Hyatt Reports Strong 2018 Results

CHICAGO—Hyatt Hotels Corporation reported that its net income increased 97.5% to $769 million for 2018. Its net income was $44 million, or $0.40 per diluted share, in the fourth quarter of 2018, compared to $213 million, or $1.75 per diluted share, in the fourth quarter of 2017.

Net income in the fourth quarter of 2017 included a $217 million gain from the sale of Avendra LLC, and $58 million of incremental tax expense attributable to recent U.S. tax reform. Adjusted net income attributable to Hyatt was $69 million, or $0.62 per diluted share, in the fourth quarter of 2018, compared to $6 million, or $0.06 per diluted share, in the fourth quarter of 2017.

“We had a very strong 2018 driven by another year of double-digit growth in management and franchising fees, nearly offsetting the earnings decline in our owned & leased segment, resulting from over $1 billion of asset sales,” said Mark S. Hoplamazian, president/CEO of Hyatt Hotels Corporation. “We successfully closed the acquisition of Two Roads Hospitality LLC, adding five new compelling brands into the Hyatt portfolio and significant future growth opportunities.”

Fourth quarter 2018 financial results as compared to fourth quarter 2017 are as follows:

  • Net income decreased 79.2% to $44 million.
  • Adjusted EBITDA increased 5% to $182 million, up 6.8% in constant currency.
  • Comparable system-wide RevPAR increased 1.5%, including an increase of 3% at comparable owned and leased hotels.
  • Comparable U.S. hotel RevPAR increased 0.9%; full service and select service hotel RevPAR increased 2.6% and decreased 3.0%, respectively.
  • Comparable owned and leased hotels operating margin increased 240 basis points to 25.1%.
  • Adjusted EBITDA margin increased 280 basis points to 28.7% in constant currency.

Fiscal year 2018 financial results as compared to fiscal year 2017 are as follows:

  • Net income increased 97.5% to $769 million.
  • Adjusted EBITDA decreased 1.9% to $777 million, down 1.7% in constant currency, reflecting significant transaction activity.
  • Comparable system-wide RevPAR increased 3.1%, including an increase of 3.6% at comparable owned and leased hotels.
  • Comparable U.S. hotel RevPAR increased 2%; full service and select service hotel RevPAR increased 2.8% and 0.2%, respectively.
  • Comparable owned and leased hotels operating margin increased 140 basis points to 24.1%.
  • Adjusted EBITDA margin increased 190 basis points to 30.9% in constant currency.
  • Net rooms growth was 13.6% in 2018, compared to growth of 7% in 2017. Excluding the acquisition of Two Roads Hospitality LLC, net rooms growth was 7.2%.
  • As of December 31, 2018, the company’s pipeline consisted of approximately 445 hotels, or approximately 89,000 rooms. This compared to approximately 330 hotels or approximately 70,000 rooms as of December 31, 2017.
  • The company repurchased 12,723,895 shares of common stock for $966 million in 2018, compared to 12,186,308 shares for $723 million in 2017.

“We believe we are well-positioned to continue to execute our long-term shift to an asset-lighter business model,” said Hoplamazian. “This is supported by a significant increase in our pipeline, which now stands at approximately 89,000 rooms, equivalent to more than 42% of our system, and our sustained net rooms growth of 7% or better.”

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