Hyatt CEO: Investor interest in all-inclusive resorts up as segment hits 'inflection point'

As Hyatt expands its all-inclusive resort affiliations, most recently with its pending acquisition of Playa Hotels & Resorts, President and CEO Mark Hoplamazian said “the ice has been broken” when it comes to investor interest in this segment of the hospitality industry.

On Hyatt’s fourth quarter and full-year 2024 earnings call, he pointed to the attractiveness of all-inclusives, citing their predictability and durability, as well as the segment's higher margins and yields.

“There has been, and there continues to be, an increasingly elevated level of inbound interest from institutional capital into the market, so we feel like we are at [an] inflection point,” Hoplamazian said.

“We're optimistic that we'll see more and more investment in these kinds of assets going forward because they're so attractive,” he continued.

The Playa acquisition, valued at $2.6 billion, is the third time Hyatt has expanded its all-inclusive resorts portfolio in four years. The company purchased Apple Leisure Group for $2.7 billion in 2021, and in October struck a 50/50 joint venture with Grupo Piñero to bring the 23 Bahia Principe Brand's properties into its Inclusive Collection.

Hyatt plans to sell off Playa's owned real estate, to result in $2 billion in asset sales by the end of 2027.

Last quarter, Hyatt closed its acquisition of Standard International and finalized its joint venture with Grupo Piñero — both deals contributed to expanding the brand’s luxury, resort and lifestyle offerings.

“Our pipeline expanded to approximately 138,000 rooms in the quarter, the new record for Hyatt, and represents 9% growth when compared to the fourth quarter of 2023,” Hoplamazian said.

He added this figure does not reflect the addition of 7,100 rooms acquired when the company signed a licensing agreement with The Venetian Resort Las Vegas in January.

Hyatt achieved 7.8% net rooms growth in 2024 and Hoplamazian pointed to notable fourth quarter openings — including Park Hyatt London River Thames, Thompson Palm Springs and Grand Hyatt Deer Valley — that contributed to Hyatt’s room growth.

With all the recent M&A activity, Hoplamazian was asked if this pace of acquisitions would continue.

“Things will definitely calm down,” he said. “This was a somewhat unique opportunity with respect to Playa, and otherwise we feel really good about the brand portfolio that we currently have and we are focusing our attention on optimization.”

Hoplamazian said the company’s strongest segment for revenue per available room growth was luxury.

“Our growth in luxury and lifestyle will continue to be very intentional, ensuring we protect the ethos of each brand and to not just grow for the sake of growth,” Hoplamazian said.

In the fourth quarter, Hyatt saw a RevPAR increase of 5%, led by business and leisure transient travel.

“Business transient customers remained our strongest growth segment, delivering revenue growth of 10% in the quarter,” Hoplamazian said. “We continue to see our large corporate customers back on the road, and we experienced an increase in both demand and average rate in the quarter. Overall, business transient revenue was up 12% for the year.”

As Hyatt’s room volume grew last year, so did its income from fees.

“We reported growth fees in the quarter of $294 million, up 17%,” said Joan Bottarini, Hyatt's chief financial officer. “We set a record for the highest gross fees in a quarter driven by franchise and other fees, which increased 27% due to the contribution from [Unlimited Vacation Club] and RevPAR growth in the United States. These fees grew by 11%, fueled by managed RevPAR growth and fees from nearly open managed hotels.”

Bottarini added that she expects “fees to steadily increase in the coming years.”

From a portfolio perspective, Hoplamazian said none of Hyatt’s hotels are “off limits” when it comes to offloading owned properties, adding “we will continue to look toward further sales of existing assets in our portfolio.”

In the fourth quarter, Hyatt completed the acquisition of three Alua properties for approximately $123 million, and has begun the marketing process to sell them.

Hyatt sold the Hyatt Regency O'Hare Chicago for gross proceeds of $40 million to MCR Investors LLC. It also sold its ownership interests in Park Hyatt Los Cabos at Cabo Del Sol and Hyatt Centric Downtown Nashville.

For 2025, Hoplamazian said Hyatt is projecting a realistic pace of growth, including year-over-year net rooms growth of 6% to 7%, RevPAR growth of 2% to 4% on a constant currency basis and net income is projected between $190 million and $240 million.

“At this point, we expect to see international outbound travel trends in 2025 that look like 2024. However, we expect domestic travel to improve throughout the year driven by business transients,” Bottarini said on the call.

For 2025, Hoplamazian noted the first half of the year will be busier for new openings.

“Sixty percent of all of our openings that we see coming out of the pipeline this year are front loaded there in the first half of the year,” he said. “That's very different than the profile we had last year, which is why we had slippage."

As of press time, Hyatt stock was trading at $147.38 a share, down 6.12% year to date. The NYSE composite was up 5.64% for the same period.

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