Hotel Management Network

Daily Newsletter

07 August 2023

Daily Newsletter

Hyatt Hotels’ net income drops by 70% in Q2 2023

The company’s system-wide hotels RevPAR surged by 15% to $148.39m during the quarter.

Hyatt Hotels has reported net income of $68m for the second quarter (Q2) of 2023, a 70% decline from $206m in Q2 2022.

The company’s total revenues during the quarter, which ended on 30 June 2023, increased by 14.9% to $1.7bn from $1.48bn in the same quarter a year prior.

The company’s system-wide hotels revenue per available room (RevPAR) surged by 15% to $148.39m in the reported quarter.

Hyatt said that its comparable owned and leased hotels RevPAR also witnessed an increase of 10.1% to $205.96m during Q2 2023.

The company’s net room growth was roughly 6.9% in the quarter.

Hyatt's adjusted earnings before interest, taxes, depreciation and amortisation for the quarter was $273m, representing a 6.9% rise compared to $255m in Q2 last year.

Hyatt president and CEO Mark Hoplamazian said: “For the fifth consecutive quarter, we posted record results demonstrating our unique positioning and continued momentum. System-wide RevPAR expanded 15% year-over-year, generating a record level of total fee revenue in the quarter.

“We updated our full-year RevPAR outlook and we expanded our pipeline to 119,000 rooms, representing approximately 40% of our existing portfolio.

“Our outlook remains optimistic, fuelled by strong group booking activity during the quarter, resulting in 2024 group pace up 10%. We believe our increasing asset-light earnings mix and free cash flow define a clear path for continued success and enhanced shareholder value into the future.”

In Q2, Hyatt opened a total of 24 new hotels. As of 30 June 2023, the company has 585 hotels or 119,000 rooms in the pipeline of executed management or franchise contracts.

In June this year, Hyatt completed the acquisition of Smith Global in a £58m ($73.5) deal that was signed earlier in April.

Demand for upscale and luxurious products has been rising steadily in the travel and tourism sector

The theme of premiumization, and the upscale and luxury markets, now have the opportunity to thrive in an industry that has had to rapidly change to meet new changes in traveler demands. The increased need for privacy, a greater focus on health and wellbeing, a desire to tick off ‘bucket list’ experiences, unintentional saving of money, the tendency to take longer trips, the focus on eco-tourism, and an increase in millionaires means the theme of premiumization will continue to grow in importance. The travel industry will experience a surge in demand for higher-end and customized offerings as experiential consumption keeps growing. For many, ‘premium’ means a variety of things. However, it refers to first-rate service, extreme comfort, and one-of-a-kind experiences in travel and tourism. Premiumization is closely linked to luxury travel. While premiumization attracts only a small number of global travelers, it is important for companies as it is a valuable revenue stream that is unlikely to be impacted by external factors like economic downturns. Personalization is key in premium offerings, the shift from focusing solely on premium products to an emphasis on delivering exclusive and personalized offerings is apparent. Therefore, smart destinations can help to create hyper-personalized services and products. Leveraging the Internet of Things, destinations can curate offerings based on gathering real-time data on guest preferences and behaviors. This enables the industry to transcend typical offerings and remain competitive.