H - Earnings call transcript Q2 2024 | Hyatt Hotels Corporation

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Operator

Good morning, and welcome to the Hyatt's Second Quarter 2024 Earnings Call. [Operator Instructions] I would now like to turn the call over to Adam Roman, Senior Vice President of Investor Relations and FP&A. Thank you. Please go ahead.

Adam Rohman

Thank you, and welcome to Hyatt's Second Quarter 2024 Earnings Conference Call.

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

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

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

to will the remarks hyatt.com this in website at In and Reporting Relations XX Financial our our today's of unless on addition, you hotels can referred of available our a on currency under find of archive be earnings on release. in reconciliation average link a daily for occupancy, our stated, this section otherwise morning's reflect rate Investor measures and constant website non-GAAP comparable financial An RevPAR that system-wide call references note basis. days. Please to

basis, call Mark. the disclosed unless changes a now Additionally, percentage otherwise I'll are call on that, during the noted. With to year-over-year turn over

Mark Hoplamazian

continually the of differentiates others, fortunate every over and last guests, many purpose our you what Thank owners and for the our our appreciation my you by Hyatt you, to the been I each power I'm for who Good start morning, visit and people. live colleagues, by sharing thank care want other. with and from colleagues Adam. very to everyone, joining to our for us I've today. world day care quarter, of around inspired our

Leisure negatively in results, growth our the group first reported was numbers pre-pandemic but tailwind above of X% Our in year. Through levels. were pipeline. This X% operating purpose the impacted renovations temporary and Easter decreased approximately revenue the in significantly business reflect the business at strategy strongest X.X%, which X travel. raising QX of was a quarter. of levels leisure and role key customer in and segments and remained of months to of despite and in transient quarter up taking Easter, of we quarter a system-wide our which impact RevPAR group Hyatt were when for our record transient travel wildfires fees, headwinds compared are XXXX, place evident the our and Maui, in leisure execution was to our several excluding U.S. resorts anticipated, as X% hotels revenue by last and we the XXXX these transient of first XXXX in headwind morning, up significant April and of

quarter, elections November. due anticipate and the the resource room markets the fourth Mexico properties October for Kippur Looking seasonality. Group the return while ahead, renovation, resorts and last in flat to is significant strong of in This Americas the under a quarter, demand approximately Yom in compared May to this is in rates major the for pace X% in to all-inclusive increased U.S. year managed U.S. falling X% the slightly transient as pace the quarter resorts Hashanah down service to reflects revenue urban higher for pre-pandemic of third in the second And third up full in months Rosh the pace Group and Caribbean is compared most XXXX. and June. half of results excluding in year we for quarter. during September U.S. is growth

Looking customer all segments. group across very strong beyond continues pace XXXX, to be

In XX%. during transient the the New markets. D.C. up had the United top-performing XX% York, the segment Seattle, increased customer rate Washington, Diego growth largest San were with revenue and business States, Our approximately quarter and revenue

X over months strong, travel the by led business for look Bookings corporate very next negotiated accounts.

strength While RevPAR in driven signs among hotels high-end which X.X%. increased the growth saw there group quarter chain our of Asia of reflected business lower in travel excluding X.X% produced upscale consumer and are The scales, as luxury we by slowing Pacific, Europe in demand and RevPAR solid brands, was of China. upper

XX of reflects membership performance end, XX% at quarter program. operating of membership increased, engagement our highlighting record the World solid base. the of penetration Our room of a year. past Hyatt over loyalty expanding a our also strength strong increase approximately growing million new reached Loyalty night the members

strategy into growth to personalized addition and loyalty experiences, member growth and authentic increased delivering to expansion and led in Our many penetration. markets new has

live, expansion, bookings for of opposed these properties of Our have redemption XXX X/X points. Mrs added to engagement paid with members & which from we significant of World since Mr XX% those Hyatt Smith, members realized after properties nearly of of course, of the our includes bookings reservations in going to World over April. as Hyatt from received

and & By members these Our with this for more been curated end opportunities in very of Mrs the most Mr our have over of accounting available even properties through uniquely points World year, Hyatt, hotels. expect & we offering XX% redeem Smith to X,XXX active have Globalist, of Smith, over Mrs engaged earn to members, our Mr these bookings.

locations, announced Under Under adding We Yellowstone as and with unique be Moab, members our exclusive of such World also for and guests. Grand will the destinations where further Hyatt with hospitality Canvas, outdoor we experiences are an in and members expanding points Zion. earn and patients Canyon, alliance our able to an premier offerings at recently XX Canvas experiential redeem

hand. of paid made Under love partnership Moab, already Both offer total with in quality experience exceptional in I'd and the weeks at my from activities, immersive X And our XX% have Under World for really first locations and the in great Utah for excited nearly overnight the months Yellowstone, Hyatt visited Hyatt seen We Canvas which Valley North Canvas Hotel leisure. live Canvas I stay Best destinations Montana. being Resort ULUM went of ago. A since of I'm bookings Under members ago, travel members few Paradise the World to interest named resort reservations by

proud as also credit of the recognized recognition the members of Best Hyatt the World to as the value provides Hotel Hyatt Rewards Overall card that the owners. a Hyatt and Credit Hyatt continues WalletHub program of World of and receive. of is loyalty recognition of hotel testament Hive our to that Hotel continued to We're Program World Best Card. The World

their our our to grow Hyatt we network to as focus us more members, to and making attractive loyalty developers. Hyatt expanding increasing Our allows offer prospective more effect options on to

Turning to development.

