5.2% Net Rooms Growth in 2020
Pipeline Maintained at Over 100,000
Rooms
Hyatt Hotels Corporation ("Hyatt" or the
"Company") (NYSE: H) today reported fourth quarter 2020 financial
results. Net loss attributable to Hyatt was $203 million, or $2.00
per diluted share, in the fourth quarter of 2020, compared to net
income attributable to Hyatt of $321 million, or $3.08 per diluted
share, in the fourth quarter of 2019. Adjusted net loss
attributable to Hyatt was $179 million, or $1.77 per diluted share,
in the fourth quarter of 2020, compared to Adjusted net income
attributable to Hyatt of $49 million, or $0.47 per diluted share,
in the fourth quarter of 2019. Refer to the table on page 14 of the
schedules for a summary of special items impacting Adjusted net
income (loss) and Adjusted earnings (losses) per diluted share in
the three months ended December 31, 2020 and December 31, 2019.
Mark S. Hoplamazian, president and chief executive officer of
Hyatt Hotels Corporation, said, "I am extremely proud of, and
grateful for, the achievements of our teams around the world
throughout 2020. The Hyatt family demonstrated resilience in the
face of difficult decisions and undertook meaningful action to
place Hyatt in a strong position as the recovery unfolds. Amidst a
backdrop of challenging operating fundamentals, our net rooms
growth was strong, demonstrating the strength of our brands. We
opened 72 hotels and entered 27 new markets. Our teams also
executed new signings to maintain a pipeline representing over 40%
growth of our existing hotel rooms in the future."
Fourth quarter 2020 financial results as compared to fourth
quarter 2019 are as follows:
- Net income (loss) decreased from $321 million to $(203)
million.
- Adjusted EBITDA decreased from $191 million to $(98) million,
almost half of which relates to costs incurred on behalf of our
managed and franchised properties that we do not intend to recover
from hotel owners.
- Comparable system-wide RevPAR decreased 68.9%.
As of December 31, 2020, the Company had cash, cash equivalents
and short-term investments of $1,882 million.
Fiscal year 2020 financial results as compared to fiscal year
2019 are as follows:
- Net income (loss) decreased from $766 million to $(703)
million.
- Adjusted EBITDA decreased from $754 million to $(177)
million.
- Comparable system-wide RevPAR decreased 65.4%.
- Net rooms growth of 5.2%.
As of December 31, 2020, the Company's pipeline consisted of
approximately 500 hotels, or approximately 101,000 rooms.
Mr. Hoplamazian continued, "We maintained a very strong
liquidity position while the fourth quarter showed a modest
sequential improvement in RevPAR. We are prepared for whatever 2021
brings, and we are looking ahead to realize improving financial
results as vaccine distribution continues and travel restrictions
are lifted over time. We continue to be guided by our purpose of
caring for people so they can be their best, and this has sustained
and strengthened our culture throughout the past year."
OPERATIONAL UPDATE
RevPAR continued to show improvement in the fourth quarter of
2020 with comparable system-wide RevPAR and comparable owned and
leased hotels RevPAR improving modestly from the third quarter of
2020. The pace of recovery varied by region, and similar to trends
in the third quarter, was led by relative strength in Greater China
and United States select service hotels.
Consistent with third quarter trends, occupancy was driven
primarily by favorable leisure transient demand, particularly on
weekends and holidays in the fourth quarter. Business transient and
group demand continued to be muted. Hyatt's full-service hotels in
the Americas were negatively impacted by group cancellations.
Nearly all properties in Hyatt's system were open at year-end.
As of December 31, 2020, 94% of total system-wide hotels (93% of
rooms) were open compared to 92% of total system-wide hotels (88%
of rooms) at September 30, 2020.
FOURTH QUARTER RESULTS
Fourth quarter of 2020 financial results as compared to the
fourth quarter of 2019 are as follows:
Management, Franchise and Other Fees
Total management and franchise fee revenues decreased 67.4%
(67.6% in constant currency) to $47 million, reflecting a
sequential improvement from $40 million reported in the third
quarter of 2020. Base management fees decreased 66.3% to $22
million, incentive management fees decreased 76.6% to $10 million,
and franchise fees decreased 57.4% to $15 million. Other fee
revenues decreased 31.6% to $12 million.
Americas Management and Franchising Segment
Americas management and franchising segment Adjusted EBITDA
decreased 90.3% (90.2% in constant currency) to $9 million,
including $9 million of bad debt expense. At September 30, 2020,
85% of Hyatt's Americas full service hotels (81% of rooms) and 98%
of Americas select service hotels and rooms were open, and
throughout the fourth quarter, operations continued to resume, with
90% of Americas full service hotels and rooms and 99% of Americas
select service hotels and rooms open at December 31, 2020.
