Hyatt Earnings & Revenues Miss Estimates in Q4, Stock Declines

Core Insights - Hyatt Hotels Corporation reported fourth-quarter 2024 results with earnings and revenues missing the Zacks Consensus Estimate, leading to a 4.4% decline in shares during pre-market trading [1] Financial Performance - Adjusted earnings per share (EPS) were 42 cents, below the Zacks Consensus Estimate of 68 cents, and down from 70 cents in the same quarter last year [2] - Revenues totaled $1,602 million, missing the consensus mark of $1,631 million and reflecting a 3.5% year-over-year decrease [2] - Owned and Leased revenues fell 25.6% to $264 million, Other revenues decreased 82.3% to $11 million, and Distribution revenues declined 4.7% to $205 million [3] - Net fees increased 18.6% year-over-year to $281 million, while revenues for reimbursed costs rose to $841 million from $791 million in the prior-year quarter [3] Operational Highlights - Adjusted EBITDA was $255 million, a 2.4% increase year-over-year, but below the predicted $278.8 million [6] - Adjusted EBITDA for Management and Franchising and Distribution segments increased by 7.2% and 199.6% year-over-year to $219 million and $20 million, respectively, while Owned and Leased segment's adjusted EBITDA decreased 36.5% to $57 million [6] Market Dynamics - The company faced demand headwinds in Q4 due to the timing of Jewish holidays and the U.S. election, with growth driven by the recovery in business transient travel in the U.S. [5] - RevPAR for comparable system-wide hotels increased by 5% compared to the same period in 2023, while comparable system-wide all-inclusive resorts' Net Package RevPAR rose 2.9% year-over-year [4] Balance Sheet - As of December 31, 2024, Hyatt reported cash and cash equivalents of $1,383 million, up from $1,134 million in the previous quarter, with total liquidity at $2.9 billion and total debt at $3.78 billion [7] Expansion Plans - In Q4, 81 new hotels (20,721 rooms) were added to Hyatt's system, with a pipeline of approximately 720 hotels (about 138,000 rooms) under executed management or franchise contracts as of December 31, 2024 [8] 2025 Outlook - For 2025, the company expects adjusted general and administrative expenses to be between $450 million and $460 million, capital expenditures of $150 million, and net rooms' growth of 6% to 7% year-over-year [9] - System-wide RevPAR is anticipated to rise by 2-4% from 2024 levels, with adjusted EBITDA projected to be between $1.1 billion and $1.15 billion, and adjusted free cash flow expected to be in the range of $450 million to $500 million [10]