HYATT REPORTS FIRST-QUARTER 2020 RESULTS
RevPAR Decline of 28% Due to COVID-19 Pandemic; Net Rooms Growth of Over 6%
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HYATT REPORTS FIRST-QUARTER 2020 RESULTS
RevPAR Decline of 28% Due to COVID-19 Pandemic; Net Rooms Growth of Over 6%
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Category: Worldwide - Industry economy
- Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2020-05-07
Hyatt Hotels Corporation ("Hyatt" or the "Company") (NYSE: H) today reported first-quarter 2020 financial results. Net loss attributable to Hyatt was $103 million, or $1.02 per diluted share, in the first quarter of 2020, compared to net income attributable to Hyatt of $63 million, or $0.59 per diluted share, in the first quarter of 2019. Adjusted net loss attributable to Hyatt was $35 million, or $0.35 per diluted share, in the first quarter of 2020, compared to Adjusted net income attributable to Hyatt of $48 million, or $0.45 per diluted share, in the first quarter of 2019. Refer to the table on page 13 of the schedules for a summary of special items impacting Adjusted net income (loss) and Adjusted earnings (losses) per share in the three months ended March 31, 2020.
Mark S. Hoplamazian, president and chief executive officer of Hyatt Hotels Corporation, said, "As COVID-19 became a global pandemic, we took prompt and meaningful actions to manage the first phase of the impact of the virus. We obtained substantial additional cash, reduced investment and corporate spending to preserve cash, and we reduced third party hotel owners' direct costs through this period. While we continue to operate in an environment of suppressed demand and great uncertainty, we believe our existing liquidity provides sufficient capacity to cover at least 30 months of operations under current conditions."First quarter of 2020 financial highlights as compared to the first quarter of 2019 are as follows: - Net income (loss) decreased 262.8% to a net loss of $103 million.
- Adjusted EBITDA decreased 54.3% to $86 million, a decrease of 53.9% in constant currency.
- Comparable system-wide RevPAR decreased 28.1%, including a decrease of 25.8% at comparable owned and leased hotels.
- Comparable U.S. hotel RevPAR decreased 24.5%; full service hotel RevPAR decreased 25.2% and select service hotel RevPAR decreased 23.0%.
- Net rooms growth was 6.3% in the first quarter of 2020.
- Comparable owned and leased hotels operating margin decreased 1,060 basis points to 14.5%.
- Adjusted EBITDA margin of 18.3% decreased 1,010 basis points in constant currency.
Mr. Hoplamazian continued, "All of the actions we have taken are informed by our purpose of care, which includes protecting the health and safety of our colleagues and guests, the financial health of our hotel owners as well as the long-term health of our business. We have taken many steps designed to demonstrate care and to help us to emerge from this crisis in a position of strength. We are well-positioned to continuously adapt our business so that we may play an important role in providing employment opportunities to members of the Hyatt family over time while caring for our guests, customers and owners so that they can be their best."OPERATIONAL UPDATEOccupancy in Greater China, where the impacts of the COVID-19 pandemic were first reported, have shown gradual improvement over the past few weeks, with occupancy approaching 25% at the end of April. Other parts of the world remain under quarantines and travel restrictions, which have resulted in significant declines in occupancy with uncertainty surrounding near-term improvement. System-wide occupancy rates as of April 30, 2020 are averaging approximately 15% for hotels that remain operational.
As of April 30, 2020, operations were suspended at approximately 35% of our system-wide hotels. Operations were suspended at 62% of our full service hotels and 19% of our select service hotels in the Americas, at 17% of our hotels in the ASPAC region, and at 58% of our hotels in the EAME/SW Asia region. Operations were suspended at 82% of our owned and leased hotels.FIRST QUARTER RESULTSFirst quarter of 2020 financial results as compared to the first quarter of 2019 are as follows:
Management, Franchise and Other Fees
Total fee revenues decreased 23.6% (23.0% in constant currency) to $108 million. Base management fees decreased 24.4% to $47 million, and incentive management fees decreased 78.1% to $8 million. Franchise fees decreased 14.8% to $27 million. Other fee revenues increased 105.8% to $26 million. The increase in other fees was primarily driven by license fees in the Americas and ASPAC management and franchising segments.
Americas Management and Franchising Segment
Americas management and franchising segment Adjusted EBITDA decreased 26.6% (26.3% decrease in constant currency). RevPAR for comparable Americas system-wide hotels increased 2.0% for the month of January and increased 0.3% for the month of February, offset by significant declines in March as a result of the COVID-19 pandemic. RevPAR for comparable Americas full service hotels decreased 24.2%, occupancy decreased 1,650 basis points to 54.3% occupancy, and ADR decreased 1.2%. RevPAR for comparable Americas select service hotels decreased 22.9%, occupancy decreased 1,380 basis points to 56.7% occupancy, and ADR decreased 4.0%. Revenue from management, franchise, and other fees decreased 20.0% (19.7% decrease in constant currency).
Transient rooms revenue at comparable U.S. full service hotels decreased 26.1%, room nights decreased 24.0%, and ADR decreased 2.7%. Group rooms revenue at comparable U.S. full service hotels decreased 23.4%, room nights decreased 23.5%, and ADR increased 0.2%.
Americas net rooms increased 3.8% compared to the first quarter of 2019, or 4.8% when excluding the large hotel that left the system on which we previously reported.
Southeast Asia, Greater China, Australia, South Korea, Japan and Micronesia (ASPAC) Management and Franchising Segment
ASPAC management and franchising segment Adjusted EBITDA decreased 58.5% (57.6% decrease in constant currency). RevPAR for comparable ASPAC full service hotels decreased 48.0%, reflecting the increase in COVID-19 pandemic cases beginning in late January 2020, primarily in Greater China, and extending to other countries in the region throughout February 2020, as hotels were operating with reduced occupancy rates or suspended operations due to lock downs, travel restrictions, and quarantine measures.
Occupancy decreased 3,150 basis points to 36.3% occupancy, and ADR decreased 3.1% for ASPAC full service hotels. RevPAR for comparable ASPAC select service hotels decreased 47.5%; occupancy decreased 2,640 basis points to 30.6% and ADR decreased 2.3%. Revenue from management, franchise, and other fees decreased 40.6% (39.6% decrease in constant currency).
ASPAC net rooms increased 10.5% compared to the first quarter of 2019.
Europe, Africa, Middle East and Southwest Asia (EAME/SW Asia) Management and Franchising Segment
EAME/SW Asia management and franchising segment Adjusted EBITDA decreased 91.2% (90.8% decrease in constant currency). RevPAR for comparable EAME/SW Asia full service hotels decreased 22.5%, driven by the impact of the COVID-19 pandemic beginning in March 2020 as hotels suspended operations and travel restrictions and lock downs resulted in cancellations and decreased demand.
Occupancy decreased 1,350 basis points to 51.3% occupancy and ADR decreased 2.0% for EAME/SWA full service hotels. RevPAR for comparable EAME/SW Asia select service hotels decreased 12.7%; occupancy decreased 800 basis points to 58.2% and ADR decreased 0.7%. Revenue from management, franchise, and other fees decreased 43.0% (42.0% decrease in constant currency).
EAME/SW Asia net rooms increased 13.4% compared to the first quarter of 2019.
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