-light

revenue our XX% fee of quarter. expansion earnings estate As the our asset-light real was mix a earnings result in relative to for

the XX% EBITDA results, and quarter higher transactions. Turning million of the which net to quarter second the approximately for XXXX, adjusted than was adjusted currency of is Hyatt impact for $XXX legacy our

system benefited Our fully environment. and businesses more franchising management RevPAR from recovered size our larger and

mentioned, As second in XXXX, in quarter up to XXXX. thrilled see period fully strong occupancy system-wide fueled same are Pacific our of second X% RevPAR Mark the meaningful compared to the recovered growth. was the quarter second XX% to relative quarter in or to compared we and RevPAR region XXXX, rates And Asia of up the by the

to the Notably compared XX% Greater for to period quarter. million $XX China the fees quarter, accounting the region the for last over revenue year the nearly doubled fee region's in of same with

as serve increases the the international the We're a year. it region momentum and of half believe as capacity flight tailwind to continue encouraged second in the in by regional and will

and the quarter EBITDA strong to regions Americas momentum Our their XXXX. in continued adjusted relative EMEA with

in of leisure strength a travel business by powerful sustained The and group demand segments the transient momentum from travel, is driven from these business. strong combination performance of

to and quarter of EBITDA the second of for quarter Moving second XX% business second with When to quarter and to increased quarter compared sustained travel demand group leased the second adjusted net leisure recovery the transient our impressive of when impact to coupled X%, compared XXXX. led XXXX, transactions, for in compared XX% The of the for to the of owned adjusted growth decreased XXXX. when RevPAR and segment. travel

points that second job teams quarter do continue set to X% driving leased an and notable quarter with compared and margins at top XXX strong results up XX%, of line excellent to basis It's exceeding for commercial XXXX comparable from of rates properties. strong second operational remained owned XXXX. the the Our nearly same

were contracts to $XX finance EBITDA were was and net Net ALG. million. million. deferrals Adjusted Turning $XX million $XX

drove increased and currency strategic key investments, foreign XXXX. of onetime ALG's financial impact of compared Three the the areas Excluding quarter to results X% second results.

package last comparable at flat against relative remained the increased dollar XX peso, Mexican XXXX. net ALG fees $XX for U.S. strengthened First, the million due in quarter headwinds the in second months. of the quarter X% the which quarter to RevPAR to the from XX% Total

are It's important no in management to paid note and revenues that ALG's with U.S. base fees. hotel impact FX booked on dollars

affected gross fees we However, profits by most property fluctuations, expenses impacting and related hotel are and FX pesos denominated the in are incentive operating Mexican earn.

on incentive increased Excluding X% in foreign total exchange quarter. impact fees the fees,

X% contract contracts were Vacation impressive for membership expand the Unlimited an the signed second to continues X,XXX pace. sold. has increase quarter Club average XXX,XXX in members at approximately it exceeding Second, ALG's UVC quarter, XXXX with price as approximately now levels in an by active

previously were In business expectations driven Third, XX% guest unit strong there pricing, full ALG approximately of a to Vacations transformed margin leading the year quarter, model by shared. growth generate to a consistent and stabilized we've results, solid margin continues X%. of revenue the and with approximately business departures XXX,XXX realized

Mexican and XXXX, of fees, of half costs second the given incentive be to while operating the and at demand optimistic peso favorable look a travel continue future pricing headwind about strength sustained we we on could leisure As we're recognize a environment. the

to like on provide also position. an and strong I'd cash update liquidity our

billion of As The of October of notes cash $X.X of total of X.X% revolving million. in XXXX and on billion and near-term approximately reported our maturity our only is X, amount debt the $X.X we borrowing $XXX credit June quarter, the of the on end $XXX XXXX, approximately billion, the At $X.X XX short-term debt in approximately outstanding. due liquidity facility. equivalents capacity million investments included cash,

X, XXXX with by hand notes be balance flow. million to strong. In A shares are approximately which together performance used under an free maturity. contributing operating committed our cash in remaining quarter, the to our million our we billion growth $XXX cash have We of of the sheet Class asset-light and repurchase the share and we $XXX issued due common strong profile is second notes to authorization. XXXX, we repay Record July will $X.X repurchased on On in investment-grade remain proceeds and

shareholders. capital share returns outlook full to some into XXXX year to our like I'd and Finally, insights additional

