Hyatt reports fourth quarter 2017 results
U.S. and Systemwide Comparable RevPAR Increased 3.0% and 3.8%, Respectively initiates Quarterly Cash Dividend of $0.15 per Share |
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Hyatt reports fourth quarter 2017 results
U.S. and Systemwide Comparable RevPAR Increased 3.0% and 3.8%, Respectively initiates Quarterly Cash Dividend of $0.15 per Share |
Category: Worldwide - Industry economy
- Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2018-02-15
Hyatt Hotels Corporation ("Hyatt" or the "Company") (NYSE: H) today reported fourth quarter 2017 financial results. Net income attributable to Hyatt was $76 million, or $0.62 per diluted share, in the fourth quarter of 2017, compared to $41 million, or $0.31 per diluted share, in the fourth quarter of 2016. Net income in the fourth quarter of 2017 included a $217 million gain from the sale of Avendra, LLC, an equity method investment, and $110 million of incremental tax attributable to recent U.S. tax reform. Adjusted net income attributable to Hyatt was $29 million, or $0.23 per diluted share, in the fourth quarter of 2017, compared to $39 million, or $0.29 per diluted share, in the fourth quarter of 2016. Refer to the table on page 4 of the schedules for a summary of special items impacting Adjusted net income and Adjusted earnings per share in the three months ended December 31, 2017.
Mark S. Hoplamazian, president and chief executive officer of Hyatt Hotels Corporation, said, "We had a strong finish to the year, delivering full-year comparable RevPAR growth of 3.3% and net hotel rooms growth of 7.0%, fueled by a record-setting 71 new hotels added to our system in 2017. Double-digit growth in management and franchising fees more than offset an earnings decline in our owned and leased segment, which reflected more than $900 million in asset dispositions."Fourth quarter of 2017 financial results as compared to the fourth quarter of 2016 are as follows: - Net income increased 87.4% to $76 million.
- Adjusted EBITDA increased 4.0% to $179 million, up 3.0% in constant currency.
- Comparable systemwide RevPAR increased 3.8%, including an increase of 4.1% at comparable owned and leased hotels. Excluding the benefit from the timing of the Jewish holiday, comparable systemwide RevPAR increased 3.2%, and comparable owned and leased hotels RevPAR increased 3.0%.
- Comparable U.S. hotel RevPAR increased 3.0%; full service and select service hotel RevPAR increased 2.9% and 3.2%, respectively.
- Comparable owned and leased hotels operating margin increased 150 basis points to 23.7%.
- Adjusted EBITDA margin decreased 20 basis points to 26.7%.
Fiscal year of 2017 financial results as compared to the fiscal year of 2016 are as follows: - Net income increased 22.3% to $249 million.
- Adjusted EBITDA increased 3.9% to $816 million, up 4.0% in constant currency.
- Comparable systemwide RevPAR increased 3.3%, including an increase of 0.9% at comparable owned and leased hotels.
- Comparable U.S. hotel RevPAR increased 2.2%; full service and select service hotel RevPAR increased 2.1% and 2.4%, respectively.
- Comparable owned and leased hotels operating margin decreased 20 basis points to 24.3%.
- Adjusted EBITDA margin decreased 70 basis points to 29.5%.
- The Company opened a record 71 hotels during 2017, compared to 59 hotels in 2016.
- Net hotel and net rooms growth was 9.8% and 7.0% in 2017, respectively, compared to growth of 9.6% and 7.3%, respectively, in 2016.
- As of December 31, 2017, the Company's pipeline consisted of approximately 330 hotels or approximately 70,000 rooms. This compared to approximately 305 hotels or approximately 66,000 rooms as of December 31, 2016.
- The Company repurchased 12,186,308 shares of common stock for $723 million in 2017, compared to 5,631,557 shares for $272 million in 2016.
