Hyatt Reports First-Quarter 2019 Results

Management and Franchise Fee Growth of 12%

Sustaining Industry-Leading Net Rooms Growth of Over 7%

CHICAGO–(BUSINESS WIRE)–Hyatt Hotels Corporation (“Hyatt” or the “Company”) (NYSE: H) today
reported first-quarter 2019 financial results. Net income attributable
to Hyatt was $63 million, or $0.59 per diluted share, in the first
quarter of 2019, compared to $411 million, or $3.40 per diluted share,
in the first quarter of 2018. Adjusted net income attributable to Hyatt
was $48 million, or $0.45 per diluted share, in the first quarter of
2019, compared to $40 million, or $0.33 per diluted share, in the first
quarter of 2018. Refer to the table on page 14 of the schedules for a
summary of special items impacting Adjusted net income and Adjusted
earnings per share in the three months ended March 31, 2019.

Mark S. Hoplamazian, president and chief executive officer of Hyatt
Hotels Corporation, said, “We had a strong start to the year,
highlighted by continued growth of management and franchising fees. The
integration of the Two Roads brands remains on track and is expected to
fuel future growth in our managed and franchised business. We are
pleased to see continued demand for our brands among developers which
drove sequential expansion of our pipeline of executed contracts even as
we maintained industry-leading net rooms growth.”

First quarter of 2019 financial highlights as compared to the first
quarter of 2018 are as follows:

  • Net income decreased 84.6% to $63 million.
  • Adjusted EBITDA decreased 7.3% to $187 million, a decrease of 6.1% in
    constant currency.
  • Comparable system-wide RevPAR increased 1.8%, including an increase of
    2.7% at comparable owned and leased hotels. Excluding the benefit from
    the timing of the Easter holiday, comparable RevPAR at system-wide
    hotels and comparable owned and leased hotels would have increased
    1.4% and 2.2%, respectively.
  • Comparable U.S. hotel RevPAR decreased 0.3%; full service hotel RevPAR
    increased 0.1% and select service hotel RevPAR decreased 1.3%.
  • Net rooms growth was 13.7%, or 7.3% excluding the acquisition of Two
    Roads Hospitality LLC in the fourth quarter of 2018.
  • Comparable owned and leased hotels operating margin increased 120
    basis points to 24.7%.
  • Adjusted EBITDA margin of 28.5% decreased 220 basis points in constant

Mr. Hoplamazian continued, “Our outlook for the balance of 2019 is
consistent with our views at the beginning of the year based on
underlying business trends. We expect growth in both system-wide RevPAR
and hotel rooms to sustain upward momentum in our lodging fees as we
continue to evolve to an asset-lighter business model.”

First quarter of 2019 financial results as compared to the first quarter
of 2018 are as follows:

Management, Franchise and Other Fees

Total management, franchise and other fees increased 6.9% (8.8% in
constant currency) to $141 million, driven by hotels added to the
system, inclusive of Two Roads, and conversions from owned to managed.
Base management fees increased 18.2% to $63 million and incentive
management fees increased 0.3% to $34 million. Franchise fees increased
13.9% to $32 million. Other fees decreased 26.3% to $12 million,
reflecting $8 million in fees reported in the first quarter of 2018
related to a franchise agreement termination for an unopened property.
Excluding other fees, management and franchise fees increased 11.8%
(14.1% in constant currency) to $129 million.

Americas Management and Franchising Segment

Americas management and franchising segment Adjusted EBITDA increased
5.3% (5.8% in constant currency). The increase was driven by higher
management, franchise, and other fees and notably, a $5 million positive
impact from the residential management operations acquired as part of
the Two Roads acquisition driven by seasonal strength in that business.
RevPAR for comparable Americas full service hotels increased 3.1%,
occupancy decreased 30 basis points, and ADR increased 3.4%. RevPAR was
driven by strength in certain resort locations outside of the United
States. RevPAR for comparable Americas select service hotels decreased
1.5%, occupancy decreased 90 basis points, and ADR decreased 0.2%. Total
Americas management and franchising revenue increased 40.8% (41.4% in
constant currency) including revenue from the aforementioned residential
management operations.

