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Hyatt Hotels Corporation (H - Free Report) delivered impressive fourth-quarter 2022 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis.
Mark S. Hoplamazian, president and chief executive officer of Hyatt Hotels Corporation, stated, "Our results in the fourth quarter mark the completion of a truly transformative year. We generated a record level of fees and free cash flow while leading the industry in organic growth for a sixth consecutive year. This outcome is a direct result of successfully executing on our asset-light growth strategy.”
Q4 Earnings & Revenues
During the fourth quarter, Hyatt reported adjusted earnings per share (EPS) of $2.55, beating the Zacks Consensus Estimate of 32 cents. In the prior-year quarter, the company reported an adjusted EPS of $(2.78) per share.
Hyatt Hotels Corporation Price, Consensus and EPS Surprise
Quarterly revenues of $1,588 million beat the consensus mark of $1,499 million by 6%. Moreover, the top line surged 47.6% on a year-over-year basis.
Operating Highlights
During the quarter, adjusted EBITDA came in at $232 million compared with $112 million reported in the year-ago quarter. Adjusted EBITDA margin increased to 27% in the fourth quarter compared with 19.2% reported in the year-ago quarter.
Segmental Details
Hyatt manages business through five reportable segments — Owned and Leased Hotels; Americas Management and Franchising; Southeast Asia, Greater China, Australia, South Korea, Japan and Micronesia (ASPAC) Management and Franchising; Europe, Africa, Middle East and Southwest Asia (EAME/SW Asia) Management and Franchising; and Apple Leisure Group Segment.
During the fourth quarter, revenues in the Owned and Leased Hotels segment totaled $324 million compared with $280 million reported in the prior-year quarter. The upside was primarily driven by improved demand across the portfolio. Owned and leased hotels’ RevPAR surged 41.7% from the prior-year quarter’s level. During the quarter, the average daily rate (ADR) was up 11.7% and the occupancy rate increased 14.5 percentage points from 2021 levels.
The segment’s adjusted EBITDA came in at $88 million during the fourth quarter compared with $57 million reported in the year-ago quarter.
During the quarter, total Management and Franchise fee revenues came in at $226 million compared with $149 million reported in the year-ago quarter. The metric rose sequentially from $224 million reported in third-quarter 2022.
In Americas Management and Franchising, RevPAR for comparable Americas full-service hotels (during the fourth quarter) surged 34.8% from the prior-year quarter’s level. While ADR increased 12.3%, occupancy rates moved up 10.6 percentage points from the prior-year quarter’s number.
RevPAR for comparable Americas select-service hotels was up 19.8% year over year. ADR increased 14.5% and occupancy rates improved 3 percentage points from the year-ago quarter’s number.
Adjusted EBITDA during the fourth quarter came in at $106 million compared with $75 million reported in the year-ago quarter.
In ASPAC Management and Franchising, RevPAR for comparable ASPAC full-service hotels (during the fourth quarter) increased 46.6% from the year-ago quarter’s figure. ADR increased 24.1% and occupancy rates improved 8.4 percentage points from the year-ago quarter’s number. During the quarter, the company reported accelerated demand in South Korea, Japan and Southeast Asia.
RevPAR for comparable ASPAC select-service hotels was up 5.8% on a year-over-year basis. ADR increased 4.3% and occupancy rates improved 0.7 percentage points from the year-ago quarter’s number.
During the quarter, adjusted EBITDA came in at $16 million compared with $8 million reported in the year-ago quarter.
In EAME/SW Asia Management and Franchising, comparable EAME/SW Asia full-service hotels’ RevPAR surged 55.1% from the year-ago quarter’s level. ADR increased 26.3% and occupancy rates rose 12.5 percentage points from the year-ago quarter’s number. The upside was primarily driven by strong fee generation in the Middle East (owing to the World Cup in Qatar) and strong leisure demand throughout Europe.
Adjusted EBITDA during the fourth quarter came in at $19 million compared with $13 million reported in the year-ago quarter.
In the Apple Leisure Group (or ALG) segment, adjusted EBITDA during the fourth quarter came in at $43 million compared with $4 million reported in the prior-year quarter. Solid demand for leisure travel, increased airlift capacity and a favorable pricing environment added to the upside.
Balance Sheet
As of Dec 31, 2022, Hyatt reported cash and cash equivalents of $1,149 million compared with $1,347 million reported in the previous quarter. Total debt as of Dec 31, 2022, stood at $3,113 million compared with $3,804 million as of Sep 30, 2022.
The company stated undrawn borrowing availability of $1,496 million under Hyatt's revolving credit facility.
2022 Highlights
Total revenues in 2022 came in at $5,891 million compared with $3,028 million in 2021.
Adjusted EBITDA in 2022 came in at $908 million compared with $257 million reported in 2021.
In 2022, adjusted EPS came in at $3.28 against $(5.24) reported in the previous year.
