Hyatt Hotels Corp. officials say they're well on their way to hitting their goal of $2 billion in hotel asset sales by the end of the year. This will fulfill a promise the company made in 2021 and will mean roughly $3.6 billion of owned hotels will have been sold since Hyatt laid plans to go asset-light in 2019.
But during Hyatt's first-quarter earnings call, President and CEO Mark Hoplamazian cautioned investors and analysts to not expect a third wave of asset sales, saying the company is now as asset-light as its competitors, and any future deals will be more targeted and opportunistic.
"From our perspective, we are fully asset-light," he said. "We do not intend to publish another targeted sell-down."
Hyatt's latest deals include the sales of the Park Hyatt Zurich, the Hyatt Regency San Antonio Riverwalk and the Hyatt Regency Green Bay — all completed since the end of the first quarter — to three different sellers but at combined proceeds of $535 million, bringing Hyatt's total sales up to $1.5 billion since August 2021. The company also has an agreement in place to sell an unnamed hotel that will "generate gross proceeds that exceed the remaining portion of the company's $2 billion asset sell-down commitment."
Hoplamazian said Hyatt is actively marketing one more hotel for sale.
Following those sales, Hyatt will make roughly 80% of its earnings from fees.
While the company retains some owned hotels, Hoplamazian said it's now comparable to what other hotel brands continue to hold.
"We, like every other company in our industry, will not get to zero [owned assets]. There's nobody in our industry that has zero," he said.
Hyatt's asset sales started in 2019 after years of Wall Street criticism that the company retained too much real estate at a time that other publicly listed hotel brands had pivoted to a more stable and predictable business model based on management and franchise fees. Proceeds for real estate sales have largely gone to a combination of stock buybacks and strategic acquisitions, including the purchase of Apple Leisure Group in 2021.
Hyatt repurchased $388 million in common stock during the first quarter.
During the earnings call, Hoplamazian said his company will remain active in the acquisitions market, with that pace expected to pick up.
"We are more actively engaged in more transactions now than we were over the course of last year," he said. "These kinds of transactions take different forms and shapes. Some of them are portfolio deals. Some of them are brand acquisitions. Some of them are management companies with brand management."
He said all deals will aim to continue to focus on high-end travelers and to "expand the network affect for World of Hyatt," the company's loyalty platform.
First-Quarter Performance
Hoplamazian said Hyatt's focus on high-end travelers has insulated it somewhat from economic factors that are limiting consumer flexibility in lower segments, and the company saw year-over-year increases in hotel revenues for the quarter.
Hyatt recorded a 5.5% systemwide increase in revenue per available room in the first quarter, compared to the same period in 2023, along with 5.5% net rooms growth and net income of $522 million.
The company now project full-year RevPAR to grow 3% to 5% compared to 2023 with gross fees of roughly $1.1 billion for the full year.
As of publication time, Hyatt stock was trading at $152.02 a share, up 16.6% year to date. The NYSE Composite was up 7.5% for the same period.