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Source: Thailand Medical News  Sep 22, 2019

Hyatt Performs Superbly And Is Optimistic For 2019 Despite Sluggish Global Economy

Hyatt Performs Superbly And Is Optimistic For 2019 Despite Sluggish Global Economy
Source: Thailand Medical News  Sep 22, 2019
Hyatt Hotels is optimistic for 2019 and 2020 and plans more growth expansions. The Company expects to open approximately 85 hotels in the 2019 fiscal year, an increase from the prior expectation of over 80 hotels. Excellent results in the first semester 2019 have allowed the group to increase its openings.

Net rooms growth was 12.6% over the same period in 2018 thanks to the addition of 22 hotels for 3,909 rooms to the portfolio in the second quarter. This growth is 6.9% excluding the acquisition of Two Roads Hospitality LLC ("Two Roads") in the fourth quarter of 2018.

Hyatt group had executed management or franchise contracts for approximately 460 hotels or 92,000 rooms as of 30 June 2019. At the end of March these figures were 455 hôtels and 91,000 rooms respectively. As a result the group's volume of rooms increased by about 1,000.

The hotel group has primarily developed on North American (United States, Canada and Mexico) and Asian markets. The EBITDA of the ASPAC region increased +17.5% as a result of the growth in the rooms portfolio on this market by +17.4% with respect to the second quarter 2018, while Hyatt's net rooms in the Americas increased by +11.2% on the same period.
This growth made it possible for the group to increase net income by +10.6% to US$86 million. RevPAR increased by +1.3% including +2.3% increase at comparable owned and leased hotels. Five hotels were added to a tightly scheduled original pipeline of 80 hotels for 2019.

Mark S. Hoplamazian, president and ceo Hyatt Hotels Corporation commented to Thailand Hotel News as to why the group's growth accelerated,”We continued to expand our portfolio at a solid pace in the second quarter. Developer demand for our brands remains strong with our base of executed contracts for future openings increasing by 1,000 rooms in the quarter net of opening of nearly 4,000 rooms. Based on this development activity and an increase in conversions of hotels to our brands we now expect to grow net rooms by 7.25% to 7.75% this year as compared with our prior expectation of 7.0% to 7.5%.”

The net number rooms is expected to grow by +7.25% to +7.75% thanks to 85 new hotels by the end of 2019. Good economic health is in the outlook for the end of 2019, with a comparable system-wide RevPAR expected to increase approximately 1% to 2% per first estimations.

The adjusted EBITDA should fall between US$ 755 and 775 million compared to a previous estimation of between US$ 780 and 800 million. This US$ 25 million decrease in EBIDTA is driven by two factors according to a report published by the group at the end of July. The first is construction-related issues at Miraval properties in Austin (Texas) and Lenox (Massachusetts). The second is the result of the impact of two sales transactions, first of Hyatt's interest in a joint venture owning a hotel in San Francisco and the second of a retail property adjacent to the Grand Hyatt San Francisco. The combined impact of these transactions on the 2019 Adjusted EBITDA is expected to be approximately $5 million.

The Hyatt group is expecting of  achieving net income between US$231 and 275 million according to recent calculations, whereas it was previously estimated between US$144 and 183 million . Hyatt Hotels is one of the few chains that has been experiencing a good revenue yield and most of it has been due to its strong management fundamentals and also strong branding.