Mr. Hoplamazian continued, "We believe we are well-positioned to execute our long-term growth strategy of maximizing our core business focused on high-end travelers, integrating new growth platforms and optimizing capital deployment. Plans to sell roughly $1.5 billion of real estate by the end of 2020 are underway. We remain confident that these actions will support growth in our business and further unlock shareholder value, as evidenced by our initiation of a quarterly cash dividend as well as the increase in our share repurchase authorization."Fourth quarter of 2017 financial results as compared to the fourth quarter of 2016 are as follows:Owned and Leased Hotels SegmentTotal owned and leased hotels segment Adjusted EBITDA decreased 8.1% (8.8% in constant currency) including a 34.0% decrease in pro rata share of unconsolidated hospitality ventures Adjusted EBITDA. The decrease in total segment Adjusted EBITDA was primarily driven by transaction activity, partially offset by benefits related to the timing of the Jewish holiday. Refer to the table on page 19 of the schedules for a detailed list of portfolio changes and the year-over-year net impact to fourth quarter owned and leased hotels segment Adjusted EBITDA. Owned and leased hotels segment revenues decreased 2.5% (3.6% in constant currency).
RevPAR for comparable owned and leased hotels increased 4.1%. Occupancy increased 120 basis points and ADR increased 2.4%.The following hotel was added to the portfolio in the fourth quarter:Hyatt House Irvine / John Wayne Airport (owned, 149 rooms)The following three hotels were removed from the owned and leased hotels portfolio as they were sold in the fourth quarter: - Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch (493 rooms), Royal Palms Resort and Spa (119 rooms) and Hyatt Regency Monterey Hotel & Spa on Del Monte Golf Course (550 rooms). The hotels continue to be Hyatt-branded with Hyatt Regency Scottsdale and Royal Palms operating under long-term management agreements and Hyatt Regency Monterey operating under a long-term franchise agreement.
Management and Franchise FeesTotal fee revenues increased 12.8% (11.9% in constant currency) to $131 million. Base management fees increased 9.5% to $52 million and incentive management fees increased 13.9% to $36 million, driven by new hotels and improved performance at existing hotels. Franchise fees increased 7.6% to $29 million. Other fee revenues increased 38.9% to $14 million, including $8 million of deferred gains.Americas Management and Franchising SegmentAmericas management and franchising segment Adjusted EBITDA increased 6.5% (6.3% in constant currency). RevPAR for comparable Americas full service hotels increased 3.3%; occupancy increased 110 basis points and ADR increased 1.7%. RevPAR for comparable Americas select service hotels increased 4.5%; occupancy increased 170 basis points and ADR increased 2.1%. Revenue from management, franchise and other fees increased 5.2% (5.1% in constant currency).
Group rooms revenue at comparable U.S. full service hotels increased 3.4%; room nights increased 0.8% and ADR increased 2.6%. Group demand was favorably impacted by the timing of the Jewish holiday. Transient rooms revenue at comparable U.S. full service hotels increased 2.0%; room nights increased 0.5% and ADR increased 1.5%.The following 16 hotels were added to the portfolio during the fourth quarter: - Park Hyatt St. Kitts, Saint Kitts and Nevis (managed, 126 rooms)
- Grand Hyatt Baha Mar, The Bahamas (managed, 1,800 rooms)
- Holston House Nashville, The Unbound Collection by Hyatt (franchised, 191 rooms)
- Spirit Ridge, The Unbound Collection by Hyatt, Canada (franchised, 226 rooms)
- Hyatt Place Ann Arbor (franchised, 142 rooms)
- Hyatt Place Athens / Downtown (franchised, 190 rooms)
- Hyatt Place Houston-Northwest / Cy-Fair (franchised, 107 rooms)
- Hyatt Place Keystone, Indiana (franchised, 103 rooms)
- Hyatt Place Knoxville / Downtown (franchised, 165 rooms)
- Hyatt Place Long Island City / New York City (franchised, 108 rooms)
- Hyatt Place Marlborough / Apex Center, Massachusetts (franchised, 137 rooms)
- Hyatt Place St. George / Convention Center, Utah (franchised, 104 rooms)
- Hyatt House Irvine / John Wayne Airport (owned, 149 rooms)
- Hyatt House Jersey City (franchised, 258 rooms)
- Hyatt House Raleigh / RDU / Brier Creek (franchised, 130 rooms)
- Hyatt House Washington DC / The Wharf (franchised, 237 rooms)