Transient rooms revenue at comparable U.S. full service hotels increased
0.4%, room nights decreased 0.9%, and ADR increased 1.4%. Group rooms
revenue at comparable U.S. full service hotels decreased 0.7%, room
nights decreased 3.8%, and ADR increased 3.2%.

Americas net rooms increased 13.6% compared to the first quarter of
2018, or 5.9% excluding Two Roads.

Southeast Asia, Greater China, Australia, South Korea, Japan and
Micronesia (ASPAC) Management and Franchising Segment

ASPAC management and franchising segment Adjusted EBITDA increased 6.5%
(11.9% in constant currency). RevPAR for comparable ASPAC full service
hotels increased 1.2%, driven by strong demand in Japan and Southeast
Asia, partially offset by weaker results in Greater China. Occupancy
increased 80 basis points and ADR was flat. Revenue from management,
franchise, and other fees increased 6.2% (10.2% in constant currency).

ASPAC net rooms increased 17.1% compared to the first quarter of 2018,
or 12.1% excluding Two Roads.

Europe, Africa, Middle East and Southwest Asia (EAME/SW Asia)
Management and Franchising Segment

EAME/SW Asia management and franchising segment Adjusted EBITDA
increased 0.8% (7.3% in constant currency). RevPAR for comparable
EAME/SW Asia full service hotels increased 3.0%, driven primarily by
strong growth in Europe and Southwest Asia. Occupancy increased 260
basis points and ADR decreased 0.8%. Revenue from management, franchise,
and other fees decreased 2.6% (2.8% increase in constant currency),
driven by lower incentive fees due to weaker conditions in the Middle

EAME/SW Asia net rooms increased 9.5% compared to the first quarter of
2018, or 8.3% excluding Two Roads.

Owned and Leased Hotels Segment

Total owned and leased hotels segment Adjusted EBITDA decreased 10.0%
(9.3% in constant currency), including an 8.3% (15.4% in constant
currency) increase in pro rata share of unconsolidated hospitality
ventures Adjusted EBITDA. The decrease in segment Adjusted EBITDA was
driven by transaction activity in 2018. Refer to the table on page 11 of
the schedules for a detailed list of portfolio changes and the
year-over-year net impact to total owned and leased hotels segment
Adjusted EBITDA.

Owned and leased hotels segment revenues decreased 9.6% (8.5% in
constant currency), also driven by the transaction activity referenced
above. RevPAR for comparable owned and leased hotels increased 2.7%,
including an approximate 50 basis point benefit from the timing of the
Easter holiday. Occupancy decreased 50 basis points and ADR increased

Corporate and Other

Corporate and other Adjusted EBITDA decreased 29.6% (29.9% in constant
currency), inclusive of $5 million of integration related expenses from
the Two Roads acquisition.

Corporate and other adjusted revenues increased 8.4% (consistent in
constant currency).

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses increased 33.4%, inclusive
of rabbi trust impact and stock-based compensation. Adjusted selling,
general, and administrative expenses increased 9.9%, or $8 million,
including approximately $9 million from the acquisition of Two Roads, of
which $5 million is considered to be one-time integration related
expenses. Refer to the table on page 15 of the schedules for a
reconciliation of selling, general, and administrative expenses to
Adjusted selling, general, and administrative expenses.


Sixteen hotels (or 3,120 rooms) opened in the first quarter of 2019,
contributing to a 13.7% increase in net rooms compared to the first
quarter of 2018. Excluding the impact of the Two Roads acquisition, net
rooms increased 7.3% compared to the first quarter of 2018. The Company
is on pace to open over 80 hotels in the 2019 fiscal year.