Americas net rooms increased 3.5% compared to the fourth quarter
of 2019.
Southeast Asia, Greater China, Australia, New Zealand, South
Korea, Japan and Micronesia (ASPAC) Management and Franchising
Segment
ASPAC management and franchising segment Adjusted EBITDA
decreased 65.5% (66.8% in constant currency) to $9 million,
including $1 million of bad debt expense. At September 30, 2020,
92% of Hyatt's ASPAC full service hotels (93% of rooms) and 93% of
ASPAC select service hotels (89% of rooms) were open, operations
continued to resume throughout the fourth quarter resulting in 98%
of Hyatt's ASPAC full service hotels (99% of rooms) and 97% of
ASPAC select service hotels (94% of rooms) being open at December
31, 2020.
ASPAC net rooms increased 11.4% compared to the fourth 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 121.8% (122.4% in constant currency) to $(3) million,
including $4 million of bad debt expense. At December 31, 2020, 84%
of EAME/SW Asia full and select service hotels (85% of rooms) were
open. This reflects a slight decrease in the number of hotels open
compared to September 30, 2020, as a result of new travel
restrictions in Europe.
EAME/SW Asia net rooms increased 4.5% compared to the fourth
quarter of 2019.
Owned and Leased Hotels Segment
Total owned and leased hotels segment Adjusted EBITDA decreased
148.5% (148.6% in constant currency) to $(48) million. Owned and
leased hotels segment results were heavily impacted by decreased
demand due to the COVID-19 pandemic, and by dispositions in 2019.
Refer to the table on page 11 of the schedules for a detailed list
of portfolio changes and the year-over-year net impact to total
owned and leased hotels segment Adjusted EBITDA.
At December 31, 2020, 82% of Hyatt's owned and leased hotels
(81% of rooms) were open. This compares to 87% of owned and leased
hotels (78% of rooms) at September 30, 2020.
Corporate and Other
Corporate and other Adjusted EBITDA decreased 57.1% (56.5%
decrease in constant currency) to $(65) million, reflecting an
incremental $23 million loss as compared to the fourth quarter of
2019. Adjusted EBITDA was negatively impacted by $45 million of
costs incurred on behalf of managed and franchised properties to
provide necessary system-wide services and programs that we do not
intend to recover from hotel owners.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses decreased 5.9%
inclusive of rabbi trust impact and stock-based compensation.
Adjusted selling, general, and administrative expenses decreased
20.7% or $19 million, primarily due to significant decreases in
expenses as a result of cost containment initiatives in 2020,
primarily payroll and related costs, and integration-related costs
incurred in 2019 associated with the acquisition of Two Roads
Hospitality LLC ("Two Roads"), partially offset by an increase in
bad debt expense. Refer to the table on page 18 of the schedules
for a reconciliation of selling, general, and administrative
expenses to Adjusted selling, general, and administrative
expenses.
OPENINGS AND FUTURE EXPANSION
Twenty-three new hotels (or 6,877 rooms) joined Hyatt's system
in the fourth quarter of 2020, contributing to a 5.2% increase in
net rooms compared to the fourth quarter of 2019. In 2020, the
Company opened a total of 72 new hotels (or 14,972 rooms) including
11 operating properties (or 2,837 rooms) that converted to a Hyatt
brand.
As of December 31, 2020, the Company had a pipeline of executed
management or franchise contracts for approximately 500 hotels
(approximately 101,000 rooms). The pipeline was unchanged compared
to December 31, 2019.
CAPITAL STRATEGY
The Company intends to successfully execute plans to sell
approximately $1.5 billion of real estate by March 2022 as part of
its capital strategy announced in March of 2019, and as of December
31, 2020, the Company has realized proceeds of nearly $1.0 billion
towards that goal from the disposition of owned assets. In December
2020, the Company sold the shares of the entities which own the
159-room Hyatt Regency Baku in Azerbaijan for approximately $11
million to an unrelated third party and entered into a long-term
management agreement for the property upon sale.
BALANCE SHEET / OTHER ITEMS
As of December 31, 2020, the Company reported the following:
- Total debt of $3,244 million.
- Pro rata share of unconsolidated hospitality venture debt of
$671 million, substantially all of which is non-recourse to Hyatt
and a portion of which Hyatt guarantees pursuant to separate
agreements.