China, represents to a see continue our the increasing brands reached increase base. We of and Hyatt led across construction. X United properties a rooms. Greater the to Signings for pipeline in our as see healthy strong the accounts were pipeline demand by we XX% interest in XXX,XXX under and world, our year-over-year, quarter approximately States X% and of existing our for continue the record Studios with room This first

adult-only, in in expansion Hyatt quarter, Our achieved first of growth Grand connections all-inclusive Hyatt pipeline Changsha, through on the openings growth The to all-inclusive Greater in with the high we X.X%. Notable rooms offerings. our Cancun, property. Hyatt meaningful continues Park younger focus the net Vivid Park a Vivid experience Grand our the Hyatt portfolio experiential introduces a worldwide. tenth and include of generation vivid China drive And Island a vibrant, to

our of first by outside Shanghai opened in Caption properties Osaka. We Hyatt and U.S., the

destination our on Finally, first Southern stunning the a by Hyatt Legend Peru. resort Resort Paracas Coast Peru opened in in the property in quarter,

markets new will our future. to that Lindner openings growth reasons. over of XX, as continue allowing the and growth to pipeline and hotels we our members, our great all strategically Our and really accelerate me all the come potential portfolio. On Group, and we're from We're key equity into the hotels brand. decades announced the continue quarter growth to excited expand for this the our open the for we about and strengthened will to for me acquisition fuel X brands June Hotels guests a and pipeline The enhance trajectory brand of of us confident well the

me suited space brand segment Europe. First, growth fill brand and conversions, to facilitating highly all in in and the across has well reuse locations that lifestyle The Hyatt significant white is adaptive a great attractive hotels for is in fast-growing upscale Europe.

important expand and strategic to This me developers all deliver allowing is expands lease greatly capture designed to realize that capital Second, that operational returns are friendly our and brand Europe. mapping lease aggressively market positioning structures, Europe. And sources to high it Europe. share required for across attractive enhances in flexibility margins, to and across note access hotels are common are brand which third, our and

to to opportunities scale we the Europe our gain to enjoy While lifestyle for globally, believe and are members the experience. destinations providing a in we expect initially, guests curated there brand brand more grow

with very guests find have We inorganic while property members for and providing creates been intentional opportunities us places growth experiences. ensuring new our guests expansion existing and great to and be that join our new will and portfolio exciting brand of to Hyatt organic and continue World to and enjoy

during to and Regency Green Turning previously San We Regency quarter, Hyatt announced. Bay Hyatt asset sales. Antonio Park the of completed sales Hyatt the second Zurich, as

realized commitment. our have billion proceeds we billion in asset from sales, these $X.X $X towards sales With gross

us the under a August, $X our above end the is billion agreement commitment. to sale put currently the expect sale We of close property will that by and of disposition which purchase

more We deal details will on that when the closes. provide transaction

published remarks, Before and Demonstrating that progress of to Care [indiscernible] science-based goals, I towards recently conclude our our targets. report our including pleased we goals highlights. World environmental sustainability I'm my annual

long-term and execution work our we with capital we exceptionally worldwide. In Day more I'm have by our made, of of our year, we our optimizing the deployment. progress and maximizing core we resource Investor While at colleagues which last pleased closing, of are led business, new the platforms growth ahead us, integrating highlighted that Hyatt strategy, proud

to and around be I multiple strong Our will to so the to our rooms, which business shareholders. provide value now live every results. more to over including operating growth for our membership extends who our dimensions, feeds, their purpose world asset-light details Joan, free of day they our stakeholders. Joan each you. fuels pipeline flow for thank best, our on care loyalty colleagues Hyatt leading people greater and want cash model across to can

Joan Bottarini

In group X%, and transient the and increased Large hotels from urban transient good to States, travel. business both led in United group accounts the RevPAR results Mark, morning, Easter and travel, travel. over markets. strong contributed Thanks, increased X.X% timing business major and reflecting group Systemwide corporate of and increased RevPAR by business everyone. benefiting

