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Hyatt Increases Guidance for Its Key Metrics

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RevPAR continues to grow

Hyatt’s RevPAR[1. revenue per available room] for 2Q17 rose 2.4% in constant dollars and 2.9% year-over-year (or YoY) in constant currency terms across its systemwide properties. Its occupancy and average daily rate (or ADR) contributed to this growth. 

Hyatt’s ADR rose 0.7% YoY in constant currency terms to $183.50. Its occupancy increased 1.6% to 77.8%.

For the first half of 2017, Hyatt’s RevPAR increased 3.8% YoY in constant currency terms to $136.60 compared to 2.5% YoY in 2016. Its occupancy for 1H17 rose 1.8% to 74.6% compared to 72.8% in 1H16.

Hyatt’s ADR rose 1.2% YoY on a constant dollar basis and 0.8% in actual dollars. Its ADR increased to $183.10 in 1H17 compared to $181.60 in 1H16.

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Strong pipeline

For 2Q17, Hyatt’s net hotel growth was 10% YoY. It added 22 new hotels to its hotel portfolio, taking the total to 689 hotels. This led to an addition of 3,366 rooms, taking Hyatt’s net room growth for the second quarter to 7% YoY.

Outlook

Hyatt expects ~60 new hotels in 2017. It has a contract for almost 300 new hotel launches. Most of these hotels are in new countries, extending the company’s geographic reach.

Hyatt’s management has increased its RevPAR guidance and expects its RevPAR to grow 1% to 3% YoY compared to its earlier guidance of 0%–2% YoY growth. This revision could help drive revenue and EBITDA[2. earnings before interest, tax, depreciation, and amortization] growth for the company.

Next, we’ll discuss Hyatt’s revenue growth outlook. Investors can gain exposure to the hotel sector by considering the First Trust Consumer Discretionary AlphaDEX ETF (FXD), which invests ~15.0% in the hotel, restaurant, and leisure sector. 

FXD holds 0.6% each in Hyatt (H) and Hilton Worldwide (HLT), 0.88% in Wyndham (WYN), and 1.6% in Marriott International (MAR).

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