With Hyatt Hotels Corporation having spent years transforming from a heavy real estate investor to a largely fee-based branding business, Hyatt CEO Mark Hoplamazian believes his company has reached an "inflection point" and has set the stage for outpacing the rest of the hotel industry in growth.
During the company's second-quarter 2025 earnings call, Hoplamazian pointed to how Hyatt flipping owned resorts from its recent purchase of Playa Hotels & Resorts is the latest stage in a yearslong process.
"Having built this foundation and transformed to an asset-light business model, we are now at an inflection point, poised to scale with efficiency and speed," Hoplamazian said.
Hyatt announced in late July a deal to sell 15 resorts to Tortuga Resorts, a joint venture of KSL Capital Partners and Mexico City-based Rodina, for $2 billion. Hyatt bought the resorts along with the operating business of Playa Hotels & Resorts just two week prior, selling 13 of them encumbered with 50-year management agreements.
Hyatt now expects to get 90% of its earnings mix from franchise fees by 2027.
Hoplamazian said Hyatt has both the benefits of being a large, established company in the hotel industry along with having plenty of room left to grow.
"I'm incredibly excited about Hyatt's future," he said. "We have an unmatched global portfolio of premium luxury, lifestyle and resort brands that has driven significant loyalty membership. Our significant white space for growth is expected to increase our fee-based earnings, further improving our capital-efficient, asset-light model. We believe we are positioned to generate durable, growing free cash flow and deliver significant shareholder value."
Confidence in full-year results
Amid many hotel companies cutting back their outlook for full-year 2025 performance, Hyatt executives still expect full-year revenue per available room growth between 1% and 3% and net rooms growth between 6% and 7%, which mirrors its outlook given earlier in the year.
Chief Financial Officer Joan Bottarini said there are several headwinds that are likely to lead to a difficult third quarter for Hyatt, including difficult year-over-year comparisons. But Hyatt officials expect a turnaround in the fourth quarter, powered somewhat by stronger business travel and easier year-over-year comparisons than the third quarter.
"We're seeing some better pickup on the [business transient] side that we expect to realize post-Labor Day into the fourth quarter," she said. "That's still shorter-term business, but as we talk about our top corporate customers, they are confident in getting back on the road post Labor Day."
Group booking pace has caused some hand-wringing in the hotel industry recently, but Hoplamazian said it's a source of optimism for Hyatt going into 2026, although it's roughly flat for the second half of 2025.
"If you pick up your head from this year and [look] into next year, the group pace is extremely strong with a lot of it represented by rate increases," Hoplamazian said.
Second-quarter performance
Hyatt's comparable systemwide revenue per available room rose 1.6% year over year in the second quarter. This is better than many of Hyatt's other hotel brand counterparts in the quarter but also a significant deceleration compared to the 5.7% RevPAR growth rate in the second quarter. Hyatt had an 11.8% growth in net rooms for the quarter — or 6.5% excluding recent acquisitions.
Hyatt's total revenue for the quarter reached $1.81 billion — up from $1.7 billion in the same quarter of 2024 — with gross fees up 9.5% year over year to $301 million. Adjusted earnings before interest, taxes, depreciation and amortization for the quarter came in at $303 million, a 1.1% year-over-year decrease.
As of publication time, Hyatt's stock was trading at $138.99 a share, down 11.1% year to date. The New York Stock Exchange Composite was up 7% for the same period.