Hyatt delays Q4 earnings but delivers some ‘encouraging’ numbers

CHICAGO — Hyatt Hotels Corp. delayed its fourth quarter and full-year earnings scheduled to be released on Thursday. But it did disclose some of its Q4 results. 

Hyatt said its comparable system-wide RevPAR increased 9.1% in the Q4 and 17% for the full year. R.W. Baird analyst Michael Bellisario said both numbers exceeded estimates and company guidance and that Hyatt’s international performance is likely the key reason for the upside.

The company also said its comparable owned and leased hotels RevPAR increased 5.9% in the fourth quarter and 15.5% for the full year of 2023, which Bellisario also said was ahead of its estimates. Comparable owned and leased hotels operating margin was 26.2% in the fourth quarter and 25.4% for the full year of 2023.

Hyatt said the earnings call was delayed because it needed more time to finalize accounting related to its Unlimited Vacation Club deferred cost activity in its Apple Leisure Group segment (which it said has no cash impact). The company has yet to reschedule the earnings call.

Bellisario said the delay can have bad optics, but the Q4 numbers released so far look promising for the company. “While a non-cash impact and non-fundamental driver of value, in our opinion, the optics, particularly related to anything ‘accounting’ related, are almost never good, especially when disclosed on the eve of an earnings release. Positively, though, Hyatt provided several performance highlights and operating updates for 4Q23 and FY23, all of which were strong and/or ahead of Baird/Street forecasts.”

C. Patrick Scholes from Truist Securities said that while Hyatt’s released numbers look promising, they lack some key performance indicators.

“While tonight’s results so far look very good and highly encouraging for 4Q earnings, [the] press release did not specifically provide Adjusted EBITDA or EPS results (understandably). There was also no commentary about any disposition activity or any forward guidance.”

Other key Q4 numbers

Hyatt’s total fees, including Apple Leisure Group, were $256 million for Q4 (well ahead of consensus) and $985 million for all of 2023. 

Both its free cash flow ($602 million) and cash flow from operations ($800 million) for 2023 were the highest in the company’s history. 

Hyatt’s net room growth was 5.9%, in line with its full-year outlook of approximately 6%. Bellisario said this was hinted at in Hyatt’s Q3 earnings when it said that certain hotel openings could slip into 2024.

The company had already disclosed with a press release before ALIS that its executed management or franchise contracts pipeline was approximately 127,000 rooms. 

Hyatt said its share repurchases in Q4 were approximately $95 million for its Class A stock (approximately 890,000 shares). Its capital return to shareholders was $500 million, which matched guidance.