Four hotels were removed from the portfolio during the fourth quarter.Southeast Asia, Greater China, Australia, South Korea, Japan and Micronesia (ASPAC) Management and Franchising SegmentASPAC management and franchising segment Adjusted EBITDA increased 17.9% (15.7% in constant currency). RevPAR for comparable ASPAC full service hotels increased 4.3%, driven by strong growth in Greater China and Southeast Asia. Occupancy increased 180 basis points and ADR increased 1.8%. Revenue from management, franchise and other fees increased 16.7% (15.0% in constant currency).The following seven hotels were added to the portfolio during the fourth quarter: - Andaz Singapore, Singapore (managed, 342 rooms)
- Hyatt Place Bangkok Sukhumvit, Thailand (managed, 222 rooms)
- Hyatt Place Shanghai Hongqiao CBD, China (managed, 252 rooms)
- Hyatt Place Shanghai New Hongqiao, China (managed, 194 rooms)
- Hyatt Place Zhuhai Jinshi, China (managed, 190 rooms)
- Hyatt House Shanghai Hongqiao CBD, China (managed, 126 rooms)
- Hyatt House Shanghai New Hongqiao, China (managed, 101 rooms)
Europe, Africa, Middle East and Southwest Asia (EAME/SW Asia) Management and Franchising SegmentEAME/SW Asia management and franchising segment Adjusted EBITDA increased 36.9% (31.7% in constant currency). RevPAR for comparable EAME/SW Asia full service hotels increased 3.8%, driven by growth in most European markets and partially offset by weak performance in the Middle East. Occupancy increased 200 basis points and ADR increased 0.7%. Revenue from management, franchise and other fees increased 15.8% (12.4% in constant currency).The following six hotels were added to the portfolio during the fourth quarter: - Hyatt Regency Moscow Petrovsky Park, Russia (managed, 298 rooms)
- Hyatt Centric Gran Via Madrid, Spain (managed, 159 rooms)
- Hyatt Centric La Rosière, France (franchised, 69 rooms)
- Hyatt Place Hyderabad / Banjara Hills, India (managed, 147 rooms)
- Hyatt House Dusseldorf / Andreas Quarter, Germany (franchised, 102 rooms)
- Hyatt House Gebze, Turkey (managed, 158 rooms)
Corporate and OtherCorporate and other Adjusted EBITDA increased 8.6% (consistent in constant currency). Corporate and other revenues increased 228.9% (consistent in constant currency), primarily driven by new business platforms, including Miraval and exhale in the wellness space, while also driven by increased revenues related to the Company's co-branded credit card.Selling, General, and Administrative ExpensesSelling, general, and administrative expenses increased 30.2%. Adjusted selling, general, and administrative expenses increased 21.4%, reflecting increased payroll and related costs, including severance charges, acquisitions and certain marketing initiatives in 2017. Refer to the table on page 10 of the schedules for a reconciliation of selling, general, and administrative expenses to Adjusted selling, general, and administrative expenses.OPENINGS AND FUTURE EXPANSIONTwenty-nine hotels (or 6,533 rooms) were added in the fourth quarter of 2017, each of which is listed above. The Company's net rooms were 7.0% higher in the fourth quarter of 2017, compared to the fourth quarter of 2016. During the 2017 fiscal year, the Company opened a record 71 hotels, representing 13,698 rooms. Six hotels, representing 1,520 rooms, were removed from the portfolio during the 2017 fiscal year.
As of December 31, 2017, the Company had executed management or franchise contracts for approximately 330 hotels (approximately 70,000 rooms), compared to the expectation for 315 hotels and 69,000 rooms as of September 30, 2017. The pipeline of executed contracts represent important potential entry into several new countries and expansion into new markets or markets in which Hyatt is under-represented. Refer to the table on page 18 of the schedules for a breakdown of the pipeline.DIVIDEND / SHARE REPURCHASEAs part of the Company's commitment to return meaningful capital to shareholders, the Company is initiating a quarterly cash dividend of $0.15 per share, representing an annualized dividend of $0.60 per share. The initial dividend will be payable on March 29, 2018 to Class A and Class B shareholders on record as of March 22, 2018.
During the 2017 fiscal year, the Company repurchased a record $723 million of shares, consisting of 12,186,308 shares of common stock (9,096,871 Class A shares and 3,089,437 Class B shares), at a weighted average price of $59.34 per share. During the fourth quarter of 2017, the Company repurchased 2,693,579 shares of common stock (1,417,601 Class A shares and 1,275,978 Class B shares) for an aggregate purchase price of $188 million. The Company ended the fourth quarter with 48,231,149 Class A and 70,753,837 Class B shares issued and outstanding.
