Hyatt CEO Mark Hoplamazian said that the company is being "mindful" about climbing Covid-19 cases in the U.S. and Europe, which he warned could result in "flat or perhaps reduced fourth-quarter demand."

"At this moment in time, those surges are pretty widespread," Hoplamazian told investors during Hyatt's third-quarter earnings call on Thursday. "Based on what we're seeing in terms of the virus progression, we have to anticipate that's going to impact demand in some way, shape or form."

Hyatt CEO Mark Hoplamazian says that around five hotels will remain closed for now. The Grand Hyatt New York is one of them.
Hyatt CEO Mark Hoplamazian says that around five hotels will remain closed for now. The Grand Hyatt New York is one of them.

For the third quarter, Hyatt reported a systemwide RevPAR decline of 72%. 

According to Hyatt CFO Joan Bottarini, the group's performance for the quarter was weighed down in part by Hyatt's chain scale composition, which "includes significant exposure to upper-upscale and luxury properties and top 25 markets in the U.S.," as well as the inclusion of closed hotels in its systemwide RevPAR calculations.

Around 92% of Hyatt's global hotels are up and running as of Sept. 30, compared with around 80% of systemwide properties at the end of June.

Hoplamazian added that he expects that around five owned, leased and joint venture hotels will remain "closed for the foreseeable future, given conditions in particularly challenging markets like New York City." These include properties like the Grand Hyatt New York and the Park Hyatt New York as well as the Hyatt Regency Jersey City on the Hudson. He emphasized, however, that the company did not anticipate these closures to be permanent.

As pandemic-related lockdowns in places like France, Germany and the U.K. go back into effect, Hoplamazian also predicted that some Hyatt hotels that have reopened in those markets could potentially shut down temporarily again.

For the month of September, roughly 84% of the company's open select-service hotels were running occupancies in excess of 30%, and approximately 32% of Hyatt's full-service hotels were running occupancy levels in excess of 40%.

In the U.S., Hyatt reported "modest increases" in average occupancy levels throughout September and October, with weekend occupancy percentages running in the low 40s and midweek occupancy percentages running in the high 20s. The company reported solid U.S. demand in drive-to resort and leisure destinations, such as the Lake Tahoe area in Nevada and Huntington Beach, Calif., but urban markets "continued to face significant headwinds."

In China, Hyatt saw RevPAR start to approach pre-Covid levels, bolstered by strong leisure travel demand and some "meaningful recovery" in both transient business travel and group business. During the China's Golden Week holiday, running Oct. 1 through Oct. 8, over 45% of the country's population traveled, with Hyatt reporting a 17% increase in RevPAR and a more than 35% increase in food and beverage spend on the same period in 2019.

As for his outlook on 2021, Hoplamazian said he predicts it will be a "tale of two halves."

"The first half is significantly down from prior years, and the second half of the year is currently down, from a cancellations perspective, in the mid-single digits," he explained. "So, two very different halves of the year. Any predictions past the very near term are unreliable, but we do have some belief that a combination of testing regimens, some therapeutics and approved vaccines will change the profile and allow us to get back to fulfilling on that demand that's currently on the books for the second half [of 2021]."

Hyatt saw third-quarter revenue fall by just over 67% to $399 million. The company reported a third-quarter net loss of $161 million, versus net income of $296 million for the same quarter last year.


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