Wells Indian lapping renovations. Andaz several under wildfires brand is being Confidante resorts be as Hyatt Regency are Hyatt in undergoing challenging will we Beach, The rebranded the comparisons due we transformational in quarter and third Scottsdale last while and the while noted, Maui Regency and Mark the later year, all-inclusive to Grand renovations. RevPAR for As growth year rebranded in approximately have the the approximately exciting this extensive Americas, growth Miami South X% with the notable Americas decreased our in X% X%. properties after by in In America, Hyatt RevPAR excluding increased States, United China, net of had quarter. Greater package RevPAR the Canada strength

reminder, levels surpassed pre-pandemic recovery a first As of the year travel, a for last dramatic saw RevPAR time. quarter for domestic the second and

expected in quarter normalize the year. We rates growth to starting this second

last macro tertiary travel secondary a conditions, compared on negatively travel in in impact and notable X% to outbound quarter with and in markets. Chinese down the the unfavorable was impacted However, greater hotels results quarter. Domestic year,

weaker major in strong offset markets, the While brand approximately testament pressures, to markets. our in positive we index a this is secondary demand our recognition could by and RevPAR we saw most in increased quarter, not a during X% these which tertiary growth China. Despite RevPAR

customers for affluent seeing from we're Although declined, domestic demand increase. travel travel

However, levels they we China outbound at travel, are in prioritizing the term. international remain travel elevated from near expect and to

XX% United again international Greater RevPAR South China outbound in XX% Japan Spain. notable and in increased and coming States approximately remarkable by strong strength inbound from demand notable United travel in increased driven the States. RevPAR increased XX%. travel approximately RevPAR and Asia Pacific, with Korea Germany with excluding produced with RevPAR results, the XX% In China, from to Greater up once due Europe,

record fees net properties growth in and XX%, reported produced greater the due for RevPAR quarter impressive fees million, our increase China. in up Greater growth the of of to due Incentive in and increased Franchise by growth, of high newly fees from decreased growth by hotels, hotels Balearic gross in in package approximately fees of Greater Our Islands. We hotels fees. a the driven fees an managed footprint, contribution and other from size hotels $XXX approximately from renovation to and and in demand our the our reflecting managed and China, and RevPAR Maui. RevPAR European our our XX% combination credit offset resorts all-inclusive co-branded XX% due franchise of non-RevPAR Canary system increased increased to UVCCs. Base contribution the under the card combination X% opened lower fees in X% hotels

adjusted Turning increase the when to franchising and adjusted our and leased of EBITDA fees. our impact for Owned by quarter, in segment transient the net revenue transactions. double Business increased and food the gross quarter X% digits increased from comparable and approximately segment driven results. by for points. was Management increased XX%, EBITDA segment revenue by the hotels basis margins increased group for related strong. In during contribution portfolio the the beverage XXX and adjusted

increased XXXX. EBITDA And expansion $X owned compared moderate our and expect for of we'll XXXX. to full segment to second year the the million Distribution margins leased flat We adjusted compared quarter finally, achieve of that to

declined expectations we Excluding during first with UVC, call. consistent adjusted million, our the $X earnings EBITDA by communicated quarter approximately

ALG million system to the approximately quarter third temporary cancellations weeks bookings to on to impact adjusted expect We Hurricane and last disruptions due EBITDA due weaker a to over the Vacations combination bookings. airline related few year last to for Beryl decline $X of

to for airlift. I'd anticipate EBITDA on $XX improved now position. approximately strong Vacations fourth compared grow of by our we adjusted update liquidity ALG to year an provide to quarter because million and cash like However, last

on in the of billion June outstanding levels share proceeds $XXX The billion We and remaining of revolving million second cash, profile $X.X sheet are approximately $X.X under repurchased invested notes investments our or of common of repurchase Class our the have securities As debt $X short-term this borrowing marketable end repay We at XXXX, remain prior the debt maturity. In increased of October our planning quarter approximately investment-grade total XXXX, total notes June. approximately facility. the investments committed these quarter, credit capacity results to equivalents to maturing was our our and At X, shares liquidity A from from billion. in balance notes billion and approximately quarter, fully and to our $X.X XX, our strong. the and issued on of we we $X.X and authorization. billion short-term cash is in we included

we We've includes exclude made called outlook, costs integration to integration a recently new pending the change turn and to integration I like XXXX our financial from Before to and our I'd financial reporting. adjusted costs to item statement transaction transactions. We a note and transactions which acquired for added now that transaction line and certain costs, income businesses costs for completed EBITDA.

believe this with information operating management consistent provides evaluates represents we our operations performance. our better and core As how

on for found Now cover will earnings full can outlook Page The our of X be XXXX. I release. details our

RevPAR transient business We for business year growth of group X% X% system-wide RevPAR we led We between outpace compared approximately States to expect second X% year growth and XXXX, to to full United travel and the the by in leisure group quarter. full expect third and growth XXXX and year. of compared anticipate for revenue transient half the the

assumes China Greater X quarters tougher year outlook year last to travel as domestic comparisons of negative this for and growth increases. international to Our outbound travel XXXX compared RevPAR is in the laps last