From January 1 through February 9, 2018, the Company repurchased 277,760 shares of Class A common stock for an aggregate purchase price of $23 million. This includes a final tranche of Class A shares that settled as part of a November 2017 accelerated share repurchase program. As of February 9, 2018, the Company had approximately $861 million remaining under its share repurchase authorization.CAPITAL STRATEGY UPDATEDuring the fourth quarter, the Company completed the following transactions: - Sold Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch (493 rooms) and Royal Palms Resort and Spa in Phoenix, Arizona (119 rooms) for approximately $305 million. The hotels continue to be Hyatt-branded under long-term management agreements.
- Sold Hyatt Regency Monterey Hotel & Spa on Del Monte Golf Course (550 rooms) for approximately $58 million. The sale was part of the Company's ongoing asset recycling strategy. The hotel continues to be Hyatt-branded under a long-term franchise agreement.
The Company continues to execute plans to sell approximately $1.5 billion of real estate by the end of 2020 as part of its long-term growth strategy. The disposition of Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch and Royal Palms Resort and Spa in the fourth quarter of 2017 reflects progress towards this goal. Additional properties are being actively marketed for sale.BALANCE SHEET / OTHER ITEMSAs of December 31, 2017, the Company reported the following: - Total debt of $1.5 billion.
- Pro rata share of unconsolidated hospitality venture debt of $580 million, substantially all of which is non-recourse to Hyatt and a portion of which Hyatt guarantees pursuant to separate agreements.
- Cash and cash equivalents, including investments in highly-rated money market funds and similar investments, of $503 million, short-term investments of $49 million and restricted cash of $234 million.
- Undrawn borrowing availability of $1.5 billion under its revolving credit facility.
2018 OUTLOOKThe Company is providing the following information for the 2018 fiscal year: - Net income is expected to be approximately $176 million to $215 million.
- Adjusted EBITDA is expected to be approximately $805 million to $825 million. These estimates also include a favorable impact from foreign currency of approximately $0 (low end of the forecast) to $5 million (high end of the forecast). Refer to the table on page 3 of the schedules for a reconciliation of Net Income to Adjusted EBITDA.
- Comparable systemwide RevPAR is expected to increase approximately 1% to 3%, as compared to fiscal year 2017.
- Adjusted selling, general, and administrative expenses are expected to be approximately $300 million. This excludes approximately $35 million to $36 million of stock-based compensation expense and any potential expenses related to benefit programs funded through rabbi trusts.
- Capital expenditures are expected to be approximately $350 million.
- Depreciation and amortization expense is expected to be approximately $367 million to $371 million.
- Interest expense is expected to be approximately $75 million to $76 million.
- Other income (loss), net is expected to be negatively impacted by approximately $65 million to $75 million related to performance guarantee expense for the four managed hotels in France.
- The effective tax rate is expected to be approximately 27% to 31%, reflecting estimated impacts from recent U.S. tax reform.
- The Company expects to grow units, on a net rooms basis, by approximately 6.0% to 6.5%, reflecting approximately 60 new hotel openings.
- The Company expects to return at least $300 million to shareholders through a combination of cash dividends on its common stock and share repurchases.
The above does not reflect anticipated changes resulting from the adoption of the new revenue recognition standard in 2018. The Company is in the process of finalizing the adoption impact and restatement of prior year results. As previously disclosed, the most material non-cash impact to Adjusted EBITDA relates to the change in accounting for deferred gains which would result in a reduction of $25 million in 2017 and an anticipated reduction of approximately $31 million in 2018.
The Company plans to update its 2018 Outlook in connection with its first quarter earnings release to reflect the impact of the new revenue recognition standard.
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.CONFERENCE CALL INFORMATIONThe Company will hold an extended investor conference call tomorrow, February 15, 2018, at 10:30 a.m. CT. Participants may listen to a simultaneous webcast of the conference call, which may be accessed through the Company’s website at investors.hyatt.com, or by dialing 647.689.4468 or (toll free) 833.238.7946, passcode #6582455, approximately 10 minutes before the scheduled start time.Additionally, investors may access a presentation that will be available on Hyatt's website at investors.hyatt.com and filed on Form 8-K on February 15, 2018, prior to the call.
