CHICAGO—Hyatt Hotels Corporation has reported its Q1 2019 financial results. Net income attributable to Hyatt was $63 million, or $0.59 per diluted share, compared to $411 million, or $3.40 per diluted share, in the first quarter of 2018. Adjusted net income attributable to Hyatt was $48 million, or $0.45 per diluted share, compared to $40 million, or $0.33 per diluted share, in the first quarter of 2018.
Mark S. Hoplamazian, president/CEO of Hyatt Hotels Corporation, said, “We had a strong start to the year, highlighted by continued growth of management and franchising fees. The integration of the Two Roads brands remains on track and is expected to fuel future growth in our managed and franchised business. We are pleased to see continued demand for our brands among developers which drove sequential expansion of our pipeline of executed contracts even as we maintained industry-leading net rooms growth.”
First quarter of 2019 financial highlights as compared to the first quarter of 2018:
- Net income decreased 84.6% to $63 million.
- Adjusted EBITDA decreased 7.3% to $187 million, a decrease of 6.1% in constant currency.
- Comparable system-wide RevPAR increased 1.8%, including an increase of 2.7% at comparable owned and leased hotels. Excluding the benefit from the timing of the Easter holiday, comparable RevPAR at system-wide hotels and comparable owned and leased hotels would have increased 1.4% and 2.2%, respectively.
- Comparable U.S. hotel RevPAR decreased 0.3%; full-service hotel RevPAR increased 0.1% and select-service hotel RevPAR decreased 1.3%.
- Net rooms growth was 13.7%, or 7.3% excluding the acquisition of Two Roads Hospitality LLC in the fourth quarter of 2018.
- Comparable owned and leased hotels operating margin increased 120 basis points to 24.7%.
- Adjusted EBITDA margin of 28.5% decreased 220 basis points in constant currency.
Hoplamazian continued, “Our outlook for the balance of 2019 is consistent with our views at the beginning of the year based on underlying business trends. We expect growth in both system-wide RevPAR and hotel rooms to sustain upward momentum in our lodging fees as we continue to evolve to an asset-lighter business model.”
Openings and Future Expansion
Sixteen hotels (or 3,120 rooms) opened in the first quarter of 2019, contributing to a 13.7% increase in net rooms compared to the first quarter of 2018. Excluding the impact of the Two Roads acquisition, net rooms increased 7.3% compared to the first quarter of 2018. The company is on pace to open over 80 hotels in the 2019 fiscal year.
As of March 31, 2019, the company had executed management or franchise contracts for approximately 455 hotels, or approximately 91,000 rooms, compared to approximately 445 hotels or approximately 89,000 rooms at Dec. 31, 2018.
Management, Franchise and Other Fees
Total management, franchise and other fees increased 6.9% (8.8% in constant currency) to $141 million, driven by hotels added to the system, inclusive of Two Roads, and conversions from owned to managed. Base management fees increased 18.2% to $63 million and incentive management fees increased 0.3% to $34 million. Franchise fees increased 13.9% to $32 million. Other fees decreased 26.3% to $12 million, reflecting $8 million in fees reported in the first quarter of 2018 related to a franchise agreement termination for an unopened property. Excluding other fees, management and franchise fees increased 11.8% (14.1% in constant currency) to $129 million.