XXXX recovery anticipate we compared constant XX% transient demand We digits full year. on growth system-wide of to range to XXXX currency in growth driven expectations by our the group Asia Pacific back in and be a are RevPAR updating of XX%, the will improving continue and to mid RevPAR a basis single the in year the business half high in to to

year opportunities. X% the of driven our expectations execute approximately We of by rooms conversion full on are XXXX, net strong ability and for reaffirming our pipeline our of to growth

Investor guidance consistent range $X.XXX net the our contracts deferrals our $X.XX $XXX from of net Day in updating EBITDA and midpoint. are to income with billion at to plus our approximately we billion billion finance And million. $X.X adjusted estimates with maintain net of We the

cash million XXXX, expected Additionally, growth flow year we are of compared reaffirming $XXX approximately free for full to showing XXXX. meaningful

to in of approximately of in expenses projects We our to carryover acquisition expect Hotel inclusive range ALG XXXX of and integration & SG&A the XXXX Dream $XXX the Mrs for million Smith. million million one-time $XXX adjusted $XX Group of and from associated with approximate Mr be

We in and be capital Irvine including to transformative capital of renovation, $XXX expenditures. investments XXXX expenditures in accounts approximately one-quarter for the which ALG Hyatt to nearly continue investment the Regency million, expect

and we a XXXX offerings of full the to returns And $XXX beverage capital shareholders As Regency and a in share inclusive million will XXXX. coming renovated for rooms is will for opening our early food of this Irvine grant reminder, we're outlook rest finally, the full dividends. through Hyatt online have reopen approximately and month and and excited year fully repurchases

of effectiveness growth RevPAR revenue total talented the through colleagues growth. world. highlights the our brands demonstrate results the and strength the drove system-wide strong our strategy, around performance rooms and In our fee continued closing We industry-leading net record our of second our of quarter underscores

Looking for a travel, business in pipeline. is bookings Further and several continued ahead leisure our optimism group factors. Asia, record of fueled recovery by forward strength

We shareholder upon the value through are that our of estate excited for deliver the flow. mix an opportunities to and value real our cash our build future through sale expansion earnings and successful free transformation, growth unlock of asset-light continue

for with it I'll turn And Q&A. operator to back you. our Thank that

Operator

Thank ahead. question Please from from first comes JPMorgan. you. Our go [Operator Joseph Greff Instructions]

Your line is open.

Mark Hoplamazian

Joe, maybe mute. on You are you there?

Joseph Greff

hear me Can you now?

Mark Hoplamazian

We got Thank you. Joe. you now

Joseph Greff

the for ALG. had you for year accounted ALG Thank question. you that percentage Mark, Hyatt the of World against taking of occupancy portfolio? What that first in room in the my half this at medium of for mentioned of you benchmark terms nights term XX% of

Mark Hoplamazian

Yeah.

think significant for room there's I expansion.

I think operated points. to basis in we've got increase is that period we longer by of the see for potential And point time. X,XXX all-inclusive that foreseeable the resorts reference a future, about that the we've other

The security, into been realized I business properties we hasn't fullest our comfortable Maya potential follow. MICE Cancun I more its There thing get I travel but is especially pull business, more into more the we would planners, are with safety that exposure say these group especially, meeting getting see in that people one in and that think will And think of can side. concerns the advisers group that for the occasional considerations are we properties. sorry, yet Riviera transient on around

Joseph Greff

to financing the the current are other assets And the a just two then on on and thinking transaction made the being has market? real that being estate environment transaction progress you we heard how assets. you How maybe the conditions follow-up market the brought loudly on environment? and about in and given evolved And Great. clearly just

Mark Hoplamazian

specific with marketing will not own. we underway at efforts inquiries do We we've point. aggressively have And for couple Honestly continue pursuing Yes. to other this that conversations. assets been respect reverse those we on a discussions of assets

are time one unique involve least at two relatively more opportunities these development maybe bigger assemble to a the or hotels like. put some that think sometimes to hotels they I site on cases in and/or because and deal other take

is context constant it's but decided a the principal underway And to are of we've there --well reasons active two. initiative. the we've the an say would I got wait dialogue -- a in just So reason marketing not

pricing is Europe bit because more that's wait. now we're right the elsewhere quite getting than in financing. because relative would primarily States is debt a pp and I acute a availability and second historic it's first The is paid United more challenging reasonable debt it And it's because environment to reason to of in of more levels. a much is say the still lot