As of March 31, 2019, the Company had executed management or franchise
contracts for approximately 455 hotels, or approximately 91,000 rooms,
compared to approximately 445 hotels or approximately 89,000 rooms at
December 31, 2018.


During the first quarter of 2019, the Company repurchased a total of
1,452,858 Class A shares for $102 million. The Company ended the first
quarter with 38,401,176 Class A and 67,115,828 Class B shares issued and

From April 1 through April 26, 2019, the Company repurchased 208,047
shares of Class A common stock for an aggregate purchase price of
approximately $16 million. As of April 26, 2019, the Company had
approximately $550 million remaining under its share repurchase


At the March 5, 2019 Investor Day, the Company described the evolution
of its capital strategy and its commitment to grow in an asset-light
manner, accelerating the mix of earnings from managed and franchised
fees. This included a $1.5 billion expansion of its asset sell-down
program over the next three years, assuming market conditions allow for
the sale of assets on attractive terms to create shareholder value. To
date, there have been no sales of real estate under this recently
announced expanded program.


As of March 31, 2019, the Company reported the following:

  • Total debt of $1,752 million.
  • Pro rata share of unconsolidated hospitality venture debt of
    approximately $550 million, substantially all of which is non-recourse
    to Hyatt and a portion of which Hyatt guarantees pursuant to separate
  • Cash and cash equivalents, including investments in highly-rated money
    market funds and similar investments, of $547 million, restricted cash
    of $24 million, and short-term investments of $54 million.
  • Undrawn borrowing availability of $1.4 billion under Hyatt’s revolving
    credit facility.


The Company is revising the following information for the 2019 fiscal

  • Net income is expected to be approximately $144 million to $183
    million, and primarily reflects changes in expected Other (income)
    loss, net and Equity losses from unconsolidated hospitality ventures.
    Please refer to table on page 13 of the schedules for revised ranges.

The Company is reaffirming the following information for the 2019 fiscal

  • Comparable system-wide RevPAR is expected to increase approximately 1%
    to 3%, as compared to fiscal year 2018.
  • Adjusted EBITDA is expected to be approximately $780 million to $800
    million. These estimates include an unfavorable impact from foreign
    currency of approximately $7 million (low end of the forecast) to $2
    million (high end of the forecast). Refer to the table on page 13 of
    the schedules for a reconciliation of Net Income to Adjusted EBITDA.
  • Adjusted EBITDA contribution from the Two Roads acquisition prior to
    non-recurring integration-related costs is estimated to be
    approximately $20 million to $25 million.
  • Interest expense is expected to be approximately $78 million to $79
  • Adjusted selling, general, and administrative expenses are expected to
    be approximately $345 million inclusive of $25 million of expenses
    related to one-time integration costs for Two Roads. Adjusted selling,
    general, and administrative expenses exclude approximately $35 million
    of stock-based compensation expense and any potential impact related
    to benefit programs funded through rabbi trusts.
  • The Company expects to grow units, on a net rooms basis, by
    approximately 7.0% to 7.5%, reflecting over 80 new hotel openings.
  • Depreciation and amortization expense is expected to be approximately
    $347 million to $352 million.
  • Other income (loss), net is expected to be negatively impacted by
    approximately $40 million to $50 million related to performance
    guarantee expense for the four managed hotels in France.
  • The effective tax rate is expected to be approximately 28% to 30%.
  • Capital expenditures are expected to be approximately $375 million.
  • The Company expects to return approximately $300 million to
    shareholders through a combination of cash dividends on its common
    stock and share repurchases.

No additional disposition or acquisition activity beyond what has been
completed as of the date of this release has been included in the
outlook. The Company’s outlook is based on a number of assumptions that
are subject to change and many of which are outside the control of the
Company. If actual results vary from these assumptions, the Company’s
expectations may change. There can be no assurance that Hyatt will
achieve these results.