- Cash and cash equivalents, including investments in
highly-rated money market funds and similar investments, of $1,207
million, short-term investments of $675 million and restricted cash
of $11 million.
- Undrawn borrowing availability of $1,499 million under Hyatt's
revolving credit facility, net of letters of credit
outstanding.
The Company believes it has adequate existing liquidity to fund
operations and investments supporting the continued growth of the
business for approximately 36 months based on fourth quarter of
2020 demand levels.
SHARE REPURCHASE/DIVIDEND
There were no Class A or Class B shares repurchased during the
fourth quarter of 2020. The Company ended the fourth quarter with
39,250,241 Class A and 62,038,918 Class B shares issued and
outstanding.
During the 2020 fiscal year, the Company repurchased $69 million
shares of Class A common stock, consisting of 827,643 shares, and
paid a $0.20 per share common dividend in the first quarter of
2020. Effective March 3, 2020, the Company suspended all share
repurchase activity, and the Company has suspended its quarterly
dividend.
2021 OUTLOOK
Given the uncertain pace and timing of recovery from the impacts
of the COVID-19 pandemic, the Company is providing limited guidance
for the 2021 fiscal year:
- Adjusted selling, general, and administrative expenses are
expected to be approximately $240 million. Refer to the table on
page 19 of the schedules for a reconciliation of selling, general,
and administrative expenses to Adjusted selling, general, and
administrative expenses.
- Capital expenditures are expected to be approximately $110
million.
- The Company expects to grow units, on a net rooms basis, by
approximately 5.0%.
No disposition or acquisition activity beyond what has been
completed as of the date of this release has been included in the
2021 Outlook. The Company's 2021 Outlook is based on a number of
assumptions that are subject to change and many of which are
outside the control of the Company. If actual results vary from
these assumptions, the Company's expectations may change. There can
be no assurance that Hyatt will achieve these results.
SEGMENT REPORTING UPDATES
Effective January 1, 2020, we changed the strategic and
operational oversight for our Miraval properties, which were
previously evaluated as a distinct business by our chief operating
decision maker (CODM). The management fees from Miraval properties
are now reported in the Americas management and franchising
segment, and the operating results and financial position of
underlying hotel results are now reported in our owned and leased
hotels segment; the results of Miraval properties were previously
reported in corporate and other. In addition, the license fees we
receive from Hyatt Residence Club are now reported within our
Americas management and franchising segment due to changes in the
strategic oversight for these license agreements. The segment
changes have been reflected retrospectively to the three months and
year ended December 31, 2019.
In addition, effective January 1, 2020, we classified Miraval
wellness resorts as full service hotels. All schedules have been
updated to reflect this change to our properties and statistics
retrospectively to the three months and year ended December 31,
2019.
CONFERENCE CALL INFORMATION
The Company will hold an investor conference call tomorrow,
February 18, 2021, at 10:30 a.m. CT. All interested persons may
listen to a simultaneous webcast of the conference call, which may
be accessed through the Company's website at investors.hyatt.com or
by registering directly prior to the event using our online
registration link provided below. Registering with the direct link
will provide participants a dial-in number for access to the call.
For those unable to listen to the live broadcast, an archive of the
webcast will be available on the Company’s website for 90 days.
Online Registration Link
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 statements about our plans, strategies, outlook,
occupancy, the impact of the COVID-19 pandemic and pace of
recovery, the amount by which the Company intends to reduce its
real estate asset base and the anticipated timeframe for such asset
dispositions, the Company's liquidity profile and sufficiency to
fund operations at current demand levels; the number of properties
we expect to open in the future, our expected Adjusted SG&A
expense, our expected capital expenditures, our expected net rooms
growth, financial performance, prospects or future events 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, but are not
limited to: the duration of the COVID-19 pandemic and its short and
longer-term effects, including the demand for travel, transient and
group business, and levels of consumer confidence, and the pace of
recovery following the pandemic, any additional resurgence, or
COVID-19 variants; the impact of the COVID-19 pandemic, any
additional resurgence, or COVID-19 variants, and the impact of
actions that governments, businesses, and individuals take in
response, on global and regional economies, travel limitations or
bans, and economic activity, including the duration and magnitude
of its impact on unemployment rates and consumer discretionary
spending; the ability of third-party owners, franchisees, or
hospitality venture partners to successfully navigate the impacts
of the COVID-19 pandemic, any additional resurgence, or COVID-19
variants; 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 ("ADR"); limited visibility with respect to
future bookings; loss of key personnel; domestic and international
political and geo-political conditions, including political or
civil unrest or changes in trade policy; 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, such as the COVID-19 pandemic, or
fear of such outbreaks; our ability to successfully achieve certain
levels of operating profits at hotels that have performance tests
or guarantees in favor of our third-party owners; the impact of
hotel renovations and redevelopments; risks associated with our
capital allocation plans, share repurchase program, and dividend
payments, including a reduction in, or elimination or suspension
of, repurchase activity or dividend payments; 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 and our ability to successfully
integrate completed acquisitions with existing operations; 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
expand our management and franchising business while at the same
time reducing 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;
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 the COVID-19
pandemic, industry consolidation, and the markets where we operate;
our ability to successfully grow the World of Hyatt loyalty
program; cyber incidents and information technology failures;
outcomes of legal or administrative proceedings; and 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. All forward-looking statements attributable to us or
persons acting on our behalf are expressly qualified in their
entirety by the cautionary statements set forth above. 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.