lease own Our and strong. continue results very be to

that We recovery of think XXX year -- predicted growth confidence the to quarter have I second that to as you in the was think year. at every come we we we range. down. basis XXX end have will end the of of that our we'll and pace top given increase year we our will extraordinary has able how and know last third But margins up end being the point sustain end this in

really So margin good we about progression and expansion. the feel earnings of

in It got hotels And think U.S. ways cap degradation ever of going of realize we've certainly of to the interest I predict sales going rates And result cap higher lower don't who's expectations any cap hard. that lower going rates the many so not one the don't value so that. rates and in be with last it's think go sorry rates going cents to direction the to earnings higher we're there. really we with But or higher associated not even to dollars is I'm and I'm multiples. in the in terms of might

Joseph Greff

viewing and is then one second just XQ When Joan. XQ for your adjusted about you and consensus or about economic XQ final XQ? guidance think And EBITDA do aligned this at you cadence adjusted maybe estimates how least think in EBITDA with how implied question the EBITDA reasonably you're Great. half

Joan Bottarini

start And year a first through midpoint bit midpoint. our the at the that at guidance Joe, that of of XX% the half generated above just billion $X.XXX we've provided I'll little the we maybe Sure, with the amount.

are legacy between the seasonality year on legacy we've and the be break second As where typically business the I of just you fourth is Hyatt legacy quarter. would at seen be Hyatt ALG. the probably look results helpful down the strongest what half quarter in second and And would

we've that's from what seen So the business.

those is group experiencing about Some quarters. normalized the of in patterns more ALG have as you been been know in have talking And driven business activity in demand ALG the we that now we business. by

at look and segment, normalized very pattern results of we seasonality we flow-through. first pricing So with at in exceptional quarter had that first the is the look the the as we strong strongest quarter quarter typically and and

quarter demand In saw investments patterns still but some very excluding my the second in some noted top strong some FX normalized made. we prepared headwinds line. increased that And I X% as results remarks we and

typically look as strongest. at and normalization second So we for is what this into where is earlier ALG mentioned QX then QX QX half I the

And these as what quarter subsequent sort historical we've look a of Omicron has at been on normalization first disrupted the periods quarters experienced the the demand our through of before acquisition. basis after we post

normalizing So, quarter-over-quarter. further the for we be the ALG segment full to expect even year,

sustained travel half look -- strong of seasonality of the business that summary we how reaffirmed two segments. the and good mentioned as because feel our year. at rest between into earlier, Mark seeing we of see kind about we're given the demand year, really really the we being the a that's we've the the And of So, the that had second midpoint, group leisure

Mark Hoplamazian

Labor earnings for none you how point off that see year. call, the falloff normalization out the We just a would be completely break of I a September that things turned business, in second and extraordinary typically the Last Day third sustained expect two through Joan quarter after saw after there's significant It of are a terms Day, reported to where described that in that quarter. half. was year, of because, of ALG add our in seasonality do the end to we drop last we Labor ALG. There as

quarter. had the second the in in were is last million year, $XX or released I third released that -- travel $X million million credits that that then we would the make from and were that $XX fourth quarter onetime credits point And

fourth But is if just comparisons will -- adjust So, see those virtue are pressured look quarter more for more seasonality the holiday actualized that at down don't term following our by demand first the we quarter really sequentially, very quarter of the into business, think and borrow that is that, a at really periods year-over-year we're you the of and appear -- and the cruise third we'll booking I end of to around significantly. are more period a that from it of where the sorry wave that concentrated normalization is of year year. a but under the

Joseph Greff

you. Thank

Operator

Our from Scholes Please Truist next from question comes ahead. go Patrick Securities.

Your open. line is

Patrick Scholes

question. you might guidance, On that? that Hi, Anything bit, your unchanged. everyone. midpoint higher that it first Thanks. range up EBITDA the morning RevPAR good like cost the to into expectations looks took guidance not kept completely of Any a flow my but read have RevPAR through? That's

Joan Bottarini

the start Sure, with guidance. RevPAR Patrick. I'll

is and in range that by RevPAR So, we tightening our year moving midpoint the range fact first the that half achieved driven XX.X% of that the the in have growth. confidence of

we'd first mid-XXs. on So provided had be the thought we we had quarter guidance when mentioned that in we the

mid second half to of higher. be in the the growth expect in right a second we're at And look year. upper little the the digits still we year, the to RevPAR for we So half as of there bit single

that So, leisure on travel momentum the from the the confidence increased I that and building also is coming mentioned some transient business seeing and just we're group sustained side.

