Hyatt Hotels Corporation (H) has delivered better-than-expected first-quarter 2025 results, with adjusted earnings and revenues topping the Zacks Consensus Estimate. On a year-over-year basis, the top line grew while the bottom line tumbled.The quarter’s results reflect the continued strong demand trends across the company’s diversified brand offerings globally. Its focus on an asset-light business model and the pipeline momentum positions it to adapt to the uncertain market conditions and ensure improvemen ...

Core Insights - Hyatt Hotels reported revenue of $1.72 billion for the quarter ended March 2025, reflecting a year-over-year increase of 0.2% and a surprise of +0.93% over the Zacks Consensus Estimate of $1.7 billion [1] - The company's EPS was $0.46, down from $0.71 in the same quarter last year, with an EPS surprise of +53.33% compared to the consensus estimate of $0.30 [1] Financial Performance Metrics - Average Daily Rate (ADR) for comparable systemwide hotels was $201.91, slightly below the estimated $204.35 [4] - Occupancy rate for comparable systemwide hotels was 66.6%, slightly above the average estimate of 66.4% [4] - Revenue per Available Room (RevPAR) for comparable systemwide hotels was $134.55, below the estimated $136.52 [4] - Total owned and leased hotels numbered 10,184, exceeding the average estimate of 10,050 [4] - Distribution revenues were reported at $315 million, slightly below the average estimate of $315.60 million, representing a year-over-year decline of -1.3% [4] - Other revenues were reported at $11 million, significantly lower than the estimated $20.88 million, marking a -68.6% change year-over-year [4] - Revenues from owned and leased hotels were $219 million, compared to the estimated $211.72 million, reflecting a -29.1% change year-over-year [4] - Net fees were reported at $287 million, exceeding the average estimate of $280.53 million [4] - Revenues for reimbursed costs totaled $886 million, slightly below the average estimate of $894.75 million [4] - Contra revenues were reported at -$20 million, worse than the average estimate of -$13.50 million [4] - Gross fees totaled $307 million, surpassing the average estimate of $292.05 million [4] - Incentive management fees were reported at $76 million, exceeding the average estimate of $68.45 million [4] Stock Performance - Shares of Hyatt Hotels have returned -9.7% over the past month, compared to a -0.7% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - The company reported a system-wide RevPAR growth of 5.7% for the quarter, with adjusted EBITDA increasing by approximately 24% to $273 million after adjusting for assets sold in 2024 [14][24][30] - Owned and leased segment adjusted EBITDA increased by 18% when adjusted for the net impact of asset sales [24] - The company ended the quarter with total liquidity of approximately $3.3 billion, including about $1.8 billion in cash and cash equivalents [26] Business Line Data and Key Metrics Changes - Business transient RevPAR grew by 12% in the quarter, driven by large corporate customers, while group RevPAR increased by 9% [14][21] - The company achieved net rooms growth of 10.5% during the quarter, with a pipeline of approximately 138,000 rooms, a 7% increase over last year [10][8] - The introduction of the Hyatt Select brand is expected to accelerate growth in the upper midscale segment in the United States [12] Market Data and Key Metrics Changes - RevPAR in the United States increased by 5.4%, positively impacted by the shift of Easter and the presidential inauguration [21] - In Greater China, RevPAR was flat compared to last year, but market share increased by approximately 1% [22] - RevPAR in Europe grew by 8.5%, driven by leisure travel growth [23] Company Strategy and Development Direction - The company is focused on an asset-light business model, with over 80% of earnings now coming from asset-light operations [18] - The company plans to continue reducing ownership of hotels and is actively pursuing the sale of several owned properties [8] - The strategy includes expanding brand presence in suburban and small metro markets through new brands like Hyatt Select and Hyatt Studios [12][19] Management's Comments on Operating Environment and Future Outlook - Management noted mixed indicators for future booking activity, with expectations for RevPAR growth in international markets to outperform the United States [15][17] - The company anticipates RevPAR growth to moderate for the remainder of the year, with a full-year RevPAR range of 1% to 3% [27][28] - Management expressed confidence in the strength of the asset-light model to navigate macroeconomic uncertainties [18][30] Other Important Information - The company repurchased approximately $149 million of Class A common stock during the quarter [24] - The company issued $1 billion of senior notes and closed on a $1.7 billion delayed draw term loan to finance the Playa acquisition [25] Q&A Session Summary Question: Update on line items or business units performance in a choppy macro environment - Management noted strength in the first quarter but acknowledged a slowdown in leisure bookings, particularly in U.S. resorts, while all-inclusive business remains solid [35][36] Question: Booking trends and cancellations - Management indicated that while there were significant cancellations in government bookings, corporate bookings are up double digits [54][56] Question: Progress on Playa transaction - Management expects to sign a deal for asset dispositions soon, with a commitment to a total sell-down of $2 billion by 2027 [60][61] Question: Construction cost inflation and pipeline status - Developers are seeing cost inflation of up to 20%, but the pipeline is vibrant with about 30% under construction [68] Question: Non-hotel related fees outlook - Non-hotel related fees showed strong growth in the first quarter, with expectations for continued healthy growth throughout the year [81][84]

