Hyatt Hotels Corp. posted its first positive quarter for net income since the beginning of the pandemic in the third quarter of 2021, and with the acquisition of Apple Leisure Group now complete, the company is looking to accelerate its move to an asset-light model.
Net income for Q3 was $120 million, after recording a net loss of $9 million in the second quarter and loss of $304 million during the first three months of the year. The most recent net-positive quarter was the final quarter of 2019, when Hyatt posted $321 million in net income.
The company completed the purchase of Apple Leisure Group on Nov. 1 and will now move to sell approximately $2 billion in property assets over the next three years in an effort to generate an increasing share of its revenue from fees, CEO Mark Hoplamazian said on an earnings call Nov. 4. Hyatt anticipates drawing 80% of earnings from franchise and other fees by the end of 2024. In the third quarter of 2021, 13% of total revenue was derived from fees.
"During the quarter, we again produced results that exceeded expectations and demonstrated the resilience of our business," Hoplamazian said. "Leisure demand continues to lead the recovery, and momentum for business and group travel is growing. The recovery is evident in more markets as travel restrictions ease and borders reopen."
Positive trends in business bookings
After leisure-transient demand drove occupancy in the summer, Hoplamazian said they are starting to see positive trends for both group and business transient bookings. Comparable systemwide revenue per available room increased 29% in the quarter when compared with the previous quarter. Business-transient and group revenue also gained momentum in the Q3, improving more than 40% from the prior quarter, with the U.S. and European markets driving the rebound.
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Hoplamazian also said he is encouraged by recent growth in business at urban properties, which recorded 10% growth in RevPAR in October compared with July.
"We're pleased with the group and business-transient trend," he said. "Upward momentum has been steady through September and October, and the rate of improvement in group booking in October has been meaningful. We had some cancellations in August and early September, but the cancellations have receded while short-term group demand has strengthened."
Leisure bookings up in October
He added that strong leisure-transient demand has continued past the start of the school year, with leisure travel up 20% in October at Hyatt properties compared with 2019 levels.
"For Americas resorts, revenue is pacing 25% ahead of 2019 levels for the last weeks of December," he said. "This festive season could be one of the strongest we've ever experienced."
Hyatt added 20 hotels totaling 4,599 rooms in the third quarter, and overall unit growth for the year is expected to be approximately 6%.
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