Other Business Updates
Coming to hotel openings, 57 new hotels (or 10,784 rooms) joined Hyatt's system in the fourth quarter of 2022. As of Dec 31, 2022, Hyatt executed management or franchise contracts for approximately 580 hotels (or 117,000 rooms).
The company continues to progress with respect to its $2.0 billion asset disposition commitment. During The fourth quarter, the company initiated marketing for two assets held for sale. The company expects to generate approximately $2 billion in gross proceeds from the sales of real estate (net of acquisitions) by 2024-end. As of Dec 31, 2022, the company has realized proceeds worth $721 million (from the net disposition of owned assets).
On Feb 2, 2023, the company acquired Dream Hotel Group. Valued at approximately $125 million, the acquisition adds 12 lifestyle hotels (or approximately 1,700 rooms) to the Hyatt portfolio. The agreement also includes an additional 24 signed long-term management agreements for hotels expected to open in the future.
2023 Outlook
For 2023, the company expects adjusted selling, general and administrative expenses between $480 million and $490 million. Capital expenditures are projected at approximately $200 million. Unit growth in 2023 is anticipated at approximately 6% on a net-room basis.
The company anticipates 2023 system-wide RevPAR to increase 10-15% from 2022 levels.
OneSpaWorld currently sports a Zacks Rank #1. OSW has a trailing four-quarter earnings surprise of 84.2%, on average. Shares of the company have increased 2.9% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates a rise of 24.2% and 91%, respectively, from the year-ago period’s levels.
Las Vegas Sands sports a Zacks Rank #1. LVS has a long-term earnings growth rate of 4.9%. The stock has increased 18.8% in the past year.
The Zacks Consensus Estimate for LVS’ 2023 sales and EPS indicates a rise of 100.8% and 217.5%, respectively, from the year-ago period’s estimated levels.
Playa Hotels carries a Zacks Rank #2 (Buy). PLYA has a trailing four-quarter earnings surprise of 19.4%, on average. Shares of the company have declined 8.3% in the past year.
The Zacks Consensus Estimate for PLYA’s 2023 sales and EPS indicates a rise of 7.9% and 26.3%, respectively, from the year-ago levels.
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Hyatt's (H) Q4 Earnings & Revenues Beat Estimates, Rise Y/Y
Hyatt Hotels Corporation (H - Free Report) delivered impressive fourth-quarter 2022 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis.
Mark S. Hoplamazian, president and chief executive officer of Hyatt Hotels Corporation, stated, "Our results in the fourth quarter mark the completion of a truly transformative year. We generated a record level of fees and free cash flow while leading the industry in organic growth for a sixth consecutive year. This outcome is a direct result of successfully executing on our asset-light growth strategy.”
Q4 Earnings & Revenues
During the fourth quarter, Hyatt reported adjusted earnings per share (EPS) of $2.55, beating the Zacks Consensus Estimate of 32 cents. In the prior-year quarter, the company reported an adjusted EPS of $(2.78) per share.
Hyatt Hotels Corporation Price, Consensus and EPS Surprise
Hyatt Hotels Corporation price-consensus-eps-surprise-chart | Hyatt Hotels Corporation Quote
Quarterly revenues of $1,588 million beat the consensus mark of $1,499 million by 6%. Moreover, the top line surged 47.6% on a year-over-year basis.
Operating Highlights
During the quarter, adjusted EBITDA came in at $232 million compared with $112 million reported in the year-ago quarter. Adjusted EBITDA margin increased to 27% in the fourth quarter compared with 19.2% reported in the year-ago quarter.
Segmental Details
Hyatt manages business through five reportable segments — Owned and Leased Hotels; Americas Management and Franchising; Southeast Asia, Greater China, Australia, South Korea, Japan and Micronesia (ASPAC) Management and Franchising; Europe, Africa, Middle East and Southwest Asia (EAME/SW Asia) Management and Franchising; and Apple Leisure Group Segment.
During the fourth quarter, revenues in the Owned and Leased Hotels segment totaled $324 million compared with $280 million reported in the prior-year quarter. The upside was primarily driven by improved demand across the portfolio. Owned and leased hotels’ RevPAR surged 41.7% from the prior-year quarter’s level. During the quarter, the average daily rate (ADR) was up 11.7% and the occupancy rate increased 14.5 percentage points from 2021 levels.
The segment’s adjusted EBITDA came in at $88 million during the fourth quarter compared with $57 million reported in the year-ago quarter.
During the quarter, total Management and Franchise fee revenues came in at $226 million compared with $149 million reported in the year-ago quarter. The metric rose sequentially from $224 million reported in third-quarter 2022.
In Americas Management and Franchising, RevPAR for comparable Americas full-service hotels (during the fourth quarter) surged 34.8% from the prior-year quarter’s level. While ADR increased 12.3%, occupancy rates moved up 10.6 percentage points from the prior-year quarter’s number.