The Company will hold an investor conference call tomorrow, May 2, 2019,
at 10:30 a.m. CT. All interested persons may listen to a simultaneous
webcast of the conference call, which may be accessed through the
Company’s website at, or by dialing 647.689.4468 or
833.238.7946, passcode #6789039, approximately 10 minutes before the
scheduled start time. For those unable to listen to the live broadcast,
a replay will be available from 1:30 p.m. CT on May 2, 2019 through May
3, 2019 at midnight by dialing 416.621.4642, passcode #6789039.
Additionally, an archive of the webcast will be available on the
Company’s website for 90 days.


Forward-Looking Statements in this press release, which are not
historical facts, are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements
include statements about our plans, strategies, outlook, occupancy, ADR
and growth trends, market share, the number of properties we expect to
open in the future, the amount by which the Company intends to reduce
its real estate asset base and the anticipated timeframe for such asset
dispositions, our expected adjusted SG&A expense, our estimated
comparable system-wide RevPAR growth, our estimated Adjusted EBITDA
growth, maintenance and enhancement to existing properties capital
expenditures, investments in new properties capital expenditures,
depreciation and amortization expense and interest expense estimates,
financial performance, prospects or future events and involve known and
unknown risks that are difficult to predict. As a result, our actual
results, performance or achievements may differ materially from those
expressed or implied by these forward-looking statements. In some cases,
you can identify forward-looking statements by the use of words such as
“may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,”
“believe,” “estimate,” “predict,” “potential,” “continue,” “likely,”
“will,” “would” and variations of these terms and similar expressions,
or the negative of these terms or similar expressions. Such
forward-looking statements are necessarily based upon estimates and
assumptions that, while considered reasonable by us and our management,
are inherently uncertain. Factors that may cause actual results to
differ materially from current expectations include, but are not limited
to, general economic uncertainty in key global markets and a worsening
of global economic conditions or low levels of economic growth; the rate
and the pace of economic recovery following economic downturns; levels
of spending in business and leisure segments as well as consumer
confidence; declines in occupancy and average daily rate; limited
visibility with respect to future bookings; loss of key personnel;
hostilities, or fear of hostilities, including future terrorist attacks,
that affect travel; travel-related accidents; natural or man-made
disasters such as earthquakes, tsunamis, tornadoes, hurricanes, floods,
wildfires, oil spills, nuclear incidents, and global outbreaks of
pandemics or contagious diseases or fear of such outbreaks; our ability
to successfully achieve certain levels of operating profits at hotels
that have performance tests or guarantees in favor of our third-party
owners; the impact of hotel renovations and redevelopments; risks
associated with our capital allocation plans and common stock repurchase
program and other forms of shareholder capital return, including the
risk that our common stock repurchase program could increase volatility
and fail to enhance shareholder value; our intention to pay a quarterly
cash dividend and the amounts thereof, if any; the seasonal and cyclical
nature of the real estate and hospitality businesses; changes in
distribution arrangements, such as through internet travel
intermediaries; changes in the tastes and preferences of our customers;
relationships with colleagues and labor unions and changes in labor
laws; the financial condition of, and our relationships with,
third-party property owners, franchisees, and hospitality venture
partners; the possible inability of third-party owners, franchisees, or
development partners to access capital necessary to fund current
operations or implement our plans for growth; risks associated with
potential acquisitions and dispositions and the introduction of new
brand concepts; the timing of acquisitions and dispositions, and our
ability to successfully integrate completed acquisitions with existing
operations; failure to successfully complete proposed transactions
(including the failure to satisfy closing conditions or obtain required
approvals); our ability to successfully execute on our strategy to
expand our management and franchising business while at the same time
reducing our real estate asset base within targeted timeframes and at
expected values; declines in the value of our real estate assets;
unforeseen terminations of our management or franchise agreements;
changes in federal, state, local, or foreign tax law;
the impact
of changes in the tax code as a result of the Tax Cuts and Jobs Act of
2017 and uncertainty as to how some of those changes may be applied;
increases in interest rates and operating costs; foreign exchange rate
fluctuations or currency restructurings; lack of acceptance of new
brands or innovation; general volatility of the capital markets and our
ability to access such markets; changes in the competitive environment
in our industry, including as a result of industry consolidation, and
the markets where we operate; our ability to successfully grow the World
of Hyatt loyalty program; cyber incidents and information technology
failures; outcomes of legal or administrative proceedings; violations of
regulations or laws related to our franchising business; and other risks
discussed in the Company’s filings with the SEC, including our annual
report on Form 10-K, which filings are available from the SEC. All
forward-looking statements attributable to us or persons acting on our
behalf are expressly qualified in their entirety by the cautionary
statements set forth above. We caution you not to place undue reliance
on any forward-looking statements, which are made only as of the date of
this press release. We do not undertake or assume any obligation to
update publicly any of these forward-looking statements to reflect
actual results, new information or future events, changes in assumptions
or changes in other factors affecting forward-looking statements, except
to the extent required by applicable law. If we update one or more
forward-looking statements, no inference should be drawn that we will
make additional updates with respect to those or other forward-looking


