Hyatt Hotels Corporation (NYSE: H) today announced that Hyatt
has reached a definitive agreement with Host Hotels & Resorts
(NYSE: HST) for the sale of the 301-room Andaz Maui at Wailea
Resort, the 668-room Grand Hyatt San Francisco, and the 454-room
Hyatt Regency Coconut Point Resort and Spa for approximately $1.0
billion. The sale reflects a blended EBITDA multiple of
approximately 16x based on Hyatt’s 2018 pro-forma estimates. Hyatt
will continue to manage the three hotels under long-term management
agreements. The transaction is expected to close near the end of
March 2018.
Mark S. Hoplamazian, president and chief executive officer of
Hyatt Hotels Corporation, said, “This agreement demonstrates the
value of our owned and leased hotels and strengthens our
longstanding and valued business relationship with Host. The
completion of this transaction not only allows Hyatt to maintain
our brand presence in these key markets with great brand
representation, but also supports the execution of our recently
announced initiative to reduce real-estate ownership as part of our
broader capital strategy to unlock shareholder value.”
Two of the three hotels, Andaz Maui and Grand Hyatt San
Francisco, reflect a combined attributed sale value of
approximately $800 million and form part of Hyatt’s ongoing $1.5
billion permanent sell-down program. On a blended basis, the sale
of these two properties reflects an EBITDA multiple of
approximately 18x based on 2018 pro-forma estimates. The sale of
Hyatt Regency Coconut Point for an attributed value of
approximately $200 million, at an EBITDA multiple of approximately
12x based on 2018 pro-forma estimates, completes Hyatt’s 2017
commitment to be a “net seller” of assets under its ongoing asset
recycling program.
Assuming closing in late March, Hyatt anticipates a net
reduction in consolidated Adjusted EBITDA of approximately $40
million for the three properties combined over the remainder of
2018.
With the completion of this transaction, Hyatt is increasing its
2018 guidance for return of capital to shareholders to a minimum of
$500 million from the previous guidance of at least $300 million.
Hyatt intends to provide a full update to the 2018 outlook
including the impact of these transactions and the new revenue
recognition accounting standard with its first-quarter earnings
release in May.
The term “Hyatt” is used in this release for convenience to
refer to Hyatt Hotels Corporation and/or one more of its
affiliates.
FORWARD-LOOKING STATEMENTS
Forward-Looking Statements in this press release, which are not
historical facts, are forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. These
statements include, but are not limited to, statements related to
the Company’s plans, objectives, goals, expectations, beliefs,
business strategies, future events, business conditions, business
trends and expectations with respect to, among other things, the
time schedule to complete the transaction, our guidance with
respect to shareholder returns, and the impact of the transaction
on consolidated Adjusted EBITDA, and involve known and unknown
risks that are difficult to predict. As a result, our actual
results, performance or achievements may differ materially from
those expressed or implied by these forward-looking statements. In
some cases, you can identify forward-looking statements by the use
of words such as “may”, ”could”, ”expect”, “intend”, ”plan”,
”seek”, ”anticipate”, ”believe”, ”estimate”, ”predict”,
”potential”, ”continue”, ”likely”, ”will”, “would” and variations
of these terms and similar expressions, or the negative of these
terms or similar expressions. Such forward-looking statements are
necessarily based upon estimates and assumptions that, while
considered reasonable by us and our management, are inherently
uncertain. Factors that may cause actual results to differ
materially from current expectations include, among others, general
economic uncertainty in key global markets and a worsening of
global economic conditions or low levels of economic growth; the
rate and the pace of economic recovery following economic
downturns; levels of spending in business and leisure segments as
well as consumer confidence; declines in occupancy and average
daily rate; limited visibility with respect to future bookings;
loss of key personnel; hostilities, or fear of hostilities,
including future terrorist attacks, that affect travel;
travel-related accidents; natural or man-made disasters such as
earthquakes, tsunamis, tornadoes, hurricanes, floods, wildfires,
oil spills, nuclear incidents, and global outbreaks of pandemics or
contagious diseases or fear of such outbreaks; our ability to
successfully achieve certain levels of operating profits at hotels
that have performance guarantees in favor of our third-party
owners; the impact of hotel renovations and redevelopments; risks
associated with our capital allocation plans and common stock
repurchase program and other forms of shareholder capital return,
including the risk that our common stock repurchase program could
increase volatility and fail to enhance stockholder value; our
intention to pay a quarterly cash dividend and the amounts thereof,
if any; the seasonal and cyclical nature of the real estate and
hospitality businesses; changes in distribution arrangements, such
as through internet travel intermediaries; changes in the tastes
and preferences of our customers; relationships with colleagues and
labor unions and changes in labor laws; the financial condition of,
and our relationships with, third-party property owners,
franchisees, and hospitality venture partners; the possible
inability of third-party owners, franchisees, or development
partners to access capital necessary to fund current operations or
implement our plans for growth; risks associated with potential
acquisitions and dispositions and the introduction of new brand
concepts; the timing of acquisitions and dispositions; failure to
successfully complete proposed transactions (including the failure
to satisfy closing conditions or obtain required approvals); our
ability to successfully execute on our strategy to reduce our real
estate asset base within targeted timeframes and at expected
values; declines in the value of our real estate assets; unforeseen
terminations of our management or franchise agreements; changes in
federal, state, local, or foreign tax law; the impact of changes in
the tax code as a result of recent U.S. federal income tax reform
and uncertainty as to how some of those changes may be applied;
increases in interest rates and operating costs; foreign exchange
rate fluctuations or currency restructurings; lack of acceptance of
new brands or innovation; general volatility of the capital markets
and our ability to access such markets; changes in the competitive
environment in our industry, including as a result of industry
consolidation, and the markets where we operate; our ability to
successfully grow the World of Hyatt loyalty program and the level
of acceptance of the program by our guests; cyber incidents and
information technology failures; outcomes of legal or
administrative proceedings; violations of regulations or laws
related to our franchising business; and other risks discussed in
the Company's filings with the SEC, including our annual report on
Form 10-K, which filings are available from the SEC. We caution you
not to place undue reliance on any forward-looking statements,
which are made only as of the date of this press release. We do not
undertake or assume any obligation to update publicly any of these
forward-looking statements to reflect actual results, new
information or future events, changes in assumptions or changes in
other factors affecting forward-looking statements, except to the
extent required by applicable law. If we update one or more
forward-looking statements, no inference should be drawn that we
will make additional updates with respect to those or other
forward-looking statements.
About Hyatt Hotels Corporation
Hyatt 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.
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version on businesswire.com: http://www.businesswire.com/news/home/20180222006365/en/
Hyatt Hotels CorporationInvestor Contact:Amanda Bryant,
312.780.5539amanda.bryant@hyatt.comorMedia Contact:Stephanie
Lerdall, 312.780.5399stephanie.lerdall@hyatt.com
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