On August 6, 2024, Hyatt Hotels Corp (H, Financial) released its 8-K filing for the second quarter of 2024. The company reported a diluted EPS of $3.46 and adjusted diluted EPS of $1.53, falling short of the analyst estimate of $2.64. Revenue for the quarter was $1,703 million, also below the estimated $1,737.74 million.
Company Overview
Hyatt is an operator of owned (4% of total rooms) and managed and franchised (96%) properties across around 20 upscale luxury brands, which includes vacation brands (Apple Leisure Group, Hyatt Ziva, and Hyatt Zilara), the recently launched full-service lifestyle brand Hyatt Centric, the soft lifestyle brand Unbound, the wellness brand Miraval, and the midscale extended-stay brand Studios. Hyatt acquired Two Roads Hospitality in 2018 and Apple Leisure Group in 2021. The regional exposure as a percentage of total rooms is 54% Americas, 22% rest of world, and 23% Asia-Pacific.
Performance and Challenges
Hyatt Hotels Corp (H, Financial) reported a comparable system-wide hotels RevPAR increase of 4.7% compared to the same period in 2023, and a 3.0% increase in comparable system-wide all-inclusive resorts Net Package RevPAR. Net Rooms Growth was approximately 4.6%. Despite these positive metrics, the company faced challenges such as the impact of the 2023 Maui wildfires and renovations at large resort properties, which negatively affected leisure travel.
Financial Achievements
Hyatt achieved a net income of $359 million and adjusted net income of $158 million for the quarter. The company also reported an adjusted EBITDA of $307 million. These achievements are significant as they reflect the company's ability to generate strong free cash flow and enhance shareholder value through its asset-light earnings model.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 | Change (%) |
|---|---|---|---|
| Management and Franchising Revenue | $222 million | $201 million | 10.5% |
| Owned and Leased Revenue | $79 million | $85 million | -7.4% |
| Distribution Revenue | $43 million | $34 million | 23.9% |
| Adjusted EBITDA | $307 million | $279 million | 10.1% |
Balance Sheet and Liquidity
As of June 30, 2024, Hyatt reported total debt of $3,885 million and total liquidity of approximately $3.5 billion, including $1,957 million in cash and cash equivalents and short-term investments. The company repurchased approximately 907 thousand shares of Class A common stock for $134 million during the quarter.
Outlook
For the full year 2024, Hyatt projects a system-wide hotels RevPAR increase of 3.0% to 4.0% on a constant currency basis compared to 2023. Net income is projected between $1,055 million and $1,115 million, and adjusted EBITDA is expected to range from $1,135 million to $1,175 million. The company also plans to return between $800 million and $850 million to shareholders through capital returns.
"We posted solid second quarter results demonstrating our differentiated positioning and continued momentum. System-wide RevPAR grew by 4.7% and net rooms growth was 4.6%, generating record gross fee revenue of $275 million in the quarter," said Mark S. Hoplamazian, President and Chief Executive Officer of Hyatt.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Hyatt Hotels Corp for further details.