The Company refers to certain financial measures that are not recognized
under U.S. generally accepted accounting principles (GAAP) in this press
release, including: net income, adjusted for special items; diluted EPS,
adjusted for special items; Adjusted EBITDA; Adjusted EBITDA margin; and
Adjusted SG&A. See the schedules to this earnings release, including the
“Definitions” section, for additional information and reconciliations of
such non-GAAP financial measures.


Investors and others should note that Hyatt routinely announces material
information to investors and the marketplace using U.S. Securities and
Exchange Commission (SEC) filings, press releases, public conference
calls, webcasts and the Hyatt Investor Relations website. While not all
of the information that the Company posts to the Hyatt Investor
Relations website is of a material nature, some information could be
deemed to be material. Accordingly, the Company encourages investors,
the media, and others interested in Hyatt to review the information that
it shares at the Investor Relations link located at the bottom of the
page on Users may automatically receive email alerts and
other information about the Company when enrolling an email address by
visiting “Sign up for Email Alerts” in the “Investor Resources” section
of Hyatt’s website at


Hyatt Hotels Corporation, headquartered in Chicago, is a leading global
hospitality company with a portfolio of 19 premier brands. As of March
31, 2019, the Company’s portfolio included more than 850 properties in
over 60 countries across six continents. The Company’s purpose to care
for people so they can be their best informs its business decisions and
growth strategy and is intended to attract and retain top colleagues,
build relationships with guests and create value for shareholders. The
Company’s subsidiaries develop, own, operate, manage, franchise, license
or provide services to hotels, resorts, branded residences, vacation
ownership properties, and fitness and spa locations, including under the Park
, Miraval®, Grand Hyatt®, Alila®
, Andaz®, The
Unbound Collection by Hyatt®
, Destination®
, Hyatt®, Hyatt Ziva
, Hyatt
, Thompson Hotels®, Hyatt
, Hyatt House®, Hyatt Place®, Joie
de Vivre®
Residence Club® 
and Exhale® brand names,
and operates the World of Hyatt® loyalty program that provides
distinct benefits and exclusive experiences to its valued members. For
more information, please visit

The financial section of this release, including a reconciliation of
the Company’s presented non-GAAP measures to the most directly
comparable GAAP measures, is provided on the Company’s website at

Note: All RevPAR and ADR percentage changes are in constant
dollars. This release includes references to non-GAAP financial
measures. Refer to the definitions of the non-GAAP measures presented
beginning on page 17 and non-GAAP reconciliations included in the


Investor Contact:
Amanda Bryant, 312.780.5539

Media Contact:
Franziska Weber, 312.780.6106

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