we're in the reaffirmed, remarks. is EBITDA would that I Mexican the FX lack the that of mentioned impacting I raising guidance in headwinds my thing we seeing prepared for -- say the peso that's that that one the So

range. really with that's what we we that the So, puts said one area that good feel in about us is relative us line previously to expectations impacting and

Mark Hoplamazian

did with acquisition. for That The the other year Mrs. thing is I our integration associated would note & is Mr. $X entirely estimate we increase expense by that, million. Smith

the So that's account also guidance. providing taken in into

Patrick Scholes

new on then you. your relates relates you. And give typically franchisee, briefly thoughts had Thank as on regions? to geographic wonder, borrowing if average And you different also, could latest the you as financing touched that? environment. around I latest especially to follow-up of it Okay. Mark $XX Thank million thoughts it that question. your under just us your

Mark Hoplamazian

think see some our all that the first next first Studios that the the first market ripple is the year, States virtue newbuilds service start XX half quarter Hyatt of expected of did we other are capital some But of virtually first in Yes. that of banks. to in effect. local for the disrupted Look, days. United that in hotels quarter mostly and I is the ground in failures of by break local and the saw regional honestly, was and off And coming have starts right we bank especially that from

banks of center terms the of the out in still. So are market basically sourcing money

high be Pricing careful. to -- relatively it you is well historic should compare if I

If over it time the the would are in actually averages. hundred it's long-term of higher. six it's of of money. basis if see that couple years significantly five on But look you you far days terms at not maybe to higher off you a long Gone it free a last to than compare period very points real

the are and reached trying at people X% rates the States look United depending you think have still short-term in But they lower SOFR are they they if in advance deals levels new are X% to it's borrowing The X% rates future. no that maybe starts. borrowing situation. the affecting can in Europe between in there's X% that the on People question structure X%. reasonable to commitments X% refinance which at have closer and at or rates rates So X% borrowing

there is the The banks developers. for best still good are local news

The has so in construction biggest we our the And see been under of formation. pipeline construction change that's proportion our openings. do capital under

same at areas. a the and that they're they refilled and under rate in programmatic the before lot that getting opened upper we've upscale of were not rooms entirely that almost were and is the So construction mid-scale

Patrick Scholes

Okay. That’s you great color. Thank

Operator

Next from ISI. question Duane Please from comes Pfennigwerth Evercore go ahead.

Your is line open.

Duane Pfennigwerth

Hey, thanks.

you this your do expectation August. think into As September have typically normalizing that visibility you about point how early for in much at

bit you we than that you chance August a be the maybe as in sit here know year to of better sort to charts, in of close there So September is last or early tracks a going expect? off did way little was

Mark Hoplamazian

been window. underperformed a There's the in hotels ALG. all-inclusive US the Mexico US a and to dichotomy all-inclusive relation in longer visibility have The resorts between good reasonably have the And booking and have actually resorts resorts Caribbean. hotels. our and all-inclusive we our Yes

So on from third business of we books. that quarter better handle the measure a have a already significant on our the with now

So good on profile. we pretty a handle the have

in They're There's two is ways. Cancun Cancun another that that's visitation that to year-over-year. the US in come I'll has down. other or call passing picked mention And actually I'll have negative Maya been dynamic up and it just and Riviera employments that three dynamic

increase to XX% Dominican also US a the First outbound a visitation Republic Dominican travel point Jamaica. XX% increase XXX-basis Europe. that's we've to sorry and Republic an seen to increase increase the XX% in in seen But we've a

So a last from our XX% now US, Europe composition year. the have in up hotels guest XX% from

seeing Cancun we're broaden to was they're Americans and So going. XXXX where the go 'XX. for place

have. It was experiences considered variety wonderful to and value money great can for in of do you you tremendous be what can the convenient

to is Mexico. some a of board. evolving Europe fire with positive to now Republic last And Coast to are quarters, has on hotels and West evolving for been both we the Jamaica cover leading respect Europe of our been people other think news The they're business the outlook to we and very good with Dominican respect that. across so the markets. continue inclusive leisure have has transient couple I

expected. your reasonable a we back and have I about There we to it. in bookings specific XXXX September of question last think that than we minute proportion visibility are had higher But to

strong by second quarter. how there. the good third be rate September to visibility of and just pretty were turned we occupancies pleasantly half for realizations within stunning bookings just on So, the the But now right absolutely we surprised have out four-week

Duane Pfennigwerth

just helpful. US follow-up. for point-of-sale then my And ALG? a That's is What reminder quick for a Thanks.