Financial Data and Key Metrics Changes - The company reported a system-wide RevPAR growth of 5.7% for the quarter, with adjusted EBITDA increasing by approximately 24% to $273 million after adjusting for assets sold in 2024 [14][26][30] - Adjusted EBITDA for the owned and leased segment increased by 18%, while the distribution segment adjusted EBITDA improved by 9.6% [26] - The company repurchased approximately $149 million of Class A common stock during the quarter, with about $822 million remaining under the share repurchase authorization [26][27] Business Line Data and Key Metrics Changes - Business transient RevPAR grew by 12%, driven by large corporate customers, while group RevPAR increased by 9% [14][22] - The luxury brand categories saw RevPAR growth of over 8%, contributing to a RevPAR index gain of over two percentage points [22] - The all-inclusive resorts in The Americas reported a net package RevPAR increase of over 4% compared to the first quarter of 2024 [14][22] Market Data and Key Metrics Changes - In the United States, RevPAR increased by 5.4%, positively impacted by the shift of Easter and the presidential inauguration [22] - RevPAR in Greater China was flat compared to last year, but market share increased by approximately 1% [23] - International inbound travel from the broader Asia Pacific region increased by 14% compared to last year, with RevPAR in Asia Pacific (excluding Greater China) up 11.2% [23][24] Company Strategy and Development Direction - The company is focused on an asset-light business model, with over 80% of earnings now coming from asset-light operations, compared to approximately 40% at the time of the IPO [19] - The introduction of the Hyatt Select brand aims to expand offerings in the upper midscale segment, targeting shorter stays in secondary and tertiary markets [12][20] - The company ended the quarter with a development pipeline of approximately 138,000 rooms, a 7% increase over last year [9][10] Management's Comments on Operating Environment and Future Outlook - Management noted mixed indicators for future booking activity, with expectations for RevPAR growth in international markets to outperform the United States [16][18] - The company anticipates RevPAR growth to moderate for the remainder of the year, with a full-year 2025 RevPAR range of 1% to 3% [28][29] - Management expressed confidence in the strength of the asset-light model to navigate macroeconomic uncertainties [19][20] Other Important Information - The company is progressing with the Playa transaction, with a tender offer period extended until May 23, 2025 [8] - The company issued $1 billion of senior notes and closed on a $1.7 billion delayed draw term loan to finance the Playa acquisition [27] - Total liquidity as of March 31, 2025, was approximately $3.3 billion, including $1.8 billion in cash and cash equivalents [27] Q&A Session Summary Question: Update on line items or business units performance in a choppy macro environment - Management noted strength in the first quarter but acknowledged a slowdown in leisure bookings, particularly in U.S. resorts, while the all-inclusive business remains solid [35][36] Question: Are there cancellations or just less bookings? - Significant cancellations were noted in government business, while corporate bookings are up double digits [54][57] Question: Progress on Playa transaction and potential buyers - Management expects to sign a deal for asset dispositions but noted uncertainties regarding timing [60][62] Question: Construction landscape and cost inflation - Developers are seeing cost inflation of up to 20%, but there is ingenuity in sourcing materials domestically to mitigate impacts [66][68] Question: Confidence in Playa transaction conditions being met - Management expressed confidence in meeting key conditions for the Playa transaction, particularly regarding antitrust clearance [77][78] Question: Changes in non-hotel related fees outlook - Non-hotel related fees are expected to grow healthily, with strong results in franchise and other fees [82][86] Question: Co-brand credit card negotiations - Management believes they will achieve a competitive new deal due to the brand portfolio and performance of the World of Hyatt program [89] Question: All-inclusive business and point of sale changes - There is an increase in Canadian travelers, contributing positively to the all-inclusive segment, while the U.S. remains the dominant market [93][95] Question: Dispositions this year excluding Playa transaction - Timing for dispositions is unpredictable due to market disruptions, but management expects to close on some properties [97][98]

ADJUSTED EBITDA† DILUTED EPS GROSS FEES NEW RECORD $20M NET INCOME $0.19 $273M $307M OPERATIONAL RESULTS +7.0% PIPELINE ROOMS GROWTH +10.5% NET ROOMS GROWTH +5.7% SYSTEM-WIDE HOTELS REVPAR◊ GROWTH +22% WORLD OF HYATT MEMBER GROWTH ~ 56M | NEW RECORD Figures as of March 31, 2025, and growth rates represent year-over-year comparisons from quarters ended March 31, 2024 and March 31, 2025. HYATT STUDIOS MOBILE / TILLMANS CORNER RECENTLY OPENED IN Q1 2025 Q1 2025 HIGHLIGHTS FINANCIAL RESULTS ...