Greater excluding end RevPAR by Finally, led in markets we Europe and of Asia to growth China. other exceed high the our Pacific, range, expect international

billion, and to We in X%, may X.X% range to portfolio expected increase of by range year. the expect Gross billion and net our a XX% last that close $X.XXX be growth, rooms to fees driven at of the potential organic growth compared conversions by between $X.XXX are year-end. midpoint transactions

from for and renovation. Greater demand hotels weaker-than-expected outlook in revised in the under accounts hotels fee contribution second Maui China, in lower quarter incentive Our

in $X.XXX of be increase is the lower at of the China billion, XXXX our range in to $XXX is Our XX% Adjusted in billion outlook during of assumes range to a hotels quarter. Adjusted to States fourth year. expected in lower and hotels to EBITDA United contribution also million. $XXX be fee a from G&A Greater the compared range fee of million during from expected $X.XXX the last second to midpoint half the contribution the

by to of of the change Free and we Our to quarter flow range million million $XX earnings mentioned our growth for million the program committed repurchases and that will outlook just realize happy to continue we related range and shareholder million EBITDA $XXX our closing, as to in have our increase value prepared the made and which expected an growth asset profile mix range costs has capital our our our from shareholders asset-light shareholders. This we your second investment-grade business remain I answer integration including growth, now accounts and is disposition removal highlight about and cash remarks, share expectations. maintaining our And model $XXX adjusted to to our and reflects dividends. In rooms in delivered finally, of of strength capital deliver allocation the $XXX exceptional returns the asset-light to net to will to to capital results further strategy, we're questions. and $XXX to RevPAR complete million. We expect fees. reduction investing returning concludes of

Operator

Kelley question Bank first come Our America. from Instructions] from of [Operator Shaun will

Shaun Kelley

of leisure the going transient on just I in X-parter on area. had sort what's a

script remarks, if it. Mark, we pre-pandemic think of could little side? And around something the Mexico to Joan seasonality. then both, return you patterns around Caribbean I out mentioned terms on barrel about that, Mark And of you said kind the take secondarily think is you're comment let's in you it, specifically prepared de-risked you just this I on, from seeing elaborate your comment think, U.S. how, call some specifically kind But here, specifically throughout and on and the across the I and So leisure you of think of bit a the can outlook there. what in

Just Caribbean in we Mexico? the of across the what are on -- seeing and ground kind and ALG

Mark Hoplamazian

start, I'll Shaun. last additional say that Joan we and are year. some lapping some will think I add periods Thanks, Great. unusual would I color.

last I demand year. the when that reporting mean, and so say the results are year, we're certain calendar of results unusual significant -- And parts in I both changes also

cause with demand level evening due to I The unfortunate a is Nonetheless, airline issues, -- Overall, maintained issues under has have the of systems disruption And very been terms few respect of the was to major headwinds that did was and not everyone complete resorts the secondly, expand to X a point, up outages Maui So at over hold of of significantly slightly. to times, high would -- but be shock experienced seeing system. we're respect to rate in the levels at traffic relatively out the that and it a issues what sort in but in to -- up renovation disruption plus pre-pandemic just continues say above that continues that holding short this lot level of we of a we sort about. general lived. knows demand the bookings. And with time.

curve, into really, of that and to see a though, quarter I this is like also are informed the we airline quarter be like significant of outlook we fourth schedules is and We that seeing bookings. what increase on The the robust terms we -- feel at So going it's high in really booking festive more to following think a into wave maintaining based we're demand overall year. somewhat quarter. a curve our tougher at think visibility October that's have And bookings third the and a for fourth November -- but I the terms point. And in in heading by level demand of cruises. schedules

quarterly call think information lot those next as starting we'll I up conference to So be. like a have on more to what and look shape bookings are that the to

Joan Bottarini

that, Yes. had the to in in RevPAR. And really look about happening your you about the add the inclusive question, we quarter, of And strong package first Shaun, increase. if with second net at growth all a on X% the had what quarter to double-digit over Caribbean, to I X%. in year, first averages would And half what's that a respect we in

So holiday. really strong. And impacted was the the Easter dynamic first quarter, quarter by second

Mark As forward up system the seeing mentioned third disruptions. forward, the in temporary fourth had the into in the into those we mid-single pacing that early in But we look season digits. with the we're disruptions hurricane look quarter, the quarter, -- as and certainly festive we

leisure when mid-single put Caribbean So we in got together, the we've about and that that will and net think our digit range. the you all in front the be mid-single-digit sustaining year in full on RevPAR that package momentum

Mark Hoplamazian

add. at continues quick inclusive up a quarter growth to if there. the our own the It's Americas. X% lapping But from globally, strong year, Just because X% look it results portfolio, you strengthened has we're second in the last but HIC Europe -- in portfolio was

encouraged So to we're see as that really well.