Mark Hoplamazian

It's I a majority occupancy. of for the total a specific you. have don't number

Duane Pfennigwerth

Okay. Thank you.

Mark Hoplamazian

The remainder has this Canadian European. actually Canadian significantly. and would be increased year

some in in is especially One quarter. alternative I'm in been US -- sourced sorry travelers biggest has biggest Canada filled of of and the decline remainder. the the markets sourced. XX% increased is US the Europe that That's second about Cancun into one

a European of at holidays incidence staying still employments Europe. in seeing hotels from higher staying now right increased market. in seeing But for least significant in honestly significantly incidence we're into our Cancun European But Europe increased we're of airport year-over-year their year-over-year

Duane Pfennigwerth

Thank you.

Operator

ahead, Please go line open. your next Our from Chad Macquarie. Beynon from question comes is

Chad Beynon

without Asia general. China China taking inbound. Morning. pre-pandemic fees Thanks about just that component ask of or know guess and of for to derive to portfolio. levels kind and my being back market huge a international in I I that question. wanted you the food the beverage from I about that was you pre-pandemic talked would Mark

and into you the back. the the if see food big secondly when do Thanks. then could international we'll what you catalyst you start beverage component has about on that in? that side China come think come talk think And if business or that inbound Wondering do to

Mark Hoplamazian

Yes.

even and the We've really half. during and do of the interesting. XXXX seen they beverage in and do actually only because over could an of lockdowns. worst is. year because their beverage So, apartments food thing revenue that the And major composition that parts didn't people a in allowed many people XXXX it's were evolution that weren't during then our cities anymore staycations XXXX led last and to Food demand leave

In across entire improvements the we've seen across this the board year, week.

business recovered up. transient and is fully then Group leisure levels. flat is some is So, to XXXX transient about actually and

still inbound XXXX. or that said XX% Having It's about XXXX. remains international depressed than than lower lower the

I that was quarter. like like something actually think or the it in second XX%

is driver and an improvement that clients But that's entertainment inbound And outlet are venues. those and sales from restaurant key sales first quarter. international club of the bar a

issue a XXXX revenues that's point. even to F&B in slightly -- overall this And rooms really so are customer as mix are total basically And that at driving fully relative it's down that's recovered.

Joan Bottarini

just business I add about international. of XXXX And would from that was our in XX% coming Yes.

and the Mark in you was progression XX% down quarter. being in the that second So first XX% that quarter it the described

upside significant So there. there's a

And in the quarter our fees doubled over last year.

future. when you going flight tailwind a international So coming capacities from us respect to about runway it's into think with inbound big the for the that

Mark Hoplamazian

flight the about the of up what Yes. are double-digit sales talk health of for XXXX. about is the and half like retail there's X% is capacity of super quite interesting And And lot actually and a good. first the that growth restaurants outlook nightlife consumer foodservice in is. sales what's And

only is real I one The about quarter. That little net a close thing would apparel very decline estate the the significant lagging a matters on people add estate the think bit real keeping that activity clothing worth. that we goods. in seen stuff durable and of is has in how which residential are that's last tabs their terms activity over

us fact and with engagement surveys respondents. of members consistently done in XX% the have of that the our our tells that said Having all that been

the plan they the travel of the at So list consistently have to list over and restaurants the themselves splurge are year. and on last of the and top top at been

fact in F&B So a to headwinds of entertainment there the and with China. respect entertainment, real some are prioritization we the see and that call travel potential estate residential that despite market

Chad Beynon

follow-up. Great. quick corporates your Thanks. you a of and mix then transient just business between us And large Could SMEs? remind