Core Insights - Hyatt Hotels reported quarterly earnings of $0.46 per share, exceeding the Zacks Consensus Estimate of $0.30 per share, but down from $0.71 per share a year ago, indicating an earnings surprise of 53.33% [1] - The company generated revenues of $1.72 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.93% and slightly up from $1.71 billion year-over-year [2] - The stock has underperformed, losing approximately 28.2% since the beginning of the year compared to the S&P 500's decline of 5.3% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.83 on revenues of $1.75 billion, and for the current fiscal year, it is $2.59 on revenues of $6.85 billion [7] - The estimate revisions trend for Hyatt Hotels is mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6] Industry Context - The Hotels and Motels industry is currently ranked in the top 32% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Net income attributable to Hyatt was $20 million, with Adjusted Net Income at $46 million[4]. - Net income for 2025 is projected between $95 million and $150 million, a decline of 93% to 88% year-over-year[8]. - Net income attributable to Hyatt Hotels Corporation for Q1 2025 was $20 million, a significant decrease from $522 million in Q1 2024[23]. - Adjusted net income attributable to Hyatt Hotels Corporation was $46 million in Q1 2025, down from $81 million in Q1 2024[41]. - Hyatt's net income attributable to the company for the three months ended March 31, 2025, was $20 million, a significant decrease from $522 million in 2024[36]. Revenue and Fees - Gross fees totaled $307 million, reflecting a 16.9% increase from Q1 2024[4]. - Total revenues for Q1 2025 were $1,718 million, slightly up from $1,714 million in Q1 2024[23]. - The company expects adjusted EBITDA for the full year 2025 to range between $1,080 million and $1,135 million[54]. Adjusted EBITDA - Adjusted EBITDA reached $273 million, a 5.4% increase, or 24.4% after adjusting for assets sold in 2024[4]. - Adjusted EBITDA for Q1 2025 was $273 million, an increase of 5.4% from $259 million in Q1 2024[38]. - Adjusted EBITDA for the three months ended March 31, 2025, was $273 million, compared to $259 million in the same period of 2024, indicating a year-over-year increase[36]. Cash Flow and Liquidity - Adjusted Free Cash Flow for 2025 is expected to be between $450 million and $500 million, a decrease of 17% to 7% compared to 2024[8]. - Total liquidity as of March 31, 2025, was $3.3 billion, including $1.8 billion in cash and cash equivalents[6]. - Free cash flow for 2025 is expected to be between $290 million and $340 million, with adjusted free cash flow projected between $450 million and $500 million[56]. - Adjusted Free Cash Flow is considered a useful liquidity measure, representing net cash from operating activities less capital expenditures[75]. Hotel Performance Metrics - Comparable system-wide hotels RevPAR increased by 5.7% compared to Q1 2024[4]. - RevPAR for system-wide hotels increased by 5.7% to $134.55 in Q1 2025 compared to Q1 2024[24]. - The company reported a 9.0% increase in RevPAR for owned and leased hotels, reaching $189.43 in Q1 2025[24]. - For the three months ended March 31, 2025, the Composite Luxury RevPAR increased to $199.27, up 8.1% compared to 2024, with an occupancy rate of 68.6%, reflecting a 3.2 percentage point increase[27]. - The Composite All-inclusive RevPAR reached $305.23, a 4.5% increase from 2024, with an occupancy rate of 83.1%, up 4.9 percentage points[27]. - The occupancy rate for the Composite Upscale & Upper Midscale segment was 67.2%, reflecting a 1.6 percentage point increase compared to the previous year[27]. Operational Highlights - The pipeline of executed management or franchise contracts stands at approximately 138,000 rooms[4]. - The company operates over 1,450 hotels and all-inclusive properties across 79 countries as of March 31, 2025[20]. - The total number of properties managed by Hyatt as of March 31, 2025, is 682, with a total of 211,737 rooms, while franchised properties account for 747 properties and 135,415 rooms[30]. - Hyatt's total properties in the United States include 726 properties with 167,036 rooms, representing the largest share of its portfolio[30]. - The total number of system-wide all-inclusive resorts is 148, with 55,422 rooms, highlighting Hyatt's expansion in this segment[30]. Costs and Expenses - General and administrative expenses decreased to $126 million in Q1 2025 from $169 million in Q1 2024[23]. - Transaction and integration costs rose to $23 million in Q1 2025, compared to $8 million in Q1 2024[23]. - G&A expenses decreased to $126 million in Q1 2025 from $169 million in Q1 2024, with adjusted G&A expenses at $109 million compared to $118 million[40]. - Asset impairments in Q1 2025 amounted to $4 million, compared to $17 million in Q1 2024[41]. Strategic Initiatives - The company plans to continue its market expansion and acquisitions, including the planned Playa Hotels Acquisition, which is not included in the 2025 outlook[53]. - The company recognized $23 million in transaction and integration costs in Q1 2025, primarily related to the planned Playa Hotels Acquisition[41]. - The acquisition of Standard International was completed for $150 million, with potential additional contingent consideration of up to $185 million based on future milestones[82]. - The company entered into a joint venture for the Bahia Principe brand, consolidating its operating results in financial statements[71]. Performance Measurement - Adjusted EBITDA is a key performance measure for the company, assisting in consistent performance comparison across reporting periods[59]. - Adjusted Net Income (Loss) and Adjusted Diluted EPS are defined as net income excluding special items, providing a clearer view of ongoing operations[66]. - Average Daily Rate (ADR) is a critical performance measure, reflecting the average room price attained by hotels[69]. - Net Package RevPAR is used to evaluate hotel performance and is calculated as the product of Net Package ADR and average daily occupancy percentage[77]. - Comparable system-wide metrics are used to assess properties managed, franchised, or serviced, excluding those with substantial damage or renovations[73]. - The company utilizes Constant Dollar Currency analysis to remove the effects of foreign currency fluctuations from operating results[74].

