Buying Apple Leisure Group is paying off for Hyatt

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The Secrets Cap Cana in the Dominican Republic. Hyatt Hotels Corp. CEO Mark Hoplamazian called the company's second-quarter performance the "strongest in the company's history by a significant margin," fueled by "record-level leisure demand" and the company's Apple Leisure Group (ALG) all-inclusive portfolio.
The Secrets Cap Cana in the Dominican Republic. Hyatt Hotels Corp. CEO Mark Hoplamazian called the company's second-quarter performance the "strongest in the company's history by a significant margin," fueled by "record-level leisure demand" and the company's Apple Leisure Group (ALG) all-inclusive portfolio.

Hyatt Hotels Corp. CEO Mark Hoplamazian called the company's second-quarter performance the "strongest in the company's history by a significant margin," fueled by "record-level leisure demand" and the company's Apple Leisure Group (ALG) all-inclusive portfolio.

During a Tuesday earnings call, Hoplamazian told investors that ALG, which Hyatt acquired for $2.7 billion last year, "significantly exceeded our expectations" in the quarter. 

For the three months through June, net package RevPAR at ALG-managed all-inclusive properties in the Americas was ahead of 2019 levels by 17%, according to Hoplamazian. (Hyatt defines net package RevPAR as including revenue derived from "the sale of package revenue comprised of rooms revenue, food and beverage and entertainment.")

Moreover, based on preliminary results for July, Hyatt reported that net package RevPAR at ALG-managed resorts in the Americas is trending 24% higher than July 2019 levels, while total package revenue for the entire ALG portfolio is approximately 74% higher than July of 2019.

"The strong net package RevPAR environment also contributed to a record number of new Unlimited Vacation Club contract signings and another terrific quarter for the ALG Vacations distribution [platforms]," added Hoplamazian. "And it's worth acknowledging the strong results were achieved when travel alternatives, such as European destinations and cruise lines had significantly more availability than in prior periods."

Apple Leisure Group's ALG Vacations arm includes packaged-travel brands Apple Vacations, Funjet Vacations, Blue Sky Tours Hawaii, Travel Impressions, CheapCaribbean and BeachBound. 

Strong recovery for Hyatt's legacy business 

Meanwhile, the pace of recovery within Hyatt's legacy business "also exceeded expectations," said Hoplamazian, with systemwide RevPAR improving from down 25% on 2019 in the first quarter to down only 5% in the second quarter. 

Excluding the region Hyatt identifies as Greater China, which comprises mainland China, Hong Kong, Macau and Taiwan, Hyatt's systemwide RevPAR finished ahead of 2019 for the three-month period. 

For the second quarter, Hyatt saw systemwide second-quarter RevPAR increase 81.7% on the same period last year, to $130.16. 

Occupancy for the quarter improved nearly 18 percentage points on the year prior, to 65.5%, while ADR for the quarter was up 32.4% on 2021, to $198.78.

Hyatt's revenue for the quarter jumped 124% on the prior year, to $1.48 billion, while net income for the second quarter increased to $206 million, versus a loss of $9 million in Q2 of 2021.

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