Operator

from Our JPMorgan. Joseph next Greff comes from question

Joseph Greff

a have and question in service talk and full China-related? multi-part of put And much difference between lines a service are I kind development the the trend for Can growth net perspective, starts? China select recent there? you, hotel How how of on in X.X% about start you construction dependency things pipeline rooms is X% to Mark. what there maybe is activity signings and

Mark Hoplamazian

Sure.

Asia generally producers the highest in Pacific China also has -- have China and and of growth pipeline. Greater of been first speaking, been So all, rooms open

the and the also So we together China of represent and the have that openings. seen change Americas we've pipeline majority

not So quality. We Hyatt we're openings, continuing of seeing great we to is we We're high are mentioned seeing Park what grow just But Changsha. we're openings. are than opening. seeing faster openings the

opened also Hotel Grand -- China. Kunming. Grand I'm XXth It's Mainland Hyatt China Greater just in We the sorry, in the Hyatt

highest the we in brands some really And going the have network -- that country. effect amongst got so we end we've remarkable on

actually that frankly, of state-owned encouraged us majority because Part we're owners of to see with the been a I've dealing to completions. is, that surprising enterprises. super So not our

really talking I dominated pace, on upper room. revenue it's about, high by room, not that being -- UrCove would UrCove, we not These is I'm also is are room not quickly a a very a openings mid-scale even always UrCove hotels, continues room -- And point though open we're is the segment top mid-scale to of you By annual head. China. With the the have get way, upper on continued that overall future into we'll I growth a growth. Chinese of don't that. respect energy, I strength my the signings China also to would back impact the the spell at to and to good healthy just good platform in and the have out off for, say for that, our say, heading the on

I'm lot of pretty that are scales. of encouraged. there's That's overall, through, more relatively sort seeing in a a China. So There there's to a it what going headlines of you actually at lot impactful -- see lower and chain we're disruptions on. lot is can

some seen China in the some travel. of luxury end also have Chinese have consumers from -- increasing our hotels their also outbound impact highest Although

Joseph Greff

then the [indiscernible] liquidity later how the enough debt from proceeds And use sale? just to $XXX Great. a cash asset of have this month plus Obviously, quick do of close to million take end this maturities 'XX? follow-up. and end this plan Joan, year of of to you care you

Joan Bottarini

any components of mentioned, we our will And that the when Mark returns. we update as transaction, shareholder do when including Joe, are So will we announce impacted by that, we outlook close. all transactions

do when it. ready for tuned we're to that announcement stay So

Operator

Our next Fargo. Dan comes Wells from question Politzer from

Daniel Politzer

this give of year mentioned is this talk the was this it's for compared pacing, XXXX? and terms in next Mark, I of that some in and And about past? believe half year. up you I maybe historical the second Can group pacing point maybe with year, the at books on that's context how X% how much how you think, in

Mark Hoplamazian

short group the and in short -- total up year. with strong of been in It's extraordinarily the long both taken terms was production vicinity, term month sorry, was and month full been how X/X bookings. net in cycle, strong XX%. term July for that I've was the really the has Absolutely. overall. term Full of

pace up August up actually So the base. bookings. July in by we December the a through very X%, booking year is saw is activity third for quarter ADR strong year X% impacted

just we're that filling compromise the rooms So bookings not getting at rates. are

We ADRs. are realizing great

vast running 'XX. equally year the ahead X.X% anything this at seen way are ahead strong. majority represents plus 'XX, For the time of increase. of ADR Tentatives the of we've pace of ever

heading really have we taken pace about So business not of tentative on the swelling we striking. for into have right only have total year, really is XX% is now, a The of [indiscernible]. And we next sales business great next but our also books that force year.

of your By So are the just -- and way, with that respect quick the sort question. by was dominated a [indiscernible] the as pharma July leading pharma addresses tech and to note, way other comment, all terms association of of tech tech. services And I the our financial are all segments. would in number and pharma categories across different pacing and well. a of both and to corporate add

very and well is -- So we average. widespread. balanced on has is very, over and pulling up don't This this is not taken like association

Daniel Politzer

quarter Joan, in And think it. to in Maui, But renovation, you the we year. versus then of headwinds China, management as back called I incentive terms get the as half the Or it of kind Got year? expect some to the of out those? fourth quarter, should the the quarter through third fees, think certainly down of about in this remainder we grow of we should be start again you see fourth for

Joan Bottarini

Yes.

