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Hyatt hopeful amid strong first quarter, 'modestly' adjusts outlook

Brand drops full-year RevPAR growth expectations to 1% to 3%
Hotel La Compañia del Valle, part of The Unbound Collection by Hyatt, opened in Panama during the first quarter. (Hyatt Hotels Corp.)
Hotel La Compañia del Valle, part of The Unbound Collection by Hyatt, opened in Panama during the first quarter. (Hyatt Hotels Corp.)
CoStar News
May 2, 2025 | 12:48 P.M.

Without ignoring the current macroeconomic challenges, Hyatt Hotels Corp. CEO and President Mark Hoplamazian explained on the company's first-quarter earnings call Thursday that Hyatt is well-positioned to weather the ongoing "choppy environment."

Hoplamazian also pointed to the company's strong first-quarter results and Hyatt's "durable asset-light business model" as reasons to be optimistic about the rest of the year. Even so, the company "modestly" revised its outlook for the remainder of 2025, dropping revenue per available room growth to 1% to 3% from 2% to 4%. Net income is projected to be between $95 million and $150 million, down from between $190 million and $240 million. Net rooms growth, originally projected between 6% to 7%, compared to the full-year 2024, remained the same on the 2025 outlook.

"As we sit here right now, the near term is definitely disrupted," Hoplamazian said on the call. "It's very important to recognize that 70% of our portfolio is luxury and upper upscale. And so as we look at how this is unfolding, tracking by segment and price point has actually become really important to understand the total story."

Zooming in on business segments

Each of the hospitality industry's various segments are telling slightly different stories, and each can be indicators on where the industry is headed.

"As we look into the current outlook, it really is a tale of three segments," Hoplamazian said. "Luxury is very strong as far into the future — which is really through the end of May — as we can see. Upper upscale is also positive through the end of May."

Upscale and select service are different stories. Pace is off, Hoplamazian said. Meanwhile, group pace is up around 2.5% to 3% for the rest of the year. But looking even further into the future, he sees even more reason for hope.

"What's most encouraging is, with about 50% of the business on the books for 2026, we're seeing an over 10% pace increase, including really healthy rate increases," he said.

Hyatt's Chief Financial Officer Joan Bottarini said that while she's seeing a slight pullback on bookings in the last three quarters of the year relative to the first quarter, it's nothing material. Slowing in booking activity is mostly affecting lower chain scales, she said, not the 5-star locations in Mexico and the Caribbean, for example.

"U.S. is a little bit slower in the last couple of weeks than international. So, when you look on on a global basis, actually, businesses is up, and leisure on a global basis is slightly down," she said. "But that, again, is driven by the two very different dynamics we're seeing, international versus U.S."

Notably, international travel unto the U.S. has slowed, according to data from Tourism Economics.

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With 30% of Hyatt's pipeline under construction, Hoplamazian addressed incoming effects from tariffs with similar positivity.

"I'm not saying we're going to skate by and not have any impact from tariffs whatsoever," he said. "I am saying that necessity is the mother of invention, and our developers are really showing some great ingenuity in how they're approaching this."

He added, "the activity on the pipeline front feels better to me than it did a year ago."

Notable first-quarter moments

In the first quarter, Hyatt opened 11,253 rooms, including the first Hyatt Studios property, Hyatt Studios Mobile / Tillmans Corner. Hyatt also opened Andaz Doha, Hotel La Compañia del Valle, part of The Unbound Collection by Hyatt, and seven UrCove properties.

The Venetian Resort Las Vegas' 7,092 rooms also became available through Hyatt booking channels in January. This figure was not included in the 2024 year-end pipeline numbers.

In other big news from the quarter, Hyatt announced its newest brand, Hyatt Select, an upper midscale, transient conversion brand that is designed to target modern travelers and provide an efficient, cost-effective model for owners.

"The brand expands Hyatt's offerings to travelers seeking shorter stays in secondary and tertiary markets," Hoplamazian said, explaining that the new brand addresses Hyatt's plans "to grow our domestic brand footprint, especially in suburban, interstate and small metro markets."

"There's strong interest in the Hyatt Select brand from owners who are looking for conversion opportunities and access the Hyatt powerful commercial platform, especially in markets where Hyatt has significant white space for growth," he said.

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Future of the Playa acquisition

Earlier this week, Hyatt extended its tender offer period until May 23 for its pending acquisition of Playa Hotels & Resorts, and Hoplamazian said the financing is in place to move forward with the deal.

"During the quarter, we issued $1 billion of senior notes. And on April 11, we closed on a $1.7 billion delayed draw term loan," he said. "We intend to use the net proceeds from our senior notes offering and the future proceeds to be drawn from the new term loan to finance the Playa acquisitions."

A few things could hold up the transaction, but Hoplamazian said he's confident the deal will go through. First, Hyatt needs to get to an 80% tendered percentage — and if not, addressing the process to acquire the remaining shares. Additionally, the deal needs to get through all anti-trust clearances that are required.

"We're just in a waiting pattern right now for clearance on antitrust. I think that's the one that we're focused on," he said, adding that it's specifically anti-trust clearance in Mexico he's speaking about. "I think we will get get to the tender level that we have as a minimum requirement."

First-quarter results

While many of the challenges in the market began in mid- to late March, Hyatt reported a strong first quarter. RevPAR increased 5.7%, compared to the first quarter of 2024 with 10.5% net rooms growth, according to the earnings release. Hyatt's net income was $20 million, with an adjusted net income of $46 million. Adjusted earnings before interest, taxes, depreciation and amortization increased 5.4% to $273 million — an increase of 24.4% after adjusting for assets sold in 2024, compared to the first quarter of 2024.

Gross fees increased 16.9% year over year to $307 million. This growth was driven by Bahia Principe and Standard International transactions, which contributed approximately $17 million, or 38%, of the total gross fee growth.

When asked about fees, Bottarini explained that this first quarter fee growth will sustain the full year's growth amid softer future quarters.

"It's a matter of watching this really closely and making sure that our teams are going to market where the demand is coming, and that's what we're focused on in light of some booking activity that's a little bit softer than we would have anticipated a couple of months ago," she said. "And that should help us sustain these fee growth numbers through the rest of the year. We posted 17% growth in the first quarter, and we anticipate the full year at the midpoint will be 9%."

As of press time, Hyatt's stock was trading at $118.68 per share, down 24.4% year to date. The NYSE Composite was up 0.3% for the same period.

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