For those unable to listen to the live broadcast, a replay will be available from 1:30 p.m. CT on February 15, 2018 through February 16, 2018 at midnight by dialing 416.621.4642, passcode #6582455. An archive of the webcast will be available on the Company’s website for 90 days.AVAILABILITY OF INFORMATION ON HYATT'S WEBSITEInvestors 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 hyatt.com. 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 investors.hyatt.com.DEFINITIONSAdjusted Earnings Before Interest Expense, Taxes, Depreciation and Amortization ("Adjusted EBITDA") and EBITDAWe use the terms Adjusted EBITDA and EBITDA throughout this earnings release. Adjusted EBITDA and EBITDA, as the Company defines them, are non-GAAP measures. We define Adjusted EBITDA as net income attributable to Hyatt Hotels Corporation plus its pro rata share of unconsolidated hospitality ventures
Adjusted EBITDA based on its ownership percentage of each venture, adjusted to exclude the following items: - interest expense;
- provision for income taxes;
- depreciation and amortization;
- equity earnings (losses) from unconsolidated hospitality ventures;
- stock-based compensation expense;
- gains (losses) on sales of real estate; and
- other income (loss), net.
We calculate consolidated Adjusted EBITDA by adding the Adjusted EBITDA of each of our reportable segments and eliminations to corporate and other Adjusted EBITDA. Our board of directors and executive management team focus on Adjusted EBITDA as a key performance and compensation measure both on a segment and on a consolidated basis. Adjusted EBITDA assists us in comparing our performance over various reporting periods on a consistent basis because it removes from our operating results the impact of items that do not reflect our core operations both on a segment and on a consolidated basis. Our president and chief executive officer, who is the chief operating decision maker, also evaluates the performance of each of our reportable segments and determines how to allocate resources to those segments, in significant part, by assessing the Adjusted EBITDA of each segment. In addition, the compensation committee of our board of directors determines the annual variable compensation for certain members of our management based in part on consolidated Adjusted EBITDA, segment Adjusted EBITDA or some combination of both. We believe Adjusted EBITDA is useful to investors because it provides investors the same information that the Company uses internally for purposes of assessing operating performance and making compensation decisions.
Adjusted EBITDA and EBITDA are not substitutes for net income attributable to Hyatt Hotels Corporation, net income, or any other measure prescribed by accounting principles generally accepted in the United States of America (GAAP). There are limitations to using non-GAAP measures such as Adjusted EBITDA and EBITDA. Although we believe that Adjusted EBITDA can make an evaluation of our operating performance more consistent because it removes items that do not reflect our core operations, other companies in our industry may define Adjusted EBITDA differently than we do. As a result, it may be difficult to use Adjusted EBITDA or similarly named non-GAAP measures that other companies may use to compare the performance of those companies to our performance. Because of these limitations, Adjusted EBITDA should not be considered as a measure of the income generated by our business. Our management addresses these limitations by reference to its GAAP results and using Adjusted EBITDA supplementally.Adjusted EBITDA MarginWe define Adjusted EBITDA margin as Adjusted EBITDA divided by total revenues, net of other revenues from managed and franchised properties. Other revenues from managed and franchised properties reflect reimbursed costs incurred on behalf of managed and franchised hotel property owners. We believe Adjusted EBITDA margin is useful to investors because it provides investors the same information that the Company uses internally for purposes of assessing operating performance.Adjusted Net IncomeAdjusted net income, as we definite it, is a non-GAAP measure. We define Adjusted net income as net income attributable to Hyatt Hotels Corporation excluding special items, which are those items deemed not to be reflective of ongoing operations. We believe Adjusted net income provides meaningful comparisons of ongoing operating results.Adjusted Selling, General, and Administrative (SG&A) ExpensesAdjusted SG&A expenses, as we define it, is a non-GAAP measure. Adjusted SG&A expenses exclude the impact of expenses related to benefit programs funded through rabbi trusts and stock-based compensation expense. Adjusted SG&A expenses assist us in comparing our performance over various reporting periods on a consistent basis since it removes from our operating results the impact of items that do not reflect our core operations, both on a segment and consolidated basis.Comparable Owned and Leased Hotels Operating MarginWe define comparable owned and leased hotels operating margin as the difference between comparable owned and leased hotels revenues and comparable owned and leased hotels expenses. Comparable owned and leased hotels revenues is calculated by removing non-comparable hotels revenues from owned and leased hotels revenues as reported in our consolidated statements of income. Comparable owned and leased hotels expenses is calculated by removing both non-comparable owned and leased hotels expenses and the impact of expenses funded through rabbi trusts from owned and leased hotels expenses as reported in our consolidated statements of income. We believe comparable owned and leased hotels