Hyatt Hotels Corp.’s third-quarter earnings beat analyst estimates, as the fourth-largest U.S. hotel company said demand rose for select-service hotels in North America.
Net income fell 53% from a year earlier, from $30 million to $14 million, because of gains on investments in the third quarter of 2010.
Revenue increased 2%, to $897 million.
The company was expected to earn 7 cents a share on $922.2 million in revenue, according to the average analyst estimate in a Thomson Reuters survey. Hyatt earned 8 cents a share.
Hyatt benefited from strong demand for select-service brands Hyatt Place and Summerfield Suites. North American revenue per available room (RevPAR) for select-service hotels rose 8.8% from a year earlier on a 4.1-point occupancy increase and a 3.1% increase in average room rates.
Hyatt’s emphasis on select-service operations was illustrated by its $660 million acquisition of the 19-hotel LodgeWorks portfolio in August.
And in September, Hyatt said it would rebrand Summerfield Suites and Hotel Sierra properties under a new extended-stay brand called Hyatt House. (Hyatt acquired the Sierra brand in the Lodgeworks acquisition.)
The rebranding effort will take place over the next year.
The Lodgeworks acquisition “immediately expands our extended-stay presence, expertise and development capabilities in North America, as well as adds several unique full-service hotels to Hyatt's portfolio,” said Hyatt CEO Mark Hoplamazian in a statement Wednesday. “While it is still early, we are pleased with the initial results.”
Overall, global RevPAR rose 6.9%, excluding currency effects. Worldwide select-service hotel RevPAR rose 10.5% from a year earlier, while full-service hotel RevPAR was up 6.3%.
For hotel and hospitality news, follow Danny King on Twitter @dktravelweekly.