RevPAR for comparable Americas select-service hotels was up 19.8% year over year. ADR increased 14.5% and occupancy rates improved 3 percentage points from the year-ago quarter’s number.
Adjusted EBITDA during the fourth quarter came in at $106 million compared with $75 million reported in the year-ago quarter.
In ASPAC Management and Franchising, RevPAR for comparable ASPAC full-service hotels (during the fourth quarter) increased 46.6% from the year-ago quarter’s figure. ADR increased 24.1% and occupancy rates improved 8.4 percentage points from the year-ago quarter’s number. During the quarter, the company reported accelerated demand in South Korea, Japan and Southeast Asia.
RevPAR for comparable ASPAC select-service hotels was up 5.8% on a year-over-year basis. ADR increased 4.3% and occupancy rates improved 0.7 percentage points from the year-ago quarter’s number.
During the quarter, adjusted EBITDA came in at $16 million compared with $8 million reported in the year-ago quarter.
In EAME/SW Asia Management and Franchising, comparable EAME/SW Asia full-service hotels’ RevPAR surged 55.1% from the year-ago quarter’s level. ADR increased 26.3% and occupancy rates rose 12.5 percentage points from the year-ago quarter’s number. The upside was primarily driven by strong fee generation in the Middle East (owing to the World Cup in Qatar) and strong leisure demand throughout Europe.
Adjusted EBITDA during the fourth quarter came in at $19 million compared with $13 million reported in the year-ago quarter.
In the Apple Leisure Group (or ALG) segment, adjusted EBITDA during the fourth quarter came in at $43 million compared with $4 million reported in the prior-year quarter. Solid demand for leisure travel, increased airlift capacity and a favorable pricing environment added to the upside.
Balance Sheet
As of Dec 31, 2022, Hyatt reported cash and cash equivalents of $1,149 million compared with $1,347 million reported in the previous quarter. Total debt as of Dec 31, 2022, stood at $3,113 million compared with $3,804 million as of Sep 30, 2022.
The company stated undrawn borrowing availability of $1,496 million under Hyatt's revolving credit facility.
2022 Highlights
Total revenues in 2022 came in at $5,891 million compared with $3,028 million in 2021.
Adjusted EBITDA in 2022 came in at $908 million compared with $257 million reported in 2021.
In 2022, adjusted EPS came in at $3.28 against $(5.24) reported in the previous year.
Other Business Updates
Coming to hotel openings, 57 new hotels (or 10,784 rooms) joined Hyatt's system in the fourth quarter of 2022. As of Dec 31, 2022, Hyatt executed management or franchise contracts for approximately 580 hotels (or 117,000 rooms).
The company continues to progress with respect to its $2.0 billion asset disposition commitment. During The fourth quarter, the company initiated marketing for two assets held for sale. The company expects to generate approximately $2 billion in gross proceeds from the sales of real estate (net of acquisitions) by 2024-end. As of Dec 31, 2022, the company has realized proceeds worth $721 million (from the net disposition of owned assets).
On Feb 2, 2023, the company acquired Dream Hotel Group. Valued at approximately $125 million, the acquisition adds 12 lifestyle hotels (or approximately 1,700 rooms) to the Hyatt portfolio. The agreement also includes an additional 24 signed long-term management agreements for hotels expected to open in the future.
2023 Outlook
For 2023, the company expects adjusted selling, general and administrative expenses between $480 million and $490 million. Capital expenditures are projected at approximately $200 million. Unit growth in 2023 is anticipated at approximately 6% on a net-room basis.
The company anticipates 2023 system-wide RevPAR to increase 10-15% from 2022 levels.
Zacks Rank & Key picks
Hyatt currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the Zacks Consumer Discretionary sector are OneSpaWorld Holdings Limited. (OSW - Free Report) , Las Vegas Sands Corp. (LVS - Free Report) and Playa Hotels & Resorts N.V. (PLYA - Free Report) .
OneSpaWorld currently sports a Zacks Rank #1. OSW has a trailing four-quarter earnings surprise of 84.2%, on average. Shares of the company have increased 2.9% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates a rise of 24.2% and 91%, respectively, from the year-ago period’s levels.
Las Vegas Sands sports a Zacks Rank #1. LVS has a long-term earnings growth rate of 4.9%. The stock has increased 18.8% in the past year.
The Zacks Consensus Estimate for LVS’ 2023 sales and EPS indicates a rise of 100.8% and 217.5%, respectively, from the year-ago period’s estimated levels.
Playa Hotels carries a Zacks Rank #2 (Buy). PLYA has a trailing four-quarter earnings surprise of 19.4%, on average. Shares of the company have declined 8.3% in the past year.
The Zacks Consensus Estimate for PLYA’s 2023 sales and EPS indicates a rise of 7.9% and 26.3%, respectively, from the year-ago levels.