operating margin is useful to investors because it provides investors the same information that the Company uses internally for purposes of assessing operating performance.Comparable Hotels"Comparable systemwide hotels" represents all properties we manage or franchise (including owned and leased properties) and that are operated for the entirety of the periods being compared and that have not sustained substantial damage, business interruption, or undergone large scale renovations during the periods being compared or for which comparable results are not available. We may use variations of comparable systemwide hotels to specifically refer to comparable systemwide Americas full service or select service hotels for those properties that we manage or franchise within the Americas management and franchising segment, comparable systemwide ASPAC full service hotels for those properties that we manage or franchise within the ASPAC management and franchising segment, or comparable systemwide EAME/SW Asia full service or select service hotels for those properties that we manage or franchise within the EAME/SW Asia management and franchising segment. "Comparable operated hotels" is defined the same as "comparable systemwide hotels" with the exception that it is limited to only those hotels we manage or operate and excludes hotels we franchise. "Comparable owned and leased hotels" represents all properties we own or lease and that are operated and consolidated for the entirety of the periods being compared and have not sustained substantial damage, business interruption, or undergone large scale renovations during the periods being compared or for which comparable results are not available. Comparable systemwide hotels and comparable owned and leased hotels are commonly used as a basis of measurement in our industry. "Non-comparable systemwide hotels" or "non-comparable owned and leased hotels" represent all hotels that do not meet the respective definition of "comparable" as defined above.Constant Dollar CurrencyWe report the results of our operations both on an as reported basis, as well as on a constant dollar basis. Constant dollar currency, which is a non-GAAP measure, excludes the effects of movements in foreign currency exchange rates between comparative periods. We believe constant dollar analysis provides valuable information regarding our results as it removes currency fluctuations from our operating results. We calculate constant dollar currency by restating prior-period local currency financial results at the current period’s exchange rates. These adjusted amounts are then compared to our current period reported amounts to provide operationally driven variances in our results.Revenue per Available Room (RevPAR)RevPAR is the product of the average daily rate (ADR) and the average daily occupancy percentage. RevPAR does not include non-room revenues, which consist of ancillary revenues generated by a hotel property, such as food and beverage, parking, and other guest service revenues. Our management uses RevPAR to identify trend information with respect to room revenues from comparable properties and to evaluate hotel performance on a regional and segment basis. RevPAR is a commonly used performance measure in our industry. RevPAR changes driven predominantly by changes in occupancy have different implications for overall revenue levels and incremental profitability than do changes driven predominantly by changes in average room rates. For example, increases in occupancy at a hotel would lead to increases in room revenues and additional variable operating costs (including housekeeping services, utilities, and room amenity costs), and could also result in increased ancillary revenues (including food and beverage). In contrast, changes in average room rates typically have a greater impact on margins and profitability as there is no substantial effect on variable costs.Average Daily Rate (ADR)ADR represents hotel room revenues, divided by the total number of rooms sold in a given period. ADR measures average room price attained by a hotel and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. ADR is a commonly used performance measure in our industry, and we use ADR to assess the pricing levels we are able to generate by customer group, as changes in rates have a different effect on overall revenues and incremental profitability than changes in occupancy, as described above.OccupancyOccupancy represents the total number of rooms sold divided by the total number of rooms available at a hotel or group of hotels. Occupancy measures the utilization of a hotel's available capacity. We use occupancy to gauge demand at a specific hotel or group of hotels in a given period. Occupancy levels also help us determine achievable ADR levels as demand for hotel rooms increases or decreases.PipelinePipeline reflects fully executed management and franchise agreements.About Hyatt Hotels CorporationHyatt Hotels Corporation, headquartered in Chicago, is a leading global hospitality company with a portfolio of 14 premier brands. As of December 31, 2017, the Company's portfolio included more than 700 properties in more than 50 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 Hyatt, Miraval, Grand Hyatt, Hyatt Regency, Hyatt, Andaz, Hyatt Centric, The Unbound Collection by Hyatt, Hyatt Place, Hyatt House, Hyatt Ziva, Hyatt Zilara, Hyatt Residence Club and exhale brand names. For more information, please visit www.hyatt.com.
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 investors.hyatt.com.
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 9 and non-GAAP reconciliations included in the schedules.
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