So overall, growth that outlook reflects to in we XX% our year-over-year. with fees a the provided change respect

about that point we're about our is midpoint, driven And to the the by reinforce by breakdown in U.S. made the the FX I to and of then driven China XX% remaining between the IMF demand and XX% the at fee. that that through our by seeing. million, $XX just the incentive at what And outlook and that a and we basin also wanted outset. we're dynamic So change there XX% about little bit seeing the there,

those in areas. the it's saw the you So in concentrated And second quarter. X performance

that anticipate to fees. and in as we we'll that it of about performing look last be half the you to year, better think relative the incentive at So relates as rest year the second

Mark Hoplamazian

in you to in base just clarify, Joan, you said meant And incentive, franchise. base sorry,

franchise in fee incentive and So the the based. XX% other is base XX%

Operator

next Our Bellisario Baird. from from question comes Michael

Michael Bellisario

X-parter on growth. unit X, net

strategic about the half, year And Or on X% the any expectations? also -- brand to the could on or takes some help I in You in your just us puts portfolio outsized low details second that Is did to and below high part you openings then M&A? back half did were And end of the transactions? then potential to get quarter? see first the you're net potential more understand think the and deletions you the referring organic said provide you end? deals

Mark Hoplamazian

real fact now. Since for but to they the First of and talking conversions. being robust growth about of QX that we're rooms year, completing QX, working portfolio example, would are all, look that just a we closer not we room first the been And theoretical we've the terminations QX. do see as outsized, are But quickly are X/X a openings on known schedule some robust conversions that XX% I've also the our particularly half. And And that to not opportunities, believe that they and will about some at were quarter we other end of deals. were first the transactions total did actually pretty for we right got and those there were this add, opportunity conversions. to to but opening us, net I subject some year forward, affect in

for like signed those all deal, where like And of their portfolio sometimes Hotels agreements deal Lindner hotels. -- franchise the means of doing all a strategic that we partnership

with management in a of hotels, a or an example. acquisition of brand platform form just like Sometimes the one did as we [indiscernible] they come

this working the point, good about. We been in -- that sort feel several have really of the on at we in hopper we've and

that. we actually But -- have date, do I growth count XX -- rate because and NRG the overall point not those everything at tell December or is a now that maintained. the momentum and make January. sometime neither is closed particular hotels can't in Now August it's whether system as and our don't to to you it's actually in either care I of the I

I've not whether we irrelevant sort or January slippage so to always And said is into me. have of

are. we time. a over smooth have look And at where You on to basis that's it

do activity. So expect more we conversion

growth one it a also level provides very analytics We've biggest don't that of just data -- in on year. they the tremendous would proven these we like sure And customer we actually the applied a that the would number qualified globe. to this cross-match with and asset I helpful point embedded in we identified we do. done is [indiscernible]. of effect. that we I with. or that of do And start to we be add thing. markets price what understand third network last a our we've always identified that already that did we and That's and making quarter base then embedded imply and resources We've course, brand and believe time we portfolios fourth want by acquisitions growth, actually work and the have our that focused across partnerships And light. huge the to that and of each attention. And That's are by have focusing of fourth extraordinarily segment. all are

So continue that follow. those principles we are to the

Operator

Our next Stephen from Morgan from question Stanley. Grambling comes

Stephen Grambling

expansion sensitivity does the interest structure like allowing things market out growth called associated the through rates? the in rapid the may the should to And alter think structure of scale the about to How U.S. fees its Europe region. could for think versus You investors or that we how need in how cyclicality lease with that is

Mark Hoplamazian

sorry, the So gist Stephen, missed of beginning. at the I'm question -- was I the

of repeat I your apologize. Just the part beginning question,

Stephen Grambling

think in how the to management and that these the Just of understanding scaling cyclicality lease-oriented in Europe about rates region?

Mark Hoplamazian

I as at look cyclical. Okay. it don't

prevailing Of of ownership proportion done of significant in through them transactions you of a that it's in the course, on at if leases. done form are the form are But look rates. dependent Europe, then

I leases We in or think, Europe. our in portfolio X have, X

into stepped anywhere We lessee have not in a being pretty much world. the

think is it X I in total, have or certainly we less now. than Grand XX

to developers an in and form. a in for won't class a leased a Europe We Having leases we are are easily in not of in of of upscale that, ownership brands, deal and those all capital attention develop the mostly base other can to enabled midscale. extend actually and have focused do as owners historically there that are now our of we but large through me select we on hotels and relationships, the our are also very but who do just the managed we X leases, any some -- have time don't sort hotels. And both now number that us. experienced acquisition, and really and upper also we not -- And of said that's that

that's excited base. large very, purpose, very am I it, we a and capital that for excited So am about -- I that

huge even of form are we globe of with format Again, that think in anything lessor And therefore, be have now is really not we we can we're right the and this for which would not to the across United the hotels. the that come in be a lessee. -- deals do institutions Some prefer. to States, underwriting I a

it's got in do. is or But a manager opportunity the growth the that new working chapter Europe, So especially. hotel franchisor, to that the something significant become for not we lessee us something just has with of

Stephen Grambling

makes fee franchise or So or unique the these other fee structure leased? ownership given or clarification, unique being different just U.S. that all relative sense. I as structures management are markets, I to guess, structures the

Mark Hoplamazian

typical, No. They're quite actually.