Mark Hoplamazian

of split It's large about say, corporates. My it's I and a many majority a guess different that is between tale dynamics. Large would corporate, it's of corporate a XX-XX SME. large really

in is down. carryover. most been one first banking and look the the of you that quarter off with by has single bank if the had mostly that one failures a Not of clients shock been our So every segment, the to that's do bank had the

fact up. single is our largest customer financial In bank and institution

consultancy like. with Same moderated. manufacturing -- Professional is overall with same professional continued slightly down, The expecting the services, significant travel looking tech. looking has at increases. the is sector But tech better. is layoff Actually and volumes, so impact sorry,

us So travel about increase suggesting pharma they're remainder and the behind going managers planners flat. for tech and year we meeting that the over and the to are see of that's think an

group other like side, and bookings looking corporate terms our the of in note association corporate I is terms that is thing XX% mix The corporate corporate of would in only -- of This on association. XX% the a at in quite a second is XXXX bookings quarter, highest million. not first but record $XXX which since record second were full the the pattern -- of and quarter the

still demand seeing group weighted corporate sustained we're the towards we're on corporate and So side.

see that's really to the and encouraged foreseeable really, to think going future. So persist that in that

of periods. -- of was that year, the in XXXX Now, full years. total plus if future you the plus the about two, into into four second and the were year into three a made XX% bookings into for plus XX% remainder plus look about was year quarter, the pattern third the then that in was XX% years, was and Half future

XXXX lot left associations. although to creating we're that's a seeing what is XXXX and and back patterns some reasonable half, book pressure for in we So still and second have dwindling of and they're

this association really their we second to will dates. predict -- year, of of through going secure the the we're we see need they see increase So in an proportion that half because bookings to

Chad Beynon

the much. color. very you Appreciate Thank

Operator

And comes go Stanley. from Please Stephen Morgan ahead. Grambling from

open. Your line is

Stephen Grambling

Just bit. with wanted to stick a little ALG

sensitivity Specifically completing pullback versus the the ALG of is impact distribution expand? departure impact with to also Management a like we broader from any could in Should integration this within and what Hyatt the things is of segment spending there segment? revenue And that Destination business see this business the departures. per leisure

Mark Hoplamazian

going the and seasonality gangbusters. is had weighted is of really of but because That's result our pricing X-Star. very net is vacations normalization X-Star growth were revenue unit mean versus I Yes. Departures of towards to year. we the about flat strong last XX% mix

markets. did true hotels outperforming other I X-Star versus market XX into the that mention Maya Cancun in cascading fact, Riviera dynamics In are remains that thing the is X-Star by points. Cancun one The hotels

though into they're even employments are with is and because the which customers, that to So arrivals highest-rated customers X-Star U.S. respect true from dropping is markets hotels. not other cascading

ALGV on is books for half So Cancun The overall to the our experience up large. bit at a X%. segment price unit average different in the second is look bookings for AI the than going segment

sale because pricing we is more platform. selling so maintaining. inventory added on through And the that we've we're But have destinations

down moderating your into some Cancun And snap quite actually and added in prices concurrently is your segments I can't significantly that your the of the package by are because got you capacity one other of change not a coming thing mention cases and did airfare system. fingers lot virtue

the hotel the airlines sector so rates sustain also of And have solid. some to pricing Cancun but demand. try dropped That's induce to it's to made into overall capability helped demand

in the up signed is which and higher the up existing XX% Club from about been Vacation to year-over-year XX% higher and Unlimited contract, that's have With upgrading is tiers membership respect X%. to per members price contracts reflected of

further. perfect a you and have by seeing. we're the we're from Day this growth. data math tighten by added way, So we growth Investor And just it past curve did but this remember was liked if analysis point fit to between the regression I'm the even we another quarter system I what size that of because in member really encouraged And magnificent. in

tightening much not left there's it Although R-squared. XX% was a

Finally margins. were vacations ALG in business Margins stratospheric. ALGV, the last year

low of bought of before we mid-XXs. to all, through the level. breaking were way business running in by Last year, was we margin ALG single-digit this First reminder

expect a And in more normalized said range would end in the level that's of range of so XX% end the of thought that exactly we to probably year we we be to the sort the that for range. XX% higher And this in business.

performing our as is business it to. So exactly the expected expectations, we

reason many because so actually I agile. the have there they really might than quickly. thought resilient they're I think and cascade super more were it's as can is shifts And