Hyatt Hotels Corporation (H) is scheduled to report first-quarter 2025 results on May 1, before the opening bell. H's earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, and missed on two occasions, the average surprise being 6.1%. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.) Trend in Estimate Revision of H The Zacks Consensus Estimate for first-quarter earnings per share (EPS) is pegged at 30 cents, indicating a deterioration of 57.8% from 71 c ...

Core Viewpoint - The market anticipates a year-over-year decline in earnings for Hyatt Hotels due to lower revenues, with the actual results being crucial for near-term stock price movements [1][2]. Earnings Expectations - Hyatt Hotels is expected to report quarterly earnings of $0.30 per share, reflecting a year-over-year decrease of 57.8% [3]. - Revenues are projected to be $1.7 billion, down 0.8% from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 3% lower in the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate for Hyatt Hotels is lower than the Zacks Consensus Estimate, leading to an Earnings ESP of -25.21% [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive or negative reading indicates the likely deviation of actual earnings from the consensus estimate, with significant predictive power for positive readings [7][8]. - Stocks with a positive Earnings ESP and a Zacks Rank of 1, 2, or 3 have historically produced positive surprises nearly 70% of the time [8]. Historical Performance - In the last reported quarter, Hyatt Hotels was expected to post earnings of $0.68 per share but only achieved $0.42, resulting in a surprise of -38.24% [12]. - Over the past four quarters, the company has beaten consensus EPS estimates twice [13]. Conclusion - Hyatt Hotels does not appear to be a strong candidate for an earnings beat, and investors should consider other factors when evaluating the stock ahead of the earnings release [16].

Core Insights - Hyatt Hotels Corporation has opened the TOOR Hotel in Toronto's Garden District, marking its second JdV by Hyatt hotel in the city and third in Canada, which supports the company's focus on expanding its lifestyle portfolio [1][2][3] Expansion and Growth - The TOOR Hotel is owned and managed by Manga Hotel Group and is designed to reflect Toronto's culture, catering to both business and leisure travelers as the city grows as a global destination [2] - Hyatt added 81 hotels (20,721 rooms) to its portfolio in Q4 2024, achieving a net room growth of 7.8% during the year, indicating strong growth prospects [4] - As of December 31, 2024, Hyatt has a pipeline of approximately 720 hotels (138,000 rooms), representing a 9% year-over-year expansion, with anticipated net room growth of 6% to 7% in 2025 [5] Financial Performance - Hyatt's shares have declined by 30% year-to-date, compared to a 20.7% decline in the Zacks Hotels and Motels industry, although improvements in revenue per available room and strong leisure travel demand are expected to drive future growth [8] - The company has experienced a trailing four-quarter negative earnings surprise of 62.9% on average, with a 30.6% decline in stock over the past year [11]