So of the might speaking, is I bespoke whatever But the by certain royalty issues. vast Lindner there have -- vary group. we vary generally actually rent might rates or mean leased the are [indiscernible] the rates portfolio majority might and in look -- Lindner

them manager, the they lessee they deal and are the are our the as the So franchise the by lesse and arrangement. -- And are with we -- we way. [indiscernible]

you are an lessee. deal -- to would than what not see a as opposed owner So and normal a with would do deal terms franchise different franchise in that those you

Operator

Richard from comes from question next Clarke Bernstein. Our

Richard Clarke

just back you Analyst correctly, flow XX%. got targets, just have I XXXX last math down XX%. to to wanted do I now guidance. those Day call And full I to EBITDA all year. -- to taking XX% want by about you'll to grow we've in like while the did CapEx about revised cash free about If the year looks hit it

hitting So in those are your confidence just we now XXXX XXXX? targets based in where on

Mark Hoplamazian

that and say economy interpreting which tilt the to participating reflective macro public through is indicators really how there key dependent U.S. to that true extrapolating the is disrupted. massive I have for a into we impact. been macro are living into It don't underlying bit on that of future. The right not a I what a said focus dynamics, And is want issue Having and the we're very and Richard, short-term is would far in. from and what period, that or that, outlook too certain the growth outlook yes, markets true extraordinarily it disruption the the overall markets now is general economic factors rate is economic are highly health we that, in the disruptive on otherwise.

Fixed X Secondly, floating variously actually days. come rate have the point, points excuse and XX this bit, or a side. side, not widened rate the the rates down on is down. at The not -- XX basis so materially stable me, the come rate have rates have market X quite out fixed floating between spreads over on last but much

expand, -- sorry, in for -- improving. market we environment that in openings at we be to looking see market we financial the is a which and able I'm assuming rate growth and capital do to adjustments the see economic up that the So future, situation set net expect rooms overall the environment, our backdrop

was and be that to Secondly, lower year. than going the thrilled CapEx dropping. been has see outlook that to it's I we've currently got next

drop to trajectory. on with expansion of CapEx conversion our the virtue asset-light free are path of flow and in EBITDA we further to cash So by respect from the

you if this about together, pretty that feel put all at I point. So our good outlook

I NRG we tracking obviously Investor can fully we next sustain are general at the put Investor get at whether years, the we is over Day, do had X% out this temporal. long direction that We I of think would set term we with to we know predict below say really And X.X it whether what consistent travel that's or X% the can't out I that, year takes Day. But the point. recovered what in by to

Richard Clarke

that. companies big got up. Maybe guess you've sense. out often Makes a know they've EBITDA, just you've in Okay. the they a moved do changed definition as transactional cost my when that the coming of I follow-up, of experience, cost

So EBITDA? maybe what the was to change making behind thesis adjusted definitional that

Joan Bottarini

rationale simple. onetime relation the to was also our activity that are Richard, costs transaction pretty Sure. our experience we integration and activity. These in

those provide as though a and the we also adjusted felt outside visibility better are to earnings all you respect so it EBITDA. was we of representation consider And with what costs as to core true of to these remove

recast we line, And on we've separate or did that Integration quarter. annual put million be we costs, first transaction you costs, seen year. then I would see XXXX will And in call the transaction and that $XX about have dead all it, for that through variable, you'll assumed costs very of say few, with quarter-to-quarter. very within is variable And we deal XXXX. year a they can have abandoned the last what costs. from And

then when on the on acquire loss asset asset transactions And base. our UVC, the we're working a of a undertake a we we through run G&A, they and company sale and they -- and they with asset transactions, or like an they sales, So sale gain recorded we on asset. as into transaction get get -- when close re-reported into did

nature the So our core onetime at change, we this these nature are made the performance why is looking variable the and operating X without items.

a going So separate forward. now line on item they're

Mark Hoplamazian

be be a lot point of some with fashion. that would just activity have I magical probably transactional in were that with I some not would item, outlook given also Richard, that's over If your caught able we quarter, might to prognostications that what fell case. to a do making predict exactly because the out, we precision line of other how this the and implication and an disruption the includes

be So it's we plan uncertain just clear. to that, sufficiently that could something like never around

Operator

Patrick from comes Scholes question next from Our Truist.