UVC There to about of is base nothing higher good in some due XX% first So expense total anyway, two expenses news. their direct is businesses pesos. between in but those as

for members. So promotional for of And that packages realized actually nights the UVC And headwinds. a the second we level in did higher in third the more we have heading secondly, of had quarter payment. some activity made are we the fourth second FX quarter free had which into finally, part and we

expenses So aside issue that's that's rate affected those FX leaving us. that direct are for the few factors a but not run the

businesses. good we these So of about feel really both

Operator

will question ahead. go of Shaun Bank Please Kelley last Our America. from from come

open. is line Your

Shaun Kelley

morning, everyone. my Hi. taking question. Good for Thanks

the XXXX kind of, a then, beat ALG growth. the level Analyst wanted horse given obviously little on you've And probably on thoughts just dead kind high net bit of, for a get So out bit. just one companies color expectations wanted on provide Mark out on unit one of and coming other detail the to some Day. lot to, so But there high-level of of little your

-- things us conversions, some and kind is time? about how I you 'XX relates any you kind remind any it that to cons look as have, question expecting like? point thinking like as can So feel that would anything at of, of, this you're just, Just addressed And pros of relate build your in movement sort that of know financing to kind do the launch? updated of of Hyatt Studios my would to environment. just already you've or how it things your to the that

to need don't You hit that twice.

Mark Hoplamazian

Okay. Thanks.

compounding edification new everyone's of net about mean, for that Excellent. number starts openings that. feel we construction we really a seen Investor rooms Day X% saw future. So a what good is said into X% slowed of I at that first of to we under growth were And all, really, hotels the then we've and yes, down. have

So that is a bit of headwind.

to signed first we're a before of LOIs moving developers developers We're on we the end dialogue Studios, a Hyatt very Studios whom for quickly. of with of high pretty moving from next going to Hyatt our Based contracts bunch year. incidence see construction open to for our

actually And we're finding the access really really good great are feel to so partners we developers that fact finding great are that about capital.

holding. dying and been see And is from the dynamic circumstance it generational generation because we And involve their are opportunities. it to And we significant and these uniquely the many in of more Mexican of terms to continue relatively true find are cases that able multiple that's family and have families most different larger. we number sources. to right kids But a prior significant we up opportunities and a many they that are assist we've also families more a of conversion of portfolios been One coming usually goals. can structure unlock owned how in self-managed in their lot just It families achieve which by is which either properties. hotels are those underway business opening families or now leaving some because change the to of in of there ways European changes

hold the cases many want In real continue to estate. to they

that management The number increased. So are a of hotels. is for incidence we up of signing relationships

baseline will to And to against as new the normalize pipeline see on will got markets course so continue a we're coming of over starts the in a which recovery provide getting more and then year. the more that a itself start capital confident we to that we've

So in I would say extremely confident short.

Shaun Kelley

something covered didn't helpful. a again, as RevPAR specifically and and second think follow-up I outlook kind really apologize, not in Really like was relates if up in X.X%. X%. I that for just you of was then the I'm side way it this is But half I And said pace up this ALG you. there detect. the quarter pace was you if and half and package I totally on said Thank the I but we've And the believe the this to second sure that think RevPAR package

that kind dramatic kind I RevPAR embedded the side validate the or given of a about more to of outlook, So just packaged the apples-to-apples? And are decel of what's deceleration, a sort I you again are talked you've again wanted both seasonal is specifically on And know of that in embedding those lot. the some normalization.

Mark Hoplamazian

on X% the books The apples-to-apples. business. is It is

continued provide So respect data. tentatives include way the stuff over year. and drivers And second to rates with it the in of outlook normalization And yes, half. one not like back are higher we the it half of the our the doesn't is of that. That's

the million million travel we $XX to everybody of quarter of million want completeness, And and quarter. $X $XX in the have fourth just I did just of in the million third and or in $XX vein remind that release credits

out that. most how commercial over doing on comprehensive of as services in with diving think comparison. means be yield do now would that that year So right a we're respect in I realized of we will go ALG. are to pretty We you but benefits of kicked say, a But the they'll review to how of course year. we a to organized deeply off the remainder next market I the that have take and And

are and thing not came capacity quarter, million By which everything technology up think including investments way had I in recurring. so Trisept a talking don't the platform second we $X about – is I'm the in the other specific for ALGV that of

were that to said we further platform. behind be going the we investing So

I those we of included the We year. in just covered and continue XXX% investments what our full have into year is and will guidance outlook.

Operator

This day. participating a and conference concludes call. have you Thank for wonderful today's

may now disconnect. You

Hyatt Hotels (H) 3 Aug 232023 Q2 Earnings call transcript