CHICAGO–(BUSINESS WIRE)–Jul. 31, 2013–?Hyatt Hotels Corporation?(?Hyatt? or the ?Company?) (NYSE: H) today reported second quarter 2013 financial results as follows:
- Adjusted EBITDA was?$212 million?in the second quarter of 2013 compared to?$180 million?in the second quarter of 2012, an increase of 17.8%.
- Adjusted for special items, net income attributable to Hyatt was?$70 million, or?$0.43?per share, during the second quarter of 2013 compared to net income attributable to Hyatt of?$39 million, or?$0.24?per share, during the second quarter of 2012.
- Net income attributable to Hyatt was?$112 million, or?$0.70?per share, during the second quarter of 2013 compared to net income attributable to Hyatt of?$39 million, or?$0.24?per share, in the second quarter of 2012.
- Comparable owned and leased hotel RevPAR increased 7.1% (7.1% excluding the effect of currency) in the second quarter of 2013 compared to the second quarter of 2012.
- Owned and leased hotel operating margins increased 150 basis points in the second quarter of 2013 compared to the second quarter of 2012. Comparable owned and leased hotel operating margins increased 230 basis points in the second quarter of 2013 compared to the second quarter of 2012.
- Comparable systemwide RevPAR increased 3.9% (4.6% excluding the effect of currency) in the second quarter of 2013 compared to the second quarter of 2012.
- Comparable U.S. full service hotel RevPAR increased 6.1% in the second quarter of 2013 compared to the second quarter of 2012. Comparable U.S. select service hotel RevPAR increased 6.0% in the second quarter of 2013 compared to the second quarter of 2012.
- Sixteen properties were opened. As of?June 30, 2013, the Company’s executed contract base consisted of approximately 200 hotels or 45,000 rooms.
- The Company repurchased 4,768,636 shares of common stock at a weighted average price of?$41.10?per share, for an aggregate purchase price of approximately?$196 million.
Mark S. Hoplamazian, president and chief executive officer of?Hyatt Hotels Corporation, said, “Our second quarter of 2013 reflected ongoing positive trends in transient demand at U.S. hotels and strong average daily rate progression.
“Since the beginning of the year, we have executed on our strategy of expanding in new and attractive markets by opening a total of 24 hotels in?the United States,?India,?France,?China?and?South Korea. Eleven of these openings were conversions of existing hotels and drove strong fee growth in the quarter.
“Looking ahead, we remain focused on improving performance at existing hotels and expanding in new and attractive markets. We expect continued healthy levels of transient demand at U.S. hotels, and anticipate further rate growth. Over the short-term, we believe that U.S. group demand growth will be modest and that demand in certain markets, such as?India?and?China, will be volatile. We remain confident in the long-term outlook for both transient and group segments.
“We continue to invest in our hotels and expect to spend approximately?$250 million?on capital expenditures in 2013, inclusive of?$80 million?towards construction of new hotels. Over the last five years, we have consistently committed capital to our owned hotels, which has resulted in a high-quality asset base that is well-positioned for outperformance and potential asset recycling in the years ahead.
“Consistent with our capital strategy, we continue to be focused on asset recycling, investment spending and pursuing new opportunities. During the quarter, we sold two properties at attractive pricing. We entered into franchise agreements for both hotels, thereby maintaining our brand presence in each market. We have increased our investment spending outlook for 2013 to over?$500 million, inclusive of an expected?$325 million?investment in the all-inclusive resort segment. We expect to introduce our first two all-inclusive resorts, each in?Mexico, by year-end.
“In the second quarter, we repurchased nearly?$200 million?of our stock. Since May of 2011, we have repurchased over?$750 million?of stock, thereby reducing our net shares outstanding by approximately 10%. Our balanced approach to capital expenditures, investment spending and return of capital to shareholders reflects our cash flow performance, business mix and strategic focus on asset recycling. We expect this to result in long-term value creation.”
SEGMENT RESULTS & OTHER ITEMS
Owned and Leased Hotels Segment
Total segment Adjusted EBITDA increased 9.8% in the second quarter of 2013 compared to the same period in 2012. Owned and leased Adjusted EBITDA increased 14.5% in second quarter of 2013 compared to the same period in 2012. Pro rata share of unconsolidated hospitality ventures Adjusted EBITDA decreased 13.6% in the second quarter of 2013 compared to the same period in 2012. The decrease was primarily due to asset sales and weaker performance in certain international markets.
RevPAR for comparable owned and leased hotels increased 7.1% (7.1% excluding the effect of currency) in the second quarter of 2013 compared to the same period in 2012. Occupancy improved 60 basis points and ADR increased 6.3% (6.3% excluding the effect of currency) compared to the same period in 2012.
Revenue increased 8.3% in the second quarter of 2013 compared to the same period in 2012. Comparable hotel revenue increased 7.0% in the second quarter of 2013 compared to the same period in 2012.
Owned and leased hotel expenses increased 6.2% in the second quarter of 2013 compared to the same period in 2012. Excluding expenses related to benefit programs funded through Rabbi Trusts and non-comparable hotel expenses, expenses increased 3.8% in the second quarter of 2013 compared to the same period in 2012. See the table on page 10 of the accompanying schedules for a reconciliation of comparable owned and leased hotels expenses to owned and leased hotels expenses.
The following hotels were removed from the owned and leased portfolio during the second quarter:
- Sold Hyatt Fisherman’s Wharf?for approximately?$104 million?and Hyatt?Santa Barbara?for approximately?$61 million. The Company entered into a franchise agreement for each property and therefore each hotel remains included in the Americas Management and Franchising segment.
Americas Management and Franchising Segment
Adjusted EBITDA increased 14.8% in the second quarter of 2013 compared to the same period in 2012.
RevPAR for comparable?Americas?full service hotels increased 5.5% (5.6% excluding the effect of currency) in the second quarter of 2013 compared to the same period in 2012. Occupancy increased 70 basis points and ADR increased 4.5% (4.7% excluding the effect of currency) compared to the same period in 2012.
Group rooms revenue at comparable U.S. full service hotels increased 5.2% in the second quarter of 2013 compared to the same period in 2012. Group room nights increased 0.4% and group ADR increased 4.8% in the second quarter of 2013 compared to the same period in 2012.
Transient rooms revenue at comparable U.S. full service hotels increased 6.9% in the second quarter of 2013 compared to the same period in 2012. Transient room nights increased 2.7% and transient ADR increased 4.1% in the second quarter of 2013 compared to the same period in 2012.
RevPAR for comparable?Americas?select service hotels increased 6.0% (6.0% excluding the effect of currency) in the second quarter of 2013 compared to the same period in 2012. Occupancy increased 150 basis points and ADR increased 4.1% (4.1% excluding the effect of currency) compared to the same period in 2012.
Click here to read more.