Charles Scholes

is, incentive business? and Chinese window fees. Just the right a from China? do of your management does is follow-up China, Currently, And now, then or into bookings your visibility of that management for basically, percentage come RevPAR fees my China what in couple what on booking incentive how compare? historically And questions question is what your

Joan Bottarini

elements, Patrick. have of sure those I make me Let all

for a as single-digit of what overall can China off is Greater composition. fees incentive have China the I of percent -- high of my is, total our composition the total, head base top I what about the to as relative far fees As

our So total. percentage that's Greater a China of as

lower fees the nature where Greater we that earning incentive of a It's than there has the of in structure, the hotels, were pretty GOP year. we're that point actually remained fees because of China we over earning earning structure consistent the are X XX% or of first our hotels incentive are dollar fees. period-over-period And on earn. We our maybe last

expectations As have we going was quarter forward. yes, environment, in demand the in RevPAR consider the negative we operating the and that what's happening

we're and what in travel we year. expect China, Pacific outbound Asia domestic that, continue the in regions the the decline around in travel, second will other seeing outside Given the of half that

-- top also look China rev. It's impacting total revenue. China So impacting that's revenue you Greater at total total line as

So is on certainly that total rate negative a impacting an impact margins. RevPAR is dynamic then growth at impacting GOP and revenue

IMS certainly our RevPAR and fees about of quarter, global a gross that more is outlook, the captured basis. earning X% in of in into our we're [indiscernible] Greater impact expected, revised fees outlook. And that's had we lesser on just what's it's the So China year than the full into the

Mark Hoplamazian

He about curve. booking also asked

Joan Bottarini

one of booking it's And the the Yes, curves. very that of Relative China. the always to -- of been in the primary Greater group window, regions it's business. is short the drivers world, other

business group our U.S., XX-plus the is in So percent.

closer have obviously periods more XX%. for In it's future. to into China, longer the group visibility to we so And

many So fit. days we in that's China, where it right very we're with the in part what of seeing windows consistent experience. be booking short the windows visibility. typically But markets now, can And

Mark Hoplamazian

couple quarter we have outbound thought. add have for quarters of I level that of probably than is the end outlook, of fourth our travel just lift a in we the embedded improve higher otherwise that now, sorry, would said inbound towards the we we inbound into And also we would China -- believe significant, lift in traffic airline quickly the or that -- do year. -- will

have had offset We China in date. that not to

was And major you talked measure that of outbound an present it's balanced travel global to Everyone demand. and China into currently. about being plenty business China, then from was if what then levels, were not pandemic travel. that's go But pre beginning a true there to coming travel is if equal driver be the of outbound So high-rated world. again. true

Operator

next question Macquarie. Chad Our Beynon comes from from

Chad Beynon

if anything of you components, to if of there's be kind what you or -- broadly, to or are X 'XX, changed as look the has gains still guess, I RevPAR think talk occupancy? more ADR, just guidance, kind beyond yes, ADR from And out the going could occupancy With respect about regarding just you opportunities? the

Joan Bottarini

for Yes. on the The year. We at in half composition, Chad, looking group remainder the way split do forecast our is the of second the about group the books. have we're a strong

is You heard a our healthy numbers X% rate and pacing that portion growth. at of

and hotels So We've maybe a closer towards for which the lagging realized business of occupancy kind to from in pre-pandemic greater are convention much business been half those and little on bit us front. demand in levels. has transient, occupancy more rates skewed the And first have our still opportunity rate. we definitely

-- on the room side. there's still but So grow to occupancy some

rate. we forward, split and our As group occupancy look are nicely between bookings

on we So opportunity have both fronts.

Chad Beynon

you what with biggest more think do And then is catalyst pacing how to that of shovel-ready? would be pipeline And of get under against rooms regard the pipeline? to the construction, kind these rooms

Mark Hoplamazian

Yes. Thank you.

which XXs, are So of XXs high is of we've over moved our last from the we to under percentage course pipeline low years, the several the construction now. from the where

associated a production renovation few we in else, terms about, under about decline -- agreements in technically earlier. for construction to but change that construction. the to with into the rooms moment, may the favorable construction, of proportion have that's X.X% lower actually significantly are year-over-year construction, so And that's China given of that surprising #X. starts itself, in XX,XXX than also of pipeline is has environment be probably under to are a those terms that dynamics So That's availability with we entered United is The a not that, a and Part some facts executed that But the that's would pipeline what rooms in the not under I -- in that but is of overall fact bit under currently #X think be under construction. the that would the inflates environment it that up of talking X% capital do more everyone the not it's conversions China. quite we've at the actually seeing the ends that. China execute roughly pipeline have or lending or new we're in something States. under

with of fund by We marginal in because developers respect signed that do who But markets it haven't the private been projects. on a debt significantly enterprises. with are hotels state-owned most to still impact has hurt China depend their our to

Operator

for We closing are out have for no remarks. -- questions. I'll time just over back it of we to further Mark Hoplamazian turn

Mark Hoplamazian

you RevPAR want all for hotels we continued care Thanks. you of and in your mostly outlook as delivered your Hyatt and to so continue interest welcoming family. help morning, just experience power I and look to you but this of to time appreciate by thank other lines, our the the to forward that can and our Hyatt

great a wish all Thank day we So you you. ahead.

Operator

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

You disconnect. may all

Hyatt Hotels (H) 6 Aug 242024 Q2 Earnings call transcript