NON-GAAP FINANCIAL MEASURES
The Company refers to certain financial measures that are not
recognized under U.S. generally accepted accounting principles
(GAAP) in this press release, including: net income (loss),
adjusted for special items; diluted EPS, adjusted for special
items; Adjusted EBITDA; Adjusted EBITDA margin; and Adjusted
SG&A. See the schedules to this earnings release, including the
"Definitions" section, for additional information and
reconciliations of such non-GAAP financial measures.
AVAILABILITY OF INFORMATION ON HYATT'S
WEBSITE AND SOCIAL MEDIA CHANNELS
Investors and others should note that Hyatt routinely announces
material information to investors and the marketplace using U.S.
Securities and Exchange Commission (SEC) filings, press releases,
public conference calls, webcasts and the Hyatt Investor Relations
website. The Company uses these channels as well as social media
channels (e.g., the Hyatt Facebook account (facebook.com/hyatt);
the Hyatt Instagram account (instagram.com/hyatt/); the Hyatt
Twitter account (twitter.com/hyatt); the Hyatt LinkedIn account
(linkedin.com/company/hyatt/); and the Hyatt YouTube account
(youtube.com/user/hyatt) as a means of disclosing information about
the Company's business to our guests, customers, colleagues,
investors, and the public. While not all of the information that
the Company posts to the Hyatt Investor Relations website or on the
Company's social media channels is of a material nature, some
information could be deemed to be material. Accordingly, the
Company encourages investors, the media, and others interested in
Hyatt to review the information that it shares at the Investor
Relations link located at the bottom of the page on hyatt.com and
on the Company's social media channels. Users may automatically
receive email alerts and other information about the Company when
enrolling an email address by visiting "Sign up for Email Alerts"
in the "Investor Resources" section of Hyatt's website at
investors.hyatt.com.
ABOUT HYATT HOTELS CORPORATION
Hyatt Hotels Corporation, headquartered in Chicago, is a leading
global hospitality company offering 20 premier brands. As of
December 31, 2020, the Company's portfolio included more than 975
hotel, all-inclusive, and wellness resort properties in 69
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
employees, build relationships with guests and create value for
shareholders. The Company's subsidiaries operate, manage,
franchise, own, lease, develop, license, or provide services to
hotels, resorts, branded residences, and vacation ownership
properties, including under the Park Hyatt®,
Miraval®, Grand Hyatt®, Alila®, Andaz®,
The Unbound Collection by Hyatt®, Destination®,
Hyatt Regency®, Hyatt®, Hyatt Ziva™, Hyatt
Zilara™, Thompson Hotels®, Hyatt Centric®,
Caption by Hyatt, Joie de Vivre®, Hyatt
House®, Hyatt Place®, tommie™, UrCove, and
Hyatt Residence Club® brand names, and operates the World of
Hyatt® loyalty program that provides distinct benefits and
exclusive experiences to its valued members. For more information,
please visit www.hyatt.com.
The financial section of this release, including a
reconciliation of the Company’s presented non-GAAP measures to the
most directly comparable GAAP measures, is provided on the
Company's website at investors.hyatt.com.
Note: All RevPAR and ADR percentage changes are in constant
dollars. This release includes references to non-GAAP financial
measures. Refer to the definitions of the non-GAAP measures
presented beginning on page 23 and non-GAAP reconciliations
included in the schedules.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210217005859/en/
Investor Contact: Amanda Bryant, 312.780.5539
amanda.bryant@hyatt.com
Media Contact: Franziska Weber, 312.780.6106
franziska.weber@hyatt.com
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